MERCOR SA Capital Group Independent Statutory Auditor's Opinion and Report Financial year ending on 31 March 2014

Transcription

1 MERCOR SA Capital Group Independent Statutory Auditor's Opinion and Report Financial year ending on 31 March 2014 The opinion has 3 pages The supplementary report has 14 pages Independent statutory auditor's opinion and supplementary report from the audit of the consolidated financial statements for the financial year ending on 31 March 2014 INDEPENDENT STATUTORY AUDITOR'S OPINION INDEPENDENT STATUTORY AUDITOR'S OPINION To the General Meeting of MERCOR SA Opinion on the consolidated financial statements We have audited the attached consolidated financial statements of the Capital Group, in which MERCOR SA based in Gdańsk, ul. Grzegorza z Sanoka 2, acts as the Parent Company (the Capital Group ). The consolidated financial statements include consolidated statement of financial position prepared as at 31 March 2014, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated cash flow account for the financial year ending on that day, as well as additional explanatory notes describing significant accounting policies and other explanatory information. Responsibilities of the Management Board and the Supervisory Board The Management Board of the Parent Company is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and other applicable provisions of law, as well as for the preparation of the report on the activities. Furthermore, the Management Board of the Parent Company is also responsible for such internal control as the Management Board determine is necessary to ensure that the consolidated financial statements are free from misstatement, whether due to fraud or error. Pursuant to the Accounting Act of 29 September 1994 (Journal of Laws of 2013, item 330, as amended) (the Accounting Act ), the Management Board of the Parent Company and the members of the Supervisory Board shall ensure that the consolidated financial statements and the report on the activities fulfil the requirements stipulated therein. Responsibility of the Statutory Auditor Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit of the consolidated financial statements in accordance with Chapter 7 of the Accounting Act, national auditing standards issued by the National Chamber of Statutory Auditors in Poland, as well as in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements

2 and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management Board of the Parent Company, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the attached consolidated financial statements of MERCOR SA Capital Group present fairly and clearly the financial position of the Capital Group as at 31 March 2014, the financial results and cash flows for the financial year ending on that day; the attached consolidated financial statements have been prepared, in all material respects, in accordance with International Financial Reporting Standards, as adopted by the European Union, and are consistent with the provisions of law imposed upon the Capital Group and affecting the contents of the consolidated financial statements. Other issues The consolidated financial statements of the Capital Group for the financial year ending on 31 March 2013 have been audited by another entity authorised to conduct the audit. This entity gave an unqualified opinion on these consolidated financial statements on 19 June Detailed information about other legal requirements and regulations Report on the activities of the Capital Group Pursuant to the requirements set out in the Accounting Act, we hereby declare that the report on the activities of MERCOR SA Capital Group includes, in all material respects, information referred to in Article 49 of the Accounting Act and in Regulation of the Minister for Finance of 19 February 2009 on current and periodic information provided by issuers of securities and on conditions under which information required by legal regulations of a third country may be recognised as equivalent (Journal of Laws of 2014, item 133) and that such information is consistent with information in the consolidated financial statements. On behalf of KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. Licence No ul. Chłodna Warsaw

3 Zbigniew Libera Key Statutory Auditor Licence No Limited partner, Plenipotentiary 9 June 2014 FINANCIAL STATEMENTS INDEPENDENT STATUTORY AUDITOR'S REPORT MERCOR SA Capital Group Supplementary report from the audit of the consolidated financial statements Financial year ending on 31 March 2014 The supplementary report has 14 pages Supplementary report from the audit of the consolidated financial statements for the financial year ending on 31 March 2014 Contents 1. General part 1.1. Identification data of the Capital Group Name of the Capital Group Registered office of the Parent Company Parent Company's registration in the National Court Register Manager of the Parent Company 1.2. Information about entities comprising the Capital Group Entities covered by the consolidated financial statements 1.3. Identification data of the key statutory auditor and the entity authorised to audit financial statements Identification data of the key statutory auditor Identification data of the authorised entity 1.4. Information on the consolidated financial statements for the previous financial year 1.5. The scope of works and liability 1.6. Information about the audited financial statements of the entities subject to consolidation Parent Company Other entities subject to consolidation 2. Financial analysis of the Capital Group 2.1. General analysis of the consolidated financial statements

