Quarterly consolidated financial

Transcription

1 consolidated financial statement of for the first quarter consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 1

2 Contents consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 2. Organization of Capital Group Business activity of Makeup of and associated and co-subsidiaries as at 31 st March Changes in the structure of capital group in the first quarter Consolidated financial statement of Consolidated statement of financial situation Information concerning changes in contingent liabilities or assets that occurred since the end of the last financial year (off balance sheet items) of Consolidated financial statement of comprehensive income Consolidated financial statement of changes in equity Consolidated cash flow account Consolidate financial statement under operating segments Geographical information Information on surety of loan, borrowing or guarantee granted by the issuer or its subsidiary Loans and borrowings of Information on borrowings granted and received Information on principles adopted during preparation of the financial statement particularly information on amendments to principles being applied in accounting policy Principles of accounting Principles of consolidation Additional financial information Weighted average number of shares Weighted average number of shares for consolidated financial statement Weighted average number of shares for separate financial statement Exchange rates used to convert selected financial data Consolidated financial statements Adjustment of comparative data Analysis of financial results achieved by Macroeconomic situation in the first quarter 2016 in Poland Areas where operates Financial results Performance of the forecast of consolidated financial results Revenues on sales and clarifications concerning their seasonal nature Analysis of financial position Significant events that took place after 31 st March Proceeding before the court, arbitration court or public authority Information on conclusion of important transactions with related entities by the issuer or its subsidiary Information on the issue, buyout and repayment of non equity and capital securities Shares and shareholders Share capital Shareholding and changes in the structure of important shareholders Shareholding and changes in ownership structure of persons in management and supervision Dividend Declaration of payment of dividend from the profit in Other significant information for the assessment of personnel, property and financial situation, financial result and their changes and significant information for the assessment of possibilities of the issuer to perform its obligations Factors that in opinion of Management Board will have the influence on results to be achieved during at least of one following quarter Risks and threats

3 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 17. Enclosure: Separate financial Statement of financial position of parent entity - Apator SA Information on amendments to contingent liabilities or contingent assets that have occurred since the end of the recent financial year (off balance sheet items) of parent entity - Apator SA Financial statement of comprehensive income of parent entity- Apator SA Financial statement of changes in equity of parent entity - Apator SA Cash flow account of parent entity - Apator SA Information on adjustments due to provisions, provision and assets due to deferred income tax mentioned in accounting act, value of elements of assets write down made

4 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 1. Selected financial data with essential items of condensed financial statement (also converted to Euro) presenting cumulative data in all quarters of current and recent quarters of financial year 4 in thousands of PLN in thousands of EUR current period previous period current period previous period Consolidated financial statement I Q 2016 I Q 2015 I Q 2016 I Q 2015 Sales revenues of products, goods and materials Profit (loss) from operating activity EBITDA Gross profit (loss) Net profit (loss) Net profit (loss) for shareholders of parent entity in Net profit (loss) for non-controlling interest Weighted average number of shares Net profit (loss) per ordinary share [PLN/ share]: 0,45 0,56 0,10 0,13 Cash flow from operating activity Cash flow from investing activity (13 934) (33 945) (3 264) (8 302) Cash flow from financing activity 657 (11 608) 154 (2 839) Total cash flow (337) (26 323) (78) (6 438) Consolidated financial statement Total assets Fixed assets Current assets Equity with non-controlling interest Non-controlling interest Share capital Long-term liabilities and provisions Short-term liabilities and provisions Weighted average number of shares Book value per ordinary share [PLN/ share]: 14,69 14,27 3,44 3,35

5 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 2. Organization of Capital Group Business activity of The entities of focused their activity in electric machines industry in the following sector segments: metering business line: metering of water and heat, metering of electricity and gas automation of power grid business lines: switchgear, supervisory and control systems and ICT line other ( non-core ) business lines: control equipment and mining equipment 2.2 Makeup of and associated and co-subsidiaries as at 31 st March 2016 Parent entity of is Apator SA. The makeup of the group as at 31st March 2016 is shown below. 2.3 Entities subject to consolidation as at 31 st March 2016 parent entity: Apator SA, acting in line of switchgear and metering of electricity subsidiaries (directly and indirectly ) consolidated by full method: Segment Business line Company Headquarters Share in capital Relationships with Apator SA Metering Metering of electricity FAP Pafal SA Świdnica 100% Subsidiary of Apator SA Apator Powogaz SA Poznań 100% Subsidiary of Apator SA Metering of water and heat Apator Metra s. r. o. Apator Miitors ApS Sumperk (Czech Republic) Horsens (Denmark) 100% 100% Indirect subsidiary of Apator SA through Apator Powogaz SA Indirect share through Apator Powogaz SA Indirect subsidiary of Apator SA through Apator Powogaz SA Indirect share through Apator Powogaz SA

