CONSOLIDATED ANNUAL REPORT OF THE IMPEXMETAL CAPITAL GROUP

Transcription

1 CONSOLIDATED ANNUAL REPORT OF THE IMPEXMETAL CAPITAL GROUP FOR 2014

2 POLISH FINANCIAL SUPERVISION AUTHORITY Consolidated annual report RS 2014 (pursuant to 82 section 2 of the Regulation of the Minister of Finance of 19 February 2009 Journal of Laws No. 33, item 259) for the issuers of securities dealing with production, construction, trade or services IMPEXMET for financial year 2014 covering the period from January 1, 2014 to December 31, 2014 including consolidated financial statements in line with: IAS/IFRS in the currency of:. ths (short name of issuer) Warsaw (zip code) (place) submitted on: March 17, 2015 IMPEXMETAL S.A. (full name of issuer) Metalowy (met) (sector as classified by WSE) Łucka 7/9 (street) (phone) (fax) info@impexmetal.com.pl ( ) TAX IDENTIFICATION NUMBER (NIP) NATIONAL REGISTER OF ECONOMIC UNITS (REGON) (www) Deloitte Polska Spółka z ograniczoną odpowiedzialnością S.k. (entity authorized to audit) SELECTED FINANCIAL DATA in ths (number) in EUR ths I. Sales revenue II. Operating profit (loss) III. Gross profit (loss) before tax IV. Net profit (loss) from continued activities attributable to equity of the parent V. Net profit (loss) VI. Net profit (loss) attributable to equity of the parent VII. Net cash flows from operating activities VIII. Net cash flows from investment activities ( ) ( ) (28 406) (46 680) IX. Net cash flows from financial activities (21 321) (5 089) X. Total net cash flows (15 468) 98 (3 692) 23 XI. Number of shares without treasury shares units as of December 12, 2014 and as of December 31, 2013 XII. Net earnings (loss) / diluted earnings (loss) of the parent per ordinary share (in /EUR) ,58 0,38 0,14 0,09 XIII. Weighted average of shares (in units) without treasury shares XIV. Net earnings (loss) / diluted earnings (loss) of the parent per share/weighted numbers of shares (in /EUR) 0,58 0,38 0,14 0, XV. Total assets XVI. Non-current liabilities XVII. Current liabilities XVIII. Equity XIX. Equity attributable to equity holders of the parent XX. Share capital XXI. Number of shares (in units) without treasury shares XXII. Book value / diluted book value per share of the parent (in /EUR) ,97 1,31 1,20

3 Consolidated financial statement of the Impexmetal Capital Group

4 Consolidated financial statement drawn up in accordance with IFRS adopted by the European Union Table of contents CONSOLIDATED INCOME STATEMENT... 5 STATEMENT OF COMPREHENSIVE INCOME... 6 CONSOLIDATED BALANCE SHEET... 6 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY... 9 CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT General information regarding the Impexmetal Capital Group Ongoing proceedings in HMN Szopienice S.A. in liquidation Platform of International Financial Reporting Standards Used Statement of the Board on the Compliance of Accounting Policies Statement of the Board on the selection of an entity to audit the financial statements Accounting principles Sales revenue Business segments industry and geographical Cost of products, goods and materials sold Other operating revenue Other operating expenses Surplus of the acquired interest in subsidiaries over the cost of acquisition Financial revenue Financial expenses Income tax Earnings per share Proposal of the Management Board regarding the distribution of profits Tangible fixed assets Investment properties at fair value Intangible assets Goodwill Investments in subsidiaries excluded from consolidation Deferred income tax assets Receivables and other long-term assets Inventories Trade and other receivables Derivative financial instruments Available-for-sale financial assets Other assets Cash and cash equivalents Assets and liabilities related to assets held for sale Initial (share) capital Own shares (negative value) Supplementary capital due to issue of shares above their face value Capital due to hedge accounting Capital due to revaluation of assets available to sell Capital due to revaluation of pension and similar benefits Retained earnings Bank loans and credits Reserves for liabilities on account of pension and similar benefits Other provisions Other liabilities Trade and other liabilities Financial instruments Financial risk management and sensitivity analysis Transactions with related parties Explanation of the statement of cash flows Dividend pair or declared within the period from the beginning of the year Changes between data revealed in this financial statement and data published in previous financial statements, impacting the result and capital Changes in contingent receivables and liabilities Significant events pertaining to the Group's activity during the period covered by the report Cyclicality and seasonality of operations in the current period Employment structure Contract and remuneration of the entity auditing the financial statements of the parent company Significant events after the reporting date Approval of the financial statement page 4

5 Consolidated financial statement drawn up in accordance with IFRS adopted by the European Union CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31, 2014 AND FOR 2013, RESPECTIVELY Continuing operations note 31/12/ /12/2013 Revenue from sales of products Revenue from sales of goods and materials Total revenue from sales Cost of products sold Value of goods and materials sold Cost of products, goods and materials sold Gross profit (loss) on sales Selling expenses General and administrative costs Other operating revenue Other operating expenses Operating profit (loss) Financial revenue Financial expenses Profit (loss) before tax Income tax Net profit (loss) from continued operations Attributable to: Equity holders of the parent Minority shareholders Net profit (loss) from discontinued operations Net profit (loss) Attributable to: Equity holders of the parent Minority shareholders Net profit (loss) per share attributable to equity holders of the 16 0,58 0,38 parent (in ) Diluted earnings (loss) per ordinary share (in ) 0,58 0,38 Net profit (loss) from continued operations attributable to equity holders of the parent (in ) Diluted earnings (loss) from continued operations per ordinary share (in ) Net profit (loss) from discontinued operations attributable to equity holders of the parent (in ) Diluted earnings (loss) from discontinued operations per ordinary share (in ) 16 0,54 0,31 0,54 0,31 0,04 0,07 0,04 0,07 Explanatory notes to the consolidated financial statement constitute its integral part. 5

