TAURON Polska Energia S.A.

Transcription

1 Condensed interim financial statements prepared in accordance with the International Financial Reporting Standards for the 1

2 INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME... 4 INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION... 5 INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION - continued... 6 INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY... 7 INTERIM CONDENSED STATEMENT OF CASH FLOWS... 8 EXPLANATORY NOTES General information Basis for preparation of the interim condensed financial statements Significant accounting policies New standards or interpretations which have been published, but have not entered into force yet Change in estimates Shares in related parties Seasonality of operations Information on operating segments Sales revenue Expenses by type Income tax Tax expense in the statement of comprehensive income Deferred income tax Tax Capital Group Dividends paid and proposed Property, plant and equipment Investment property Non-current intangible assets Shares Bonds Long-term loans Current intangible assets Inventories Trade and other receivables Cash and cash equivalents Equity Issued capital Major shareholders Reserve capital, retained earnings and restrictions on dividend payment Revaluation reserve from valuation of hedging instruments Interest-bearing loans and borrowings Bonds issued Loans from the European Investment Bank Cash pool Overdraft facilities Other provisions Contingent liabilities Collateral against liabilities Capital commitments Related party disclosures Transactions with related parties and State Treasury companies Executive compensation Financial instruments Carrying amount and fair value of financial instrument classes and categories Fair value hierarchy Details of significant items in individual categories of financial instruments Finance and financial risk management

3 31.1. Financial risk management Financial management Significant items of the statement of cash flows Cash flows from investing activities Cash flows from financing activities Details of other significant changes in the reporting period Events after the end of the reporting period

4 CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME Note 31 March 2013 Continuing operations Sales revenue Cost of sales 10 ( ) ( ) Gross profit Other operating income Selling and distribution expenses (6 333) (9 054) Administrative expenses (25 888) (26 169) Other operating expenses (689) (409) Operating profit Dividend income Other finance income Finance costs (84 984) (84 112) Profit before tax Income tax 11 (12 639) 398 Net profit from continuing operations Net profit for the period Other comprehensive income subject to reclassification to profit or loss: Change in the value of hedging instruments Income tax expense (1 445) - Other comprehensive income not subject to reclassification to profit or loss: 19 - Actuarial gains/(losses) related to provisions for post-employment benefits 24 - Income tax expense (5) - Other comprehensive income for the period, net of tax Total comprehensive income for the period Earnings per share (in PLN): - basic and diluted, for profit for the period basic and diluted, for profit from continuing operations for the period Explanatory notes to the condensed interim financial statements constitute an integral part hereof. 4

5 CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION ASSETS Note 31 December 2013 Non-current assets Property, plant and equipment Investment property Intangible assets Shares Bonds Loans granted Other financial assets Other non-financial assets Deferred tax asset Current assets Intangible assets Inventories Income tax receivables Trade and other receivables Bonds Derivative instruments Other non-financial assets Cash and cash equivalents TOTAL ASSETS Explanatory notes to the condensed interim financial statements constitute an integral part hereof. 5

6 CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION - continued Note 31 December 2013 EQUITY AND LIABILITIES Equity Issued capital Reserve capital Revaluation reserve from valuation of hedging instruments 23.4 ( ) ( ) Retained earnings/accumulated losses Total equity Non-current liabilities Interest-bearing loans and borrowings Liabilities under finance leases Other financial liabilities Derivative instruments Provisions for employee benefits Accruals, deferred income and government grants Current liabilities Current portion of interest-bearing loans and borrowings Current portion of liabilities under finance leases Trade and other payables Derivative instruments Provisions for employee benefits Other provisions Accruals, deferred income and government grants Income tax payable 17 - Other non-financial liabilities Total liabilities TOTAL EQUITY AND LIABILITIES Explanatory notes to the condensed interim financial statements constitute an integral part hereof. 6

