Multimedia Polska Group

Transcription

1 Multimedia Polska Group SELECTED FINANCIAL INFORMATION PLN 000 EUR 000 for six months for six months for six months for six months ended ended ended ended 30 June June June June 2012 condensed consolidated financial statements Sales revenues Operating profit/(loss) Profit/(loss) before tax Net profit/(loss) (1 717) (407) Net profit/(loss) attributable to equity holders of the parent (1 718) (408) Basic earnings per share (in PLN or EUR) Diluted earnings per share (in PLN or EUR) Number of shares (not in thousands) Weighted average number of shares (not in thousands) Weighted average number of shares for diluted earnings per share (not in thousands) Cash flows from operating activities Cash flows from investing activities (97 548) ( ) (23 149) (48 582) Cash flows from financing activities as at 30 June 2013 as at 31 December 2012 as at 30 June 2013 as at 31 December 2012 Current assets Non-current assets Total assets Current liabilities Non-current liabilities Equity Share capital PLN/EUR average exchange rate (NBP) 30 June June December 2012 Balance sheet n/a Income statement, cash flow statement n/a

2 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2013 WITH QUALIFIED AUDITOR S REVIEW REPORT

3 Interim condensed consolidated income statement... 3 Interim condensed consolidated statement of comprehensive income... 4 Interim condensed consolidated statement of financial position... 5 Interim condensed consolidated cash flow statement... 6 Interim condensed consolidated statement of changes in equity... 7 Interim condensed consolidated statement of changes in equity General Information Composition of the Group Composition of the Parent s Management Board Approval of the interim condensed consolidated financial statements Basis of preparation of the interim condensed consolidated financial statements Key accounting policies Changes in estimates Seasonality Operating segments Other operating income/expenses Finance income and costs Income tax Earnings (loss) per share Dividends paid and declared Property, plant and equipment and other intangible assets Acquisitions and disposals Impairment Leases Liabilities under Finance Leases and Financing Agreements Receivables under operating leases the Group as lessor Financial assets Prepayments and accrued income Employee Benefits Other financial assets Cash and cash equivalents Share capital, statutory reserve funds and other capital reserves Share capital Other capital reserves Undivided financial results and restrictions on dividend payment Interest-bearing bank borrowings and debt instruments Debt securities Business combinations and acquisitions of non-controlling interests Trade and other payables (current) Accruals and deferred income Contingent liabilities Court proceedings Tax settlements Universal service Investment commitments Reconciliation of differences between changes in certain items of the statement of financial position and the cash flow statement Related-party transactions Entities with significant influence on the Company Transactions with members of the Management and Supervisory Boards

4 31.3. Company shares held by members of the Management and Supervisory Boards Transactions with management staff as part of the employee share program Goals and policies of financial risk management Capital management Events subsequent to the balance-sheet date

5 INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2013 Three months ended 30 June 2013 Six months ended 30 June 2013 Three months ended 30 June 2012 Six months ended 30 June 2012 Continuing operations Note Subscriber-generated and inter-operator revenue 170, , , ,535 Other revenue 3,756 9,369 5,044 9,954 Revenue 9 173, , , ,489 Depreciation and amortisation 52, ,220 46,378 92,418 Materials 4,904 10,472 4,563 9,271 Services 55, ,350 56, ,254 Taxes and charges 5,580 11,260 5,274 10,682 Salaries and wages 17,411 36,247 15,354 32,219 Other employee benefits 6,857 10,989 2,223 4,707 Other expenses 1,174 2,477 1,343 2,245 Cost of merchandise and materials sold Cost of sales 143, , , ,880 Gross profit (loss) 30,002 63,579 37,697 73,609 Other income 10 4,165 7,162 2,577 4,740 Other expenses 10 2,551 4,891 4,394 6,437 Operating profit (loss) 31,616 65,850 35,880 71,912 Finance income 11 4,197 7,984 2,624 8,062 Finance costs 11 50,085 70,318 20,096 37,827 Share in profit of an associate - - (260) 53 Profit (loss) before tax (14,272) 3,516 18,148 42,200 Actual tax expense 12 1,818 5,233 7,209 12,555 Net profit (loss) from continuing operations (16,090) (1,717) 10,939 29,645 Net profit (loss) for the period (16,090) (1,717) 10,939 29,645 Attributable to: Owners of the parent (16,091) (1,718) 10,938 29,644 Non-controlling interests Earnings (loss) per share (in PLN): basic earnings (loss) for the period 13 (0.18) (0.02) diluted earnings (loss) for the period 13 (0.18) (0.02) Notes to the interim condensed consolidated financial statements attached on pages 9 to 37 are an integral part of these financial statements 3

6 INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the six months ended 30 June 2013 Three months ended 30 June 2013 Six months ended 30 June 2013 Three months ended 30 June 2012 Six months ended 30 June 2012 Net profit (loss) for the period (16,090) (1,717) 10,939 29,645 Other comprehensive income Available-for-sale financial assets Cash flow hedges Actuarial gains/(losses) on defined benefit pension plans Income tax relating to components of other comprehensive income Net other comprehensive income COMPREHENSIVE INCOME FOR THE PERIOD (16,090) (1,717) 10,939 29,645 Notes to the interim condensed consolidated financial statements attached on pages 9 to 37 are an integral part of these financial statements 4

