PETROFOX SP.ZO.O. SEPARATE FINANCIAL STATEMENT FOR THE PERIOD FROM 1 JANUARY TO 1 JUNE Bielsko-Biała, 2 July 2018 PETROFOX SP.ZO.O.

Transcription

1 SEPARATE FINANCIAL STATEMENT FOR THE PERIOD FROM 1 JANUARY TO 1 JUNE 2018 Bielsko-Biała, 2 July 2018 PETROFOX SP.ZO.O.

2 Reporting value: Polish zloty (PLN) GENERAL INFORMATION Information about the Company Petrofox Spółka z ograniczoną odpowiedzialnością [limited liability company] was established on the basis of the Company s Deed of Formation in the form of a notarial deed made before the Notary Public Stanisław Kozak at the Notarial Office of the Notaries: Artur Kozak, Wojciech Wypych, Agnieszka Lisowska S.C. in Warsaw, on The Company s seat is in Bielsko-Biała at ul. Partyzantów 49. The Company is entered in the National Court Register under KRS no , by virtue of the decision of District Court for Bielsko-Biała, 17th Commercial Division of the National Court Register of On , Management Board of Abadon Real Estate S.A took a decision to instigate a procedure provided for in art. 516 of the Code of Commercial Companies, involving a simplified merger of Petrofox Sp. z o.o. with its registered offices in Bielsko-Biała, the Issuer s subsidiary, by transferring all the assets to Abadon Real Estate S.A. The core business of the Company according to the Polish Classification of Business Activity is: Head offices and holdings activity, excluding financial holdings Members of the Management Board: - Iskra Nikodem - Member of the Management Board - Feist Michał - Member of the Management Board The period of operation of the Company is indefinite. The financial statement comprises data for the period from to In the period covered by this statement, the Company did not participate in any mergers or divisions of business entities. The financial statement for the presented period has been drawn up with the assumption that the Company s business operations will be a going concern in foreseeable future and there are no premises which would indicate any threats to such operations. In the presented statement, no corrections were made due to any possible qualifications in the opinions on the financial statements of the previous periods, issued by entities authorised to audit the financial statements. Statement of comprehensive income is prepared in a multi-step variant. Statement of cash flows is prepared using an indirect method. Conformity of the financial statement with International Accounting Standards, presentation currency and the applied level of rounding. This financial statement for the period from to is drawn up as per International Accounting Standards (IAS)/ International Financial Reporting Standards (IFRS) and the related interpretations published as directives of the European Commission. Management Board of the Company confirms that the presented financial statement reliably presents the financial position, results and cash flows. The reporting and presentation currency of this consolidated financial statement is Polish zloty, and all amounts are expressed in the Polish zloty (unless stated otherwise). APPLIED ACCOUNTING PRINCIPLES General information Accounting ledgers are run and kept at the Company s seat in Bielsko-Biała at ul. Partyzantów 49. The financial year of the Company covers the period of subsequent 12 months, starting on 01 January and ending on 31 December every year. The accounting ledgers are opened at the beginning of each financial year, within 15 days from the first day of the financial year. The accounting ledgers are closed on the day ending the financial year, no later than within 3 months from the last day of the preceding financial year. The Company s accounting comprises: The adopted accounting principles (policy), including the Company s Chart of Accounts. The accounting ledgers are kept in a computer form, using a multi-module program, integrated accounting and book-keeping system Sage Symfonia ERP. The module Finance and Accounting is a universal solution, which in its standard version is designated to keep the accounting ledgers of entities other than banks and insurance companies. The program ensures keeping the accounts and reporting of the Company according to International Financial Reporting Standards and the Accounting Act. 2