6 Consolidated financial statement drawn up in accordance with IFRS adopted by the European Union STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31, 2014 AND FOR 2013, RESPECTIVELY note 31/12/ /12/2013 Net profit (loss) Income in capital to be reclassified to the financial result (4 151) Exchange differences on recalculation of foreign units Hedging instruments of cash flows (3 645) Revaluation of assets available to sell 36 (2 610) (1 140) Deferred income tax regarding income in capital (571) 596 Income in capital not to be reclassified to the financial result (456) 106 Valuation of pension and similar benefits 37 (562) 131 Deferred income tax regarding income in capital 106 (25) Income recognized in net capital (4 045) Total comprehensive income Attributable to: Equity holders of the parent Minority shareholders CONSOLIDATED INCOME STATEMENT discontinued operations FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31, 2014 AND FOR 2013, RESPECTIVELY Discontinued operations 31/12/ /12/2013 Revenue from sales of products Revenue from sales of goods and materials Total revenue from sales Cost of products sold Value of goods and materials sold Cost of products, goods and materials sold Gross profit (loss) on sales Other operating revenue Other operating expenses Operating profit (loss) Financial revenue 3 9 Financial expenses Profit (loss) before tax Income tax (9 033) Net profit (loss) from discontinued operations Attributable to: Equity holders of the parent Minority shareholders Explanatory notes to the consolidated financial statement constitute its integral part. CONSOLIDATED BALANCE SHEET COMPILED AS OF DECEMBER 31, 2014 AD DECEMBER 31, 2013, RESPECTIVELY 6

7 Consolidated financial statement drawn up in accordance with IFRS adopted by the European Union ASSETS note 31/12/ /12/2013 Fixed assets Tangible fixed assets Investment property Intangible assets Goodwill Investments in controlled entities Available for sale financial assets Loans granted Deferred income tax assets Receivables and other non-current assets Total non-current assets Current assets Inventories Trade and other receivables Loans granted Derivative financial instruments Available for sale financial assets Income tax receivables Other assets Cash and cash equivalents Total current assets Held-for-sale assets (*) Total assets (*) Discontinued operations of HMN Szopienice S.A. in liquidation. Explanatory notes to the consolidated financial statement constitute its integral part. 7

8 Consolidated financial statement drawn up in accordance with IFRS adopted by the European Union CONSOLIDATED BALANCE SHEET (cont'd) LIABILITIES Equity note 31/12/ /12/2013 Initial (share) capital Own shares (negative value) 33 (24 441) (24 441) Supplementary capital due to issue of shares above their face value Capital due to hedge accounting (2 528) Capital due to valuation of pension and similar benefits 37 (222) 161 Capital due to revaluation of assets available to sell 36 (1 780) 334 Exchange differences on recalculation of controlled entities Retained earnings, including: Reserve capital Profit of the equity holders of the parent in the current year Equity attributable to equity holders of the parent Equity attributable to minority shareholders Total equity Long-term liabilities and provisions for liabilities Bank loans and credits Reserves for liabilities on account of pension and similar benefits Deferred income tax liabilities Other long-term provisions Other Liabilities Other liabilities Total long-term liabilities and provisions Short-term liabilities and provisions for liabilities Trade and other liabilities Bank loans and credits Derivative financial instruments Income tax liabilities Reserves for liabilities on account of pension and similar benefits Other short-term provisions Other liabilities Total short-term liabilities and provisions Total liabilities Liabilities related to held-for-sale assets (*) Total liabilities (*) Discontinued operations of HMN Szopienice S.A. in liquidation. Explanatory notes to the consolidated financial statement constitute its integral part. 8

9 Consolidated financial statement drawn up in accordance with IFRS adopted by the European Union (IAS 34) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31, 2014 AND FOR 2013, RESPECTIVELY note initial (share) capital own shares (*) supplementary capital due to issue of shares above their face value capital due to hedge accounting equity attributable to equity holders of the parent capital due to revaluation of assets available to sell exchange differences on recalculation of foreign units capital due to valuation of pension and similar benefits retained earnings equity attributable to minority shareholders State as of January 1, (24 441) (2 528) Total income for (2 114) (383) Treasury shares buy-back Capital from consolidation (change of share structure) (17) 22 5 Dividend payment (283) (283) State as of December 31, (24 441) (1 780) (222) total State as of January 1, 2013 note initial (share) capital own shares (*) supplementary capital due to issue of shares above their face value capital due to hedge accounting equity attributable to equity holders of the parent capital due to revaluation of assets available to sell exchange differences on recalculation of foreign units capital due to valuation of pension and similar benefits retained earnings equity attributable to minority shareholders (22 498) Total income for (2 853) (924) Treasury shares buy-back 33 - (1 943) (1 943) Capital from consolidation (change of share structure) Dividend payment (179) (179) State as of December 31, (24 441) (2 528) (*) Own shares in the price of purchase, purchased for redemption or further re-sale in the amount of units as of and as of total Equity capital attributable to equity holders of the parent has been influenced by changes in stakes of the parent entity in subsidiaries, which did not result in the loss of control. The changes have been described in note 1 in point Changes in the structure of the Impexmetal Capital Group in Explanatory notes to the consolidated financial statement constitute its integral part. 9

