date submitted: 2006-09-13 (issuer's full name)

Elbudowa PSr THE SECURITIES AND EXCHANGE COMMISSION Consolided Bi-Annual Report PSr 2006 (Pursuant to 86 item 2 and 87 item 1 of the Regulion of the Minister of Finance of 19 October 2005 - Journal of Laws No 209 item 1744) for issuers of securities with the business profile of production, construction, trade or service for six months of the financial year 2006 period from 2006-01-01 to 2006-06-30 including the condensed consolided financial stements according to IFRS currency PLN (Polish zloty) and the condensed financial stements according to IFRS currency PLN (Polish zloty) de submitted: 2006-09-13 year Elektrobudowa Spółka Akcyjna Elbudowa (issuer s abridged name) (issuer's full name) service construction (business sector acc. To the WSE classificion) 40-246 Kowice (postal code) (place) Porcelanowa 12 (street) (32) 25 90 100 (32) 25 90 216 (telephone) (fax) elbudowa@elbudowa.com.pl www.elbudowa.com.pl (e-mail) (www) 634-01-35-506 271173609 (Tax Identificion Number NIP) PricewerhouseCoopers (auditing company) SELECTED FINANCIAL DATA in thousands of PLN (REGON) (number) in thousands of EURO H1 / 2006 H1 / 2005 H1 / 2006 H1 / 2005 da referring to the condensed consolided financial stements I. Revenues 158 624 124 920 40 671 30 614 II. Opering profit (loss) 6 154 3 423 1 578 839 III. Gross profit 6 112 3 421 1 567 838 IV. Net profit 4 490 1 903 1 151 466 V. Net profit tributable to the Company shareholders 3 943 1 574 1 011 386 VI. Net profit tributable to minority holders 547 329 140 80 VII. Cash flows from opering activities 5 820-7 740 1 492-1 897 VIII. Cash flows from investing activities -3 211-2 637-823 -646 IX. Cash flows from financing activities 4 536 7 982 1 163 1 956 X. Net increase/decrease in cash 7 145-2 395 1 832-587 XI. Total assets 187 915 165 358 46 474 40 929 XII. Liabilities 117 643 101 907 29 095 25 224

XIII. Non-current liabilities 4 932 2 442 1 220 605 XIV. Current liabilities 112 711 99 465 27 875 24 619 XV. Equity 70 272 63 451 17 379 15 705 XVI. Equity tributable to Company shareholders 68 132 62 395 16 850 15 444 XVII. Share capital 24 821 24 821 6 139 6 144 XVIII. Minority interest 2 140 1 056 529 261 XIX. Number of shares (pcs) 3 971 000 3 971 000 3 971 000 3 971 000 XX. Book value per share (in PLN / EUR) 17,70 15,98 4,38 3,96 Da referring to the condensed financial stements XXI. Revenues 147 878 125 813 37 915 30 833 XXII. Opering profit 4 342 2 575 1 113 631 XXIII. Gross profit 5 149 2 573 1 320 631 XXIV. Net profit 4 037 1 287 1 035 315 XXV. Cash flows from opering activities 1 247-9 253 320-2 267 XXVI. Cash flows from investing activities -2 784-2 416-714 -592 XXVII. Cash flows from financing activities 4 536 8 007 1 163 1 962 XXVIII. Net increase/decrease in cash 2 999-3 662 769-897 XXIX. Total assets 175 086 159 759 43 302 39 543 XXX. Liabilities 107 723 97 919 26 642 24 237 XXI. Non-current liabilities 4 932 2 442 1 220 605 XXII. Current liabilities 102 791 95 477 25 422 23 632 XXIII. Equity 67 363 61 840 16 660 15 306 XXXIV. Share capital 24 821 24 821 6 139 6 144 XXXV. Number of shares (pcs) 3 971 000 3 971 000 3 971 000 3 971 000 XXXVI. Book value per share (in PLN / EUR) 16,96 15,57 4,19 3,85 Pursuant to binding regulions the Report must be submitted to the Polish Securities and Exchange Commission, the Warsaw Stock Exchange and the informion agency 2