3 Reporting value: Polish zloty (PLN) Settlements on account of remuneration for work and contracts of mandate are kept using and payroll and HR program Sage Symfonia Kadry i Płace [HR and Payroll] - supporting management payroll and HR data of the employees. It prepares the list of payrolls and keeps the payroll and HR documentation. Fixed assets are managed using the program Sage Środki Trwałe [Fixed Assets]. Lotus - a system supporting managing the company and communication among employees, circulation of documents in the company and approving them, i.e. invoices, contracts, orders Keeping the accounting ledgers on the basis of accounting documents with records of events kept in a chronological and systematic order. Periodic determination or checking by stock-taking the actual level of assets and liabilities. Measurement of assets and liabilities as well as determining the financial result. Preparing the financial statement. Gathering and storing the accounting documents and other documents provided for in the accounting act. The Company s Chart of Accounts is run in a manner allowing recording economic events pursuant to the Accounting Act, IAS and IFRS, and in a manner allowing correct determination of the taxation basis, tax obligation and tax liability on account of the taxes to be paid by the company. List of accounting ledgers: A. A journal ledger - used for recording data of the economic operations in a chronological order, day after day The Company keeps one journal ledger for all the registered operation. B. Main ledgers - accounts of the main ledger are used for recognising records in a systematic orders on accounts defined in the Company s Chart of Accounts. Entries in the accounts of the main ledgers are made in the chronological order. C. Auxiliary ledgers - accounts of auxiliary ledgers are kept as a supplements of records of the main ledgers in a systematic and chronological order. D. Trial balance - on the basis of entries in the accounts of the main ledgers, trial balance is prepared at the end of each month, and it includes: E. Symbols (names of accounts), F. Trial balance of the main ledger and breakdown of balances of accounts of the auxiliary ledgers. G. Statement of assets and liabilities (inventory) Accounting ledgers If the accounting ledgers are kept using a computer, it is considered that relevant IT resources of the accounting organised in the form of Sage Symfonia ERP Finanse i Księgowość [Finance and Accounting], separate computer data collections, database or its isolated parts are equivalent to accounting ledgers, regardless of the place of creating and storing them. In the module Finanse i Księgowość (the tab Ledgers from the tab menu Reports), there are properly parametrised, ready statements and reports, allowing printing the accounting ledgers according to the requirements of the Act. Closing the accounting ledgers involves irrevocable exclusion of the possibility to make accounting records in the collections that form closed accounting ledgers. Therefore, in the module Finance and Accounting, the function of approving (opening balance, data of the financial year...) is used, whose use blocks the possibility of making any changes in the approved data. Printouts of the accounting ledgers Pursuant to the Act, users are obliged to print regularly or copy the contents of accounting ledgers to another computer data carrier, which ensures durability of the recorded information at least for the period required for storing the accounting ledgers, i.e. 5 years. The frequency of making the statements is defined in the Act as follows: Journal ledger - it is printed no later than at the end of the financial year; the statement is available from the menu Reports, tab Ledgers. Sage Symfonia ERP Finanse i Księgowość - Accounts of the main ledger (synthetic registration) and accounts of the auxiliary ledger - they are printed no later than at the end of the financial year; the statement is available from the menu Settings, tab Chart of Accounts. - Statements of turnovers and balances of the main ledgers - it is prepared at the end of each reporting period, minimum at the end of the month; the statement is available from menu Reports tab Ledgers. - Breakdown of balances of accounts of the auxiliary ledgers - it is prepared at least on the day of closing the accounting ledgers; the statement is available from menu Reports, tax Ledgers. - Breakdown of balances of assets under stock-taking - it is prepared as at the day of the stock-taking; the statement is available from menu Reports, tax Ledgers. 3

4 Reporting value: Polish zloty (PLN) Journal ledger Entries in the journal ledger are numbered in order, and totals of entries (turnovers) are calculated in a continuous manner. The manner of making entries in the journal ledger allows their clear relation to the verified and approved accounting documents. In the event of keeping the accounting ledgers using a computer, the accounting entry has an automatically assigned number of item, under which it was entered in the journal ledger, and also data allowing to determine the person responsible for contents of the entry. The journal ledger of registrations kept in the module Finance and Accounting covers a chronological record of data on economic operations. In the journal ledger, all the items of accounting documents are recognised automatically. While printing the statement, the scope of reporting periods is selected, which are to be seen on the printout. Under each month, documents in the journal ledger are sorted in the order of registration dates. During registration of the document, the entries in the account are automatically assigned subsequent numbers of items in the journal ledger, which clearly relate the entries with the verified and approved accounting documents. At the same time, each entry noted in the journal ledger is marked with the reference number of the person who is responsible for such an entry. In the summary of journal ledger entries, turnovers of previous months are presented, and aggregate turnovers at the end of the given period, which allows comparison of aggregate turnovers with the trial balance. Collections of synthetic and analytic accounts Accounts of the main ledger (synthetic) include entries about events using the systematic approach. On the accounts of the main ledger, events are recognised which have been registered before or at the same time in the journal ledger, according to the principle of double entry. Entries in the specific account of the main ledger are made in the chronological order. Accounts of the auxiliary ledger (analytic) include entries specifying and supplementing entries in accounts of the main ledger. They are kept using a systematic approach, as an isolated system of ledgers, files (collections of accounts), computer data collections, reconciled with balances and entries in the accounts of the main ledger, Trial balance On the basis of entries in the accounts of the main ledgers, trial balance is prepared at the end of each reporting period, and it includes: 1. account symbols or names, 2. balances of accounts as of the day of opening the accounting ledgers, turnovers for the reporting period and balances at the end of the reporting period, 3. balances of accounts as of the day of opening the accounting ledgers, turnovers for the reporting period and balances at the end of the reporting period, Turnovers of the trial balance should be in compliance with the turnovers of the journal ledger. At least on the day of closing the accounting ledgers, a breakdown of balances of all accounts of the auxiliary ledgers is prepared as at the date of stock taking - the statement of balances of the group of assets being subject to stock taking. Source evidence The basis of entries in the accounting ledgers are accounting documents, confirming that an economic transaction has been concluded, i.e. source evidence. While keeping the accounting ledgers with the use of a computer, entries in the accounting ledgers entered automatically through communication devices, computer data carriers or prepared according to an algorithm (program) on the basis of the information already included in the ledgers are considered to be equivalent to source evidence, subject to ensuring that during registration of such entries, at least the following conditions will be met: 1. they will be in a permanently legible form, according to the contents of relevant accounting documents, 2. it is possible to determine their source of origin and the person responsible for entering them, In the module Finance and Accounting, the only method of entering data in the accounting ledgers is to register it by the user. This also pertains to all data entered automatically by other programs. The decision of registering a document is every time taken by a user holding relevant authorisations. The identifier of the person registering the given document is assigned at the moment of registering the documents. 3) the applied procedure ensures that correctness of processing of relevant data is verified and that entries are complete and identical, 4) source data in the place of their origin is appropriately protected in a manner ensuring that it has not changed, for the period required for storing such accounting documents. According to the provisions of the act, entries in the ledgers are made in a permanent manner. Procedures and measures protecting from data modification or destruction are applied. In the module Finance and Accounting, the only method of correcting entries that have been entered, verified and approved in the accounting ledgers is to register a document correcting the previous entries. It is allowed to use black-ink or red-ink correcting entry. A relevant record will be generated automatically by the program, on the basis of the selected incorrect entry. At the same time, continuity of numbering is ensured by the program. In the module Finance and Accounting, it is not possible to register additional items to the approved and registered documents. 4