4 Consolidated statement of financial position Consolidated statement of comprehensive income 2.2. Selected financial data 3. Detailed part 3.1. Accounting policies 3.2. The basis for preparing the consolidated financial statements 3.3. Consolidation method 3.4. Goodwill arising out of consolidation 3.5. Consolidation of the capital and calculation of non-controlling interest 3.6. Transactions excluded from consolidation 3.7. Additional information to the consolidated financial statements 3.8. Report on the activities of the Capital Group 1. General part 1.1. Identification data of the Capital Group Name of the Capital Group MERCOR SA Capital Group Registered office of the Parent Company ul. Grzegorza z Sanoka Gdańsk Parent Company's registration in the National Court Register Registry court: District Court Gdańsk-Północ in Gdańsk, 7th Commercial Division of the National Court Register Date: 21 September 2004 Registry number: KRS Share capital as at the end of the reporting period: PLN 3,914, Manager of the Parent Company The Management Board of the Parent Company acts as the manager of the entity. As at 31 March 2014, the Management Board of the Company comprised the following persons: Mr Krzysztof Krempeć The Chairman of the Management Board, Mr Grzegorz Lisewski The First Deputy Chairman of the Management Board Information about entities comprising the Capital Group Entities covered by the consolidated financial statements As at 31 March 2014, the following entities comprising the Capital Group were subject to consolidation: Parent Company: MERCOR SA. Subsidiaries consolidated by the full method: Tecresa Protección Pasiva S.L., Mercor - Proof LLC, Mercor Ukraina Sp. z o.o.,

5 Mercor UA Sp. z o.o., Mercor Fire Protection Systems s.r.l., MHD 1 Sp. z o.o., MB1 Sp. z o.o. (formerly BEM Sp. z o.o.), Mercor HD Sp. z o.o., Mercor HD Spółka z ograniczoną odpowiedzialnością SKA (formerly Mercor HD MDI Sp. z o.o. SKA), Mercor Czech Republic s.r.o., Mercor Slovakia s.r.o., Mercor Hungaria Ltd., MCR Mercor HD Sp. z o.o. SKA (formerly Trinity Limited Partnerships Sp. z o.o. (SPV 25) SKA), MMS sp. z o.o. w likwidacji. The following subsidiaries were subject to consolidation for the first time in the financial year ending on 31 March 2014 due to fact of assuming control by the Parent Company: MCR Mercor HD Sp. z o.o. SKA (formerly Trinity Limited Partnerships Sp. z o.o. (SPV 25) SKA) an entity covered by the consolidated financial statements for the period between 16 September 2013 and 31 March 2014, Mercor Ukraina Sp. z o.o. an entity covered by the consolidated financial statements for the period between 15 October 2013 and 31 March 2014, Mercor Czech Republic s.r.o. an entity covered by the consolidated financial statements for the period between 4 September 2013 and 31 March 2014, Mercor Slovakia s.r.o. an entity covered by the consolidated financial statements for the period between 6 September 2013 and 31 March 2014, Mercor Hungaria Ltd. an entity covered by the consolidated financial statements for the period between 5 March 2014 and 31 March 2014, The following subsidiaries were subject to consolidation until the moment the Parent Company lost control: Hasil s.r.o. an entity covered by the consolidated financial statements for the period between 1 April 2013 and 16 December 2013, Hasil a.s an entity covered by the consolidated financial statements for the period between 1 April 2013 and 16 December Identification data of the key statutory auditor and the entity authorised to audit financial statements Identification data of the key statutory auditor Full name: Zbigniew Libera Licence No.: Identification data of the authorised entity Name: KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. Registered office: ul. Chłodna 51, Warsaw Registry number: KRS Registry court: District Court for the Capital City of Warsaw, 12th Commercial Division of the National Court Register NIP number:

