Consolidated Quarterly Report QSr 1/2009 quarter/year

Transcription

1 CIECH QSr 1/2009 adjusted FINANCIAL SUPERVISION AUTHORITY Consolidated Quarterly Report QSr 1/2009 quarter/year (pursuant to 82 section 2 and 83 section 1 of the Ordinance of the Minister of Finance of February 19th, 2009 Journal of Laws No. 33, item 259) for the issuers of securities conducting manufacturing, building, commercial or service activity for the first quarter of the fiscal year 2009, covering the period between January 1st, 2009 and March 31st, 2009, containing condensed consolidated financial statement prepared in compliance with the International Financial Reporting Standards presented in the Polish zloty and condensed financial statement prepared in compliance with the International Financial Reporting Standards CIECH presented in the Polish zloty date of submission: (abbreviated name of the issuer) Warsaw (zip code) Puławska 182 (street) CIECH S.A. (full name of the issuer) Chemical (che) (telephone) biuro.prasowe@ciech.com ( ) NIP (tax identification number) (sector according to the classification of the Warsaw Stock Exchange) (city) (number) (fax) (www) REGON (state statistical number) SELECTED FIGURES Q year-todate, period between January 1st, 2009 and March 31st, 2009 PLN 000 EUR 000 Q year-todate, period between January 1st, 2008 and March 31st, 2008 Figures related to condensed consolidated financial statement Q year-todate, period between January 1st, 2009 and March 31st, 2009 Q yearto-date, period between January 1st, 2008 and March 31st, 2008 I. Net sales of products, goods and materials 970,845 1,030, , ,814 II. Operating profit (loss) 64, ,083 14,039 42,470 III. Profit (loss) before taxes 51, ,798 11,280 34,800 IV. Total net profit (loss) 33,189 94,489 7,216 26,561 V. Net profit (loss) attributable to controlling shareholders 31,918 91,148 6,940 25,622 VI. Net profit (loss) attributable to minority shareholders 1,271 3, VII. Net cash flows from operating activities 75,280 3,869 16,367 1,088 VIII. Net cash flows from investment activities (146,146) (10,228) (31,775) (2,875) IX. Net cash flows from financial activities 14,780 59,023 3,213 16,592 X. Total net cash flows (56,086) 52,664 (12,194) 14,804 XI. Total assets 4,537,793 4,079, ,221 1,157,084 XII. Non-current liabilities 1,070,197 1,349, , ,621 XIII. Current liabilities 2,578,004 1,533, , ,073 XIV. Total equity 889,592 1,196, , ,390 XV. Equity attributable to controlling shareholders 837,407 1,149, , ,144 XVI. Minority interest 52,185 46,703 11,100 13,246 XVII. Share capital 164, ,115 34,908 46,547 XVIII. Earnings (loss) per share (in PLN/EUR) Figures related to condensed financial statement XIX. Net sales of products, goods and materials 423, ,784 92, ,233 XX. Operating profit (loss) 26,595 29,126 5,782 8,187 XXI. Gross profit (loss) 48,719 27,394 10,592 7,701 Financial Supervision Authority 1

2 CIECH QSr 1/2009 SELECTED FIGURES Q year-todate, period between January 1st, 2009 and March 31st, 2009 PLN 000 EUR 000 Q year-todate, period between January 1st, 2008 and March 31st, 2008 Q year-todate, period between January 1st, 2009 and March 31st, 2009 XXII. Net profit (loss) 39,259 21,176 8,536 5,953 XXIII. Net cash flows from operating activities 16,710 13,155 3,633 3,698 Q yearto-date, period between January 1st, 2008 and March 31st, 2008 XXIV. Net cash flows from investment activities (35,954) (37,433) (7,817) (10,523) XXV. Net cash flows from financial activities (165) 41,742 (36) 11,734 XXVI. Total net cash flows (19,409) 17,464 (4,220) 4,909 XXVII. Total assets 2,216,499 1,885, , ,843 XXVIII. Liabilities and provisions for liabilities 1,605,196 1,133, , ,595 XXIX. Non-current liabilities 427, ,301 91, ,166 XXX. Current liabilities 1,177, , , ,429 XXXI. Equity 611, , , ,248 XXXII. Share capital 164, ,115 34,908 46,547 XXXIII. Basic earnings per share (in PLN/EUR) XXXIV. Diluted earnings per share (in PLN/EUR) The report should be submitted to the Financial Supervision Authority, the Warsaw Stock Exchange and an information agency pursuant to legal regulations. CONTENT OF THE REPORT File Extended consolidated quarterly report of the Ciech Group for Q Description Extended consolidated quarterly report of the Ciech Group for Q SIGNATURES OF THE COMPANY S REPRESENTATIVES Date Name and surname Title/function Signature Ryszard Kunicki Robert Bednarski Marcin Dobrzański Artur Osuchowski Katarzyna Rybacka President of the Management Board of CIECH Spółka Akcyjna Member of the Management Board of CIECH Spółka Akcyjna Member of the Management Board of CIECH Spółka Akcyjna Member of the Management Board of CIECH Spółka Akcyjna Chief Accountant of CIECH Spółka Akcyjna Financial Supervision Authority 2