5 Reporting value: Polish zloty (PLN) Contents of the accounting document In the module Finance and Accounting, each document entered in the ledgers is marked with the id number of the user holding relevant authorisations in the system, who took a decision to register a document. The id number serves the function of the signature. After registration, documents are sent to the buffer (which allows their additional verification). According to the requirements of the act, it is necessary to determine the type and number of the document being the grounds for an entry. In the module Finance and Accounting, this task is fulfilled by storing information with the internal number of the source document and the registration number assigned automatically during registration. Additionally, the registration number determines the type of document (e.g. bank statements, sale invoices, posting orders). Description of the operation in the Finance and Accounting module corresponds to the contents of the evidence item. The accounting document expressed in foreign currencies should include their conversion to the Polish zloty, according to the exchange rate applicable on the date of concluding the economic transaction. Regarding documents in the foreign currency, conversion to the Polish zloty must be made in the same accounting document, which is fulfilled by the module Finance and Accounting by registering entries in multiple currencies. Simultaneously in the Polish zloty and auxiliary in a foreign currency, providing the conversion rate which may be placed on the original accounting document. Verifiability of ledgers Accounting ledgers are considered to be verifiable if it is possible to determine that the entries, balances and operation of the applied calculation procedures are correct, in particular: 1. evidencing records allows identification of documents and manner of entering them in the accounting ledgers at all stages of processing data, In the module Finance and Accounting, automatic numbering of each symbol of document is applied, at the moment of entering it. Separate numbering system is conducted for each type of document symbols. Numbers assigned by the program (registration numbers are used by users for quick identification of the accounting documents). Moreover, while entering the document in the ledgers, it is automatically assigned with a subsequent number resulting from marking items in the journal ledgers, thus both numbers are visible in the journal ledger. 2. In the event of keeping the accounting ledgers with the use of a computer, control of completeness of the accounting system collections and data processing parameters is ensured. In the module Finance and Accounting, special diagnostic reports are available, which control completeness of the data collections. It is also possible to control data processing parameters significant for correct operation of the program - changes are registered in the program and it is possible to view history of their changes. 3. access to data collections is ensured, which regardless of the applied technique, allowing clear and understandable information on the entries made in the accounting ledgers at any time and selected reporting period. In the module Finance and Accounting, tools are available that allow viewing entries and reports listing summary data according to parameters set by the user. Protection of IT resources Pursuant to the amended art. 73 sec. 7 of the Accounting Act, documents will be forwarded to electronic data carriers before approval of the financial statement. This rule may apply to all accounting documents, excluding documents related to transfer of property rights of real properties, entrusting responsibility for assets, significant contracts and other documents determined by the manager of the entity. The condition of using this possibility is to have devices that allow restoring the documents in the form of a printout, unless other regulations provide for otherwise. The documentation referred to in art. 10 sec. 1, accounting ledgers, accounting documents, stock taking documents and financial statements, hereinafter referred to also as collections, are stored in an appropriate manner and protected from unauthorised modifications, dissemination, damage or destruction. Copies of system data are made automatically every day in a summary version, and the full version is made once per week. In order to increase security, system data is stored in the company and outside its seat. Protection of IT resources - involves among others limited access of users to databases and the system of processing and preparing backup copies of data and the system of processing it. A system of passwords and authorisations granted to the system users ensures protection from unauthorised access to the computer system. In art. 71.2, the act stipulates that in the case of keeping the accounting ledgers with the use of a computer, data protection involves: 1. using data carriers resistant to threats, 2. selecting appropriate measures of external protection, 3. creating backup copies systematically, saved on computer carriers for at least the required period for storing the accounting ledgers, 4. and ensuring protection of computer programs and accounting IT system data by applying appropriate program and organisational solutions, protecting from unauthorised access or destruction. 5