10 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31, 2014 AND FOR 2013, RESPECTIVELY note 31/12/ /12/2013 Cash flows from operating activities Profit (loss) before tax Amortization and depreciation Profit/loss on financial operations Dividends from profit shares (2 098) (399) Profit/loss on investment operations (15 937) (21 715) Changes in working capital Receivables (increase) / decrease Inventories (increase) / decrease (67 663) (9 181) Liabilities increase / (decrease) (36 872) Provisions and accruals (15 892) Other items (3 903) Cash generated on operating activities Income tax received / (paid) (2 626) (1 935) Net cash flows from operating activities Cash flows from investing activities Proceeds Disposal of tangible fixed assets Sales of financial assets Dividends received Interest received and repayment of granted loans Disposal of bonds Other investing proceeds - 1 Payments Purchase of tangible fixed assets (46 759) (29 933) Acquisition of financial assets ( ) ( ) Loans granted (44 632) (54 853) Purchase of bonds (45 222) (39 189) Other investing expenditures (728) - Net cash flows from investment activities 30 ( ) ( ) Cash flows from financial activities Proceeds Credits and Loans Other financial income Payments Purchase of own shares - (1 943) Dividends and other payments to owners (283) (3 078) Repayment of credits and loans ( ) (85 811) Payments due to financial lease agreements (84) (36) Interest paid (9 765) (14 974) Other financial expenditures (2 405) - Net cash flows from financial activities 30 (21 321) Total net cash flows (15 468) 98 Impact of exchange rate fluctuations on the balance of cash in foreign currencies 474 (177) Change of cash and cash equivalents (14 994) (79) Opening balance of cash and cash equivalents, including: from continued operations from discontinued operations Opening balance of cash of purchased/disposed entities - - Closing balance of cash and cash equivalents, including: from continued operations from discontinued operations Explanatory notes to the consolidated financial statement constitute its integral part. 10

11 CONSOLIDATED STATEMENT OF CASH FLOWS discontinued operations FOR THE PERIOD FROM JANUARY 1 TO DECEMBER 31, 2014 AND FOR 2013, RESPECTIVELY Discontinued operations Cash flows from operating activities 31/12/ /12/2013 Profit (loss) before tax Corrections (9 316) (36 810) Interest paid - - Net cash flows from operating activities (9 012) (13 582) Cash flows from investing activities Proceeds Payments - - Net cash flows from investment activities Cash flows from financial activities Proceeds Payments (5 132) (9 038) Net cash flows from financial activities (7 733) Change of cash and cash equivalents 307 (474) Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents Explanatory notes to the consolidated financial statement constitute its integral part. 11

12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT COMPILED AS OF DECEMBER 31, General information regarding the Impexmetal Capital Group The parent company, Impexmetal S.A., hereinafter referred to as the parent company/company, was established on July 1, 1995 in Warsaw, through a transformation of the state-owned company Centrala Importowo Eksportowa Impexmetal. The Company's registered office is the city of Warsaw, at ul. Łucka 7/9. The Company is registered in the District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register, under National Court Register (KRS) number The Company as a National Register of Economic Units (REGON) number of , as well as a Tax Identification Number (NIP) of On June 30, 2008, the Company merged with the subsidiary Aluminium Konin Impexmetal S.A. The merger of Impexmetal S.A. and Aluminium Konin Impexmetal S.A. occurred pursuant to art pt. 1 in relation to art of the Code of Commercial Companies ( CCC ) by transferring all assets of the acquired company (Aluminium Konin - Impexmetal S.A.) to the acquirer (Impexmetal S.A.). Since June 30, 2008, according to the Polish Classification of Activities, Impexmetal has been operating as a joint stock company with the primary business activity no B. The primary business activity of the parent company includes: - manufacture of aluminum and aluminum alloys, - wholesale of metals and metal ores, - wholesale of other intermediates, Impexmetal S.A. is the parent company of the Impexmetal Group. The parent company in relation to Impexmetal S.A. is Boryszew S.A. The Company is entitled to establish companies of any business profile both domestically and abroad, to join other companies and to set up branches and representative offices. Impexmetal S.A. shares are traded on a regulated market the Metal Industries Sector (according to the classification of the Warsaw Stock Exchange) since June 24, The duration of the Company is unlimited. The primary business activities of the companies of Capital Group Impexmetal, included in the consolidated financial statements, include: manufacture of steel products from copper and its alloys, manufacture of steel products from copper and brass, manufacture of intermediates from copper and its alloys, manufacture of products from zinc, purchase, processing and trading of battery scrap and non-ferrous metal waste, manufacture of lead, commercial activities. 12