3 EXTENDED CONSOLIDATED QUARTERLY REPORT OF THE CIECH CHEMICAL GROUP for Q1 2009

4 TABLE OF CONTENTS I. Consolidated Financial Statement of the Ciech Group Consolidated Profit and Loss Account of the Ciech Group Consolidated Statement of Comprehensive Income of the Ciech Group Consolidated Statement of Financial Position of the Ciech Group Consolidated Statement of Cash Flows of the Ciech Group Consolidated Statement of Changes in Equity of the Ciech Group II. Information on the presentation principles for the Extended Consolidated Quarterly Report of the Ciech Group Basis for preparing the Extended Consolidated Quarterly Report of the Ciech Group Statement of conformity Adopted accounting principles Functional and presentation currency and conversion principles III. Notes to the Consolidated Financial Statement of the Ciech Group The most important events in the Ciech Group from January 1st, 2009 up to the preparation of this statement A description of achievements of the Ciech Group in the period between January 1st and March 31st, 2009 and a description of factors and events that have a significant impact on the financial result Basic financial figures Sales revenues Profit/loss on sales and operating profit/loss Net profit/loss Assets Liabilities Cash flows Investment tasks carried out Financial figures by business segment Derivative transactions Seasonality and cyclicality of the operations of CIECH S.A. and the Ciech Group Fulfilment of profit forecasts previously published for a given year in light of the results disclosed in the quarterly report against the forecasted results Factors that influence the Ciech Group s results, with particular focus on the next quarter External factors Internal factors Consolidated entities Effects of changes to the organisational structure of the Ciech Group s business units in Q1 2009, including business mergers, acquisitions or disposals of the Group s entities, long-term investments, de-mergers, restructuring and discontinuation of activity Changes in the shares of CIECH S.A. held by the Members of the Management Board and Supervisory Board CIECH S.A. s shareholders holding at least 5% of shares/votes at the General Meeting of Shareholders Provisions and write-downs on assets from to Notes to the Statement of Comprehensive Income of the Ciech Group Purchase and disposal of tangible fixed assets Information concerning changes in contingent liabilities or contingent assets that have occurred since the end of the last financial year Procedures pending before courts, in arbitration proceedings or public administration bodies as at March 31st, CIECH S.A Subsidiaries Information concerning a non-standard and non-routine transaction or transactions with affiliated entities concluded by CIECH S.A. or its subsidiaries Information on loan and borrowing sureties or guarantees granted by CIECH S.A. or its subsidiaries Information regarding the issue, redemption and repayment of debt securities and equity 2

5 securities in the Ciech Group Information concerning dividends paid or (declared), in total and per share, broken down into ordinary shares and preference shares Discontinued operations and assets held for sale Information concerning default in debt repayment or any violations of borrowing contract provisions not subsequently adjusted Information concerning non-consolidated subsidiaries and associates Reconciliation of equity presented in the statement for Q with the currently presented financials as comparable data IV. Condensed Individual Financial Statement of CIECH S.A. for Q prepared in accordance with the International Financial Reporting Standards Individual Profit and Loss Account of CIECH S.A Individual Statement of Comprehensive Income of CIECH S.A Statement of Financial Position of CIECH S.A Statement of Cash Flows of CIECH S.A Statement of Changes in Equity of CIECH S.A Notes to the financial statement prepared for Q ending on March 31st, Basis and accounting principles (policy) Earnings per share Seasonality and cyclicality of operations Changes in accounting estimates Information on the issue, redemption and repayment of debt securities and equity securities Information on dividends paid Financial figures by business segment Information on material events that occurred after the end of Q and have not been reflected in the presented interim report Changes in the structure of the entity Information concerning changes in contingent liabilities or contingent assets... 3 OFF-BALANCE SHEET ITEMS Information about write-downs on assets and provisions in the period covered by the statement, i.e Notes to the Statement of Comprehensive Income of CIECH S.A Information about the reversal of all provisions for restructuring costs Information on the purchase and disposal of tangible fixed assets and commitments to purchase tangible fixed assets Court cases Corrections of errors from previous periods Information about unpaid loans or breach of loan agreement provisions Transactions with affiliates Events occurring after the balance-sheet date... 5 V. Statement of the Management Board

6 I. Consolidated Financial Statement of the Ciech Group 1. Consolidated Profit and Loss Account of the Ciech Group * * PLN 000 Continued operations Continued operations Net sales of products, goods and materials 970,845 1,030,985 Cost of sales (782,065) (768,710) Gross profit/loss on sales 188, ,275 Other operating revenues 17,658 38,127 Selling costs (50,939) (64,457) General and administrative expenses (72,821) (71,080) Other operating expenses (18,105) (13,782) Operating profit/loss 64, ,083 Financial revenues 67,699 5,214 Financial expenses (78,923) (34,661) Net financial revenues/expenses (11,224) (29,447) Share in net profit of subsidiaries valued under the equity method (1,467) 2,162 Profit/loss before taxes 51, ,798 Income tax (18,693) (29,309) Net profit/loss 33,189 94,489 Profit/loss on sales related to discontinued operations - - Profit/loss for the financial year 33,189 94,489 including: Net profit/loss attributable to controlling shareholders 31,918 91,148 Net profit/loss attributable to minority shareholders 1,271 3,341 Earnings per share (in PLN): Basic Diluted * No discontinued operations occurred in the presented period. 4

7 2. Consolidated Statement of Comprehensive Income of the Ciech Group PLN Continued operations Continued operations Net profit for the financial year 33,189 94,489 Other gross comprehensive income Currency translation differences (foreign companies) (19,450) (2,456) Available-for-sale financial assets (measurement recognised under revaluation reserve) 12,172 (3,890) Hedge accounting (measurement recognised under cash flow hedge) (60,065) - Other (recognised under retained profits) 64 - Income tax attributable to other components of comprehensive income 9,394 - Other net comprehensive income (57,885) (6,346) COMPREHENSIVE INCOME (24,696) 88,143 Comprehensive income, including attributable to: (24,696) 88,143 Controlling shareholders (25,972) 85,358 Minority interest 1,276 2,785 5