7 INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2013 Note 30 June December 2012 ASSETS Non-current assets Property, plant and equipment , ,217 Goodwill , ,429 Intangible assets , ,316 Financial assets , ,751 Non-current receivables Prepayments and accrued income Deferred tax assets 12 49,499 47,466 1,375,905 1,366,668 Current assets Inventories Trade and other receivables 62,794 57,314 Income tax receivable 26 1,059 Prepayments and accrued income 18 16,911 2,273 Other financial assets 20 33,818 47,399 Cash and cash equivalents ,206 4, , ,327 TOTAL ASSETS 1,661,076 1,479,995 EQUITY AND LIABILITIES Equity (attributable to owners of the parent) Share capital 91,777 91,611 Share premium - - Treasury shares (188) - Other capital reserves 45,946 44,722 Retained earnings 3, ,909 Distributions from net profit during the financial year - - Non-controlling interests Total equity , ,264 Non-current liabilities Interest-bearing bank borrowings, debt instruments and other 23, , ,947 Debt securities in issue 24 1,090, ,610 Deferred income Provisions Deferred tax liabilities 6,872 8,060 1,263, ,819 Current liabilities Interest-bearing bank borrowings, debt instruments and other 23, 16 15, ,607 Trade and other payables , ,449 Debt securities in issue 24 75,363 58,264 Income tax liabilities 937 7,138 Prepayments and accrued income 27 43,656 44,656 Deferred income 27 6,028 6,753 Provisions 4,046 4, , ,912 Total liabilities 1,520,422 1,204,731 TOTAL EQUITY AND LIABILITIES 1,661,076 1,479,995 Notes to the interim condensed consolidated financial statements attached on pages 9 to 37 are an integral part of these financial statements 5

8 INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 June 2013 Cash flows from operating activities Note Six months ended 30 June 2013 Six months ended 30 June 2012 Profit before tax 3,516 42,200 Adjustments: 147, ,221 Share in profit of equity-accounted associates - (53) Depreciation and amortisation 105,220 92,418 Interest and dividends, net 31,179 27,884 Foreign exchange (gains)/losses (29) 9 Gain/(loss) from investing activities (155) (328) Change in inventories (10) (177) Change in receivables 30 (5,735) (1,625) Change in liabilities, net of borrowings 30 7,582 9,705 Change in accruals and deferrals 30 (13,226) (6,384) Change in provisions - - Income tax paid (13,621) (13,867) Other adjustments 36,071 1,639 - liquidation of tangible assets finance fees and commissions 29,633 2,047 - incentive scheme own shares 6, other 128 (469) Net cash from operating activities 150, ,421 Cash flows from investing activities Proceeds from sale of property, plant and equipment and intangible assets Acquisition of property, plant and equipment, intangible assets and an organised part of business (85,496) (84,085) Acquisition of a subsidiary, net of cash acquired (10,264) (104,329) Acquisition of investments in associates and joint ventures - (17,025) Interest received 12 - Repayment of loans advanced Loans advanced (2,515) (130) Net cash from investing activities (97,548) (205,240) Cash flows from financing activities Proceeds from issue of shares Proceeds from issue of bonds 1,038, ,000 Decrease in finance lease liabilities and liabilities under financing agreements (7,246) (9,467) Repayment of interest on finance lease liabilities and liabilities under financing agreements (435) (1,007) Increase in borrowings 173,573 89,000 Repayment of borrowings (244,412) (203,479) Share buy-back (9,794) (30,000) Interest, fees and commissions paid (68,235) (34,570) Redemption of debt securities (635,800) - Dividends paid to parent equity holders (132,732) - Net cash from financing activities 113,086 60,477 Net change in cash and cash equivalents 166,330 6,658 Cash at beginning of period 21 4,876 3,105 Gain/loss on measurement of foreign-currency cash - - Cash at end of period, including: ,206 9,763 - of limited purpose of use 121,237 - Notes to the interim condensed consolidated financial statements attached on pages 9 to 37 are an integral part of these financial statements 6

9 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2013 Share capital Share premium Treasury shares Other capital reserves Retained earnings/deficit Total Non-controlling interests Total equity As at 1 January , , , , ,264 Comprehensive income for the period (1,718) (1,718) 1 (1,717) Issue of shares Share issue expenses (1) - (1) - (1) Share options ,211-6,211-6,211 Share based payments (incentive scheme) - - 6,712 (6,211) Share buy-back - - (6,900) - - (6,900) - (6,900) Retirement of shares Acquisition of non-controlling interests Distribution of profit brought forward Dividends paid * (132,870) (132,870) - (132,870) Other increases/decreases** ,225 (1,225) As at 30 June ,777 - (188) 45,946 3, , ,654 * Note 14 **Note 22.2 Notes to the interim condensed consolidated financial statements attached on pages 9 to 37 are an integral part of these financial statements 7

10 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2012 Share capital Share premium Treasury shares Other capital reserves Retained earnings/deficit Total Non-controlling interests Total equity As at 1 January ,295 - (97,518) 131, , , ,359 Comprehensive income for the period ,644 29, ,645 Issue of shares Share issue expenses Share options Share based payments (incentive scheme) Share buy-back - - (49,511) (49,128) (49,128) Retirement of shares (14,684) - 147,029 (132,345) Acquisition of non-controlling interests Distribution of profit brought forward ,689 (44,689) Other increases/decreases As at 30 June , , , , ,876 Notes to the interim condensed consolidated financial statements attached on pages 9 to 37 are an integral part of these financial statements 8