6 Reporting value: Polish zloty (PLN) Accounting principles The financial statement is prepared according to the concept of historical cost, except the presentation and revaluation of certain fixed assets and financial instruments. The major accounting principles applied by the Company are presented below. The principles are in line with the principles presented in the comparable period. Stock taking of assets In order to correctly present and measure and assets and sources of financing them, the Company conducts stock taking of assets. Each stock taking is conducted pursuant to an internal regulation. The regulation determines members of the stock taking committee, count team and schedule of stock taking activities, the manner and scope of the conducted stock taking. Intangible assets Measurement as at the receipt date. Initial value of intangible assets is the purchase price or the cost of manufacturing. Measurement after initial recognition As at the balance sheet date, intangible assets are valued according to their purchase price less amortisation write-offs, and also impairment write-offs Depreciation The Company applies linear method of amortisation of intangible assets, Annual amortisation rates for intangible fixed assets are as follows: - licences and software from 2 to 5 years, Intangible assets whose initial value exceeds PLN 0.5 k PLN are amortised based on estimated economic useful life rates. Intangible assets are amortised starting from the moment when they are available for use, i.e. from the moment of adapting the asset to the place and conditions necessary for starting its functioning according to the management s intentions for the period corresponding to its estimated economic useful life. Economic useful life periods are verified periodically (at least at the end of each financial year). Impairment write-offs Intangible assets are verified in terms of impairment if events or changes occurred, which indicate that the balance sheet value of intangible fixed assets may be impossible to recover. The verification is conducted periodically (at least at the end of each financial year). Goodwill Goodwill of the company upon consolidation results from the occurrence of surplus, as at the date of acquisition, of costs of acquiring an entity over the fair value of identifiable assets and liabilities of the subsidiary, associate or joint venture as at the date of acquisition. Goodwill is presented as a component of assets and at least once a year it is analysed in terms of impairment. Goodwill is not subject to amortisation. A possible impairment is recognised directly in the statement of comprehensive income and it is not reversed in subsequent periods. Impairment is calculated as a difference between the current net value of assets plus goodwill and the fair value calculated using discounted cash flow method. The Company applies full method while measuring the goodwill. Property, plant and equipment Measurement as at the receipt date. Initial value of tangible fixed assets is the purchase price or the cost of manufacturing. Measurement after initial recognition As at the balance sheet date, non-current assets, excluding land, are valued according to their purchase price or manufacturing costs less depreciation, amortisation or impairment write-offs. Land is valued at its purchase price less impairment write-offs. Costs incurred after initial recognition (introducing a fixed asset for use) such as costs of repairs, reviews, operating charges, affect the financial result of the reporting period when they were incurred. Costs as to which it is possible to demonstrate that they affect increase in the expected economic benefits due to possessing a given non-current asset exceeding the initially assumed benefits, increase the value of such a non-current asset. 6