8 3. Consolidated Statement of Financial Position of the Ciech Group PLN 000 ASSETS Non-current assets Tangible non-current assets 2,454,197 2,350,758 1,979,760 Right of perpetual usufruct 32,245 32,361 32,673 Intangible assets, including: 219, , ,458 - goodwill 74,497 69,750 67,427 Investment real property 22,151 22,353 31,397 Non-current receivables 3, Investments in affiliates and jointly-controlled entities measured under the equity method 35,769 37,280 53,438 Other long-term investments 107,816 89,240 77,211 Deferred tax assets 40,490 41,386 8,776 Total non-current assets 2,916,524 2,781,769 2,382,735 Current assets Inventory 418, , ,228 Short-term investments 378 1,185 2,976 Income tax receivables 29,842 28,593 12,390 Trade and other receivables 1,022, ,723 1,080,514 Cash and cash equivalents 70, , ,305 Non-current assets held for sale 79,570 70,618 99,498 Total current assets 1,621,269 1,580,345 1,696,911 Total assets 4,537,793 4,362,114 4,079,646 EQUITY AND LIABILITIES Share capital 164, , ,115 Own shares - - Share premium 151, , ,328 Equity components related to assets held for sale Cash flow hedge (159,977) (111,700) - Revaluation reserve (13,109) (22,887) 15,272 Other reserve capitals 78,521 78,521 78,521 Currency translation differences (subsidiaries) (70,416) (50,961) (20,818) Retained profits 686, , ,499 Equity attributable to controlling shareholders 837, ,876 1,149,917 Minority interest 52,185 49,412 46,703 Total equity 889, ,288 1,196,620 Liabilities Loans, borrowings and other debt instruments 387, , ,211 Other non-current liabilities 370, , ,385 Employee benefits 61,323 59,769 57,088 Provisions (other long-term) 110, , ,538 Deferred tax provision 140, , ,824 Total non-current liabilities 1,070,197 1,117,431 1,349,046 Overdraft facility 78,011 66,323 51,747 6

9 EQUITY AND LIABILITIES Loans, borrowings and other debt instruments 1,366,248 1,264, ,340 Trade and other liabilities 1,020, , ,652 Income tax liabilities 24,176 26,141 35,324 Provisions (short-term provisions for employee benefits and other provisions) 89,185 91, ,917 Liabilities related to non-current assets held for sale - - Total current liabilities 2,578,004 2,330,395 1,533,980 Total liabilities 3,648,201 3,447,826 2,883,026 Total equity and liabilities 4,537,793 4,362,114 4,079,646 Off-balance Sheet Items PLN Contingent receivables guarantees and sureties received other off-balance sheet receivables Contingent liabilities 40,605 40,595 -guarantees and sureties granted 40,048 39,738 - other off-balance sheet liabilities Other other Total off-balance sheet items 40,839 40,848 7

10 4. Consolidated Statement of Cash Flows of the Ciech Group PLN 000 PLN Cash flows from operating activities Net profit (loss) for the period 33,189 94,489 Adjustments Amortization/depreciation 62,150 52,453 Recognition / reversal of write-downs - 28 Foreign exchange profit / loss (59,356) 11,397 Investment real property revaluation - - Profit / loss on investment activities (7,048) (4,648) Profit / loss on disposal of fixed assets 1,654 (29,838) Dividends and interest 24,232 16,517 Input income tax 18,693 29,309 Profit / loss on shares in companies valued under the equity method 1,467 (2,162) Operating profit / loss before changes in working capital and provisions 74, ,545 Change in receivables (74,858) (103,743) Change in inventory 23,305 (22,215) Change in current liabilities 32,691 13,505 Change in provisions and employee benefits 9,211 (5,273) Net cash generated from operating activities 65,330 49,819 Interest paid (17,911) (12,599) Income tax paid (14,196) (30,572) Profit / loss on sales attributable to discontinued operations - - Measurement of derivatives 44,982 (1,456) Other adjustments (2,925) (1,323) Net cash from operating activities 75,280 3,869 Cash flows from investment activities Inflows (in + ) 6, ,237 Disposal of a subsidiary - - Disposal of intangible and tangible fixed assets 3, ,111 Disposal of financial assets - - Disposal of investment real property - - Dividends received - - Interest received 2, Repayment of borrowings - - Other inflows 50 4,322 Outflows (in - ) (152,554) (119,465) Acquisition of a subsidiary (after deduction of acquired cash) (64,418) (22,429) Acquisition of intangible and tangible fixed assets (86,621) (86,285) Acquisition of financial assets (189) (5,219) Acquisition of investment real property - (10,751) Research and development Equity increase and contributions (1,000) - Loans granted (500) - 8

11 Other - 5,219 Net cash from investment activities (146,146) (10,228) PLN Cash flows from financial activities Inflows (in + ) 109, ,148 Net inflows from issue of shares and other equity instruments, and equity contributions - - Loans and borrowings taken 109, ,120 Subsidies received - - Issue of debt securities - - Other financial inflows - 2,028 Outflows (in - ) (94,990) (285,125) Purchase of own shares - - Dividends paid and other payments to controlling shareholders - - Dividends paid to minority shareholders - - Repayment of loans and borrowings (89,783) (280,348) Redemption of debt securities - - Payment of financial lease liabilities (5,134) (512) Other financial outflows (73) (4,265) Net cash from financial activities 14,780 59,023 Total net cash flows (56,086) 52,664 Cash as at the beginning of period 45,797 95,602 Impact of foreign exchange differences 2,801 (708) Cash as at the end of period (7,488) 147,558 9