11 Notes NOTES 1. General Information The Multimedia Polska Group (the Group ) is composed of Multimedia Polska Spółka Akcyjna (the Parent or the Company ) and its subsidiaries (see Note 2). These interim condensed consolidated financial statements of the Group have been prepared for the of the six months ended 30 June 2013 and contain comparative data for the six months ended 30 June 2012 and as at 31 December The income statement and the statement of comprehensive income contain data the period of the three months ended 30 June 2013 as well as comparative data for the three months ended 30 June 2012, which has not been reviewed or audited by a qualified auditor. The Parent is registered with the National Court Register maintained by the District Court, VIII Commercial Division of the National Court Register, under entry No The Parent has been assigned industry identification No. REGON The Company s registered office is located in Gdynia, at ul. Tadeusza Wendy 7/9. The Parent and its subsidiaries have been established for indefinite time. The Group s main activity is the provision of a wide range of telecommunication services, including in particular radio, television, Internet and telephony over cable television systems. During its meeting held on 18 October 2011, the Polish Financial Supervision Authority granted the Company's request to permit reconversion of the Company shares into certificated form and allowed the Company to rematerialise its shares with effect as of 8 November On 3 November 2011, the Company received a Resolution of the Management Board of the Warsaw Stock Exchange to delist from the Main Market of the WSE the Company shares assigned code No. PLMLMDP00015 as of 8 November The resolution followed the decision of the Polish Financial Supervision Authority to allow the Company to rematerialise its shares. These interim condensed consolidated financial statements of the Group for the six months ended 30 June 2013 were approved for publication by the Management Board on 21 August The interim financial result may not fully reflect the result which could be achieved for the entire financial year. 2. Composition of the Group The Group comprises Multimedia Polska S.A. and the following subsidiaries: Name Address Business activity Interest held 30 June December Tele Top Grupa Multimedia Polska Sp.z o.o. (TOP) Multimedia Polska-Południe S.A. (TNPD) Telewizja Kablowa Brodnica Sp. z o.o. Multimedia Polska PR Sp. z o.o. Multimedia Polska Inwestycje Sp. z o.o. 6 Media Operator Sp. z o.o ul. T. Wendy 7/9, Gdynia, Poland ul. T. Wendy 7/9, Gdynia, Poland ul. T. Wendy 7/9, Gdynia, Poland ul. T. Wendy 7/9, Gdynia, Poland ul. T. Wendy 7/9, Gdynia, Poland ul. T. Wendy 7/9, Gdynia, Poland - film and video production 99.97% 99.97% - voice, data and other telecommunication services - cable television, other building installation - public relations and communication activities - wholesale of electronic and telecommunication equipment and parts - voice, data and other telecommunication services 100% 100% 94,12%* 94,12%* 100% 100% 100%* 100%* 100% 100% 9

12 Notes 7 Stream Communications Sp. z o.o. 8 Stream Service Sp. z o.o. 9 Stream Investment Sp. z o.o Roxwell Investments Sp. z o.o. Transmitel Rzeszów Sp. z o.o. ul. T. Wendy 7/9, Gdynia, Poland al. 29 Listopada 130, Kraków, Poland ul. Jana Pawła II 19, Warsaw, Poland ul. Jana Pawła II 19, Warsaw, Poland Rzeszów, ul. Ignacego Solarza 9A * Held indirectly through its subsidiary Multimedia Polska- Południe S.A. ** Held indirectly through its subsidiary Stream Communications Sp. z o.o. - voice, data and other telecommunication services - services consisting in installation, repair and maintenance of radio and television transmitters - voice, data and other telecommunication services - other business and management consultancy - voice, data and other telecommunication services 100% 100% merged with Stream Communications Sp. z o.o. 100%** 100%** 100%** 100% 100% 100% 100% The composition of the Group changed during the six months ended 30 June On 31 July 2012, Stream Communications Sp. z o.o. (acquiring company) and Stream Service Sp. z o.o. (target company) agreed upon a merger plan, which was notified to the competent registry court. On 1 March 2013, the District Court of Gdańsk-Północ, VIII Commercial Division of the National Court Register registered the merger of Stream Communications sp. z o.o. and Stream Service sp. z o.o. The merger was effected based on Resolution no. 3053/2012 of the General Meeting of Stream Communications Sp. z o.o. dated 17 December 2012 and Resolution no. 3056/2012 of the General Meeting of Stream Service Sp. z o.o. dated 17 December The merger was effected in the manner provided for in Art in conjunction with Art of the Polish Commercial Companies Code, i.e. by transferring all assets and liabilities of the target company to the acquiring company. The purpose of the merger was to reduce expenses associated with the operations of subsidiaries and to streamline the managing and reporting processes within the Group. On 25 June 2013 the Company entered into an agreement under which it will be entitled to purchase, in the second half of the year 2013, shares in the capital of telecom company and paid PLN 8,224 thousand as advance payment by 30 June As at 30 June 2013 and 31 December 2012, the percentage of voting rights held by the Company in its subsidiaries was equal to the percentage of shares held in these entities. 3. Composition of the Parent s Management Board As at 30 June 2013, the composition of the Parent s Management Board was as follows: Andrzej Rogowski President of the Management Board. The composition of the Management Board did not change during the reporting period nor during the period up to the date of approval of these interim condensed consolidated financial statements. 4. Approval of the interim condensed consolidated financial statements These interim condensed consolidated financial statements were approved for publication by the Management Board on 21 August Basis of preparation of the interim condensed consolidated financial statements These interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards endorsed by the European Union ( IFRS ), in particular in accordance with IAS