PricewerhouseCoopers Sp. z o.o. Oddział w Kowicach ul. Sowińskiego 46 40-018 Kowice Polska Telefon +48 (32) 604 0200 Faks +48 (32) 604 0300 http://www.pwc.com/pl TRANSLATORS EXPLANATORY NOTE The following document is a free translion of the registered auditor s report of the below-mentioned Polish Company. In Poland stutory accounts must be prepared and presented in accordance with Polish legislion and in accordance with the accounting principles and practices generally used in Poland. The accompanying transled report has not been reclassified or adjusted in any way to conform to accounting principles generally accepted in countries other than in Poland, but certain terminology current in Anglo-Saxon countries has been adopted to the extent practicable. In the event of any discrepancy in interpreting the terminology, the Polish language version is binding. Independent Registered Auditor s Report on the review of the bi-annual consolided financial stements for the period 1 January 2006 30 June 2006 To the Shareholders and the Supervisory Board of Elektrobudowa S.A. We have reviewed the tached bi-annual consolided financial stements of the Elektrobudowa S.A. Group (hereinafter referred to as the Group) in which the parent company is Elektrobudowa S.A. (hereinafter referred to as the Company), Porcelanowa 12, Kowice, which comprise: (a) the consolided balance sheet as 30 June 2006, showing total assets and total liabilities and equity of PLN 187,915 thousand; (b) the consolided income stement for the period from 1 January to 30 June 2006, showing a net profit of PLN 4,490 thousand; (c) the stement of changes in consolided equity for the period from 1 January to 30 June 2006, showing a decrease in equity of PLN 1,321 thousand; (d) the consolided cash flow stement for the period from 1 January to 30 June 2006, showing net inflows of PLN 7,145 thousand; (e) notes to the financial stements comprising informion on the accounting policies adopted and additional notes and explanions. The Company s Management Board is responsible for preparing the bi-annual consolided financial stements in accordance with Internional Financial Reporting Standards as adopted by the European Union reled to interim financial reporting (IAS 34). Our responsibility was to present a report on these bi-annual consolided financial stements based on our review.

Independent Registered Auditor s Report on the review of the bi-annual consolided financial stements for the period 1 January 2006 30 June 2006 To the Shareholders and the Supervisory Board of Elektrobudowa S.A. (cont d) We have performed our review in accordance with the auditing standards issued by the Nional Council of Registered Auditors, applicable in the Republic of Poland. Under these standards, we are obliged to plan and perform the review to obtain reasonable assurance th the bi-annual consolided financial stements are free of merial irregularities. We have performed our review on the basis of an analysis of the above-mentioned bi-annual consolided financial stements, a review of the books of account and the informion obtained from the Company s Management Board and employees of the Group. The scope of work performed was significantly less than the scope of an audit, because our review was not aimed expressing an opinion on the truth and fairness of the bi-annual consolided financial stements. This report does not constitute an audit opinion on the consolided financial stements within the meaning of the Accounting Act of 29 September 1994 (Journal of Laws of 2002 No. 76, item 694 with subsequent amendments). Our review has not revealed a need to make any significant changes to the tached bi-annual consolided financial stements to ensure th they give a true, fair and clear view of the Group s financial standing as 30 June 2006 and of the results of its operions for the period from 1 January to 30 June 2006 in accordance with the Internional Accounting Standard 34 Interim Financial Reporting On behalf of PricewerhouseCoopers Sp. z o.o. and the person conducting the review: Tomasz Reinfuss Member of the Management Board Registered Auditor Registered Audit Company No. 90038/7274 No. 144 Kowice, 13 September 2006 1

ELEKTROBUDOWA SA GROUP The Interim Consolided Financial Stements period from 1 January 2006 to 30 June 2006 2