7 CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE 3-MONTH PERIOD ENDED 31 MARCH 2014 Note Issued capital Reserve capital Revaluation reserve from valuation of hedging instruments Retained earnings/ Accumulated losses Total equity 1 January ( ) Profit for the period Other comprehensive income Total comprehensive income for the period ( ) FOR THE 3-MONTH PERIOD ENDED 31 MARCH 2013 Issued capital Reserve capital Revaluation reserve from valuation of hedging instruments Retained earnings / Accumulated losses Total equity 1 January ( ) Profit for the period Other comprehensive income Total comprehensive income for the period March ( ) Explanatory notes to the condensed interim financial statements constitute an integral part hereof. 7

8 CONDENSED INTERIM STATEMENT OF CASH FLOWS Note 31 March 2013 Cash flows from operating activities Profit /(loss) before taxation Adjustments for: Depreciation and amortization (Gain)/loss on foreign exchange differences Interest and dividends, net (3 099) (61 444) (Gain)/loss on investing activities 392 (1 714) (Increase)/decrease in receivables (Increase)/decrease in inventories Increase/(decrease) in payables excluding loans and borrowings ( ) Change in other non-current and current assets Change in deferred income, government grants and accruals 145 (510) Change in provisions ( ) (86 058) Income tax paid 890 (30 036) Net cash generated from (used in) operating activities (20 407) Cash flows from investing activities Proceeds from sale of property, plant and equipment and intangible assets Purchase of property, plant and equipment and intangible assets (3 449) (21 717) Purchase of shares 32.1 (77 540) - Purchase of bonds 32.1 ( ) ( ) Redemption of bonds Loans granted (5 850) (38 850) Repayment of loans granted Dividends received Interest received Net cash generated from (used in) investing activities ( ) ( ) Cash flows from financing activities Proceeds from loans and borrowings Repayment of loans and borrowings (20 455) - Issue of debt securities Redemption of debt serurities 32.2 ( ) - Payment of finance lease liabilities (809) (125) Interest paid (12 542) (6 507) Commission paid (4 136) (3 481) Net cash generated from (used in) financing activities Net increase / (decrease) in cash and cash equivalents (23 647) Net foreign exchange difference (15) (721) Cash and cash equivalents at the beginning of the period ( ) ( ) Cash and cash equivalents at the end of the period, of which : 22 ( ) ( ) restricted cash Explanatory notes to the condensed interim financial statements constitute an integral part hereof. 8

9 EXPLANATORY NOTES 1. General information These condensed interim financial statements have been prepared by TAURON Polska Energia Spółka Akcyjna (the Company ) with its registered office at ul. ks. Piotra Ściegiennego 3 in Katowice, Poland, whose shares are publicly traded. The Company s condensed interim financial statements cover the and present comparative data for the 31 March 2013 as well as figures as at 31 December The data for the and the comparative data for the 31 March 2013, as contained herein, have not been audited or reviewed by a certified auditor. The comparative data as at 31 December 2013 have been audited by a certified auditor. The Company was established by a Notarized Deed on 6 December 2006 under the business name of Energetyka Południe S.A. On 8 January 2007, the Company was registered with the District Court of Katowice-Wschód, Business Division of the National Court Register, under number KRS The change of its name to TAURON Polska Energia S.A. was registered with the District Court on 16 November The Company was assigned statistical number (REGON) and tax identification number (NIP) TAURON Polska Energia S.A. was established for an unlimited period. The scope of the core business of TAURON Polska Energia S.A. includes: Head office and holding operations, except for financial holdings PKD Z; Sales of electricity PKD Z; Sales of coal and biomass PKD Z; Sales of gaseous fuels in a network system PKD Z. TAURON Polska Energia S.A. is the parent of the TAURON Polska Energia S.A. Capital Group. 2. Basis for preparation of the condensed interim financial statements These condensed interim financial statements have been prepared in accordance with the International Financial Reporting Standards ( IFRS ), in particular, International Accounting Standard 34 ( IAS 34 ) and the IFRS as endorsed by the European Union ( EU ). IFRS consist of standards and interpretations approved by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee. These condensed interim financial statements have been presented in the Polish zlotys ( PLN ) and all figures are in PLN thousand, unless stated otherwise. These condensed interim financial statements have been prepared on the assumption that the Company will continue as a going concern in the foreseeable future. the date of approval of these financial statements for publication, there were no circumstances that would indicate a threat to the Company s ability to continue as a going concern. The condensed interim financial statements do not contain all information and disclosures required for annual financial statements and they should be read jointly with the Company s financial statements prepared in accordance with IFRS for the year ended 31 December These condensed interim financial statements for the were approved for publication on 13 May The Company also prepared the condensed interim consolidated financial statements for the, which were approved for publication by the Management Board on 13 May These condensed interim financial statements are part of the consolidated report, which also includes the condensed interim consolidated financial statements for the. 9