13 Notes As at the date on which these consolidated financial statements, in light of the current process of IFRS endorsement in the European Union and the nature of the Company activities there is a difference between International Financial Reporting Standards and International Financial Reporting Standards endorsed by the European Union. The Company applied the possibility existing for the companies applying International Financial Reporting Standards endorsed by the EU, to apply IFRS 10, IFRS 11, IFRS 12, restated IAS 27 and IAS 28 for the reporting periods beginning on 1 January International Financial Reporting Standards comprise standards and interpretations accepted by the International Accounting Standards Board ( IASB ) and the International Financial Reporting Interpretations Committee ( IFRIC ). These interim condensed consolidated financial statements are presented in thousands of Polish zloty ( PLN ), except when otherwise indicated. These interim condensed consolidated financial statements of the Group have been prepared on the assumption that the Group companies will continue as going concerns. As at the date of approval of these consolidated financial statements, the Management Board is not aware of any facts or circumstances that would indicate a threat to the Group continuing as a going concern. These interim condensed consolidated financial statements do not contain all the information and disclosures required to be included in the annual consolidated financial statements and should be read in conjunction with the Group s consolidated financial statements for the year ended 31 December 2012, approved for publication on 28 February Key accounting policies The accounting policies applied to prepare these interim condensed consolidated financial statements are consistent with the policies applied in the preparation of the Group s consolidated financial statements for the year ended 31 December 2012, save for the effect of application of the following amendments to standards and new interpretations effective for annual periods beginning on 1 January Amendments to IAS 19 Employee Benefits - effective for financial years beginning on or after 1 January 2013 Amendments to IAS 19 concerning defined benefit plans are connected with i.e.: elimination of corridor approach, implementation of the requirement of immediate recognition of changes in plan assets/liabilities and immediate recognition of past service cost, recognition actuarial gains/losses in other comprehensive income and new disclosures. Amendments are also implementing changes in connection with split into short- and long-term employee benefits. Employee benefits In accordance with the Group s systems of remuneration Group s employees are entitled to jubilee awards and pension benefits. Jubilee awards are paid to employees after the defined period of employment. Pension benefits are paid once, at the moment of retirement. The amounts of pension benefits and jubilee awards depend on the period of employment and average remuneration of employee. The Group recognizes provision for future liabilities concerning pension benefits and jubilee awards for the purpose of assigning costs to periods they are connected with. Under IAS 19 jubilee awards are other long-term employee benefits, and pension benefits are postemployment defined benefit plans. Current value of these liabilities at every reporting date is calculated by the independent actuary. Determined liabilities are amounted to the discounted payments, which will be done in the future, taking into consideration employee turnover and are connected with the period to the balance sheet date. Demographic and employee turnover information are based on the historical data. Gains and losses relating to actuarial calculations concerning post-employment benefits are recognized in other comprehensive income. Amendments to IAS 1 Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income - effective for financial years beginning on or after 1 July 2012, Changes in grouping items presented in other comprehensive income. Other comprehensive income to be reclassified to profit or loss are presented separately from items not reclassified to profit or loss. Amendments to IAS 12 Income Taxes: Deferred Tax: Recovery of Underlying Assets effective for financial years beginning on or after 1 January 2012 in EU effective at the latest for financial years beginning on or after 1 January The Amendment had no impact on the Group s financial position, performance and the scope of information presented in the Group s financial statements. Amendments to IFRS 1 First time Adoption of International Financial Reporting Standards: Severe Hyperinflation and Removal of Fixed Dates for First time Adopters effective for financial years beginning on or after 1 July