13 Structure of the Impexmetal Capital Group as of December 31, 2014: Structure of the Impexmetal Capital Group subsidiaries fully consolidated as of December 31, 2014: Impexmetal Capital Group according to operating segments Aluminum Copper Zinc and lead Trade FŁT Polska Sp. z o.o. FLT Bearings Ltd. FLT France SAS FLT Metals Ltd. Metalexfrance S.A. Impexmetal S.A. Baterpol S.A. Impexmetal S.A. Sales Division with the exclusion of the Sales Division /parent company/ Hutmen S.A. ZM Silesia S.A. Other unassigned Symonvit Ltd. WM Dziedzice S.A. Polski Cynk Sp. z o.o. S&I S.A. SPV Lakme Investment Sp. z o.o. SPV Impexmetal Sp. z o.o. Baterpol Recykler Sp. z o.o Impex-invest Sp. z o.o. Eastside Capital Investments Sp. z o.o. Baterpol Recykler Sp. z o.o. Sp. komandytowa Baterpol S.A. Sp. komandytowa Surowce Hutmen S.A. Sp. komandytowa Baterpol S.A. i Wspólnicy Sp. komandytowa Baterpol Recycler Sp. z o.o. Komandytowo Akcyjna ZM Nieruchomości Sp. z o.o. Since November 2005, the parent company with regard to Impexmetal S.A. is Boryszew S.A. Within the on December 31, 2014, the set-up of industry segments has changed. Baterpol Recycler Sp. z o.o. and SPV Impexmetal Sp. z o.o., previously presented as Other unassigned, have been reclassified to the Zinc and lead as well as Aluminum segment. The change was caused by the start of activities by Baterpol Recycler Sp. z o.o. and by transferring assets from Symonvit Ltd. to SPV Impexmetal Sp. z o.o. 13

14 Impexmetal Capital Group by % of share capital Impexmetal S.A. 100% 98,35% FŁT Polska Sp. z o.o. 98,35% FLT France SAS 98,35% 100% FLT Bearings Ltd. 98,35% 97,00% 78,55% Impex-Invest Sp. z o.o. 100% 100% HMN Szopienice S.A. SPV Lakme Investment 100% Metalexfrance S.A. in liquidation 61,77% Sp. z o.o. 98,35% 49,03% 61,56% 100% 13,48% Production companies effective % share in own capital SPV Impexmetal Sp. z o.o. 98,79% (*) Baterpol S.A i Wspólnicy Sp. komandytowa 21,45% Hutmen S.A. 65,07% 71,30% 2,72% 88,46% 100% 97,03% ZM Silesia S.A. 97,88% (**) 11,54% Polski Cynk Sp. z o.o. 99,66% Baterpol S.A. 99,66% Baterpol Recykler Sp.z o.o. 99,66% 100% 100% 100% ZM Nieruchomości Sp. z o.o. 97,03% Baterpol Recykler Sp. z.o.o Sp. Komandytowo-Akcyjna Eastside Capital Investments Sp. z o.o. 100% 100% Trading and service companies effective % equity share Other companies effective % equity share WM Dziedzice S.A. 73,17% 26,78% Baterpol Recykler Sp. z.o.o Sp. komandytowa FLT& Metals Ltd. 100% 100% Companies in liquidation effective % equity share Surowce Hutmen S.A Sp. komandytowa Baterpol S.A Sp. komandytowa S&I S.A. 100% 100% (*) Zakład Utylizacji Odpadów Sp. z o.o. unconsolidated subsidiary directly holds 2,98% of the capital, while Impexmetal S.A. holds 59,97% of the capital of Zakład Utylizacji Odpadów Sp. z o.o. (**) Impexmetal S.A. holds 97,03% share capital and, moreover, ZM Silesia S.A. holds 0,87% of own shares. Symonvit Ltd. 100% 100% 14

15 Detailed information regarding owned shares and stocks in subsidiaries fully consolidated as of December 31, 2014: Name of unit Place of registration and business activity Effective share of the parent company in the Company (%) Share in the total number of votes (%) Gross value of shares and stocks Write-downs / differences in contribution in kind (*) Carrying value of shares and stocks (net) ZM Silesia S.A. (a) Katowice 97,88 97, FLT & Metals Ltd. London, Great Britain Primary activity manufacture of products from zinc 100,00 100, trade Metalexfrance S.A. (b) Paris, France 98,35 100, trade distribution of FŁT Polska Sp. z o.o. Warsaw 98,35 98, bearings purchase, processing Baterpol S.A. (c) Świętochłowice 99,66 100, and trade of battery scrap Polski Cynk Sp. z o.o. (d) Oława 99,66 100, (79 328) (**) trade HMN Szopienice S.A. in liquidation (e) Katowice 61,56 61,77 10 (10) - Hutmen S.A. (f) Wrocław 65,07 65, WM Dziedzice S.A. (g) Czechowice- Dziedzice 73,17 98, (2 039) in liquidation since production of intermediates from copper and its alloys manufacture of products from copper and brass S & I S.A. Switzerland 100,00 100, does not conduct operational activity FLT Bearings Ltd. (h) London, Great Britain 98,35 100, distribution of bearings FLT France SAS SPV Lakme Investment Sp. z o.o. Impex Invest Sp. z o.o. Eastside Capital Investments Sp. z o.o. (i) Sartrouville, France 98,35 100, (500) distribution of bearings Warsaw 100,00 100, (63 884) (*) development (j) Warsaw 100,00 100, (*) investment Warsaw 100,00 100, has not commenced business activity Symonvit Ltd. Cyprus 100,00 100, cease of activity Baterpol Recycler Sp. z o.o. Baterpol S.A. i Wspólnicy Sp. K. Surowce Hutmen S.A. Sp. K. Baterpol Recycler Sp. z o.o. Sp. K. (k) Wrocław 99,66 100, zinciferous waste disposal (**) Warsaw 100,00 100, (*) wholesale of products (**) Wrocław 100,00 100, (**) Wrocław 100,00 100, Baterpol S.A. Sp. K. (**) Katowice 100,00 100, SPV Impexmetal Sp. z o.o. Baterpol Recycler Sp. z o.o. Sp. K.-A. ZM Nieruchomości Sp. z o.o. wholesale of waste and scrap wholesale of waste and scrap wholesale of waste and scrap (l) Warsaw 98,79 99, ( ) (*) 477 asset management (m) Katowice 97,03 100, (19 110) (*) 126 (n) Katowice 97,03 100, Total ( ) manufacture of inorganic chemicals property management (*) Difference in contribution in kind. (**) Due to the different shares in the profit, loss and liquidation capital, for the purpose of simplification the effective participation of the Parent Company in the company of 100% was adopted. (a) Impexmetal S.A. holds 97,03% share capital and, moreover, ZM Silesia S.A. holds 0,87% of own shares (b) Share of FŁT Polska Sp. z o.o. in the share capital and votes at the AGM 100% (c) Share of Polski Cynk Sp. z o.o. in the share capital and votes at the AGM 100% (d) Share of Impexmetal S.A. in the share capital and votes at the AGM 88,46% Share of ZM Silesia S.A. in the share capital and votes at the AGM 11,54% 15