6 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial imeters sp. z o.o. Gdańsk 100% Indirect subsidiary of Apator SA through Apator Powogaz SA Indirect share through Apator Telemetria SA 6 TOV Apator Metroteks Kiev (Ukraine) 61% Apator Telemetria Sp. z o. o. Słupsk 51,5% Indirect subsidiary of Apator SA through Apator Powogaz SA Indirect share through Apator Powogaz SA Indirect subsidiary of Apator SA through Apator Powogaz SA Indirect share through Apator Powogaz SA Apator Metrix SA Tczew 100% Subsidiary of Apator SA Metering of gas GWi Ltd. Coventry (the United Kingdom) 100% Indirect subsidiary of Apator SA through Apator Metrix SA Indirect share through Apator Metrix SA Metering of electricity and gas Apator GmbH Berlin (Germany) 100% Subsidiary of Apator SA Automation of power grid operation ICT Apator Rector Sp. z o. o. Zielona Góra 100% Subsidiary of Apator SA Supervisory and control systems Apator Elkomtech SA Łódź 100% Subsidiary of Apator SA Switchgear line Apator GmbH Berlin (Germany) 100% Subsidiary of Apator SA Non-core Mining line Apator Mining Sp. z o. o. Katowice 100% Subsidiary of Apator SA Control line Apator Control Sp. z o. o. Toruń 100% Subsidiary of Apator SA entities jointly controlled and evaluated by equity method: Segment Business line Company Headquarters Share in capital Relationships with Apator SA Metering Metering of water and heat ZAO Teplovodomer Mytishi (Russia) 50% Indirect jointly controlled by Apator SA through Apator Powogaz SA Indirect share through Apator Powogaz SA Metering of gas INDA d.o.o. Ljubljana (Slovenia) 35% Indirect jointly controlled by Apator SA through Apator Metrix SA 3. Changes in the structure of capital group in the first quarter 2016 In the first quarter 2016 i.e. on 29 th March 2016 joint controlled entity - OOO Apator Electro with headquarters in Moscow was liquidated (the motion for liquidation was submitted on 24 th December 2015). However, the changes in the structure of entity including merger, take over or sale of entities of the capital group, long-term investments, split, restructuring and discontinue of activity have not occurred.

7 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial In the first quarter 2016 some changes occurred in the makeup of Management Board of Apator SA. On 18 th February 2016, Supervisory Board of Apator SA made the decision, effectively 22 nd February 2016 to appoint Piotr Dobrowolski the Member of Management Board. Further to the above since 22 nd February 2016 Management Board of Apator SA operates in three person makeup: Andrzej Szostak President of Management Board, Piotr Nowak Member of Management Board, Piotr Dobrowolski Member of Management Board 7 On 25 th February 2016 the President of Management Board of Apator SA Andrzej Szostak announced that he would not stand for the candidate to Management Board of Apator SA for the next tenure that will commence on 14 th June Consolidated financial statement of Consolidated and separated financial statements for the first quarter in 2016 have been prepared in accordance with International Accounting Standards (IAS / IFRS) and related to them interpretations announced in form of Regulations of European Commission and Regulation of Ministry of Finance dated 19 th February 2009 on current and regular information being transferred by the issuers of securities (uniform text; Dz.U. 2014, item 133) Interim financial statements (consolidated and separated ones of parent entity) for the period of first quarter 2016 have been constructed according to IAS 34 (interim financial reporting). Interim financial statements do not include all the information and disclosures that are required in annual financial statement and they should be read together with annual financial statement of Apator Capital Group as at 31 st December Consolidated statement of financial situation Day Fixed assets Intangible assets Goodwill of related entities Property, plant and equipment Investment properties Investments in associated entities consolidated by equity method Other long-term financial assets in other entities 89 2 Long -term receivables from other entities Long-term prepayments Deferred tax assets Current assets Inventories

8 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Day Trade receivables from related entities from other entities Current tax assets Receivables due to other taxes (excluding income tax) and other similar charges Other short-term receivables from related entities from other entities Other short-term financial assets in other entities Cash and cash equivalents Short-term prepayments TOTAL ASSETS Day Equity Equity for shareholders of parent entity Share capital Other capitals Reserve of remeasurements of defined benefit plans (58) (58) Capital from evaluation of hedging transactions and exchange differences from consolidation (3 958) (2 986) Undistributed financial result undistributed result from previous years result of current period write-offs from net profit in the financial year (negative value) (8 852) (8 852) Non-controlling interest Liabilities Long-term liabilities and provisions Long-term loans and borrowings from other entities