10 3. Significant accounting policies TAURON Polska Energia S.A. The accounting principles (policy) adopted for the preparation of the condensed interim financial statements are consistent with those adopted for the preparation of the annual financial statements of TAURON Polska Energia S.A. for the year ended 31 December 2013, except for the following amendments to standards and new interpretations applicable to annual periods beginning on 1 January 2014: IFRS 10 Consolidated Financial Statements applicable in the EU to annual periods beginning on or after 1 January 2014; IFRS 11 Joint Arrangements applicable in the EU to annual periods beginning on or after 1 January 2014; IFRS 12 Disclosure of Interests in Other Entities applicable in the EU to annual periods beginning on or after 1 January 2014; Revised IFRS 10, IFRS 11 and IFRS 12 Transition Disclosures applicable in the EU to annual periods beginning on or after 1 January 2014; IAS 27 Separate Financial Statements applicable in the EU to annual periods beginning on or after 1 January 2014; IAS 28 Investments in Associates and Joint Arrangements applicable in the EU to annual periods beginning on or after 1 January 2014; Revised IAS 32 Financial Instruments: Presentation Offsetting Financial Assets and Financial Liabilities applicable to annual periods beginning on or after 1 January 2014; Revised IFRS 10, IFRS 12 and IAS 27 Investment Vehicles applicable to annual periods beginning on or after 1 January 2014; Revised IAS 36 Impairment of Assets: Disclosure of Recoverable Amount of Non-financial Assets applicable to annual periods beginning on or after 1 January 2014; Revised IAS 39 Financial Instruments: Recognition and Measurement Novation of derivatives and continuation of hedge accounting applicable to annual periods beginning on or after 1 January The introduction of the abovementioned standards and interpretations has not exerted a significant effect on the accounting principles (policy) adopted by the Company. 4. New standards or interpretations which have been published, but have not entered into force yet. The following standards and interpretations have been issued by the International Accounting Standards Board or the International Financial Reporting Interpretations Committee, have not been endorsed by the European Union and are not yet effective: IFRS 9 Financial Instruments (the effective date has not been determined yet) was published by the IASB on 12 November On 28 October 2010 IASB issued revised IFRS 9, introducing new requirements concerning accounting for financial liabilities and transferring the requirements concerning derecognition of financial assets and liabilities from IAS 39. On 19 November 2013 IASB issued a number of amendments to financial instruments accounting. The standard develops a uniform approach to determine whether financial assets are measured at amortized cost or fair value and replaces numerous principles specified in IAS 39. Amendments of November 2013 introduce significant changes to hedge accounting and allow for recognizing own credit risk without changing other principles of accounting for financial instruments. They also annulled the effective date of IFRS 9 (set at 1 January 2015); IFRS 14 Regulatory Deferral Accounts applicable to annual periods beginning on or after 1 January IFRS 14 has been introduced as a transitional standard for first-time adopters; Revised IAS 19 Employee Benefits Defined Benefit Plans: Employee Contributions - applicable to annual periods beginning on or after 1 July 2014; Annual Improvements to IFRS (Cycle ) - applicable to annual periods beginning on or after 1 July 2014; Annual Improvements to IFRS (Cycle ) - applicable to annual periods beginning on or after 1 July 2014; IFRIC 21 Levies (published on 20 May 2013). IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets applicable to annual periods beginning on or after 1 January The Company analyzed the impact of the abovementioned standards and interpretations on the accounting policies applied by the Company except for the impact of IFRS 9 Financial Instruments, which will be analyzed after publishing all 10