14 Notes in EU effective at the latest for financial years beginning on or after 1 January 2013, Amendment to IFRS 1 is not applicable for the Group IFRS 13 Fair Value Measurement - effective for financial years beginning on or after 1 January 2013, IFRS 13 Establishes a single set of principles on how to determine fair value of financial and non-financial assets and liabilities, when required or permitted under IFRS. IFRS 13 does not influence on the obligation of the situation when the measurement at fair value is required. Regulations of IFRS 13 are applicable both to the initial measurement and after the initial recognition. Requires new disclosures on valuation techniques and inputs used to determine fair values and the effect of certain inputs on fair value measurement. The Amendment had no impact on the Group s financial position, performance and the scope of information presented in the Group s financial statements. IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine - effective for financial years beginning on or after 1 January The Interpretation is not applicable for the Group Amendments to IFRS 7 Financial Instruments Disclosures: Offsetting Financial Assets and Financial Liabilities - effective for financial years beginning on or after 1 January 2013, Additional quantitative and qualitative disclosures relating to transfers of financial assets when: - Financial assets are derecognized in their entirety, but there is a continuing involvement in them (e.g., options or guarantees on the transferred assets) - Financial assets are not derecognized in their entirety The Amendment had no impact on the Group s financial position and performance. Amendments to IFRS 1 First time Adoption of International Financial Reporting Standards: Government Loans effective for financial years beginning on or after 1 January Amendment is not applicable for the Group. Improvements to IFRSs (issued in May 2012) effective for financial years beginning on or after 1 January 2013, IAS 1 - The amendment clarifies the difference between voluntary additional comparative information and the required minimum comparative information, IAS 16 The amendment clarifies that major spare parts and servicing equipment that meet the definition of property, plant and equipment are not inventory IAS 32 The amendment removes existing income tax requirements from IAS 32 Financial Instruments: Presentation and requires entities to apply the IAS 12 requirements to any income taxes arising from distributions to equity holders IAS 34 - The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 Operating Segments. In accordance with the Amendment total assets and liabilities for a particular reportable segment need to be disclosed only when: the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity s previous annual financial statements for that reportable segment The Amendment had no impact on the Group s financial position, performance and the scope of information presented in the Group s financial statements. The Group did not choose to use the option of early application of any other standard, interpretation or amendment which has been published but has not yet become effective. 7. Changes in estimates The Group reviewed and changed as of 1 January 2013 the estimated expected useful lives of tangible assets. This change increased net profit by about PLN thousand. In H1 2013, there were no other changes in estimates that would materially affect the current or future periods. 8. Seasonality As the Group s operations are not subject to seasonality, the presented results do not show any material fluctuations during the year. 12

15 Notes 9. Operating segments In accordance with the requirements of IFRS 8 Operating Segments, the Group divides its business activities into four separate segments television, Internet, telephony and other services (lease of infrastructure). The basic measure of profit in the telecommunication industry is EBITDA. Analysis of EBITDA divided into segments is one of the tools in making business decisions by Management. No operating segments have been aggregated to form the above reportable operating segments. Management monitors the operating results of individual business units for the purpose of making decisions about resource allocation and performance assessment. The Group s financing (including finance income and cost) and income taxes are managed on a Group basis and are not allocated to operating segments. Segmentation is performed on the basis of individual accounting transactions. Most revenue and some variable cost items are allocated directly to specific segments. Other revenue and costs are allocated to a specific segment based on allocation keys such as the structure of RGUs (revenue generating units), structure of fixed assets, intangible assets, revenue from subscriber sales, wholesales, other services, or based on the structure of inventory. Revenue generated by the Group mainly comes from retail customers. Revenue from business customers other operators using the Group s network or services represent not more than 7% of total revenue. The television segment covers cable TV, digital TV and products such as Premium packages. The Internet segment is primarily based on providing HFC and DSL Internet services, as well as mobile Internet, Multisaver and BSM (wireless multimedia network) services. The telephony segment consists of fixed-line telephony services, interconnect services, indirect services and pay phones. All of the segments include appropriately allocated revenue from other sales, such as sales of activation services, reactivation services and package migrations (recognised as revenue in the income statement). Other services/leasing consist of revenue and costs of leasing telecommunication infrastructure, links, bandwidth, network and offices. Not allocated items include finance costs or income, income tax charges and the results of transactions which impact the value of fixed assets. Detailed segmental information for the six months ended 30 June 2013 : Television Broadband Other services Telephony Internet - Leases Not allocated Total Revenue 173, ,800 58, ,660 Other revenue 1, ,436 8,154-12,033 Direct variable costs (53,896) (1,627) (8,389) - - (63,912) Operating expenses (51,455) (35,694) (30,063) (770) - (117,982) Other operating income/expenses 2, ,616 Adjustments for one-off events 1,841 2,017 3, ,728 EBITDA 74,237 71,662 25,661 7, ,143 Other income/expenses (67,912) (67,912) Depreciation and amortisation (42,939) (32,981) (29,300) - - (105,220) Share in profit of associates Adjustments for one-off events (1,841) (2,017) (3,671) (199) - (7,728) Net profit 29,457 36,664 (7,310) 7,384 (67,912) (1,717) Other income/expenses for the six months ended 30 June 2013, totalling PLN (67,912) thousand, comprises: - other operating income/expenses related to the change in value of non-current assets PLN (345) thousand, - finance income and costs PLN (62,334) thousand, - income tax PLN (5,233) thousand. Cost of sales recognised in the income statement comprise: direct variable costs, operating expenses and amortisation and depreciation. 13