9 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Day Long-term liabilities towards other entities Deferred income tax liabilities Long-term liabilities due to employee benefits Other long-term provisions Short-term liabilities and provisions Short-term loans and borrowings from other entities Trade liabilities towards related entities towards other entities Current tax liabilities Liabilities due to other taxes (excluding income tax) and other similar charges Other short-term liabilities towards related entities towards other entities Short-term liabilities due to employee benefits Other short-term provisions TOTAL LIABILITIES Information concerning changes in contingent liabilities or assets that occurred since the end of the last financial year (off balance sheet items) of Day Contingent receivables Contingent receivables due from other entities Contingent liabilities Contingent liabilities connected with related entities due to guaranties and warranties granted to related entities other Contingent liabilities due to other entities

10 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Day due to guaranties and warranties granted Other off-balance-sheet items Fixed assets leased Ordinary mortgage Bail mortgage Pledge on assets Assignment of receivables Blank bills of exchange Other - compulsory mortgage Total off-balance-sheet items Additionally the Group has established the following hedging of the repayment of liabilities to the bank: hedging of the repayment of receivables by silent assignment min. 30% of all the turnover of Apator S.A., assignment of the rights from insurance contract of the property of Apator SA located in Ostaszewo as the hedging of long-term loan bail deposit in currency and in amount specified in guarantee issued by Raiffeisen Bank Polska SA in case of failure of other hedging by Apator SA, hedging the repayment of the loans in Bank Handlowy w Warszawie SA by assignment of receivables, power of attorney to the cash on current account in Raiffeisen Bank Polska SA leaded for Apator SA registered pledge on tangible fixed assets of Apator SA to maximum hedging amount of PLN 15,64 m with the assignment of rights from insurance contract pledge on shares of Apator SA in amount of 150% the limit used for guarantees in Raiffeisen Bank Polska SA, minimum value of the pledge is PLN 10,6 m hedging of bank guarantee of Apator S.A. 5 pieces of in promissory notes (each to the amount of PLN 9,5m but not more than PLN 9,5 m in total) and hedging of insurance guarantee of 5 pieces of in blanco promissory notes, hedging of the repayment of liabilities due to lease contracts concluded by Apator SA of 30 pieces of promissory notes (maximum amount of the liabilities as at 31 st March 2016 is PLN 0, 8 m). registered pledge on securities of Apator S.A. being in possession of Apator Mining Sp.z o.o. to maximum hedging amount of PLN 60 m, hedging of the repayment of long-term loan by registered pledge for shares of Apator Elkomtech S.A. to maximum hedging amount of PLN 98,4 m, assignment of rights from insurance contract of the property of Apator Mining Sp.z o.o. located in Pszów, assignment of rights from insurance contract of the current assets of Apator Mining Sp.z o.o. assignment of rights from insurance contract of the property of Apator Powogaz S.A. located in Poznań, assignment of rights from insurance contract of the property of Apator Metra located in Czech Republic,

11 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial registered pledge on inventory of manufacturing in progress and materials of FAP PAFAL S.A., assignment of rights from insurance contract of the property of FAP Pafal S.A. located in Świdnica, assignment of rights from insurance contract of the current assets of FAP Pafal S.A. (it concerns the inventory of manufacturing in progress and materials), power of attorney for the disposal of the cash collected on bank account of FAP Pafal S.A., hedging of the loan on current account of FAP Pafal S.A. by in blanco promissory note, hedging of bank guarantee of proper performance of the contract FAP Pafal S.A. by in blanco promissory note. assignment of rights from insurance contract of hedging the current assets of Apator Control Sp.z o.o., 11 Based on the above described hedging of performance of bank contracts at the end of March 2016, the entities of declared to subject to the enforcement to the total amount of PLN 560,2 m. The declarations regard loan contracts and bank guarantee contracts contracts of derivatives. The declarations submitted refer to maximum amounts of liabilities of entities extended by bank charges.