11 phases. According to the Management Board the standards and interpretations in question do not materially impact the existing accounting policy. The Company did not choose an early application of any standard, interpretation or change, which was published, but is not yet mandatorily effective. 5. Change in estimates In the period covered by these condensed interim financial statements there were no significant changes in estimates and estimation methods applied, which would affect the current or future periods, other than those presented below or mentioned further in these condensed interim financial statements. Deferred tax Due to the forecasted taxable income in 2014 of the Tax Capital Group (TCG), of which the Company is a member, and projected taxable income of the Company in subsequent years, the deferred tax asset has been recognized in these financial statements in the full amount. Impairment tests of shares Taking into account the indications that the Company s capitalization has recently been below the carrying amount as well as the situation in the energy market, as at 31 December 2013 the Company tested its shares disclosed under noncurrent assets for impairment. The test was conducted based on the present value of projected cash flows from operations of major companies, by reference to detailed projections for and the estimated residual value. The level of the weighted average cost of capital (WACC) during the projection period, as used in the calculations, ranges from 7.54% to 8.53% in nominal terms before tax. WACC is calculated taking into account the risk-free rate determined by reference to the yield on 10- year treasury bonds (4.2%) and the risk premium for operations appropriate for the power industry (5%). The growth rate used for extrapolation of projected cash flows beyond the detailed planning period is at the level of 2.5% and it corresponds to the estimated long-term inflation rate. Key business assumptions affecting the estimated value in use of tested companies have been discussed in detail in the Company s financial statements for the year ended 31 December The results of the tests did not indicate the necessity to recognize any impairment losses on shares held. An analysis of the indications as at revealed that the market value of the Company s net assets had not changed considerably in the first quarter of Therefore, it was assumed that the results of the tests as at 31 December 2013 were still true and no impairment tests needed to be carried out as at the end of the reporting period. Full tests will be performed as at 30 June Shares in related parties, TAURON Polska Energia S.A. directly held shares in the following key subsidiaries: 11