16 (e) Share of Polski Cynk Sp. z o.o. in the share capital and votes at the AGM 61,77% (f) Share of Impexmetal S.A. in the share capital and votes at the AGM 2,72% Share of Impex Invest Sp. z o.o. in the share capital and votes at the AGM 49,03% Share of SPV Impexmetal Sp. z o.o. in the share capital and votes at the AGM 13,48% (g) Share of Impexmetal S.A. in the share capital 26,78% and votes at the AGM 26,57% Share of Hutmen S.A. in the share capital 71,30% and votes at the AGM 71,52% (h) Share of ZMFLT France SAS in the share capital and votes at the AGM 100 % (i) Share of FŁT Polska Sp. z o.o. in the share capital and votes at the AGM 100% (j) Share of Impexmetal S.A. in the share capital and votes at the AGM 78,55% Share of Baterpol S.A. i Wspólnicy spółka komandytowa in the share capital and votes at the AGM 21,45% (k) Share of Polski Cynk Sp. z o.o. in the share capital and votes at the AGM % (l) Share of Impexmetal in the share capital and votes at the AGM 97,00%, Share of Zakład Utylizacji Odpadów Sp. z o.o. unconsolidated subsidiary in the share capital and votes at the AGM 2,98% (share of Impexmetal S.A. in the share capital and votes at the AGM of Zakład Utylizacji Odpadów Sp. z o.o. is 59,97%) (m) Share of ZM Silesia S.A. in the share capital and votes at the AGM 100,00% (n) Share of ZM Silesia S.A. in the share capital and votes at the AGM 100,00% Companies excluded from consolidation are presented in Note 22. Exclusions from consolidation of some of the Impexmetal Capital Group's companies were done due to their negligible impact on the consolidated financial statement and due to the fact that the effect associated with including them in the consolidation would be disproportionate with the amount of work incurred associated with this task. Changes in the Capital Group structure in 2014 Disposal of Susmed Sp. z o.o. shares On April 29, 2014 Hutmen S.A. disposed of shares constituting 100% of the share capital and votes at the General Meeting of Shareholders of Susmed Sp. z o.o. seated in Toruń in favor of an entity from outside of the Impexmetal Capital Group. Disposal of shares in Baterpol Recycler Sp. z o.o. Spółka Komandytowo - Akcyjna by Baterpol S.A. On August 11, 2014 Baterpol S.A. disposed of A series shares with a face value of 100,00 each, constituting 100% share capital in Baterpol Recycler Sp. z o.o. Spółka Komandytowo Akcyjna. The shares were purchased by ZM Silesia S.A. Increase of share capital in Baterpol Recycler Sp. z o.o. Spółka Komandytowo Akcyjna On August 14, 2014, the Extraordinary General Meeting of Baterpol Recycler spółka z ograniczoną odpowiedzialnością spółka komandytowo akcyjna adopted a resolution regarding the increase of the company's share capital from ,00 to ,00 through the issuing of Class B shares with a face value of 100,00 each as part of private subscription. Moreover, a resolution was adopted regarding the change of the Company's Statute. The offer to take up the Class B shares was presented to the sole shareholder of the company, i.e. ZM Silesia S.A. On August 14, 2014 ZM Silesia S.A. accepted the offer to take up the shares. The Class B shares were covered with a contribution in kind in the form of perpetual usufruct right to plots located in Katowice at Al. Korfantego, with a total value of ,00. ZM Silesia S.A. transferred the perpetual usufruct right to lands and ownership of properties onto Baterpol Recycler spółka z ograniczoną odpowiedzialnością S.K.A. On October 29, 2014, the District Court for Katowice Wschód in Katowice, VIII Commercial Division of the National Court Register registered an increase of the Company's share capital in the Register of Entrepreneurs. Establishment of ZM Nieruchomości Sp. z o.o. On September 12, 2014, ZM Silesia S.A. established a company called ZM Nieruchomości Sp. z o.o. The registered office of the new Company is Katowice. The share capital is 5 000,00 and is divided into 100 equal and undivided shares with a face value of 50,00 each. ZM Silesia S.A. took up all the shares in the Company's share capital. The Court entered the new entity into the Register of Entrepreneurs kept by the National Court Register on October 22, Liquidation of Katech-Hutmen Sp. z o.o. On September 24, 2014 Hutmen S.A. obtained information from the Proxy of Hutmen S.A. regarding the start of liquidation of Katech-Hutmen Sp. z o.o. under the Ukrainian law. The company has not conducted activity since April 1, 2003 and is excluded from consolidation. 16