16 Notes Detailed segmental information for the three months ended 30 June 2013 : Television Broadband Other services - Telephony Internet Leases Not allocated Total Revenue 86,690 53,018 28, ,703 Other revenue ,109-5,061 Direct variable costs (27,230) (814) (4,125) - - (32,169) Operating expenses (25,260) (18,181) (15,646) (274) - (59,361) Other operating income/expenses 1, ,715 Adjustments for one-off events , ,150 EBITDA 36,969 35,417 12,679 3,034-88,099 Other income/expenses (47,807) (47,807) Depreciation and amortisation (21,354) (16,341) (14,537) - - (52,232) Share in profit of associates Adjustments for one-off events (408) (860) (2,683) (199) - (4,150) Net profit 15,207 18,216 (4,541) 2,835 (47,807) (16,090) Other income/expenses for the three months ended 30 June 2013, totalling PLN (47,807) thousand, comprises: - other operating income/expenses related to the change in value of non-current assets PLN (101) thousand, - finance income and costs PLN (45,888) thousand, - income tax PLN (1,818) thousand. Cost of sales recognised in the income statement comprise: direct variable costs, operating expenses and amortisation and depreciation. Comparative data for the six months ended 30 June 2012 : Television Broadband Other services Telephony Internet - Leases Not allocated Total Revenue 161,706 94,818 63, ,830 Other revenue 1,370 1,037 1,378 8,874-12,659 Direct variable costs (46,443) (2,152) (10,566) - - (59,161) Operating expenses (45,954) (31,709) (28,750) (888) - (107,301) Other operating income/expenses Adjustments for one-off events 1,832 1, ,773 EBITDA 72,562 63,110 26,275 7, ,933 Other income/expenses (44 150) (44 150) Depreciation and amortisation (36,709) (27,959) (27,750) - - (92,418) Share in profit of associates Adjustments for one-off events (1,832) (1,076) (865) - - (3,773) Net profit 34,021 34,075 (2,340) 7,986 (44,097) 29,645 Other income/expenses for the six months ended 30 June 2012, totalling PLN (44,150) thousand, comprises: - other operating income/expenses related to the change in value of non-current assets PLN (1,830) thousand, - finance income and costs PLN (29,765) thousand, - income tax PLN (12,555) thousand. 14

17 Notes Data for the three months ended 30 June 2012 : Television Broadband Other services Telephony Internet - Leases Not allocated Total Revenue 83,425 48,427 31, ,155 Other revenue ,497-6,381 Direct variable costs (24,687) (1,008) (5,539) - - (31,234) Operating expenses (23,450) (15,804) (14,531) (443) - (54,228) Other operating income/expenses Adjustments for one-off events 1,832 1, ,773 EBITDA 37,859 33,217 12,795 4,054-87,925 Other income/expenses (26,575) (26,575) Depreciation and amortisation (18,566) (14,067) (13,745) - - (46,378) Share in profit of associates (260) (260) Adjustments for one-off events (1,832) (1,076) (865) - - (3,773) Net profit 17,461 18,074 (1,815) 4,054 (26,835) 10,939 Other income/expenses for the three months ended 30 June 2012, totalling PLN (26,575) thousand, comprises: - other operating income/expenses related to the change in value of non-current assets PLN (1,894) thousand, - finance income and costs PLN (17,472) thousand, - income tax PLN (7,209) thousand. Revenue comprises revenue from subscriber services and interoperator activities. Other revenue comprises revenue from the rental of telecommunication infrastructure, lines, bandwidth, networks and premises, as well as revenue from other sales -advertising, licences. Direct variable costs paid by the Group include programming charges, copyright royalties, administrative fees, interconnect fees and bandwidth costs. Operating expenses are the costs of materials and energy, rentals, services, salaries, taxes, sales and marketing. Due to the nature of services and transactions performed by the Group, there are no sales/purchases or other transactions between the business segments. The Group defines EBITDA as operating profit adjusted for depreciation and amortisation and other expenses and income resulting from a change in the value of non-current assets. In the calculation of EBITDA, the Company disregards one-off events. In the six months ended 30 June 2013, the Group generated EBITDA of PLN 179,143 thousand. The Group s EBITDA for the six months ended 30 June 2012 was PLN 169,933 thousand. In the first six months of 2013, EBITDA by segments was as follows: Television PLN 74,237 thousand, i.e. 41.5% of total EBITDA, Internet PLN 71,662 thousand, i.e. 40.0% of total EBITDA, Telephony PLN 25,661 thousand, i.e. 14.3% of total EBITDA, Other services (lease) PLN 7,583 thousand, i.e. 4.2% of total EBITDA. In the corresponding period of 2012, EBITDA by segments was as follows: Television PLN 72,562 thousand, i.e. 42.7% of total EBITDA, Internet PLN 63,110 thousand, i.e. 37.1% of total EBITDA, Telephony PLN 26,275 thousand, i.e. 15.5% of total EBITDA, Other services (lease) PLN 7,986 thousand, i.e. 4.7% of total EBITDA. In Q2 2013, the Group generated EBITDA of PLN 88,099 thousand. The Group s EBITDA in the corresponding period of 2012 was PLN 87,925 thousand. 15