12 Item Entity s name Registered office Core business Direct share of TAURON in the entity s capital Direct share of TAURON in the entity s governing body 1 TAURON Wytwarzanie S.A. Katowice Generation, transmission and distribution of electricity and heat 99.79% 99.79% 2 TAURON Dystrybucja S.A. Kraków Distribution of electricity 99.71% 99.71% 3 4 TAURON Sprzedaż Sp. z o.o. TAURON Obsługa Klienta Sp. z o.o. Kraków Sale of electricity % % Wrocław Services % % 5 TAURON Ekoenergia Sp. z o.o. 1 Jelenia Góra Generation and sale of electricity % % 6 Polska Energia Pierwsza Kompania Handlowa Sp. z o.o. 7 TAURON Ciepło S.A. 2 Katowice 8 9 TAURON Czech Energy s.r.o. TAURON Sprzedaż GZE Sp. z o.o. Mysłowice Sale of electricity % % Ostrawa, Czech Republic Production and distribution of heat 96.57% 99.10% Sale of electricity % % Gliwice Sale of electricity % % 10 TAURON Wydobycie S.A. 3 Jaworzno Hard coal mining 47.52% 31.99% 1 On 2 January 2014, a business combination of TAURON Ekoenergia Sp. z o.o., MEGAWAT MARSZEWO Sp. z o.o. and BELS INVESTMENT Sp. z o.o. was registered. 3 On 30 April 2014, a business combination of Enpower Service Sp. z o.o. and TAURON Ciepło S.A. was registered as described in detail in Note 34 to these condensed interim financial statements. At the same time, the name of the acquirer has been changed to TAURON Ciepło Sp. z o.o. 3 TAURON Polska Energia S.A. also holds indirect interest in TAURON Wydobycie S.A. through a subsidiary TAURON Wytwarzanie S.A. Under the agreements for the use of shares, TAURON Polska Energia S.A. also holds 52.48% interest in the issued capital, giving it 68.01% of votes at the General Shareholders Meeting of TAURON Wydobycie S.A. Consequently, the Company holds 100% of shares in TAURON Wydobycie S.A. which gives 100% of votes at the General Shareholders Meeting., TAURON Polska Energia S.A. held indirect shares in the following major subsidiaries: Item Entity s name Registered office Core business Indirect share of TAURON in the entity s capital Indirect share of TAURON in the entity s governing body Shareholder as at 1 Kopalnia Wapienia Czatkowice Sp. z o.o. 1 Krzeszowice Limestone quarrying, crushing and grinding; stone quarrying 99.79% 99.79% TAURON Wytwarzanie S.A. 2 3 TAURON Dystrybucja Serwis S.A. 1 TAURON Dystrybucja Pomiary Sp. z o.o. 1 Wrocław Tarnów Repair and maintenance of electrical equipment Repair and maintenance of electronic equipment 99.71% 99.71% 99.71% 99.71% TAURON Dystrybucja S.A. TAURON Dystrybucja S.A. 1 TAURON Polska Energia S.A. uses the shares held by its subsidiaries. Additionally, as at, TAURON Polska Energia S.A. held indirect shares in the following major jointly controlled entities: 12

13 Item Entity s name Registered office Core business Indirect share of TAURON in the entity s capital Indirect share of TAURON in the entity s governing body Shareholder as at 31 March Elektrociepłownia Stalowa Wola S.A. Stalowa Wola Production, transmission, distribution and sales of electricity 49.90% 49.90% TAURON Wytwarzanie S.A. 2 Elektrownia Blachownia Nowa Sp. z o.o. Kędzierzyn Koźle Generation of electricity 49.90% 49.90% TAURON Wytwarzanie S.A. 7. Seasonality of operations The Company s operations related to electricity sales are not seasonal in nature, hence the Company s performance in this area shows no significant fluctuations during the year. As the Company carries out holding operations, it discloses significant dividend income recognized under financial revenue as at the dates of the resolutions on dividend payment, unless such resolutions set other record dates. In the the Company did not recognize any dividend income from subsidiaries. In the 31 March 2013, the Company recognized dividend income from subsidiaries of PLN thousand. 8. Information on operating segments The Company carries out its business in two operating segments, i.e. Sales and Holding activity. Holding activity segment assets include: shares in subsidiaries; bonds acquired from subsidiaries; cash pool loan receivables, including a cash pool deposit; receivables arising from other loans granted to related parties. Holding activity segment liabilities include: bonds issued by the Company, including liabilities arising from valuation of hedging instruments related to such bonds; loans obtained from the European Investment Bank to carry out investment projects in subsidiaries; cash pool loan liabilities. Holding activity segment includes intra-group receivables and liabilities arising from income tax settlements of the Tax Capital Group companies. Financial revenue and expenses include dividend income as well as net interest income and expense earned/incurred by the Company in relation to the central financing model adopted by the Group. Unallocated expenses include the Company s general and administrative expense, as they are incurred for the Group as a whole and are not directly attributable to a specific operating segment. EBITDA is the profit/loss on continuing operations before tax, financial income and expenses, increased by amortization/depreciation. 13