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 Index to the consolided financial stements CONSOLIDATED BALANCE SHEET... 5 CONSOLIDATED INCOME STATEMENT... 6 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY... 7 CONSOLIDATED CASH FLOW STATEMENT... 9 1. General informion... 10 1.1. Composition of the Group and its principal activity... 10 1.2 Going concern concept... 11 2. Summary of significant accounting policies... 12 2.1 Stement of compliance with legislion... 12 2.2. Basis of preparion... 12 2.3 Consolidion... 12 2.4 Foreign currency translion... 13 2.5 Property, plant and equipment... 14 2.6 Intangible assets... 15 2.7 Impairment of assets... 15 2.8 Investments... 15 2.9 Leasing... 17 2.10 Inventories... 17 2.11 Construction contracts... 17 2.12 Trade receivables... 18 2.13 Cash and cash equivalents... 18 2.14 Fixed assets held for trading and discontinued operions... 18 2.15 Share and reserve capital... 19 2.16 Loans and borrowings... 19 2.17 Income taxes... 19 2.18 Employee benefits... 20 2.19 Provisions... 21 2.20 Trade and other liabilities... 21 2.21 Revenue recognition... 22 2.22 Method of establishing the financial result... 22 2.23 Financial risk management... 23 2.24 Segment reporting... 23 2.25 New accounting standards and interpretions... 24 3. Operions discontinued in the reporting period or to be discontinued in the next period... 24 4. Changes in presention of the consolided financial stements... 25 5. Segment informion... 28 6. Property, plant and equipment... 33 7. Intangible assets... 38 8. Joint ventures... 42 2

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 9. Available-for-sale financial assets... 42 10. Deriviive financial instruments... 46 11. Trade and other receivables... 46 11.1 Trade and other receivables recognised in non-current assets... 47 11.2 Trade and other receivables recognised in current asssets... 48 11.3 Non-current prepayments... 50 12. Inventories... 51 13. Cash and cash equivalents... 51 14. Short-term prepayments... 52 15. Share capital... 53 16. Reserve capital... 54 17. Net profit tributable to Elektrobudowa SA equity holders... 55 18. Trade and other payables... 55 18.1 Non-current payables... 55 18.2 Trade and other payables... 56 19. Loans and borrowings... 58 20. Deferred income tax... 61 20.1 Deferred income tax assets... 62 20.2 Provision for deferred income tax... 64 21. Provisions for liabilities and other charges... 66 22. Accrued expenses... 67 23. Sales revenues... 68 24. Construction contracts... 69 24.1 Amounts due from customers for construction contract work... 69 24.2 Amounts due to customers for contract work... 69 25. Expenses by nure... 70 26. Other gains (losses) net... 71 27. Finance income (expenses) net... 71 28. Income tax... 72 29. Earnings per share... 74 30. Dividend per share... 75 31. Cash flow stement... 75 32. The Management Board and the Supervisory Board... 77 33. Polish zloty exchange res... 78 34. Reled party transactions... 79 3

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 36. Investments... 80 37. Contingencies... 80 38. Events after the balance sheet de... 82 39. Employees... 83 40. Changes in the applied accounting standards... 83 41. Essential estimes and assumptions... 83 42. Additional notes... 84 4