12 5. Consolidated Statement of Changes in Equity of the Ciech Group Attributable to controlling shareholders PLN 000 Share capital Own shares Share premium Equity components related to assets held for sale Cash flow hedge Revaluation reserve Other reserve capitals Currency translation differences (subsidiaries) Retained profits Equity attributable to controlling shareholders Minority interest Total equity Equity as at 01/01/2009 Previously reported 164, ,328 - (111,700) (22,887) 78,521 (50,961) 656, ,876 49, ,288 Changes in accounting principles Adjustments of fundamental errors Equity (restated) as at 01/01/ , ,328 - (111,700) (22,887) 78,521 (50,961) 656, ,876 49, ,288 Adjustments related to negative minority interest (1,497) (1,497) 1,497 - Comprehensive income in (48,277) 9,778 - (19,455) 31,982 (25,972) 1,276 (24,696) Equity as at 31/03/ , ,328 - (159,977) (13,109) 78,521 (70,416) 686, ,407 52, ,592 10

13 Attributable to controlling shareholders PLN 000 Share capital Own shares Share premium Equity components related to assets held for sale Cash flow hedge Long-term investment revaluation reserve Other reserve capitals Currency translation differences (subsidiaries) Retained profits Equity attributable to controlling shareholders Minority interest Total equity Equity as at 01/01/2008 Previously reported 164, , ,162 78,521 (18,918) 673,308 1,067,515 44,904 1,112,419 Changes in accounting principles Adjustments of fundamental errors (3,255) (3,255) - (3,255) Equity (restated) as at 01/01/ , , ,162 78,521 (18,918) 670,053 1,064,260 44,904 1,109,164 Adjustments related to negative minority interest (754) (754) Dividends paid - (57,961) (57,961) (323) (58,285) Change in the Group s composition (2,925) (2,516) Comprehensive income in (111,700) (42,049) - (32,043) 44,714 (141,078) 7,002 (134,076) Equity as at 31/12/ , ,328 - (111,700) (22,887) 78,521 (50,961) 656, ,876 49, ,288 11

14 Attributable to controlling shareholders PLN 000 Share capital Own shares Share premium Equity components related to assets held for sale Cash flow hedge Long-term investment revaluation reserve Other reserve capitals Currency translation differences (subsidiaries) Retained profits Equity attributable to controlling shareholders Minority interest Total equity Equity as at 01/01/2008 Previously reported 164, , ,162 78,521 (18,918) 673,308 1,067,515 44,904 1,112,419 Changes in accounting principles Adjustments of fundamental errors (3,255) (3,255) - (3,255) Equity (restated) as at 01/01/ , , ,162 78,521 (18,918) 670,053 1,064,260 44,904 1,109,164 Adjustments related to negative minority interest (298) - Change in the Group s composition (688) (688) Comprehensive income in (3,890) - (1,900) 91,148 85,358 2,785 88,143 Equity as at 31/03/ , , ,272 78,521 (20,818) 761,499 1,149,917 46,703 1,196,620 12

15 II. Information on the presentation principles for the Extended Consolidated Quarterly Report of the Ciech Group 1. Basis for preparing the Extended Consolidated Quarterly Report of the Ciech Group The presented consolidated financial statement for the period from January 1st, 2009 to March 31st, 2009, including comparative information, was approved by the Management Board of CIECH S.A. on May 12th, 2009 to be published on May 13th, This consolidated statement covers the financial statements of CIECH S.A., the parent company, and its subsidiaries (jointly referred to as the Ciech Group ; the Group ), as well as the Group s interests in associates. The scope of information presented in the Extended Consolidated Quarterly Report is consistent with the requirements of: International Accounting Standard 34 Interim Financial Reporting, the Regulation of the Minister of Finance of February 19th, 2009 on Current and Interim Information Submitted by the Issuers of Securities. Preparation of financial statements in compliance with IFRS requires the Management to exercise professional judgement, estimates and assumptions that impact the adopted accounting principles and the value of assets, liabilities, income and expenses presented. All estimates and related assumptions are based on historical experience and various other factors considered reasonable under the given circumstances, and the results of such estimates are the basis for professional judgement of the carrying value of assets and liabilities, which cannot be calculated using other sources. The actual value may differ from the estimated value. The estimates and related assumptions are subject to current verification. Changes in accounting estimates are recognised in the period in which they are made, if such changes apply solely to that period, or in the current period and future periods, if such changes apply both to the current and future periods. The Management Board s professional judgements, which have a significant impact on the consolidated financial statements, and the estimates bearing a high risk of significant changes in future periods, have been presented in part III, points 10 and 14 of this Report. 2. Statement of conformity The consolidated financial statement of the Ciech Group, as well as the financial statements of all subsidiaries and associates of CIECH S.A. for the presented period and corresponding periods have been prepared according to all the International Financial Reporting Standards (IFRS), adopted for usage in the European Union as at March 31st, The Management Board of the parent company used their best judgement in selecting and interpreting the applicable standards, as well as in the selection of measurement methods and principles for the different items of the Ciech Group s IFRS consolidated financial statement as at March 31st, 2009, including comparative data. Due diligence was exercised when preparing the tables and notes below. The financial information presented here was not audited. 3. Adopted accounting principles In the presented period, there were no changes to the accounting principles as compared to the principles presented by the Group in the Consolidated Report of the Ciech Group for 2008 that was made available to the public on April 30th, The Report in question includes detailed information regarding the principles and methods of the valuation of assets and liabilities and measurement of the financial result, as well as the method of preparing the financial statements and comparable data. These principles have been used on a continuous basis when preparing all consolidated financial statements of the Ciech Group since the date of transition to IFRS, i.e. since January 1st, In conjunction with the application by the Ciech Group of revised IAS 1 Presentation of Financial Statements and new IFRS 8 Operating Segments starting from January 1st, 2009, there was a change in the presentation of financial statements and information about operating segments. The new division of activity into segments is grounded on the criterion of product and service diversification based on management information. The aforesaid changes have also been applied by the Ciech Group in the presentation of comparable data. 4. Functional and presentation currency and conversion principles The Polish zloty (PLN) shall be the measurement and reporting currency of the presented consolidated financial statement. Unless provided otherwise, the data in the consolidated financial statement have been presented in 13