14 or as at Sales Holding activity Unallocated items Total Revenue Sales outside the Group Sales within the Group Segment revenue Profit/(loss) of the segment Unallocated expenses - - (25 888) (25 888) Profit/(loss) from continuing operations before tax and net finance income (costs) (25 888) Net finance income/(costs) - (3 209) (506) (3 715) Profit/(loss) before income tax (3 209) (26 394) Income tax expense - - (12 639) (12 639) Net profit/(loss) for the period (3 209) (39 033) EBITDA (25 888) Assets and liabilities Segment assets Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Other segment information Capital expenditure * Depreciation/amortization (6 569) - - (6 569) * Investment expenditure includes outlays on property, plant and equipment as well as non-current intangible assets, except for energy certificates acquired by the Company. In the, revenue from sales to two major clients, being members of the Capital Group, represented 43% and 12% of the Company s total revenue in the Sales segment, amounting to PLN thousand and PLN thousand, respectively. 14

15 31 March 2013 or as at 31 December 2013 Sales Holding activity Unallocated items Total Revenue Sales outside the Group Sales within the Group Segment revenue Profit/(loss) of the segment Unallocated expenses - - (26 169) (26 169) Profit/(loss) from continuing operations before tax and net finance income (costs) (26 169) Net finance income (costs) Profit/(loss) before income tax (20 824) Income tax expense Net profit/(loss) for the period (20 426) EBITDA (26 169) Assets and liabilities Segment assets Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Other segment information Capital expenditure * Depreciation/amortization (5 957) - - (5 957) * Investment expenditure includes outlays on property, plant and equipment as well as non-current intangible assets, except for energy certificates acquired by the Company. In the 31 March 2013, revenue from sales to two major clients, being members of the Capital Group, represented 51% and 11% of the Company s total revenue in the Sales segment, amounting to PLN thousand and PLN thousand, respectively. 9. Sales revenue 31 March 2013 Revenue from sales of goods for resale and materials (excise duty not excluded) Excise duty (3 591) (2 906) Revenue from sales of goods for resale and materials, of which: Electricity Gas Energy certificates Emission allowances Other Rendering of services, of which: Trading services Other Total sales revenue Effective from 2012, the Company has been acting as an agent in transactions involving biomass and coal purchase for the Group companies in the Generation and Heat segment. The Company purchases raw materials from third parties 15

16 and from the TAURON Group companies, which are subsequently sold to the Group companies only. The Company recognizes revenue only from agency services (supply management). In the, raw materials purchased and subsequently resold in the abovementioned transactions amounted to PLN thousand, while revenue from agency services amounted to PLN thousand, which represents a major part of revenue from trading services. 10. Expenses by type 31 March 2013 Costs by type Depreciation of property, plant and equipment and amortization of intangible assets (6 569) (5 957) Materials and energy (552) (327) Consultancy services (714) (1 781) Distribution services (156) (1 057) IT services (9 002) (3 477) Other external services (3 086) (3 013) Taxes and charges (3 182) (9 227) Employee benefits expense (18 270) (16 529) Inventory write-downs Allowance for doubtful debts (11) - Advertising costs (7 910) (7 521) Other (368) (322) Total costs by type (49 820) (46 804) Change in prepayments, accruals and deferred income Selling and distribution expenses Administrative expenses Cost of goods for resale and materials sold ( ) ( ) Cost of sales ( ) ( ) A decrease in the costs of taxes and charges in the year-on-year is mainly due to a decrease in the costs of transmission and exchange fees for sales of electricity. 11. Income tax Tax expense in the statement of comprehensive income Key items of the tax expense disclosed in the statement of comprehensive income: 31 March 2013 Current income tax Deferred tax (12 675) - Income tax expense in profit/(loss) (12 639) 398 Income tax expense relating to other comprehensive income (1 450) - In the 31 March 2013 the deferred tax was not charged to profit in the statement of comprehensive income, because, based on projections assuming no tax profit, the Company recognized deferred tax asset up to the amount of the deferred tax liability in the comparable period Deferred income tax Deferred income tax results from: 16