12 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Consolidated financial statement of comprehensive income 12 Period Sales revenues Sales revenues of products and services to related entities to other entities Sales revenues of goods and materials to related entities to other entities Cost of goods sold ( ) ( ) Cost of products and services sold ( ) ( ) - to related entities (1 733) (4 958) - to other entities ( ) ( ) Cost of goods and materials sold (9 578) (9 799) - to related entities (40) (219) - to other entities (9 538) (9 580) Gross profit (loss) on sales Selling costs (8 167) (8 265) Overheads (24 837) (23 493) Profit (loss) on sales Other operating revenues (costs), including: (38) 409 Result on sales and liquidation of property plant and equipment and intangibles Result on revaluation of non financial current assets (622) (26) Result on other operating activity Share in profits of entities consolidated by equity method Profit (loss) on operating activity Financial revenues (costs), including: (1 324) (160) Interest on loans and borrowings (1 126) (1 077) Result on other interest (36) 39 Result on bills of exchange (2) 1 Result on exchange differences (687) (1 721) Result on currency transactions Result on revaluation of financial current assets

13 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Period Other financial revenues (costs) (269) (305) Profit (loss) before tax Current income tax (4 288) (3 683) Deferred income tax 615 (194) 13 Net profit (loss) Other comprehensive income Other net comprehensive income (960) Items that can be reclassified in the future: Trade differences of foreign entities (213) (203) Net result on hedging accounting including tax effect (747) Comprehensive income in total Net profit (loss), including shareholders of parent company non-controlling interest Comprehensive income in total, including: shareholders of parent company non-controlling interest Period Profit on operating activity Amortisation and depreciation EBITDA

14 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Consolidated financial statement of changes in equity CAPITAL FOR THE SHAREHOLDERS OF PARENT ENTITY Share capital Other capitals Reserve of remeasurements of defined benefit plans Capital on valuation of hedging transactions and exchange differences from consolidation Undistributed financial result TOTAL Non-controlling interest TOTAL EQUITY Balance as at (58) (2 986) Changes in equity since till Comprehensive income: Net profit since till Other comprehensive income: Items that can be reclassified to financial result in the future: Net result on hedging accounting including tax effect (747) - (747) - (747) Net exchange differences translated from financial statement to the currency of presentation (225) - (225) 12 (213) Comprehensive income since till (972) Transactions with shareholders recognized directly in equity Dividends (160) (160) Total transactions with shareholders since till (160) (160) Balance as at (58) (3 958)

15 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 15 CAPITAL FOR THE SHAREHOLDERS OF PARENT ENTITY Share capital Other capitals Reserve of remeasurements of defined benefit plans Capital on valuation of hedging transactions and exchange differences from consolidation Undistributed financial result TOTAL Noncontrolling interest TOTAL EQUITY Balance as at (2 824) Changes in equity since till Comprehensive income: Net profit since till Other comprehensive income: Items that can be reclassified to financial result in the future: Net result on hedging accounting including tax effect Net exchange differences translated from financial statement to the currency of presentation (196) - (196) (7) (203) Comprehensive income since till Transactions with shareholders recognized directly in equity Consolidation of subsidiary (3 148) (3 148) - (3 148) Total transactions with shareholders since till (3 148) (3 148) - (3 148) Balance as at

16 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Consolidated cash flow account Period Cash flow from operating activity Profit before tax (continued operation) Korekty/ Adjustments Amortization of intangible assets Depreciation of property, plant and equipment (Profit) loss on sales of tangible fixed assets and intangibles (277) (272) (Profit) loss from evaluation of investment properties at fair value - (1 001) (Profits) losses from the change of fair value of derivatives (579) - Cost of interest Share in (profits) losses of associated entities (239) (643) Taking control over subsidiary (negative goodwill) Interest received (111) (161) Other adjustments (608) (860) Cash from operating activity before taking into consideration changes in current assets Change in inventories (5 681) (4 936) Change in receivables (5 832) Change in liabilities Change in provisions Change in accruals and prepayments (3 389) (5 353) Other adjustments (272) 263 Cash generated by operating activity Income tax paid (5 946) (10 010) Net cash from operating activity Cash flow from investing activity Outflows for the purchase of intangibles (2 909) (1 196) Outflows for the purchase of tangible fixed assets (4 976) (5 487)