17 Increase of share capital in SPV Impexmetal Spółka z o.o. On October 15, 2014, the Extraordinary General Meeting of SPV Impexmetal Sp. z o.o., with a registered seat in Warsaw, increased the share capital of the Company from ,00 (one million one hundred thousand Polish zlotys) to ,00 (thirty three million five hundred twenty seven thousand Polish zlotys), i.e. by a sum of ,00 (thirty two million four hundred twenty seven thousand Polish zlotys), by creating (thirty two thousand four hundred twenty seven) new shares with a face value of 1 000,00 (one thousand Polish zlotys) each. All newly-created shares will be taken up by Impexmetal S.A. at a price of 5 000,00 per 1 share (five thousand Polish zlotys). On January 26, 2015 the District Court for the Capital City of Warsaw in Warsaw, XII Commercial Division of the National Court Register made an entry regarding the increase of the Company's share capital in the Register of Entrepreneurs. Sales of Hutmen S.A. shares to a subsidiary On December 30, 2014 Impexmetal S.A. transferred shares of Hutmen to SPV Impexmetal Sp. z o.o. based on a civil law contract and orders. The shares constitute 13,48% of that company's share capital and provide 13,48 votes at the General Meeting of the company. As a result of transferring the shares, Impexmetal S.A. holds shares of Hutmen S.A., which constitutes 2,72% of that company's share capital and which entitled to 2,72% of votes at the General Meeting. Changes in the Group structure after December 31, 2014 Liquidation of Symonvit Limited On January 7, 2015 a petition was filed to the registry court in Limassol (Cyprus) regarding Members' voluntary winding up of Symonvit Ltd., in which Impexmetal S.A. holds 100% shares. Increase of share capital in Impex-Invest Sp. z o.o. On January 22, 2015, the Extraordinary General Meeting of Impex-Invest Sp. z o.o. adopted a resolution regarding the increase of share capital from the sum of ,00 to ,00, i.e. by an amount of ,00, through creating 500 new shares with a face value of 1 000,00 each. All newly-created shares were taken up by Impexmetal S.A. and were covered by a contribution in kind. Currently, Impexmetal S.A. directly holds 79% of capital and votes at the General Meeting, while the second shareholder Baterpol S.A. i Wspólnicy s.k. directly holds 21% of capital and votes at the General Meeting. Increase of share capital in Eastside Capital Investments Sp. z o.o. On January 20, 2015, the Extraordinary General Meeting of Eastside Capital Investments Sp. z o.o. adopted a resolution regarding the increase of share capital from the sum of ,00 to ,00, i.e. by an amount of ,00, through creating 50 new shares with a face value of 1 000,00 each. All newly-created shares were taken up by Impexmetal S.A. and were covered by a contribution in kind. Currently, Impexmetal S.A. directly holds 100% of share and capital at the General Meeting. 17

18 Details regarding subsidiaries which have a significant impact on minority shares A subsidiary of large impact on minority shares in the Impexmetal Capital Group is Hutmen S.A. listed on the Stock Exchange. Presented below is financial information of Hutmen S.A. which has significant minority shares. The indicated sums are amounts before eliminating transactions between Group entities. Selected financial data of Hutmen S.A. 31/12/ /12/2013 Fixed assets Current assets Total assets Equity Non-current liabilities Current liabilities Total liabilities Effective share of the parent company in the Company 65,07% 65,23% Minority shares 34,93% 34,77% Capital attributable to owners of the parent Equity attributable to minority shares Selected financial data of Hutmen S.A. cont'd period ended 31/12/2014 period ended 31/12/2013 Revenue Costs Net profit for the financial year (24 540) Net profit attributable to company owners (16 007) Net profit attributable to minority shareholders (8 533) Net profit for the financial year (24 540) Other comprehensive income attributable to company owners (1 239) Other comprehensive income attributable to minority shareholders 661 (660) Other comprehensive income for the financial year (1 899) Comprehensive income attributable to company owners (17 246) Comprehensive income attributable to minority shareholders (9 193) Comprehensive income for the financial year (26 439) Cash flows from operating activities (3 603) Cash flows from investment activities (3 420) (8 125) Cash flows from financial activities (18 888) Net cash flows (194)

19 2. Ongoing proceedings in HMN Szopienice S.A. in liquidation Proceedings brought by HMN Szopienice S.A. in liquidation against the State Treasury - the Minister of the Treasury, to establish the non-existence of the State Treasury's right to require the Company to pay the amount of ,9 ths as reimbursement of aid granted to the Company under the Agreement as of March 6, 2003 as amended by Annex No. 1 dated December 28, 2005 have been described in previously published reports (the last detailed information regarding the proceedings has been published in the report for Q1 on May 13, 2014) With regard to the above, as of December 31, 2014 the financial statement of the Company shows a liability towards the State Treasury on account of reimbursement of public aid in the amount ht ths (out of which: primary obligation in the amount of ths and interest on the above-mentioned liability towards the State Treasury in the amount of ths). 3. Platform of International Financial Reporting Standards Used Standards and interpretations applied for the first time in 2014 In the current year, the Group's companies have adopted new and revised standards and interpretations listed below, issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee and approved for use in the European Union ( EU ), applicable to its operations and effective for annual reporting periods from January 1, IFRS 10 Consolidated Financial Statements, approved in the EU on December 11, 2012 (effective for annual periods beginning on or after January 1, 2014), IFRS 11 Joint Arrangements, approved in the EU on December 11, 2012 (effective for annual periods beginning on or after January 1, 2014), IFRS 12 Disclosure of Interests in Other Entities, approved in the EU on December 11, 2012 (effective for annual periods beginning on or after January 1, 2014), IAS 27 (revised in 2011) Separate Financial Statements, approved in the EU on December 11, 2012 (effective for annual periods beginning on or after January 1, 2014), IAS 28 (revised in 2011) Investments in Associates and Joint Ventures, approved in the EU on December 11, 2012 (effective for annual periods beginning on or after January 1, 2014), Amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities explanations of Transitional Rules, approved in the EU on April 4, 2013 (effective for annual periods beginning on or after January 1, 2014), Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements Investment Entities, approved by the EU on November 20, 2013 (effective for annual periods beginning on or after January 1, 2014), Amendments to IAS 32 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities, approved by the EU on December 13, 2012 (effective for annual periods beginning on or after January 1, 2014), Amendments to IAS 36 Impairment of Assets Recoverable Amount Disclosures for Non-financial Assets, approved by the EU on December 19, 2013 (effective for annual periods beginning on or after January 1, 2014), Amendments to IAS 39 Financial Instruments: Recognition and Measurement Novation of derivatives and continuation of hedge accounting, approved by the EU on December 19, 2013 (effective for annual periods beginning on or after January 1, 2014). The above standards, interpretations and amendments to standards did not have a significant impact on the accounting policy used in the Group so far, nor on the presentation of financial statements. 19