7 Reporting value: Polish zloty (PLN) Prepayments for tangible fixed assets, fixed assets under construction are presented at the nominal value, i.e. amounts handed to the suppliers as advances for the processed orders. Prepayments in a foreign currency are measured at least at the balance sheet date using an average NBP exchange rate applicable on that day. Depreciation Straight-line depreciation method is applied to all property, plant and equipment unless there are premises which lead to a conclusion that a different depreciation method would allow a more reliable reflection both of the economic benefits derived from the given non-current asset and its wear. The Company applies the following annual depreciation rates for the basic groups of fixed assets: - perpetual usufruct right is not subject to amortisation, - building, premises, civil and water engineering structures 10 years - technical equipment and machinery from 2 to 5 years - means of transport from 2.5 to 5 years, - other non-current assets from 5 to 10 years. Property, plant and equipment are depreciated starting from the moment when they are available for use, i.e. from the moment of adapting the asset to the place and conditions necessary for starting its functioning according to the management s intentions for the period corresponding to its estimated economic useful life. While determining the period of depreciation and annual depreciation rate for tangible fixed assets exceeding PLN 500, an estimated period of using the given fixed asset is considered. The applied depreciation rates of fixed assets are verified periodically (at least at the end of each financial year). The verification involves an analysis of periods of using all fixed assets controlled by the Company. Changes in the depreciation rates are effected from the subsequent reporting period. Impairment write-offs Property, plant and equipment are verified in terms of impairment if events or changes occurred, which indicate that the balance sheet value of property, plant and equipment may be impossible to recover. The verification is conducted periodically, at least at the end of each financial year. If there are premises indicating that the balance sheet value exceeds the estimated recoverable value, then the value of assets or cash generating centres is reduced to the level of recoverable value. Perpetual usufruct Perpetual usufruct rights of the land are presented by the entity as non-current assets which are not subject to depreciation. Their initial value is determined on the basis of the purchase price. As at the balance sheet date, they are measured according to their purchase price less impairment write-off. Investment properties An investment property, according to IAS 40, a real property which is held in possession due to: revenues from rents, increase in its value or both of the two. Such a property is not used in production, deliveries of goods, rendering services or administration activities, nor it is designated as part of usual business of the entity. Investment properties include in particular: a. land held due to its long-term increase in its value, and not to be sold after a short period under normal business activity of the entity; b. land whose future use is currently unspecified (if the entity has not determined that it will be using the land as a property occupied- by an owner, or it will designate it for sale in a a short period under normal business activity- then such land is considered to be held in possession due to long-term increase in its value); c. a building owned by the entity or its part. According to IAS 40, a real property is presented as assets only if it is likely that the entity will generate future economic benefits in relation with such property and it is possible to measure reliably its purchase price or manufacturing costs. Initially, investment real properties are valued according to their purchase price or manufacturing cost, taking into consideration the transaction costs. This means that an entity measures all the costs incurred for purchasing or manufacturing its investment real properties at the moment of incurring them. They include costs incurred initially for purchasing the investment properties and incurred at a later time in order to increase, replace part of the real property or maintain it. After initial recognition of the real properties, the entity applies fair value measurement model, it measures all investment properties and investment properties under construction according to their fair value, except cases when the entity is not able to determine reliably the fair value of investment properties. 7

8 Reporting value: Polish zloty (PLN) Leasing Financial lease agreements, which transfer on the Company basically all the risk and all benefits resulting from having the leased asset are activated as at the day of starting the lease according to one of the following two values, whichever is lower: fair value of the leased asset or current value of minimum lease fees. Lease charges are split into financial costs and decrease of liabilities in a manner that allows achieving the entire rate of interest on the outstanding liability. Financial costs are recognised directly in the statement of profit and loss. Activated property, plant and equipment used pursuant to financial lease are depreciated throughout the useful life of the non-current asset. Lease agreements, pursuant to which the lessor retains basically the entire risk and all loans resulting from possessing the leased asset are classified as operating lease agreements. Operating lease fees are charged as costs in the statement of profit and loss applying the straight line method, throughout the period of lease. Benefits received and due as an incentive to conclude an operating lease agreement are presented in the statement of profit and loss using the straight line method, in the period resulting from the lease agreement. Long-term investments The purpose of purchasing long-term investments is to generate economic benefits in the future. With the assumption that as the time passes, their value will increase. They are maintained in order to derive economic benefits resulting from increase in their value. Stock The current asset stock comprises: - goods purchased for reselling, - expenditures for planned projects Measurement of goods - as at the receipt date. As at the receipt date, goods are valued at their actual purchase price, not higher than net selling prices. - after initial recognition Goods rotation valued at the purchase price not higher than net selling prices. As at the balance sheet date, the value of final stock of goods and materials is valued according to their purchase prices, not higher than their net selling prices at the balance sheet date. Measurement of expenditures for planned projects - as at the receipt date. As at the receipt date, expenditures are valued at their actual purchase price, not higher than net selling prices. - after initial recognition Expenditure rotation valued at the purchase price not higher than net selling prices. As at the balance sheet date, the value of final balance of expenditures is valued according to their purchase prices, not higher than their net selling prices at the balance sheet date. Stock revaluation If stock lost its usable or commercial value, its measurement is lowered to the level of net selling prices which can be achieved. Results of such value reduction are charged as other operating costs. Financial Instruments Financial assets are divided as follows: financial assets maintained until maturity, financial assets measured at fair value through profit or loss, loans and receivables and financial assets available for sale. Financial assets maintained until maturity are investments with defined, or possible to define payments, and fixed maturity date, which the Company intends and may hold until their maturity except the Company s own credits and receivables. Financial assets measured acquired in order to generate profit, owing to short-term price fluctuations are classified as financial assets measured at fair value through profit or loss. All the remaining financial assets which are not loans or receivables of the Company are financial assets available for sale. Financial investments maintained until their maturity are included in long-term assets, if their maturity exceeds 12 months from the balance sheet date. Financial assets measured at fair value through profit or loss are classified as current assets if the Management Board intends to realise them within 12 months from the balance sheet date. Acquisition and disposal of financial assets is recognised as at the date of concluding the transaction. At the moment of initial presentation, they are measured at their purchase price, i.e. fair value, including the transaction costs. Shares in subsidiaries are classified as assets available for sale. They are measured at their purchase price, including the transaction costs. As at the balance sheet date, if on the basis of concluded analyses there are premises that in the future, the assets will not yield - partially or in full - anticipated economic benefits, impairment revaluation write-offs are made. 8