16 thousands of PLN (PLN 000). For the purposes of presenting selected financial data, particular assets and liabilities disclosed in the balance sheet were translated into EUR according to the average exchange rate of the National Bank of Poland as at the balance sheet date (March 31st, 2009), i.e Individual items of the profit and loss account were translated into EUR according to the exchange rate calculated as the arithmetic mean of average EUR exchange rates determined by the National Bank of Poland as at the last day of every month, i.e. from January 2009 to March 2009, respectively: 4,4392; 4,6578; 4,7013. The exchange rate for the presented reporting period is

17 III. Notes to the Consolidated Financial Statement of the Ciech Group 1. The most important events in the Ciech Group from January 1st, 2009 up to the preparation of this statement On January 5th, 2009, the shareholders of Polskie Konsorcjum Chemiczne Sp. z o.o. (PKCh) on the Shareholders Meeting adopted a resolution on increasing the Company s share capital by PLN 50 thousand to the amount of PLN 100 thousand. Simultaneously, CIECH S.A., Zakłady Azotowe w Tarnowie- Mościcach S.A. (ZAT), Zakłady Azotowe Kędzierzyn SA (ZAK) and PKCh signed a Shareholders Agreement, regulating the principles of cooperation between the parties in the process of future acquisition of a controlling shareholding in Anwil S.A. The shares acquired by ZAT and ZAK will entitle each of the companies to 25% of the votes at the Shareholders Meeting. The remaining 50% shall belong to CIECH S.A. The registration by the Registry Court in the register of companies of the National Court Register occurred on February 19th, The information was announced in Current Report no. 1 of January 5th, 2009 and Current Report no. 10 of February 27th, On January 14th, 2009, CIECH S.A. and PKP Cargo S.A., with its registered office in Warsaw, signed an agreement concerning the transport of goods of companies forming the Ciech Group on domestic routes. The value of the agreement for 2009 is estimated at approximately PLN 75 million. The information was announced in Current Report no. 2 of January 14th, On January 15th, 2009, an annex to the long-term agreement of April 15th, 2008 concluded by Soda Polska CIECH Sp. z o.o. and Kompania Węglowa S.A., was signed: it regulated the deliveries and prices of power coal in The value of the agreement in 2009 is estimated at approximately PLN 200 million net. The information was announced in Current Report no. 3 of January 15th, On January 26th, 2009, Soda Polska Ciech Sp. z o.o. (an indirect subsidiary of CIECH S.A.) concluded with Bank Pekao S.A., having its registered office in Warsaw, a Loan Agreement for the financing of the company s investment activity between 2008 and 2012, amounting to PLN 256,300 thousand. The information was announced in Current Report no. 5 of January 27th, On February 10th, 2009, the Management Board of CIECH S.A. decided to reduce operating costs and investment expenditure for Ciech Group in As a part of the savings program, the financial plan for 2009 assumes a reduction in operating costs by PLN 71 million and investment expenditure by PLN 121 million. The decision to reduce operating costs and investment expenditure is due to the need to respond to threats resulting from unfavourable changes in market conditions. The information was announced in Current Report no. 7 of February 10th, On February 18th, 2009, CIECH S.A. and Jochen Ohm concluded a settlement under which: Jochen Ohm, a former minority shareholder of Soda Deutschland Ciech GmbH and the President of German subsidiaries of CIECH S.A., resigns early from all his positions and functions. The collaboration between CIECH S.A. and its subsidiaries, on the one hand, and Jochen Ohm, on the other hand, is settled and finished conclusively. CIECH S.A. acquires the remaining 8% of shares in Soda Deutschland Ciech GmbH, thus becoming the sole shareholder of the company. CIECH S.A. obtains the title of ownership for the land where caverns held for sale are located. CIECH S.A. acquires rights to 100% of profits on the sale and exploitation of caverns. The value of the settlement amounts to EUR 12,500 thousand. The information was announced in Current Report no. 8 of February 18th, On March 18th, 2009, a multilateral agreement was concluded by and between Nafta Polska S.A. and the companies: CIECH S.A., Zakłady Azotowe w Tarnowie-Mościcach S.A., with its registered office in Tarnów, Zakłady Azotowe Kędzierzyn S.A., with its registered office in Kędzierzyn-Koźle, the financial advisor of Nafta Polska S.A., Raiffeisen Investment AG, with its registered office in Vienna, Raiffeisen Investment Polska Sp. z o.o., with its registered office in Warsaw, and the legal advisor of Nafta Polska, Radzikowski, Szubielska i Wspólnicy Spółka Komandytowa, with its registered office in Warsaw. The purpose of the agreement is the realisation of the process of selecting an investor or investors who will purchase shares in ZAT, ZAK and CIECH S.A. and who are able at the same time to acquire shares in the increased capital of the aforesaid companies. The financial advisors of Nafta Polska are Raiffeisen Investment AG, with its registered office in Vienna, Raiffeisen Investment Polska Sp. z o.o., with its registered office in Warsaw, and their subcontractors Lazard & Co. Limited, with its registered office in Great Britain, as well as Bank Zachodni WBK SA, with its registered office in Wrocław. The process includes, in particular, the preparatory phase, the announcement of an invitation to negotiations concerning the sale of shares in ZAT, ZAK and CIECH S.A., held by the State Treasury and 15