17 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Period Inflows from the sales of tangible fixed assets Outflows for the purchase of financial assets available for sales (6 577) - Outflows for the purchase of financial assets held for trading (77) 733 Inflows from sales of financial assets held for trading Interest received Other inflows(outflows) (1 495) (28 826) Net cash from investing activity (13 934) (33 945) Cash flow from financing activity Inflows from loans and borrowings taken Repayment of loans and borrowings (3 487) (18 329) Interest (1 218) (1 163) Dividends paid (141) - Repayment of liabilities under finance lease contracts (1 968) (1 033) Other inflows(outflows) (92) (82) Net cash from financing activity 657 (11 608) Increase(decrease) of net cash and cash equivalents (337) (26 323) Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Consolidate financial statement under operating segments Activity of is focused on two essential segments: metering power grid automation Activity carried out beyond segments defined in the Strategy of the Group has been presented as other one. Current classification of operating segments is pursuant to updated strategy of the Group for the period Following the identification of segments changed the comparative period was transformed. Metering Segment Power grid automation Other ("noncore") Unallocated items Total

18 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Financial results of operating segments since till Sales revenues Cost of goods sold Gross profit on sales Selling costs Overheads Profit on sales (526) (1 219) Other operating revenues (costs) (36) (32) 30 - (38) Share in profits of associated entities Profit from operating activity (496) (1 219) Amortization and depreciation EBITDA (163) (1 219) Financial results of operating segments for the period since till Sales revenues Cost of goods sold Gross profit on sales Selling costs Overheads Profit on sales (943) Other operating revenues (costs) 491 (44) (38) Share in profits of associated entities Profit on operating activity (23) (943) Amortization and depreciation EBITDA (943) Geographical information delimited the following areas of activity: Home domestic sales, EU sales carried out in the countries of European Union, Export sales carried out in other countries Home Export EU Total

19 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 19 Sales revenues in geographical segments since till Total revenues Sales outside Sales to related entities Sales revenues in geographical segments since till Total revenues Sales outside Sales to related entities Information on surety of loan, borrowing or guarantee granted by the issuer or its subsidiary In the first quarter 2016 the Issuer and its subsidiary did not grant any surety of the loan, borrowings and guarantees. On 31 st March 2016 the status of sureties of loans, borrowings and guarantees granted in previous periods was as follows: 1) Subsidiary of Apator Powogaz SA : surety for bill of exchange hedging the insurance guarantee of remedy of defects by subsidiary - Apator Telemetria Sp. z o.o. for the total amount of PLN for Zarząd Gospodarki Komunalnej in Jerzyce Sp. z o.o. Validity of surety expired on 13 th January surety of the loan taken in ING Bank Śląski SA for subsidiary Apator Telemetria sp. z o.o. to the amount of PLN 3,5 m for the period until ) Subsidiary - Apator Metrix SA guarantee granted to subsidiary - George Wilson Industries Ltd (GWi) to maximum amount of GBP 6,7 m i.e. PLN 35,4 m for the period of 3 years with the option to be prolonged for the next 4 years. The surety is the hedging of the cooperation between GWi and National Grid Gas Plc in respect of repairs, overhauls and supplies of gas meters and regulators. granted the guarantee BI Group PLC for the repayment of the loan taken by GWi in amount of GBP 1,7 m i.e. PLN 9,6 m for the period until ) Apator SA the guarantee of proper performance of the contract valid till for the amount of PLN by the subsidiary Apator Rector sp. z o.o. for RWE Group Business Services Polska sp. z o.o. granted by Raiffeisen Bank SA. The commission due to above guarantee is equal in value of the costs incurred towards the bank extended by 5% of the amount of guarantee granted. guarantee for National Industry Group for the amount of GBP 4,5 m (i.e. PLN 25,5 m) hedging the repayment by Apator Metrix SA of the payment postponed for shares in GWi. Guarantee was granted until The commission to guarantee granted is 0.8% annually.