20 Standards and Interpretations announced but not yet entered into force While compiling this financial statement, Group Companies did not use the following standards, amendments to standards and interpretations which have been published by IASB and approved for use in the EU but have not yet entered into force: Amendments to various standards "Improvements to IFRSs ( cycle)" made as part of the procedure of annual improvements to IFRS (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38) primarily focused on resolving inconsistencies and clarifying the wording approved in the EU on December 17, 2014 (effective for annual periods beginning on or after February 1, 2015), Amendments to various standards Improvements to IFRSs ( cycle) made as part of the procedure of annual improvements to IFRS (IFRS 1, IFRS 3, IFRS 13 and IAS 40), primarily focused on resolving inconsistencies and clarifying the wording approved in the EU on December 18, 2014 (effective for annual periods beginning on or after July 1, 2015), Amendments to IAS 19 Employee Benefits Defined Benefit Plans: employee benefits approved in the EU on December 17, 2014 (effective for annual periods beginning on or after February 1, 2015), IFRIC Interpretation 21 Levies approved in the EU on June 13, 2014 (effective for annual periods beginning on or after June 17, 2014). The Parent Company decided not to exercise the possibility of an earlier application of the above standards, amendments to standards and interpretations. According to the Parent Company's estimates, the aforementioned standards, interpretations and amendments to standards would not have a material impact on the consolidated financial statement if adopted by the Group at the balance sheet date. Standards and Interpretations adopted by the IASB, but not yet approved by the EU IFRS, as adopted by the EU, do not differ significantly from the regulations adopted by the International Accounting Standards Board (IASB), with the exception of the following standards, amendments to standards and interpretations which, at the date of publishing the financial statement, has not yet been adopted for use: IFRS 9 Financial Instruments (effective for annual periods beginning on or after January 1, 2018), IFRS 14 Regulatory Deferral Accounts (effective for annual periods beginning on or after January 1, 2016), IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after January 1, 2017), Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures Sales or contribution of assets between the investor and the associate or joint venture (effective for annual periods beginning on or after January 1, 2016), Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 28 Investments in Associates and Joint Ventures Investment Entities: application of release from consolidation (effective for annual periods beginning on or after January 1, 2016), Amendments to IFRS 11 Joint Arrangements Settling the purchase of shares in joint operations (effective for annual periods beginning on or after January 1, 2016), Amendments to IAS 1 Presentation of Financial Statements Initiative regarding disclosures (effective for annual periods beginning on or after January 1, 2016), Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets Explanations regarding possible depreciation methods (effective for annual periods beginning on or after January 1, 2016), Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture Agriculture: crops (effective for annual periods beginning on or after January 1, 2016), Amendments to IAS 27 Consolidated and Separate Financial Statements Method of ownership rights in separate financial statements (effective for annual periods beginning on or after January 1, 2016), Amendments to various standards Improvements to IFRSs ( cycle) made as part of the procedure of annual improvements to IFRS (IFRS 5, IFRS 7, IAS 19 and IAS 34), primarily focused on resolving inconsistencies and clarifying the wording (effective for annual periods beginning on or after July 1, 2015). 20