18 Nafta Polska, and negotiations with selected potential investors conducted by Nafta Polska. Pursuant to the agreement, every company authorised Nafta Polska to conduct any and all activities aimed at selecting one or several investors interested in acquiring the companies shares as well as in offering financial aid to the companies for the purchase of shares in Anwil S.A. or realisation of the companies other investment goals. All analyses and source documents will be provided by the companies in accordance with the provisions regulating the disclosure of confidential information within the meaning of the Act on the Offering. The agreement entered into force upon its signing and may be terminated by Nafta Polska at all times upon fourteen days notice. The agreement is automatically cancelled after 15 months from its signing unless the parties thereto decide to extend it in writing. Nafta Polska may assign its rights and obligations under the agreement to the State Treasury. The information was announced in Current Report no. 16 of March 19th, On April 10th, 2009, the project Establishment of a combustion gas desulphurisation system in Elektrociepłownia Janikowo gained initial acceptance and was entered onto the list of projects recommended for co-financing from EU funds, presented by the National Fund for Environmental Protection and Water Management (NFOSiGW). The subsidy equals the requested amount, i.e. over PLN 17 million. The co-financing agreement is scheduled for Q On April 10th, 2009, the project Development of boilers in EC Janikowo (CKTI2 boiler) gained initial acceptance and was entered onto the list of projects recommended for co-financing from EU funds, presented by the National Fund for Environmental Protection and Water Management (NFOSiGW). The subsidy equals the requested amount, i.e. over PLN 13 million. The co-financing agreement is scheduled for Q On April 14th, 2009, the Management Board of ZACHEM S.A. gave its consent for an additional working capital facility in Bank Pekao S.A. amounting to PLN 20,000 thousand. The Supervisory Board approved the decision. Plant and equipment constituting ZACHEM S.A. s tangible fixed assets are to be treated as collateral. On April 23rd, the District Court for the Capital City of Warsaw, 13th Commercial Division, registered an increase in the share capital of CIECH FINANCE Sp. z o.o. by PLN 600 thousand. The shares created as a result of share capital increase will be acquired by CIECH S.A. The capital was increased by way of a resolution of the Extraordinary Shareholders Meeting of April 1st, On April 28th, 2009, the Management Board of CIECH S.A. obtained information on the decision of the Regional Court in Warsaw (file no. XVI GC 531/07), delivered on the same day in a case against PTU S.A. instigated by FSO S.A. The Regional Court declared Resolutions no. 2 and 3 invalid, passed on March 19th, 2003 by the Compulsory Administration (acting in the capacity of the general shareholders meeting). Resolution no. 2 concerned a decrease in the share capital through reducing the nominal value of shares, while Resolution no. 3 concerned an increase in the share capital by way of 10th, 11th and 12th issue of shares with the exclusion of the pre-emptive right of former shareholders. Pursuant to Resolution no. 3 on the increase of share capital, the shares of PTU S.A. (operating under the name DAEWOO Towarzystwo Ubezpieczeniowe Spółka Akcyjna at the moment of passing the resolutions) were acquired, inter alia, by Janikowskie Zakłady Sodowe JANIKOSODA S.A. and Inowrocławskie Zakłady Chemiczne SODA MĄTWY S.A. Both resolutions were challenged by FSO S.A. but the court dismissed the suits twice. As a result of the appeal which was lodged, the Regional Court in Warsaw by way of a decision of April 28th, 2009 declared Resolutions no. 2 and 3 invalid, for in the opinion of the court these were adopted in breach of the principles of social intercourse. The decision is not final (which is why it is difficult to estimate its potential influence on the consolidated financial statement of the Ciech Group). The challenged resolutions remain in force until the decision is validated. As at the balance sheet date and reporting date, Janikowskie Zakłady Sodowe JANIKOSODA S.A. holds 22.71% of shares in the share capital of PTU S.A., while Inowrocławskie Zakłady Chemiczne SODA MĄTWY S.A %. The intention of the Management Board of PTU S.A. is to lodge an appeal in the case in question as soon as possible. On April 28th, 2009, the companies: CIECH S.A., Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. (hereinafter referred to as Siarkopol G), Kopalnie i Zakłady Przetwórcze Siarki Siarkopol in liquidation (hereinafter referred to as Siarkopol T) and Comexport Companhia De Comercio Exterior (hereinafter referred to as Comexport) signed a voluntary settlement concerning an amicable solution to the long-term dispute between Comexport, on the one hand, and Ciech S.A., Siarkopol T and Siarkopol G, on the other hand. The dispute resulted from a contract for the delivery of sulphur concluded in the 1990s. Under the concluded contract, the Polish entities paid Comexport an amount lower than the one adjudicated by way of a decision of the Court of Arbitration at the International Chamber of Commerce in Paris. CIECH S.A. obliged to pay Comexport USD 828 thousand. The amount was paid in the form of a bank draft for the benefit of Comexport on the date of settlement. Pursuant to the settlement, each party waived any and all 16