20 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial surety to the amount of PLN 23 m for subsidiary Apator Rector sp. z o.o., concerning the repayment of loans taken in Bank Millennium is as follows: - PLN 6 m due to loan contract on current account until PLN 17 m due to revolving loan contract until The commission due to guarantee granted is 0,8% per annum for every commenced quarter of the year Loans and borrowings of Day Description Long term loans and borrowings Short-term loans and borrowings Loans and borrowings in total, including: In the first quarter 2016 the issuer and its subsidiaries did not conclude any important loan contracts. As at 31 st March 2016 the status of important loan contracts concluded in previous periods is as follows: 1) Bank Handlowy w Warszawie SA granted Apator SA, the long-term loan in amount of PLN for financing the acquisition 100% of the shares of Elkomtech SA. The loan has been granted for the period of 5 years and it has been repaying since 31 st December 2014 in nine semi-annual capital instalments: the first instalment was paid on 31 st December 2014 in amount of PLN the instalments from second to eight to be paid at the end of June and December in amount of PLN the ninth instalment to be paid on 31 st December 2018 in amount of PLN As at 31 st March 2016 the amount of PLN remained to be repaid. The interest is charged and its payment is being made in quarterly periods. Under the contract of long-term loan the following hedging has been established: registered pledge to the highest insurance amount of PLN 60 m established for 1,8 million of own shares of Apator SA being in possession of subsidiary - Apator Mining sp. z o.o., registered pledge for 100% shares of Elkomtech, registered pledge for fixed assets with the assignment of rights from insurance contract, mortgage to the amount of PLN 40 m for the property of Apator SA located in Ostaszewo with the assignment of rights from insurance contract, Apator SA has made the statement of subject to enforcement to the highest amount of PLN in respect of its liabilities resulting of the long-term loan contract. 2) Apator Metrix SA and Bank Millenium SA concluded the long-term loan contract (investment) for the amount of PLN 15 m. The loan was granted for the period till The interest of the loan has been established pursuant to variable interest rate equal WIBOR rate for three-month deposits extended by the margin of the bank. The repayment of the loan is hedged by bail mortgage to the amount of PLN 23, 3 m for the property located in Tczew and alienation of fixed assets of total value PLN 2, 4 m. As at 31 st March 2016 the status of the loan granted is PLN 9,8 m.

21 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 21 3) Apator Powogaz SA and ING Bank Śląski SA on 5 th May 2015 concluded the contract of long-term refinancing loan for the amount of EUR (PLN 3,3 m pursuant to the purchase exchange rate of dominant bank dated 31 st March 2016 equal 1 EUR = 4,1472 PLN. The loan was granted until 29 th December The interest on the loan has been established based on variable EURIBOR IM interest rate extended by margin of the bank per annum. As at 31 st March 2016 the status of the loan granted is PLN 2,2 m 4) Apator Powogaz SA has taken the long-term loan in ING Bank Śląski for the amount of PLN 27, 5 m for the financing the acquisition of Mitors ApS., the payment for contribution in kind of Fellows s.c. and purchased shares in imeters sp. z o.o. by Apator Telemetria sp. z o.o. - the subsidiary of Apator Powogaz SA. The loan has been granted till 30 th November 2022 and it has been repaying in monthly instalments starting from The interest on the loan is being established pursuant to variable interest rate equal WIBOR 1M extended by margin of the bank that value depends on net debt/ebidta ratio and commission. As at 31 st March 2016 the status of the loan granted is PLN 26,2 m. Under the loan contract the following hedging has been established: mortgage, initially in amount of PLN 76,8 m of the amount of the debt used for the property of the Company located in Poznań with the assignment of rights from insurance policy that based under the annex of the contract concluded after reporting period i.e. 19 th April 2016 was decreased to PLN 33 m. power of attorney to dispose the financial means collected on all current and future open accounts of the Bank. Further to the liabilities resulting out of the long-term loan contract, the Company declared to subject to enforcement to the amount of PLN 96 m Information on borrowings granted and received In the first quarter 2016 the entities of did not grant or receive the borrowings from the entities outside. In the capital group in the first quarter 2016 one borrowing was granted Apator SA by subsidiary Apator Elkomtech SA on 28 th January 2016 in amount of PLN 3 m. The borrowing was granted for the period until at the interest rate equal the sum of WIBOR 3M rate and margin of value 1,3% per annum. The interest was paid 29 th February 2016 and the borrowing was repaid on 14 th March As at 31 st March 2016 the status of borrowings granted and received in previous period is as follow: 1) Apator Rector sp. z o.o. has the borrowing from Apator SA in amount of PLN 9 m, the interest is pursuant to variable interest rate defined as the sum of WIBOR 1M rate (for single months deposits) and margin in value of 0,9% annually. The interest is calculated for single months. The maturity date is on 27 th June As at 31 st March 2016 the total value of the borrowings used was PLN ) Apator Metrix SA has the receivables due to borrowings granted its subsidiary GWi Ltd: Reason Borrowing granted for current activity of the Amount of borrowing Date the borrowing was granted Status as at Currency Maturity date GBP 2016 Interest rate 3 p.p above the base rate of Barclays Bank PLC