6 KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. is entered in the list of entities authorised to audit financial statements that is kept by the National Chamber of Statutory Auditors under number Information on the consolidated financial statements for the previous financial year The consolidated financial statements for the financial year ending on 31 March 2013 have been audited by Deloitte Polska Spółka z ograniczoną odpowiedzialnością sp.k. An unqualified opinion on these statements has been given by the statutory auditor. The consolidated financial statements were approved on 30 September 2013 by the Annual General Meeting of the Parent Company. The consolidated financial statements were filed with the Registry Court on 15 October The scope of works and liability This report has been prepared for the General Meeting of MERCOR SA based in Gdańsk, ul. Grzegorza z Sanoka 2. It refers to the consolidated financial statements that include consolidated statement of financial position prepared as at 31 March 2014, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated cash flow account for the financial year ending on that day, as well as additional explanatory notes describing significant accounting policies and other explanatory information. The consolidated financial statements have been audited in accordance with the contract of 22 October 2013 that was entered into pursuant to resolution of the Supervisory Board of 12 October 2013 on the selection of an entity authorised to audit financial statements. The consolidated financial statements have been audited in accordance with Chapter 7 of the Accounting Act of 29 September 1994 (Journal of Laws of 2013, item 330, as amended) (the Accounting Act ), national auditing standards issued by the National Chamber of Statutory Auditors, as well as in accordance with International Standards on Auditing. The consolidated financial statements were audited at the entities comprising the Capital Group between 18 and 22 November 2013 and between 19 and 30 May The Management Board of the Parent Company is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and other applicable provisions of law, as well as for the preparation of the report on the activities. Our responsibility was to express an opinion on these consolidated financial statements and prepare the supplementary report on these consolidated financial statements based on our audit. On the day this report was issued, the Management Board of the Parent Company made a statement confirming that the attached consolidated financial statements were fair and clear and that there had been no events not disclosed in the consolidated financial statements that would significantly affect the data presented in the consolidated financial statements for the audited year. While the consolidated financial statements were being audited, the Management Board of the Parent Company made all statements, gave all explanations and provided all information requested by us, as well as made all the documents and information required to give the opinion and to prepare the report available to us.

7 There were no limitations whatsoever to the scope of works planned and carried out. The scope of the audit, as well as the method for conducting the audit, result from the engagement documentation that is stored at the registered office of the authorised entity. Both the key statutory auditor and the authorised entity are independent from the entities comprising the audited Capital Group within the meaning of Article 56(3) and (4) of the Act of 7 May 2009 on statutory auditors and their self-government organisation, entities authorised to audit financial statements and public supervision (Journal of Laws of 2009, No 77, item 649, as amended) Information about the audited financial statements of the entities subject to consolidation Parent Company Separate financial statements of the Parent Company for the financial year ending on 31 March 2014 were audited by KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k., i.e. by an entity authorised to audit financial statements (number 3546) and were given an unqualified opinion Other entities subject to consolidation Name of the entity Tecresa Protección Pasiva S.L. An entity authorised to conduct audit A day on which the reporting period ends Type of the opinion KPMG Auditores, S.L. 31/03/2014 audit in progress Mercor - Proof LLC OOO "AHKLTTPACT-AyflHT" 31/12/2013 audit in progress Mercor Ukraina Sp. zo.o. Mercor UA Sp. z o.o. Mercor Fire Protection Systems s.r.l MHD 1 Sp. z o.o. MB1 Sp. z o.o. (formerly BEM Sp. z o.o.) Mercor HD Sp. z o.o. KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. Mercor HD Spółka z ograniczoną odpowiedzialnością SKA (formerly Mercor HD MDI Sp. z o.o. SKA) Mercor Czech Republic s.r.o. Mercor Slovakia s.r.o. Mercor Hungaria Ltd. 31/12/2013 n/a 31/12/2013 n/a 31/12/2013 n/a 31/03/2014 n/a 31/03/2014 unqualified 31/03/2014 n/a 31/12/2013 n/a 31/03/2014 n/a 31/03/2014 n/a 31/03/2014 n/a