21 According to the Parent Company's estimates, the aforementioned standards, interpretations and amendments to standards would not have a material impact on the consolidated financial statement if adopted by the Group at the balance sheet date. At the same time, the regulations adopted by the EU do not apply to hedge accounting for financial assets and liabilities, the rules of which have not been approved for use in the EU. According to estimates of the Parent Company, the application of hedge accounting for financial assets and liabilities in accordance with IAS 39 Financial Instruments: Recognition and Measurement would not have a material impact on the financial statements if adopted by the EU as of the balance sheet date. 4. Statement of the Board on the Compliance of Accounting Policies The Board of Impexmetal S.A. in the person of Ms. Małgorzata Iwanejko, Chairman of the Board, and Mr. Jan Woźniak, Member of the Board, declares that, to the best of our knowledge, the consolidated financial statement and comparative information have been prepared in accordance with the applicable accounting principles, and that the financial statement presents a true and fair view of the financial position and the profit or loss of the Impexmetal Group. The Board confirms that the Impexmetal Group Business Report presents a true picture of the development and achievements, as well as its condition, including a description of the main risks and hazards. 5. Statement of the Board on the selection of an entity to audit the financial statements The Board of Impexmetal S.A. declares that Deloitte Polska Spółka z ograniczoną odpowiedzialnością Sp.k., performing the audit of the consolidated financial statements for 2014, was selected in accordance with the law and that Deloitte Polska Spółka z ograniczoną odpowiedzialnością Sp.k. and the auditors performing the audit fulfilled the conditions for presenting an unbiased and independent opinion on the financial statement in accordance with applicable regulations and professional standards. 6. Accounting principles Basis of preparation Information contained in this Statement has been prepared pursuant to the Regulation of the Minister of Finance as of February 19, 2009 regarding Current and Periodic Information Published by Issuers of Securities and Conditions for Recognizing as Equivalent Information Required by the Laws of a Non-Member State (original text: Journal of Laws No. 33, Item 259 of 2009, unified text: Journal of Laws, item 133 of 2014) and the International Accounting Standards as adopted by the European Union (EU). The accounting principles and calculation methods used by the Group have not changed in the period covered by this Statement. The accounting policies adopted are consistent with International Financial Reporting Standards to the extent determined by the European Parliament and Council Regulation (EC) No 1606/2002 of July 19, 2002 on the application of international accounting standards, as amended. The consolidated financial statement is prepared in accordance with the historical cost convention, except for the revaluation of certain fixed assets and financial instruments. The consolidated financial statement consists of a consolidated profit and loss account, prepared using a multiple-step variant, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity and consolidated statement of cash flows. Cash flows from operating activities is determined using the indirect method, cash flows from financing activities and investing activities using the direct method. The most important accounting principles applied by the Group are presented below. The functional currency of the Capital Group and the reporting currency of this consolidated financial statement is the Polish zloty. Principles of consolidation The consolidated financial statement includes the financial statement of the parent company and of entities controlled by the parent company prepared as of the balance sheet date. Control exists when the parent company has the ability to influence the financial and operating policies of a subordinate entity so as to obtain benefits from its activities. 21

22 Exclusion from consolidation resulted from practical reasons and the applied simplification is irrelevant from the point of view of the overall consolidated report and the evaluation of the financial situation of the Group. Basic principles of consolidation applied by the Impexmetal Capital Group: - as of the balance sheet date, the composition and structure of the Capital Group is determined by the parent company on the basis of an inventory of all levels of the Group, - affiliates that meet the conditions of consolidation are included in the consolidated financial statement from the date of acquisition of control, joint control or significant influence, - in cases where it is necessary, the financial statements of subsidiaries are adjusted in order to standardize the accounting policies applied by the entity with the principles applied by the parent company. Consolidation method controlled entities are recognized in the consolidated financial statement according to the following methods: - full consolidation method involving adding up the relevant items from the subsidiaries' reports with the data from the parent company's report, - equity method, whereby the shares expressed in purchase prices are adjusted for the difference between the purchase price and the value of the share in the equity of these entities. This difference is recognized in the consolidated financial result. A separate item in the consolidated statement of financial position presents the value of shares held in associates valued at the balance sheet date. Investments in associates have not been consolidated as at the balance sheet date, and this method has not been applied. Consolidation adjustments: - conversion of financial statements of affiliates denominated in foreign currency, - all transactions, income and expenses between affiliates included in the consolidation are eliminated, - adjustment of unrealized profit or loss in the Group, included in consolidated assets and resulting from the sale of assets at prices different than their net book value, - exclusion of all inter-company balances of receivables and liabilities, - adjustment of dividends payable or paid by subsidiaries to parent companies at all levels of the Group, - capital adjustment and adjustment of earnings for the financial year by the minority interest, - financial results of entities acquired or disposed of during the year are included in the consolidated financial statement from the date of taking over control of them by the Group until the date that control ceases. As of the date of acquisition of control, the assets and liabilities of the acquiree are measured at their fair value. The excess of the purchase price over the fair value of the entity's identifiable net assets acquired is recognized as goodwill. If the purchase price is lower than the fair value of the identifiable net assets acquired, the difference is recognized in the profit and loss statement in the period in which the acquisition took place. Minority interest is presented in an appropriate proportion of the fair value of assets and capital. Breakdown of activities adopted for the purposes of the cash flow statement investment activity associated with investments in intangible assets, tangible fixed assets, financial assets and short-term financial assets, as well as all related monetary costs and benefits, financial activities related to the acquisition or loss of financing sources for the Group and all related monetary costs and benefits, operational activities the basic and auxiliary activities of the Group resulting from the articles of association, covering everything except the aforementioned activities. Data in the statement of financial position items are presented on the accrual basis, and cash flows are presented on the cash basis. The figures used for reporting cash flows are derived from the statement of financial position, profit and loss account and statement of other comprehensive income, as well as the data directly from the books. Foreign currency Transactions denominated in foreign currencies are converted at the time of initial recognition to the functional currency: - at the exchange rate actually applied, i.e. at the buying or selling exchange rate used by the bank in which the transaction is carried out, in case of sale or purchase of foreign currencies, - in the case of other transactions, including in the case of receipt of receivables and the payment of liabilities in foreign currencies, at the average exchange rate for a given currency set by the National Bank of Poland as of the date of the transaction. The exchange rate in effect on the date of the transaction is the average NBP exchange rate announced on the last business day preceding the transaction. Non-monetary items carried at fair value that are denominated in foreign currencies are valued at the average NBP exchange rate in effect on the date of determining fair value. 22