22 Reason company consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Amount of borrowing Date the borrowing was granted Status as at Currency Maturity date Interest rate 22 Borrowing granted for current activity of the company Borrowing granted for current activity of the company Borrowing granted for current activity of the company Borrowing granted for current activity of the company GBP GBP GBP GBP 2016 Total GBP 3 p.p above the base rate of Barclays Bank PLC 3 p.p above the base rate of Barclays Bank PLC 3 p.p above the base rate of Barclays Bank PLC 3 p.p above the base rate of Barclays Bank PLC As at the borrowing granted GWI was in total GBP (i.e. PLN ) according to purchase exchange rate of dominant bank dated 31 st March 2016 equal (1 GBP = PLN 5.236). As at the interest was paid. 3) Apator Powogaz SA has the receivables due to borrowings granted its subsidiary - Apator Miitors ApS: Reason Borrowing granted to finance the repayment of bonds Borrowing granted for current activity of the company Borrowing granted for current activity of the company Amount of the borrowing Date the borrowing was granted Status as at (interest included) Currency Maturity date Interest rate ,27 EUR % ,63 EUR % ,25 EUR % Total ,15 EUR As at the borrowing granted Apator Miitors was in total EUR (i.e. PLN 3,7 m pursuant to average exchange rate of the National Bank of Poland dated 31 st March 2016 equal 1EUR = PLN 4,2684). Interest is paid at the end of every calendar year. 4) Apator Metrix SA has got the borrowing from Apator SA in amount of PLN 2 m for the period until at the interest rate equal the sum of WIBOR 1M rate and margin in amount of 0,9% annually. Interest is calculated every month. 5) GWi has got the borrowing in amount of GBP 1,7 m (i.e. PLN 9,6 m) taken from BI Group PLC. The company repaid the first part of the borrowing in amount of GBP 0,1 m until , the repayment of other parts will be made from current assets of GWi pursuant to the following schedule: - not later than 30 th November 2016: GBP 0,1 m, - not later than 30 th November 2017: GBP 0,6 m, - not later than 30 th November 2018 : GBP 0,9 m.

23 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 5. Information on principles adopted during preparation of the financial statement particularly information on amendments to principles being applied in accounting policy. 5.1 Principles of accounting Since 2005 pursuant to the obligation imposed by the amendment to the Accounting Act, consolidated financial statements of are prepared pursuant to International Financial Reporting Standards. At the same time there was the possibility given by the Accounting Act that General Shareholders Meeting of Apator S.A. and entities of adopted the resolutions that financial statement of entities in would be prepared pursuant to MSSF/MSR (both separate and consolidated statements). Financial statements (separated and consolidated) at 31 st March 2016 were prepared according to International Financial Reporting Standards (IFRS/IAS) and interpretations related to them announced in the form of Regulations of the European Commission, in Polish zloty, due to the fact that Polish zloty is the main currency in which economic operations are performed in Capital Group of Apator. Financial statements of foreign entities included in Apator Capital Group were calculated into the reporting currency according to rules resulting from International Accounting Standard No. 21. Financial statements were prepared assuming that the business activities of the entities of will be continued in the foreseeable future. As of the day of preparation of the consolidated financial statement there are no circumstances indicating the threat to business activity of the entities of to be continued. Financial statements were prepared according to historical cost accounting convention except the valuation of some fixed assets (investment properties) and financial instruments (derivatives) that are valuated at fair value. Detailed accounting principles used by were presented in RS 2015 consolidated financial statement. 5.2 Principles of consolidation Consolidated financial statement of the Capital Group includes the data of APATOR SA - parent company and its subsidiaries. Related entities use uniform accounting principles binding in the parent company and they use homogenous form and scope of separate and consolidated financial statements that are the bases for consolidation in the capital group. Consolidated financial statement of the capital group is prepared for balance day and for the financial period, specified for separated financial statement of the parent company. For the day of purchase, the assets and liabilities of the entity being purchased are valuated at their fair market value. The excess of the purchase price above the fair market value possible to identify the net assets of the entity acquired is recognized as a goodwill. If the purchase price of the company is lower than the fair market value of the identifiable taken over net assets of the company, the difference is recognized as a profit in the income statement for the period in which the purchase took place. The share of non-controlling interest is presented in an appropriate proportion of fair market value of assets, assets and capitals. Financial results of entities purchased or sold during the year are recognized in the consolidated statement in accordance with the date of their purchase or sale. The method of consolidation was used while preparing the consolidated financial statement by adding individual positions of reports, exclusions and other adjustments. Exclusions include: 23