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Consolided balance sheet as Note 30 June 2006 31 December 2005 * 30 June 2005 * ASSETS Fixed assets 43 640 43 868 42 850 Property, plant and equipment 6 31 204 30 142 29 734 Intangible assets 7 2 393 2 207 1 900 Available-for-sale financial assets 9 879 879 879 Trade and other receivables 11.1 8 675 9 707 9 722 Deferred income tax assets 20 0 441 122 Non-current prepayments and accrued income 11.3 489 492 493 Current asssets 144 275 131 540 122 508 Inventories 12 22 316 6 197 17 486 Trade and other receivables 11.2 81 560 94 146 83 752 Derivive financial instruments 10 381 181 0 Current prepayments and accrued income 14 784 262 428 Amount due from construction contracts 24.1 21 985 20 650 14 164 Cash and cash equivalents 13 17 249 10 104 6 678 Total assets 187 915 175 408 165 358 EQUITY AND LIABILITIES Equity 70 272 71 593 63 451 Share capital 15 24 821 24 821 24 821 Reserve capital 16 56 661 58 282 58 396 Foreign currency translion of subsidiaries 6 (82) (44) Prior years' profit (loss) (17 299) (22 215) (22 352) Net profit (loss) 17 3 943 9 280 1 574 Total equity tributable to the Company's equity holders 68 132 70 086 62 395 Minority interest 2 140 1 507 1 056 Liabilities Non-current liabilities 4 932 3 929 2 442 Deferred income tax liabilities 20 639 0 0 Employee benefit obligions 21 1 767 2 040 1 209 Trade and other payables 18.1 2 526 1 889 1 233 Current liabilities 112 711 99 886 99 465 Trade and other liabilities 18.2 78 482 65 577 59 727 Corpore income tax obligions 338 1 359 0 Loans, borrowings and debt securities 19 21 377 16 415 30 507 Provisions 21 575 634 613 Accrued expenses 22 1 890 3 224 1 234 Amounts due to construction contracts customers 24.2 10 049 12 677 7 384 Total liabilities 117 643 103 815 101 907 Total equity and liabilities 187 915 175 408 165 358 *rested da The notes on pages 10 to 85 are an integral part of these consolided financial stements. 5

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Consolided income stement six months ended 30 June Note 2006 2005* Revenues 23 158 624 124 920 Cost of products, goods and merials sold 25 (148 511) (115 751) Gross profit on sales 10 113 9 169 Selling costs (982) (326) Administrive expenses (3 723) (4 058) Other gains (losses) - net 26 746 (1 362) Opering profit 6 154 3 423 Finance cost - net 27 (42) (2) Profit before tax 6 112 3 421 Income tax expense 28 (1 622) (1 518) Profit for the period 4 490 1 903 of which: Equity holders of the Company 3 943 1 574 Minority interest 547 329 Earnings per share for profit tributable to the equity holders of the Company during the year (expressed in PLN per share) - basic 29 0,99 0,40 - diluted 29 0,96 0,39 * rested da The notes on pages 10 to 85 are an integral part of these consolided financial stements. 6

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Consolided stement of changes in equity Share capital Reserve capital from share premium Attributable to equity holders of the Company Other reserve capital Prior years' profit (loss) Net profit Foreign currency translion differences of subsidiaries Attributable to minority interest Total equity 1 January 2006 24 821 10 369 47 913 (12 935) 0 (82) 1 507 71 593 currency translion differences 0 0 0 0 0 88 86 174 net proft for the period 0 0 0 0 3 943 0 547 4 490 Total recognised income for H1 2006 0 0 0 0 3 943 88 633 4 664 profit distribution 0 0 2 820 (2 820) 0 0 0 0 coverage of prior years' loss 0 0 (4 441) 4 441 0 0 0 0 dividend payment 0 0 0 (5 957) 0 0 0 (5 957) dividend servicing 0 0 0 (28) 0 0 0 (28) 30 June 2006 24 821 10 369 46 292 (17 299) 3 943 6 2 140 70 272 Share capital Reserve capital from share premium Attributable to equity holders of the Company Other reserve capital Prior years' profit (loss) Net profit Foreign currency translion differences of subsidiaries Attributable to minority interest Total equity 1 January 2005 24 821 10 369 46 801 (17 126) 0 (110) 664 65 419 currency translion differences 0 0 0 0 0 28 28 56 net proft for the period 0 0 0 0 9 280 0 815 10 095 Total recognised income for 2005 0 0 0 0 9 280 28 843 10 151 profit distribution 0 0 1 112 (1 112) 0 0 0 0 dividend payment 0 0 0 (3 971) 0 0 0 (3 971) dividend servicing 0 0 0 (6) 0 0 0 (6) 31 December 2005 24 821 10 369 47 913 (22 215) 9 280 (82) 1 507 71 593 The notes on pages 10 to 85 are an integral part of these consolided financial stements. 7