18 Notes In Q2 2013, EBITDA by segments was as follows: Television PLN 36,969 thousand, i.e % of total EBITDA, Internet PLN 35,417 thousand, i.e % of total EBITDA, Telephony PLN 12,679 thousand, i.e. 14.4% of total EBITDA, Other services (lease) PLN 3,034 thousand, i.e. 3.4 % of total EBITDA. In the corresponding period of 2012, EBITDA by segments was as follows: Television PLN 37,859 thousand, i.e. 43.1% of total EBITDA, Internet PLN 33,217 thousand, i.e. 37.8% of total EBITDA, Telephony PLN 12,795 thousand, i.e. 14.5% of total EBITDA, Other services (lease) PLN 4,054 thousand, i.e. 4.6% of total EBITDA. The Group provides its services on the territory of the Republic of Poland, which constitutes a single consistent geographic area. Hence, the Group does not make any allocations to geographic segments. 10. Other operating income/expenses Other operating income increased by PLN 2,422 thousand on the six months ended 30 June The Group reversed the provision for liabilities (PLN 1,889 thousand) and noted the increase under item of damages, compensations and fines received or receivable (PLN 513 thousand). Other operating expenses decreased by PLN 1,546 thousand on the six months ended 30 June The largest drop was attributable to duty on actions under civil law charged on shares (PLN 2,182 thousand) and other expenses (PLN 530 thousand). The strongest rise was seen in costs of impairment losses and write-downs of uncollectible receivables (PLN 669 thousand) and impairment losses on other non-current assets (PLN 403 thousand), liquidation of tangible assets (PLN 38 thousand) and impairment losses on inventories (PLN 35 thousand). 11. Finance income and costs Finance income decreased by PLN 78 thousand on the six months ended 30 June The largest drop recorded in finance income was in interest on loans advanced and purchased bonds (PLN 613 thousand). The strongest rise was seen in bank interest received (PLN 529 thousand). Finance costs increased by PLN 32,491 thousand on the six months ended 30 June The strongest rise was seen in commissions on bonds (PLN 28,002 thousand), mainly resulting from premature bonds buyout, interest on bonds (PLN 9,339 thousand) and foreign exchange losses (PLN 2,036 thousand). The largest drop was attributable to interest, fees and commissions on bank borrowings (PLN 6,622 thousand). 12. Income tax The main elements of the tax expense in the income statement include: Three months ended 30 June 2013 Six months ended 30 June 2013 Three months ended 30 June 2012 Six months ended 30 June 2012 Current income tax Current income tax charge 649 8,247 6,347 13,423 Deferred income tax Relating to origination and reversal of temporary differences 1,169 (3,014) 862 (868) Income tax expense disclosed in the income statement 1,818 5,233 7,209 12,555 Deferred tax assets and liabilities are affected by the temporary difference between the carrying amount and the tax value of tangible assets, liabilities under borrowings and other debt instruments and liabilities under notes issued. 16

19 Notes 13. Earnings (loss) per share Basic earnings (loss) per share are computed as the quotient of the net profit (loss) for a given accounting period attributable to holders of the Parent Company s ordinary shares and the weighted average number of outstanding shares in that period. Diluted earnings (loss) per share are determined by including in the weighted average number of shares those ordinary shares which were bought back with a view to being offered to employees as part of the incentive share option plan. The table below presents earnings (loss) per share, calculated based on consolidated data net of earnings attributable to non-controlling interests: Three months ended 30 June 2013 Six months ended 30 June 2013 Three months ended 30 June 2012 Six months ended 30 June 2012 Consolidated net profit (loss) from continuing operations (16,091) (1,718) 10,938 29,644 Weighted average number of outstanding shares used to calculate 91,614 91,622 91,611 93,109 EPS Earnings (loss) per share (0.18) (0.02) Diluted net earnings (loss) per share Three months ended 30 June 2013 Six months ended 30 June 2013 Three months ended 30 June 2012 Six months ended 30 June 2012 Consolidated net profit (loss) from continuing operations (16,091) (1,718) 10,938 29,644 Weighted average number of outstanding shares used to calculate 91,631 91,631 91,611 93,109 diluted EPS Earnings (loss) per share (0.18) (0.02) Dividends paid and declared On 27 June 2013, the Annual General Meeting passed Resolution No. 9 designating the entire profit generated by the Company in 2012 totalling PLN 132,870 thousand for distribution to shareholders. The Annual General Meeting of Multimedia Polska S.A. set 27 June 2013 as the record day and 28 June 2013 as dividend day. Until 30 June 2013, the Company paid to the shareholders PLN 132,346 thousand as dividend. 15. Property, plant and equipment and other intangible assets Acquisitions and disposals In the six months ended 30 June 2013, the Group acquired property, plant and equipment and intangible assets and incurred expenses for assets under construction totalling PLN 82,277.7 thousand (six months ended 30 June 2012: PLN 86,551.8 thousand) and acquired tangible assets under lease agreement in the amount of PLN thousand. In the six months ended 30 June 2013, the Group disposed of property, plant and equipment with a net value of PLN 86 thousand (six months ended 30 June 2012: PLN 98.6 thousand), generating a net gain of PLN thousand (2012: PLN thousand). 17

20 15.2. Impairment MULTIMEDIA POLSKA GROUP Notes During the period ended 30 June 2013, the Group reduced impairment losses on fixed assets by PLN thousand following disposals and liquidation of fixed assets on which the impairment loss was recognised (the Group reduced impairment losses by PLN thousand in the corresponding period of 2012). 16. Leases Liabilities under Finance Leases and Financing Agreements Finance leases pertain to motor vehicles, electronic equipment of server rooms and head-ends, and computer systems. In accordance with the lease agreements, principally all risks and benefits arising in the connection with holding the assets were transferred. In H1 2013, the Company entered into finance lease agreements concerning the lease of vehicles with a total value of PLN 331 thousand. The Company classified the lease agreement as finance lease on the basis of an assessment of the economic content of each transaction and the extent to which the risks and benefits arising from the possession of the lease items are allocated to the lessor and the less. As at 30 June 2013 and 31 December 2012, the future minimum payments and the present value of net lease payments were as follows: Minimum lease payments 30 June 2013 Present value of payments Minimum lease payments 31 December 2012 Present value of payments Within 1 year 4,314 4,110 4,390 4,150 After one year but not more than five years 1,524 1,478 2,382 2,280 Total minimum lease payments 5,838 5,588 6,772 6,430 Less finance charge (250) (342) Present value of minimum lease payments 5,588 6, Receivables under operating leases the Group as lessor As at 30 June 2013, the future annual minimum lease receivables under non-cancellable operating leases amounted to PLN 8,400 thousand. 17. Financial assets 30 June December 2012 Shares Other securities* 145, ,295 Loans advanced** 21,157 5,396 Other*** 8,224 - Financial assets 174, ,751 * Non-current portion of the bond acquired by the Company from Tri Media Holdings Limited on 22 December ** The Group advanced loans to Management and Supervisory Board Members ( in the six months ended 30 June 2013 totalled PLN 2,500 thousand). In 2012 and in the six months ended 30 June 2013, the Group advanced loans to its employees, business partners and other third parties. *** advance payment for shares in telecom company (note 2) 18