24 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial - value of shares of subsidiaries held by the parent entity quoted in purchase price; 24 - mutual receivables and liabilities and other similar settlements of similar nature of consolidated entities; - profit and costs resulted from economic operations between consolidated entities; - profit and costs resulted from economic operations between consolidated entities included in the value of consolidated assets; - dividends calculated or paid by consolidated entities to other consolidated entities. 6. Additional financial information 6.1 Weighted average number of shares Book value per share was calculated by division the equities by weighted average number of shares, but profit per share was calculated by division of net profit from activity continued by weighted average number of shares Weighted average number of shares for consolidated financial statement Weighted average number of shares as at 31 st March 2016 and 31 st December 2015 is and it includes the number of shares being in possession of the subsidiary Weighted average number of shares for separate financial statement Weighted average number of shares as at 31 st March 2016 and 31 st December 2015 is and it is equal number of shares. 6.2 Exchange rates used to convert selected financial data Items of assets and liabilities and items of cash flow account according to average exchange rate binding on the day of preparation of the financial statement. Items of income statement according to Eur average exchange rate is the arithmetic mean of average of exchange rates announced by the National Bank of Poland binding on the last day of the month. I Q I Q 2015 Eur / PLN Eur / PLN Eur / PLN Comprehensive income statement 4,3559 X 4,1489 Cash flow statement 4,2684 X 4,0890 Statement of financial position 4,2684 4,2615 X 6.3 Information on adjustments due to provisions, provision and assets due to deferred income tax mentioned in accounting act, write downs of the value of elements of assets.

25 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Consolidated financial statements Deferred income tax assets and income tax provision Status at the beginning of the period Net exchange differences translated from financial statement to currency presented Charging the result due to the change in temporary differences and tax loss Increase (decrease) of equity due to the change of temporary differences Status at the end of the period Deferred income tax since till Deferred tax assets (1) Provisions for employee benefits (1) Provisions for bonuses Provisions for margins of revenues Provisions for warranty repairs Provisions for future costs Salaries and wages, insurance premiums unpaid Property write downs, plant and equipment and intangibles Inventory write downs 951 (3) Receivables write downs Valuation at fair value - derivatives Valuation at fair value derivatives at interest rate 31 - (2) Valuation at fair value-other financial assets Tax loss Tax relief due to operation in Pomeranian Special Economic Zone (914) Balance amortization apart to tax one Internal transactions Differences due to finance lease contracts Temporary differences due to long-term contracts (construction contracts) 99 - (99) - - Other costs not taxed in the period, including: Deferred income tax liabilities (158) Valuation at fair value - property

26 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 26 Status at the beginning of the period Net exchange differences translated from financial statement to currency presented Charging the result due to the change in temporary differences and tax loss Increase (decrease) of equity due to the change of temporary differences Status at the end of the period Valuation at fair value - derivatives (158) 482 Valuation at fair value - derivatives at interest rate 2 - (2) - - Valuation at fair value-other financial assets (15) Balance amortization apart to tax one Excess of nominal value over book value of apportionment Differences due to finance lease contracts Temporary differences due to long-term contracts (construction contracts) Other revenues not taxed in the period, including: Total X (6) X Deferred tax assets X X X Deferred income tax liabilities X X X 7 994

27 Effective tax rate: consolidated financial statement for the first quarter 2016 of with condensed quarterly financial 27 Period Profit (loss) before tax: Income tax calculated according to binding tax rate: Adjustments 285 (18) Possible tax on tax free revenues (permanent differences) (98) (173) Tax from non-deductible expenses (permanent differences) Tax on internal transactions in the group (permanent differences) 218 (257) Tax on items not included in financial result of the period (45) 32 Adjustment to tax loss from past years - (63) Other deductions (29) (50) Income tax specified in comprehensive income statement Effective tax rate 21,08% 18,86% Non-current & current assets write downs: Status at the beginning of the period Change due to take over/ exclusion of entity Change in the period (increase "+", decrease "-") Net exchange differences translated from financial statement to the currency presented Status at the end of the period Goodwill of subordinated entities Property, plant and equipment Other financial assets Inventories (15) Receivables Total (15)

28 consolidated financial statement for the first quarter 2016 of with condensed quarterly financial Provisions for liabilities: 28 PROVISIONS FOR LIABILITIES BENEFITS FOR EMPLOYEES OTHER PROVISIONS Severance payments, jubilee awards (actuary) Restructuring provision (benefits) Bonuses Leaves Warranties Others Provision for unrealized margin on sales to associate Total Value of provisions at the beginning of the period Provisions raised during the period Provisions reversed during the period (12) (12) Provisions used during the period - (35) (1 221) (32) (15) (5) - (1 308) Remeasurement of provision recognized in other comprehensive income Net exchange differences arising on the conversion of the financial statements to currency of presentation (5) Value of provisions at the end of the period, including: long term provisions short term provisions