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Share capital Reserve capital from share premium Attributable to equity holders of the Company Other reserve capital Prior years' profit (loss) Net profit Foreign currency translion differences of subsidiaries Attributable to minority interest Total equity 1 January 2005 24 821 10 369 46 801 (17 126) 0 (110) 664 65 419 currency translion differences 0 0 0 0 0 66 63 129 net proft for the period 0 0 0 0 1 574 0 329 1 903 Total recognised income for H1 2005 0 0 0 0 1 574 66 392 2 032 profit distribution 0 0 1 226 (1 226) 0 0 0 0 dividend payment 0 0 0 (3 971) 0 0 0 (3 971) dividend servicing 0 0 0 (29) 0 0 0 (29) 30 June 2005 24 821 10 369 48 027 (22 352) 1 574 (44) 1 056 63 451 The notes on pages 10 to 85 are an integral part of these consolided financial stements. 8

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Consolided cash flow stement six months ended 30 June Note 2006 2005* Cash flows from opering activities Net profit 4 490 1 903 Amortision 2 251 2 580 Interest and share in profit (dividends) 406 1 021 Gains (loss) from investing activities (74) (288) Change due to deferred income tax 1 080 1 286 Change in inventories (16 119) (5 166) Change in trade and other receivables 31 13 462 14 215 Change in liabilities, except loans and borrowings 31 8 200 (12 671) Income tax paid (1 361) (1 525) Change in current accruals (1 856) 32 Change in non-current accruals 3 3 Change in settlements of construction contracts (3 963) (9 049) Other adjustments 31 (699) (81) Net cash (used in) / genered from opering activities 5 820 (7 740) Cash flows from investing activities Disposal of intangible assets and property, plant & equipment 334 588 Purchase of intangible assets and property, plant & equipment (3 545) (3 225) Net cash fused in investing activities (3 211) (2 637) Cash flows from financial activities Loans and borrowings 6 948 9 025 Redemption of debt securities (1 986) 0 Payment of financial lease commitments (28) (21) Interest (398) (1 022) Net cash genered from financial activities 4 536 7 982 Net decrease /increase in cash 7 145 (2 395) Cash beginning of period 10 104 9 073 Cash end of period 31 17 249 6 678 * rested da The notes on pages 10 to 85 are an integral part of these consolided financial stements. 9

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Notes to the consolided financial stements 1. General informion 1.1. Composition of the Group and its principal activity The ELEKTROBUDOWA SA Group is composed of three entities: The Parent - Elektrobudowa SA with its registered office in Kowice, ul. Porcelanowa 12, 40-246 Kowice. Elektrobudowa SA is a joint stock company established and acting according to the Polish law. The joint stock company was creed through transformion of the ste-owned company named Przedsiębiorstwo Montażu Elektrycznego Elektrobudowa based in Kowice. The transformion act was made on 9 January 1992 in the form of a notary deed (Repertory No. 225/95) by the Notary Office no.18 in Warsaw run by the notary public Paweł Błaszczak. The Company was entered in Division B under number 7682 to the Commercial Register of the District Court, X Register Department Kowice, on the basis of valid decision by this Court issued on 3 February 1992 (Ref. number RHB 7682 VII of the Central Commercial Register 248/92). At present the court of registrion for the Company is the District Court in Kowice, Business Department of the Nional Court Register, with the reference number KRS 000007425. Principal activity of the Company according to the Polish Classificion of Activities (PKD 4531 A) is executing of electrical installions in building and structures. A sector according to the Warsaw Stock Exchange classificion: building. Shares of the Parent are quoted on the Warsaw Stock Exchange. The business activity of Elektrobudowa SA includes: comprehensive electrical installion works as provided in all newly built, extended and modernized power stions and industrial facilities, supply of electric power equipment, mainly the energy transmission and distribution equipment, designing, engineering, testing and commissioning services. A subsidiary - KRUELTA Sp. z o. o. (Ltd.) with its registered office 17a, Magnitogorska Street in Sankt Petersburg. Elektrobudowa SA holds 51% interest in KRUELTA Sp. z o.o., which represents 51% of KRUELTA equity. According to the company Articles certain resolutions of the Annual General Meeting has to be adopted unanimously, and passing others requires not less than 2/3 of the total number of votes. The requirement has been introduced to secure Elektrobudowa SA against decisions unfavourable for them, which otherwise might be taken by the Russian partner, Tavrida. The notes on pages 10 to 85 are an integral part of these consolided financial stements. 10