8 MCR Mercor HD Sp. z o.o. SKA (formerly Trinity Limited Partnerships Sp. z o.o. (SPV25) SKA) MMS sp. z o.o. w likwidacji 31/10/2013 n/a 31/12/2013 n/a 2. Financial analysis of the Capital Group 2.1. General analysis of the consolidated financial statements Consolidated statement of financial position Transformed data ASSETS 31/03/2014 % of 31/03/2013 % of PLN '000 assets PLN '000 assets Fixed assets Goodwill 39, , Other intangible assets 12, , Property, plant and equipment 60, , Long-term investments 11, Assets from deferred income 9, , tax Other long-term assets 8, , , , Current assets Inventory 19, , Receivables from deliveries and services on < 11 O Al\ and other receivables / D/foD.ZUj J 1 J Z.4 /1 Receivables from 6, , income tax Forward contracts Other current assets , Short-term investments 11, Cash and equivalents 112, , , , TOTAL ASSETS 368, , LIABILITIES Equity capital Transformed data 31/03/2014 % of 31/03/2013 % of PLN '000 liabilities PLN '000 liabilities Share capital 3, , Supplementary capital from sale of shares above 106, , their nominal value Reserve capital Capital from valuation of hedging transactions 4, , Currency translation differences on consolidation Retained profits 160, , Capital allocated to shareholders of the Parent 276, , Company

9 Non-controlling interest 4, , Total equity capital 281, , Long-term liabilities Long-term loans and credit 7, , Reserve for deferred tax Reserves for liabilities Liabilities from deliveries and services and other liabilities / o Other financial liabilities 14, , , , Short-term liabilities Short-term loans and credit 1, , Liabilities from deliveries and services , and other liabilities Forward transactions 31 Liability from income tax Reserves for liabilities 3, , Other financial liabilities 5, , , , TOTAL LIABILITIES 368, , Consolidated statement of comprehensive income Continued activities Sales revenue Own sales costs PLN ' ,28 (137,030) % of sales revenue transformed data PLN ' ,910 (141,952) % of sales revenue Gross profit on sales 62, , Other operating revenue Costs of sales General administrative costs Other operating costs 1,220 (23,739) (18,723) (6,463) ,230 (28,979) (14,078) (6,633) Profit on operating activities 15, , Financial revenue Financial costs Write-downs for goodwill 948 (2,428) (3,103) (57,349) Profit (loss) before tax 13, (40,439) 19.4 Income tax (5,510) 2.8 6, Net profit (loss) on continued activities 8, (33,507) 16.0 Discontinued activities Net profit (loss) on discontinued activities 5, (12,139) 5.8 Net profit (loss) 13, (45,646) 21.9 Allocated to: Shareholders of the Parent Company Non-controlling interest 11,571 2,144 (48,307) 2,661

10 Other total revenue Currency translation differences on the recalculation of financial statements of foreign entities Hedge accounting Other total net revenue Total revenue Allocated to: Shareholders of the Parent Company Non-controlling interest Profit (loss) per share: On continued activities: Ordinary Diluted (5,211) (5,211) 8,504 6,998 1,506 0,52 0, (306) 42 (264) 4.3 (45,910) (48,571) 2,661 (2,14) (2,14) On continued and discontinued activities Ordinary Diluted 0,88 0,88 (2,92) (2,92) 2.2. Selected financial data 1. Net profit margin on sales Net profit for financial year x 100% sales revenue 2. Return on equity Net profit for financial year x 100% equity - net profit for financial year 3. Receivables turnover ratio Average gross receivables from deliveries and services x 365 days Sales revenue 4. Debt margin liabilities x 100% Total liabilities 5. Liquidity ratio Current assets Short-term liabilities % negative value 5.0% negative value 202 days 257 days 23.8% 38.0% Sales revenue include revenue from the sales of products, goods and materials on continued activities. Average gross receivables from deliveries and services represent the arithmetic mean of receivables from deliveries and services as at the beginning and end of the reporting period, without taking account of write-downs for them. 3. Detailed part 3.1. Accounting policies The Parent Company maintains up-to-date documentation describing the applied accounting policies used in the Capital Group and adopted by the Management Board of the Parent Company.