21 Notes 18. Prepayments and accrued income 30 June December 2012 Lease Insurance 1, Technical support Permissions Arrangement commissions on credit facility 3,384 - Other finance expenses (commissions) Energy 1 14 Road zone rented 4 5 Company Social Benefit Fund Real estate tax 5,164 - WLR - commission fees Marketing 3, Other Total 17,371 2,520 - current 16,911 2,273 - non-current The increase in real estate tax under prepayments and accrued income is due to the nature of the tax and the settlement cycle. 19. Employee Benefits Employee Share Option Plan On 20 June 2013, the Extraordinary General Meeting of the Company adopted Resolution No. 4 on the implementation of share option plan of the Company by offering 500,000 own shares to the employees within the company founded by the authorized persons. 20. Other financial assets 30 June December 2012 Loans advanced** 1,997 14,776 Other securities* 31,821 32,623 Other financial assets 33,818 47,399 * Current portion of the bond acquired by the Company from Tri Media Holdings Limited on 22 December ** In 2012 and in the six months ended 30 June 2013, the Group advanced loans to Company s employees, business partners and third parties. 21. Cash and cash equivalents Cash at bank earns interest at floating rates based on interest rates on overnight bank deposits. Current deposits are placed for periods of different lengths, from overnight up to one month depending on the Group s current cash requirements, and bear interest at rates fixed in advance for such deposits. As at 30 June 2013, the fair value of cash and cash equivalents amounted to PLN 171,206 thousand (PLN 4,876 thousand as at 31 December 2012). All risk factors inherent in the Company's business are described in Note

22 Notes As at 30 June 2013, the amount of undrawn funds available to the Group under the overdraft facility was PLN 16 thousand. The balance of cash and cash equivalents as at 30 June 2013 disclosed in the consolidated cash flow statement for the six months ended 30 June 2013 included: 30 June June 2012 Cash at bank and in hand 171,100 9,537 Current deposits - - Other cash Cash and cash equivalents, including: 171,206 9,763 - of limited purpose of use 121, Share capital, statutory reserve funds and other capital reserves Share capital As at 30 June 2013, the Company s share capital amounted to PLN 91,777,270 and was divided into 91,777,270 ordinary bearer shares with a par value of PLN 1 per share. Each share confers the same right to dividend and interest in capital. The Company s share capital changed during the six months ended 30 June On 31 January 2013, the Extraordinary General Meeting of Multimedia Polska S.A. passed Resolution no. 6 on increasing the share capital whereby the share capital of the Company was raised from PLN 91,610,770 to PLN 91,777,270 through the issue of 166,500 ordinary registered shares with a par value of PLN 1.00 per share. The preemptive rights of the existing shareholders were lifted and the new issue shares were designated for Mr. Andrzej Rogowski President of the Board. On 11 February 2013, the District Court for Gdańsk-Północ in Gdańsk, VIII Commercial Division of the National Court Register registered the increase in the Company's share capital from PLN 91,610,770 to PLN 91,777,270. In connection with adopting the resolution referred to above, the Extraordinary General Meeting amended Art. 6 of the Articles of Association of Multimedia Polska S.A. - Par value of shares All issued shares have a par value of PLN 1 each and have been paid for in full. - Large holdings of shares Shareholder Number of shares held Number of votes at the General Meeting Percentage of votes at the General Meeting Percentage held in share capital M2 Investments Limited (1) 47,654,722 47,654, % 51.92% Tri Media Holdings Ltd (2) 38,273,340 38,273, % 41.70% Other shareholders (3) 5,849,208 5,849, % 6.38% Total 91,777,270 91,777, % % 1) M2 Investments Limited is a company in which Mr Tomek Ulatowski and Mr Ygal Ozechov, the Co-Chairmen of the Supervisory Board (with their respective related entities) indirectly hold each 50% of shares and control the decision making process. M2 Investments Limited is a subsidiary of YTD LLC, with registered office in Wilmington, USA, in which the Co-Chairmen of the Supervisory Board (with their respective related entities) hold 100% of shares and through which they control the decision making process at the purchasing entity. 2) Entities controlled by EVL with registered office in Nicosia, the Republic of Cyprus. 3) Multimedia Polska S.A held 12,462 own shares. The Company is not entitled to exercise the voting rights attached to these shares at its General Shareholders Meeting. 20