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Notes to the consolided financial stements (continued) ELEKTROBUDOWA SA controls opering and financial policy of Kruelta, as: - Chairman of the Supervisory Board is elected from candides indiced by Elektrobudowa SA, - the Supervisory Board of Kruelta consists of two representives of Elektrobudowa and two representives of Tavrida, - in the case of an equal number of votes, the chairman of the Supervisory Board has the casting vote. In the opinion of the Management Board of Elektrobudowa SA the conditions presented above are decisive for consolidion of Elektrobudowa SA and Kruelta by the full method. Principal business of KRUELTA is the assembly and sales of medium voltage switchgears in the Russian market. This offer is to be completed with the sale of low voltage switchgears and mobile containerized substions. A subsidiary - KONIP Sp. z o.o. (Ltd) with its registered office in Kowice, 12, Porcelanowa St., 40-246 Kowice. Elektrobudowa SA holds 100% interest in the equity of KONIP Sp. z o.o. KONIP Sp. z o.o. administers the real property owned by Elektrobudowa S.A. or in perpetual usufruct by the Parent. The scope of their business particularly includes maintenance and administrion of building and structures, renting the useful areas, fire protection services, cleaning the rooms and area as well as industrial protection, providing telecommunicion services, maintaining the Parent s archives and the reception service. 1.2 Going concern concept The entities in the Group will continue in operional existence for the unspecified time. The consolided financial stements have been prepared with the assumption of continuion of business operions in the foreseeable future by the entities of the Group and th there are no circumstances indicing th the continuion of operions by the entities of the Group is risk. Among the estimes done as the balance sheet de there are no such estimes which could imply a significant risk of involving merial corrections of balance sheet values of assets and liabilities during the next financial year. If, after preparion of the annual financial stements an entity of the Group is informed about events which have substantial effect on this report, or which make the assumption of business continuion by the entity unjustified, the Management Board of Elektrobudowa SA will be entitled to introduce adjustments to the financial stements up to the moment of their approval. This does not rule out the possibility of introducing retrospective changes to the financial stements reled to adjustment of errors, or changes in accounting policies as per IAS 8 in the ler periods. In the opinion of the Management Board of Elektrobudowa SA there are no circumstances posing a thre to the continuity of business operions. The notes on pages 10 to 85 are an integral part of these consolided financial stements. 11

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Notes to the consolided financial stements (continued) 2. Summary of significant accounting policies 2.1 Stement of compliance with legislion The report of Elektrobudowa SA Group for the H1 ended 30 June 2006 has been prepared in conformity with the Regulion of the Minister of Finance of 19 October 2005 on current and periodical informion provided by issuers of securities. 2.2. Basis of preparion These consolided financial stements of the Group has been prepared in accordance with the Internional Financial Reporting Standards (IFRS) on interim reporting (IAS 34). The present financial stements have been prepared under the historical cost convention, with the exception of revaluion of derivive instruments shown fair value. Some key accounting estimes are necessary for preparing the stements in compliance with IFRS. The Management Board has to take a number of subjective decisions concerning the applicion of the Group accounting policies. More compliced areas, areas which require a subjective judgment or areas in which the assumptions and appraisals are significant for the financial stements as a whole, have been described in additional comments to the financial stements (Notes: 9, 11.2, 15, 21, 24). 2.3 Consolidion Subsidiaries Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and opering policies generally accompanying a shareholding of more than one half of thee voting rights in the company governing bodies. The existence and effect of potential voting rights th are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolided from the de on which control is transferred to the Group. They are deconsolided from the de on which control ceases. In the Group there are no entities excluded from consolidion. The purchase method of accounting is used to account for the investment in subsidiaries in separe financial stements. Separe financial stements of the reled parties subject to consolidion have been prepared in accordance with the unified accounting standards. The notes on pages 10 to 85 are an integral part of these consolided financial stements. 12