9 Reporting value: Polish zloty (PLN) Loans Loans are financial assets, not being derivatives, with defined or possible to define payments, which are not listed on active market. Loans are measured using an adjusted purchase price method. Loans and receivables are classified as current assets if their maturity date does not exceed 12 months from the end of the reporting period. Loans and receivables with maturity date exceeding 12 months from the end of the reporting period are classified as fixed assets. Loans and receivables are presented in the statement of financial position as: Other financial assets. Receivables Trade receivables are not interest-generating instrument. Measurement as at the receipt date and after initial recognition Receivables are valued as the amount to be paid, following the principle of conservative valuation and they are recognised as net amount (less revaluation write-downs). Revaluation of receivables The value of receivables is revaluated taking into consideration the likelihood of their payment, through a revaluation write-off. Receivables revaluation write-offs are made regarding: - receivables pursued at court, - receivables overdue above 180 days, as to which there is it is very likely that the debtor will not fulfil the payment obligation. As at the balance sheet date, foreign receivables are valued at average exchange rate determined by NBP on that date. Financial liabilities and capital instruments Financial liabilities are deemed to be incurred at the moment of the entity s conclusion of the contract being the financial instrument. They are entered in the ledgers at the date of concluding the contract, regardless of the transaction settlement date provided by in the contract. Measurement as at the recognition date Financial liabilities as at the recognition date are measured at the fair value of the received amount or value of other received assets. Liabilities other than financial liabilities are recognised on the recognition date as the amount to be paid. Measurement as at the balance sheet date Financial liabilities for sale (derivatives not being hedging instruments as well as short selling instruments) are measured as at the balance sheet date at their fair value. The measurement difference is presented in a separate financial statement and it is recognised in the financial result of the current reporting period as financial revenues or costs. Other financial liabilities are valued as at the balance sheet date, in the amount of adjusted purchase price, applying the effective interest rate. The measurement difference adjusts the value of the measures liability item and it is presented in the financial result of the current reporting period as financial revenues or financial costs. Liabilities other than financial liabilities are recognised on the balance sheet date as the amount to be paid. Bank credits Bank credits and loans are recognised according to the purchase price corresponding to the fair value of the received cash, less costs related with obtaining them. Credits and loans in the subsequent periods are valued according to adjusted purchase price, applying effective interest rate. All effects regarding adjusted purchase price and effects of removing the liability from the balance sheet or stating its impairment are presented in the statement of comprehensive income. Trade liabilities Trade liabilities are not an interest-bearing instrument and they are recognized in the balance sheet in their nominal value. Provisions Provisions for liabilities are presented as justified, true and fair value. Provisions are created for certain or very likely future liabilities, which can be reliably estimated. Provisions are dissolved or reduced when the liability occurs, for which the provision was created. 9