19 claims under the said contract for the delivery of sulphur as well as any and all claims resulting from the conducted proceedings. On May 5th, the Supervisory Board of CIECH S.A. adopted a resolution in which it gave a positive opinion on the motion lodged by the Management Board of CIECH S.A. on April 28th, 2009 and concerning the recommended allocation of CIECH S.A. s profit for 2008 amounting to PLN 14,994 thousand for the company s supplementary capital. The information was announced in Current Report no. 17 of May 6th, On May 5th, 2009, the Supervisory Board of CIECH S.A. adopted a resolution on the appointment of Deloitte Audyt Sp. z o.o. as an expert auditor to audit the financial statements of CIECH S.A. and the financial statements of the Ciech Group for The information was announced in Current Report no. 18 of May 6th, On May 5th, 2009, Sodawerk Stassfurt GmbH & Co. KG, a subsidiary of CIECH S.A., concluded with RWE Gasspeicher GmbH, a subsidiary of REW AG, an agreement concerning the sale of a mining title to part of an excavation area owned by Stassfurter Salzattel I and adjacent real property as well as the preparation of four caverns located in this area for gas storage. The contract will become effective after obtaining the consent of the local Mining Authority based on the German Federal Mine Act. The total contract value by 2019 will exceed EUR 60 million. The information was announced in Current Report no. 19 of May 6th, A description of achievements of the Ciech Group in the period between January 1st and March 31st, 2009 and a description of factors and events that have a significant impact on the financial result 2.1 Basic financial figures In Q1 2009, the Ciech Group generated a net profit amounting to PLN 33,189 thousand, the balance sheet total amounted to PLN 4,537,793 thousand and the net cash decreased by PLN 56,086 thousand. The table below presents selected financial figures and basic financial ratios for Q and Q Selected figures PLN Change 2009/2008 Net sales of products, goods and materials 970,845 1,030,985 (5.8%) Cost of sales 782, , % Gross profit from sales 188, ,275 (28.0%) Selling costs 50,939 64,457 (21.0%) General and administrative expenses 72,821 71, % Other operating revenue / expenses (447) 24,345 - Profit on operating activities 64, ,083 (57.3%) Financial revenue/expenses (11,224) (29,447) (61.9%) Share in net profit of subsidiaries valued under the equity method (1,467) 2,162 - Income tax 18,693 29,309 (36.2%) Profit on sales attributable to discontinued operations Net profit 33,189 94,489 (64.9%) Net profit attributable to minority shareholders 1,271 3,341 (62.0%) Net profit attributable to controlling shareholders 31,918 91,148 (65.0%) EBITDA 126, ,536 (37.7%) PLN Change 2009/2008 Assets Non-current assets 4,537,793 2,916,524 4,079,646 2,382, % 22.4% Current assets, including: 1,621,269 1,696,911 (4.5%) - inventory 418, , % - current receivables 1,052,501 1,092,904 (3.7%) - cash and cash equivalents 70, ,305 (64.6%) - current investments 378 2,976 (87.3%) - non-current assets held for sale 79,570 99,498 (20.0%) 17

20 PLN Change 2009/2008 Total equity 889,592 1,196,620 (25.7%) Equity attributable to controlling shareholders 837,407 1,149,917 (27.2%) Minority interest Non-current liabilities 52,185 1,070,197 46,703 1,349, % (20.7%) Current liabilities 2,578,004 1,533, % PLN Change 2009/2008 Net cash flows from operating activities 75,280 3,869 1,845.7% Net cash flows from investment activities Net cash flows from financial activities (146,146) 14,780 (10,228) 59,023 1,328.9% (75.0%) Total net cash flows (56,086) 52, Change 2009/2008 Net earnings per share (65.0%) Net return 3.4% 9.2% (62.7%) EBIT % 6.7% 14.7% (54.6%) EBITDA % 13.1% 19.7% (33.9%) Current ratio (45.5%) Quick ratio (44.4%) Debt ratio 80.4% 70.6% 13.9% Equity to assets ratio 19.6% 29.4% (33.0%) Source: CIECH S.A. Calculation principles: net earnings per share net earnings / weighted average number of ordinary shares in the given period (pursuant to the definition of IAS 33 Earnings per share ), net return net profit for a given period / net revenues from sales of products, services, goods and materials in a given period, EBIT % operating profit for a given period / net revenues from sales of products, services, goods and materials in a given period, EBITDA % (operating profit + depreciation for a given period) / net revenues from sales of products, services, goods and materials in a given period, current ratio current assets at the end of a given period / current liabilities at the end of a given period, quick ratio current assets less inventory at the end of a given period / current liabilities at the end of a given period, total debt ratio current and non-current liabilities at the end of a given period / total assets at the end of a given period, equity to assets ratio total equity at the end of a given period / total assets at the end of a given period. 2.2 Sales revenues Consolidated net sales of the Ciech Group in Q amounted to PLN 970,845 thousand. In comparison to the same period in 2008, net sales decreased by PLN 60,140 thousand, i.e. 6%. The main reason for the decrease were lower sales revenues in the organic segment obtained on major products (TDI, EPI, resins) due to a considerable price drop. The activity of the Ciech Group concentrates on four main segments: soda, organic, agro-chemical, silicates and glass. These segments generated in total more than 93% of the Group s sales revenues. The structure of revenues has not changed in comparison with the same period in The greatest share in the revenues for Q is attributed to the sales of soda segment products, similarly to the same period in Additionally, the dominant role of the soda segment, which generated more than 42% of sales revenues, increased. Sales revenues by business segment Q Q change change % % share in total revenues Q % share in total revenues Q Soda segment, including: 410, ,723 81, % 42.3% 31.9% Dense soda ash 256, ,823 55, % 26.4% 19.5% Light soda ash 74,509 62,338 12, % 7.7% 6.0% Salt 31,237 23,710 7, % 3.2% 2.3% Baking soda 24,440 16,935 7, % 2.5% 1.6% Calcium chloride 6,207 1,745 4, % 0.6% 0.2% 18