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Notes to the consolided financial stements (continued) Inter-company transactions, balances and unrealized gains on transactions between Group companies are elimined. Unrealised losses are also elimined unless the transaction provides evidence of an impairment of the asset transferred. The parent s and other consolided entities share of the subsidiaries, with th portion of net assets of subsidiaries, measured their fair value, which reflects the parent s and other consolided entities share in the reled parties, the de of taking control by the Group, is elimined. 2.4 Foreign currency translion a) Functional and presention currency Items included in the financial stements of each of the Group s entities are measured using the currency of the primary economic environment in which the entity operes (the functional currency ). The consolided financial stements are presented in thousands of Polish zlotys. Polish zloty (PLN) is the functional and presention currency both of ELEKTROBUDOWA SA and the Elektrobudowa SA Group. b) Transactions and balances Foreign currency transactions are transled into the functional currency using the exchange re prevailing the des of the transactions as follows: - disposal of foreign currency and repayment of receivables transactions are transled the buying re applied by the bank used by the Group: - purchase of foreign currency and repayment of payables transactions are transled the selling re applied by the bank used by the Group: - other transactions are transled average exchange re for each currency announced by the Nional Bank of Poland, unless customs documents quote another exchange re; - assets and liabilities the balance sheet de are transled the average Exchange re for each currency announced by the Nional Bank of Poland. Gains and losses from such transactions and from the translion the year-end of monetary assets and liabilities denomined in foreign currencies are recognized in the income stement, except where hedge accounting is applied. c) Translion of balance sheet items and income stement items The results and financial position of all Group entities (none of which has the currency of a hyperinflionary economy) th have a functional currency different from the presention currency are transled into the presention currency as follows: The notes on pages 10 to 85 are an integral part of these consolided financial stements. 13

The interim consolided financial stements for period from 1 January 2006 to 30 June 2006 (all amounts in thousands of Polish zloty unless otherwise sted) Notes to the consolided financial stements (continued) assets and liabilities in each presented balance sheet are transled the closing re the de of th balance sheet; income and expenses for each income stement are transled average exchange re for each currency, which is the arithmetic mean of average res on the last day of each month of the reporting period, unless this average is not a reasonable approximion of the cumulive effect of the res prevailing on the transaction des, in which case income and expenses are transled the des of the transactions; all resulting exchange differences are recognized as a separe component of equity. 2.5 Property, plant and equipment All property, plant and equipment is show cost less subsequent depreciion and impairment). Depreciion on assets is calculed using the straight-line method according to res which reflect their estimed useful life. Periods of economic usability of the assets are as follows: Applied depreciion res: Buildings Plant and machinery Vehicles Other 25-40 years 3-15 years 5-7 years 4-10 years Subsequent expenses are recognised in the carrying amount of each item or included as a separe asset (as approprie), only when it is probable th the Company will gain future economic benefits associed with the item and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income stement during the financial period in which they are incurred. At each balance sheet de the value of each item is reviewed in order to estime if it is not greer than its recoverable amount (if it is greer, the asset s carrying amount is written down to its recoverable amount. The review also covers the adopted depreciion method and establishing whether the depreciion period is adeque for the estimed distribution in time of economic benefits from the asset. Property, plant and equipment under construction are measured according to costs incurred. The notes on pages 10 to 85 are an integral part of these consolided financial stements. 14