10 Reporting value: Polish zloty (PLN) Severance pays Provisions for employee benefits are created only if the provisions of the law, labour arrangement or employment contract clearly stipulate that the employer is obliged to pay them and their value is significant. Due to significance, it is not necessary to create such provisions for severance pays if their value is at the level of one-month salary. Liabilities pursued at court In the case of liabilities pursued at court against the Company, and not presented in the ledgers of the Company, provisions are created in reliably estimated value, in particular considering: amount of the principal liability pursued at court, amount of interest, court fees, attorney fees, bailiff fees etc. Accruals Accruals are settled according to the principle of conservative valuation and they include in particular the calculated provisions for costs, whose occurrence in future reporting periods is certain or very likely. Sales revenues The revenues are recognised as the amount which is likely to yield economic benefits related with the given transaction to the Company and if the revenue amount can be measured reliably. Revenues are recognised using a memorial method, regardless of the date of receiving payment. Sales revenues from selling construction services are recognised in the period when such services were rendered, based on the progress of the given contract, determined on the basis of the ratio of actually completed works to all services to be rendered. Long-term services The Company, being a contractor of construction services, the Company applies the provisions resulting from IAS 11 Construction Service Contracts. The Company applies percentage method, as it allows credible determination of progress of an unfinished service. Revenues on account of an unfinished construction project are presented according to the progress of the project. Revenues, costs i profits are presented proportionately to the level of advancement of works. While determining the progress of construction contract and determining correctly and revenues and costs, the Company applies the method which will allows it to determine credibly the completion status at a specific date. These methods may, depending on the nature of the contract, include: - determining by the Supervision Inspector for the given investment the progress of works, confirmed by acceptance report and proportionate recognition of revenues and costs according to the remuneration stated in the contract, - determining the progress percentage of physically completed part of the works and in relation to the budget of the given investment, increased by the margin resulting from the contract for determining the level of revenues and costs at the given moment. Subsequently, comparison to the recognised costs and revenues according to the contract and registering any possible differences. The differences are referred to items Construction contracts respectively as assets or liabilities of the balance sheet. While determining the advancement of a construction service, on the basis of progress of such works, only those contractual expenses are included which reflect the status of works completion. Construction deposits relating to long-term contracts are presented in separate items of assets and liabilities. Costs of external financing Costs of external financing (interest) presented as a cost in the period in which they are incurred. Profit on business activity Profit on business activity is calculated after considering the costs of restructuring, but before considering the financial costs and revenues. Transactions in foreign currencies As at the balance date, cash assets and liabilities denominated in foreign currencies are converted in accordance with the average NBP exchange as at the balance sheet date. During the year, currency selling and purchasing transactions as well as payment of receivables and liabilities are valued at the selling or buying rate applied by the bank, which provides services for the entity in a given transaction. During the year, other transactions denominated in foreign currencies are valued at average NBP rate as at the date of effecting such transactions, unless the customs declaration or other document binding upon the entity provides for a different exchange rate. Income tax Current tax (Corporate Income Tax) and deferred tax constitute obligatory deductions from the financial result. Current tax encumbrance is calculated on the basis of the tax result (basis of taxation) in a given financial year. The tax profit (loss) differs from the accounting net profit (loss) due to exclusion of taxable revenue and costs being cost deductible expenses in the subsequent years, as well as costs and revenues which will never be subject to taxation. Tax encumbrances are calculated on the basis of tax rates applicable in a given financial year. 10

11 Reporting value: Polish zloty (PLN) The Company creates a provision and determines assets on account of deferred income tax on the basis of temporary differences between the value of assets and liabilities presented in the accounting ledgers and their tax value and tax loss to be deducted in the future. Deferred income tax assets comprise future costs, which are likely to be realised in the future period. ASSUMPTIONS CONCERNING ESTIMATES Accounting principles regarding main assumptions for the future and sources of uncertainties regarding estimates are presented in specific items of chapter APPLIED ACCOUNTING PRINCIPLES. The nature and balance sheet value of estimates as at the balance sheet date, changes in estimates in the period are presented in specific notes to the statement. Professional judgement Some information provided in the consolidates financial statement is based on estimates and professional judgement of the Company. Values achieved in this manner frequently may not match the actual results. Among the assumptions and estimates which were most significant while measuring and presenting assets and liabilities are: Evaluation of lease agreements The Company is a party to lease agreements, which have been considered to be either operating lease or financial lease. While making the classification, the Company evaluated whether under the agreement, basically all the risks and nearly all the benefits have been transferred on the lessee, related with the use of assets. Deferred tax assets The Company recognises a deferred tax asset on the basis of an assumption that tax gain will be generated in the future, allowing its use. Deterioration of the generated tax results in the future could cause that the assumption would be unjustified. Amortisation and depreciation rates Amortisation and depreciation rates are determined on the basis of the anticipated usable life of property, plant and equipment as well as intangible assets. The Company annually verifies the adopted periods of usable life on the basis of current estimates. 11