21 Q Q change change % % share in total revenues Q % share in total revenues Q Organic segment, including: 242, ,989 (67,061) (21.6%) 25.0% 30.1% TDI 93, ,577 (40,637) (30.2%) 9.7% 13.1% Resins 53,182 61,419 (8,237) (13.4%) 5.5% 6.0% Plastics 54,950 61,881 (6,931) (11.2%) 5.7% 6.0% EPI 10,012 17,832 (7,820) (43.9%) 1.0% 1.7% Agro-chemical segment, including: 214, ,488 (45,008) (17.3%) 22.1% 25.2% Fertilisers 76, ,036 (44,414) (36.7%) 7.9% 11.7% Plant protection chemicals 62,013 73,445 (11,433) (15.6%) 6.4% 7.1% Phosphoric acid 16,534 18,524 (1,990) (10.7%) 1.7% 1.8% Phosphorites 9,756 3,582 6, % 1.0% 0.3% Feed 6,861 5,543 1, % 0.7% 0.5% Grain 4,487 3,289 1, % 0.5% 0.3% Silicates and glass segment, including: 42,010 70,106 (28,096) (40.1%) 4.3% 6.8% Sulphur 1,072 16,528 (15,456) (93.5%) 0.1% 1.6% Glass blocks and packaging 21,408 24,300 (2,892) (11.9%) 2.2% 2.4% Sodium glass 9,952 7,729 2, % 1.0% 0.7% Sodium water glass 4,087 4,371 (,284) (6.5%) 0.4% 0.4% Other operations segment 61,198 62,679 (1,481) (2.4%) 6.3% 6.1% TOTAL 970,845 1,030,985 (60,140) (5.8%) 100.0% 100.0% 2.3 Profit/loss on sales and operating profit/loss In Q1 2009, the gross profit on sales amounted to PLN 188,780 thousand and in the same period of 2008 PLN 262,275 thousand, whereas operating profit amounted to PLN 64,573 thousand and PLN 151,083 thousand, respectively. The positive contributors to the presented profit were as follows: persistence of high prices of soda ash on European markets, persistence of low prices of raw materials for petrochemical production, maximum use of TDI production and sales capacity, considerable weakening of the Polish currency (against the EUR and USD), favouring the improvement of export profitability of the Ciech Group (excluding currency hedging transactions). The presented results also take into account one-off events, i.e. settlement of the purchase of 8% of shares in Soda Deutschland Ciech GmbH from Jochen Ohm and the purchase of shares in ZACHEM S.A. from its employees. The negative contributors to the presented profit were as follows: considerable decrease in the domestic sales of chemical products, excluding pharmaceuticals, between January and March, 2009 in comparison with the same period in 2008 (by more than 11% as per fixed prices, the 2007 Polish Classification of Economic Activities), i.e. at the level of adequate decrease for the entire Polish industry, situation on the soda ash market a lower demand from recipients translates into a decreased sales volume, which creates price pressure (weakening of the former economic upturn in the European glass industry the main recipient of soda ash connected with the uncertainty of soda ash producers and recipients as to further development of their markets), price and margin drop on the TDI market as a result of the crisis in the furniture, construction and automotive industries, i.e. major TDI recipients, situation on the domestic market of compound fertilisers very low demand for fertilisers from agricultural producers, which results mainly from the high level of prices in relation to the customer purchasing power; moreover, the prices of compound fertilisers on global markets remain low, decrease in demand and strong competition on the market of epoxy and polyester resins. After Q1 2009, the EBIT margin rate amounted to 6.7% (14.7% the year before). 19

22 2.4 Net profit/loss The consolidated net profit for Q amounted to PLN 33,189 thousand, whereby PLN 31,918 thousand is the controlling shareholders net profit. Net profitability reached 3.4%. Besides the operating result, the net profit in Q was affected by the measurement of financial instruments and costs of increased debt service. At the same time, the negative impact of high financial costs was partially balanced by positive currency differences. Financial performance by type of business PLN change 2009/ Profit on operating activities 64, ,083 (57.3%) 2. Net financial revenues/expenses (11,224) (29,447) (61.9%) 3. Share in net profit of subsidiaries valued under the equity method (1,467) 2,162 (167.9%) 4. Income tax 18,693 29,309 (36.2%) 5. Profit on sales attributable to discontinued operations Net profit ( ) 33,189 94,489 (64.9%) 7. Profit attributable to minority shareholders 1,271 3,341 (62.0%) 8. Profit attributable to controlling shareholders (6-7) 31,918 91,148 (65.0%) Source: CIECH S.A. 2.5 Assets At the end of March 2009, the Group s non-current assets amounted to PLN 2,916,524 thousand. In comparison with the balance as at December 31st, 2008, the value of non-current assets increased by PLN 134,755 thousand (i.e. 4.8%). The highest increase was observed in the case of tangible non-current assets, which grew by PLN 103,439 thousand, i.e. by 4.4%, as compared to December The increase was mainly due to investment expenditure on production assets in order to keep up with the current pace of growth. In particular, this refers to SODA MĄTWY Group, Z.Ch. Organika-Sarzyna S.A., ZACHEM S.A. and Soda Deutschland Ciech Group. The share of non-current assets in total assets is 64.3% (nearly 84.5% at the end of 2008). The Group s current assets amounted to PLN 1,621,269 thousand as at March 31st, The following items dominated among the current assets: trade and other receivables 63.1% of current assets, and inventory 25.8%. As compared with the end of December 2008, the value of current assets increased by PLN 40,924 thousand (the highest increase was observed under trade and other receivables by PLN 91,936 thousand); on the other hand, the value of cash and cash equivalents decreased by PLN 41,597 thousand and the value of inventory by PLN 18,809 in comparison with December Liabilities The Ciech Group s liabilities (non-current and current) as at March 31st, 2009 amounted to PLN 3,648,201 thousand, which signifies an increase in comparison with the balance as at the end of December 2008 by PLN 200,375 thousand (i.e. 5.8%). The increase in liabilities results mainly from the increase in liabilities pertaining to loans and borrowings (increase by PLN 111,948 thousand, i.e. 6.5%), whereby current liabilities increased by PLN 113,070 thousand and noncurrent liabilities decreased by PLN 1,122 thousand. The information on the change in the structure of liabilities is presented in part III, point 20 of this Report. Moreover, the Group s companies, mainly SODA MĄTWY Group and ZACHEM, financed certain investment outlays on production assets from external funds. The decrease in other non-current liabilities in comparison with the balance as at the end of December 2008 is connected mainly with the settlement of purchase of shares in Soda Deutschland Ciech from J. Ohm. The total debt ratio (current and non-current liabilities / total assets) was 80.4% as at March 31st, 2009 (79.0% at 20