11 The applied accounting policies can be found in the additional explanatory notes to the consolidated financial statements, as required by International Financial Reporting Standards adopted by the European Union. Due to the fact that not all the entities comprising the Capital Group apply the same accounting policies, which are consistent with the policies applied by the Parent Company, the financial statements prepared by these entities have been transformed appropriately, by bringing the data in line with the accounting principles applied by the Parent Company, in order to prepare the consolidated financial statements. Financial statements of the entities covered by the consolidated financial statements were prepared as at the end of the same reporting period as the financial statements of the Parent Company The basis for preparing the consolidated financial statements The consolidated financial statements of MERCOR SA Capital Group have been drawn up in accordance with International Financial Reporting Standards, as adopted by the European Union, and other applicable provisions of law. Consolidation documentation prepared pursuant to the requirements of Regulation of the Minister for Finance of 25 September 2009 on the detailed rules for the preparation of consolidated financial statements of capital groups by entities other than banks or insurance companies (Journal of Laws of 2009, No 169, item 1327) has been used as a basis for preparing the consolidated financial statements Consolidation method Information about the consolidation method can be found in Note 2.4 comprising the additional explanatory notes to the consolidated financial statements Goodwill arising out of consolidation Information about the method used to determine goodwill arising out of consolidation can be found in Note 2.4 comprising the additional explanatory notes to the consolidated financial statements Consolidation of the capital and calculation of non-controlling interest Share capital of the Parent Company constitutes share capital of the Capital Group. Other components of the Capital Group's equity have been calculated by adding the appropriate components of equity of the subsidiaries covered by the consolidated financial statements, which correspond to the Parent Company's percentage share in the equity of the subsidiaries as at the end of the reporting period, to the individual components of the Parent Company's equity. Only these parts of the appropriate components of the equity of the subsidiaries have been included in the Capital Group's equity that had arisen from the day the Parent Company assumed control over them. Non-controlling interests in the subsidiaries covered by the consolidated financial statements have been calculated on the basis of the percentage share of non-controlling interest in the equity of the subsidiaries as at the end of the reporting period Transactions excluded from consolidation Intra-group transactions have been excluded from consolidation. Sales between entities comprising the Group, other intra-group operating revenue and costs, as well as financial costs and revenue, have been excluded from consolidation. Data forming the basis for exclusions have been obtained from the accounting books of MERCOR SA and reconciled with information obtained from the subsidiaries Additional information to the consolidated financial statements

12 Data included in the additional explanatory notes to the consolidated financial statements that include the description of significant accounting policies and other explanatory information have been presented, in all material respects, fully and correctly. Such data constitutes an integral part of the consolidated financial statements Report on the activities of the Capital Group The report on the activities of the Capital Group includes, in all material respects, information referred to in Article 49 of the Accounting Act and in Regulation of the Minister for Finance of 19 February 2009 on current and periodic information provided by issuers of securities and on conditions under which information required by legal regulations of a third country may be recognised as equivalent (Journal of Laws of 2014, item 133); such information is consistent with information in the consolidated financial statements. On behalf of KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. Licence No ul. Chłodna Warsaw Zbigniew Libera Key Statutory Auditor Licence No Limited partner, Plenipotentiary 9 June 2014 REPORT ON THE ACTIVITIES AS PREPARED BY THE MANAGEMENT BOARD