12 PLATFORM OF THE APPLIED INTERNATIONAL FINANCIAL REPORTING STANDARDS Statement on compliance This financial statement has been prepared on the basis of International Financial Reporting Standard, in the form approved by the European Union (EU). Status of approving Standards in the EU IFRS, in the form approved by the EU do not differ significantly from regulations accepted by the International Accounting Standard Board (IASB). According to the Entity s estimates, standards, interpretations and amendments to standards approved by IASB and not yet approved by the EU would not have a significant impact on the financial statement of the Entity. Voluntary change of the accounting principles While preparing this financial statement, in comparison to previous periods, the entity applied IFRS within the scope required by IAS1. Amendments to the existing standards published by the International Accounting Standard Board New standards and amendments to the existing standards which have already be issued by IASB and approved by the EU, which came into force in Since 1 January 2017, the following new standards, amendments and interpretations are applicable: Standard Validity date Description of changes Amendments to IAS 7 - Statement of cash flows 1 January 2017 The standard specifies information provided. to the users of the statements, relating to the financial activities of the entity. Amendments to IAS 12 - Income tax 1 January 2017 Amendments to IFRS (cycle ) 1 January 2017 Specification of requirements for recognising assets due to deferred tax assets, regarding debts instruments measured at fair value. A collection of amendments to IFRS 12 - specification of requirements for disclosures of information on shares regardless of how they are treated. New standards and amendments which have already be issued by IASB and approved for application in the EU, but have not yet come into force. Standard Validity date Description of changes Amendments to IFRS 2 - Share based 1 January 2018 Specification of the manner of recognising certain types payments of share-based payments. IFRS 9 Financial Instruments 1 January 2018 The standard introduces: - sorting out classification and recognition of financial assets based on characteristics of their cash flows and business model of the entity; - introducing a uniform methodology of assessing impairment of financial assets; Amendment to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in affiliates and joint ventures - a new hedging accounting model, which to a wider extent was connected with risk management. 1 January 2016 or after this Contains: date. guidelines relating Effectiveness date of to sales or contributions amendments assets was deferred until by the investor to completion of research works an associate or joint venture. on equity method. Amendments to IFRS 4 Insurance 1 January 2018 or Application of IFRS 9 Financial Instruments in IFRS 4.

13 contracts IFRS 14 Regulatory Deferral Accounts regulated activity at the moment of application of IFRS 9 for the first time 1 January 2016 Accounting principles and rules of disclosures for The process of approving recognition for application in the EU territory of assets and liabilities resulting from was not started by the time regulated price transactions if of issuing the final version if the entity decides to change to IFRS. IFRS 14 12

14 IFRS 15 Revenues from contracts with customers 1 January 2018 The standard relates to all contracts concluded with customers, except the ones that are in the scope of other IFRS (i.e. lease, insurance contracts and financial instruments). IFRS 15 unifies the requirements for recognition of revenues. IFRS 16 Leasing 1 January 2019 Introduction of a uniform model of registering leasing; Interpretation to IASB 22 Transactions in foreign currencies and advance payments 1 January 2018 IAS 40 Investment properties 1 January 2018 no distinction between operating and financial leasing. The standard indicates how the transaction date can be determined for the purposes of determining the correct exchange rate of transactions concluded foreign currencies, if the entity pays or receives an advance payment in a foreign currency. Specification that transfer of real property to or from investment properties. may occur only if the manner of using the property changed. Amendments to IFRS (cycle ) A collection of amendments to: 1 January 2018 IFRS 1 - deleting several exemptions provided for in this standard, which are no longer applicable; IAS 18 - specified moment when investment entities may decide to select the method of measuring interests in associates or joint ventures at fair value, and not using the equity method. IASB 23 provides guidelines for recognising uncertainties in the scope of income tax. Entity Interpretation to IASB 23 Uncertainty should judge whether the tax recognitions should. related with recognition of income 1 January 2019 be considered individually or certain tax recognitions tax should be judged jointly. Selection should better reflect expectations related to solving the uncertainties. IFRS 17 Insurance contracts 1 January 2021 A new approach to recognising revenues and profit/losses in the period of providing insurance services. Amendments to IFRS 9 Financial 1 January 2019 Description of an option of prepayment with a negative compensation Instruments Amendments to IFRS 15 Revenues from 1 January 2018 contracts with customers - explanations to IFRS 15 Revenues from contracts with customers Explanations to IFRS 15 Revenues from contracts with customers The Company intends to adopt the above new standards, amendments to standards and interpretations of IFRS published by the International Accounting Standards Board, not applicable as of the reporting date, from the date when they come into force, after approval by the European Union. Impact of new regulations on future statements of the Company The Company estimated the impact of amendments to the above standards on the Company s financial statements. The Company is of the opinion that the above amendments will not have a significant impact on its financial statements. 13

15 Reporting value: Polish zloty (PLN) STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD FROM TO for the period Multi-step variant Note from Continued operations from to to Revenues - - Revenues from sale of products, goods and materials, services Revenues from in-kind contribution 32 Profit on investment Other operating revenue Costs 4, , Manufacturing costs of sold products, goods and materials, services Cost of in-kind contribution 33 Operating costs 33 4, , Other operating costs Profit (loss) on operations (4,637.64) (2,147.26) Financial revenues (costs) 35 (533,201.54) (45,146.55) Other profit (loss) on investments - 557, Profit (loss) before tax (537,839.18) 510, Income tax - 187, current deferred 31 - (187,106.00) Net profit (loss) Continued and discontinued operations (537,839.18) 697, Other comprehensive income - Recognition of other effects of previous years Total comprehensive income (537,839.18) 697, Net profit (loss) attributable to: Note (537,839.18) 697, shareholders of the parent 38 - minority shareholders 38 Bielsko-Biała, 2 July Person entrusted with keeping accounting ledgers Management Board 14