17 31 December difference between tax base and carrying amount of fixed and intangible assets due interest on bonds difference between tax base and carrying amount of financial assets other Deferred tax liability December provisions for the obligation to surrender energy certificates provisions for employee benefits other provisions and accruals difference between tax base and carrying amount of fixed and intangible assets difference between tax base and carrying amount of financial liabilities valuation of hedging instruments other Deferred tax assets, of which: Deferred tax assets recognized in profit or loss Deferred tax assets recognized in other comprehensive income Deferred tax asset, net Deferred tax in the statement of financial position Tax Capital Group Major companies constituting the Tax Capital Group: TAURON Polska Energia S.A., TAURON Wytwarzanie S.A., TAURON Dystrybucja S.A., TAURON Sprzedaż Sp. z o.o., TAURON Obsługa Klienta Sp. z o.o., TAURON Ekoenergia Sp. z o.o. and Polska Energia Pierwsza Kompania Handlowa Sp. z o.o., the Tax Capital Group had income tax receivables for 2013 of PLN thousand and paid advances for tax for 2014 in the amount of PLN thousand which have been presented together in the financial statements under Income tax receivables. At the same time, due to the Company s settlements, as the Representative Company, with the Tax Capital Group companies, it disclosed liabilities to these subsidiaries arising from tax overpayment of PLN thousand, which have been presented in the statement of financial position under Trade and other payables, as well as receivables from the Tax Capital Group companies arising from tax underpayment of PLN 44 thousand, which have been presented in the statement of financial position under Trade and other receivables. 12. Dividends paid and proposed On 15 April 2014 the Management Board decided to recommend to the Ordinary General Shareholders Meeting the amount of dividend payment to the shareholders of the Company of PLN thousand from the net profit of the Company generated in the financial year 2013, i.e. PLN 0.15 per share. At the same time, the Management Board decided to provide recommendation to the Ordinary General Shareholders' Meeting determining the record date at 14 August 2014 and the payment date at 4 September On 18 April 2014 the Supervisory Board approved the recommendation concerning profit distribution and determining the record and payment dates presented to the Ordinary General Shareholders Meeting by the Management Board. 17

18 The Ordinary General Shareholders Meeting, analyzing the request of the Management Board with respect to distribution of profit for 2013 and determining the record and payment dates, has been planned for 15 May On 16 May 2013, the General Shareholders Meeting adopted a resolution to allocate PLN thousand to dividend payment to the Company s shareholders (PLN 0.20 per share). The dividend was paid out from the net profit generated by the Company in 2012, which amounted to PLN thousand. The record date was set at 3 June 2013 and the payment date at 18 June Property, plant and equipment Plant and machinery Motor vehicles Other Tangible fixed assets, total Assets under construction Property, plant and equipment, total Cost Opening balance Donations (55) - - (55) - (55) Closing balance ACCUMULATED DEPRECIATION Opening balance (3 840) (3 416) (6 915) (14 171) - (14 171) Depreciation for the period (1 053) (234) (463) (1 750) - (1 750) Donations Closing balance (4 838) (3 650) (7 378) (15 866) - (15 866) NET CARRYING AMOUNT AT THE BEGINNING OF THE PERIOD NET CARRYING AMOUNT AT THE END OF THE PERIOD March 2013 Plant and machinery Motor vehicles Other Tangible fixed assets, total Assets under construction Property, plant and equipment, total Cost Opening balance Direct purchase Allocation of assets under construction (1 399) - Liquidation - - (74) (74) - (74) Closing balance ACCUMULATED DEPRECIATION Opening balance (6 924) (2 390) (4 894) (14 208) - (14 208) Depreciation for the period (900) (249) (704) (1 853) - (1 853) Liquidation Closing balance (7 824) (2 639) (5 533) (15 996) - (15 996) NET CARRYING AMOUNT AT THE BEGINNING OF THE PERIOD NET CARRYING AMOUNT AT THE END OF THE PERIOD Investment property The investment property is composed of buildings located in Katowice Szopienice, at ul. Lwowska 23 used based on a finance lease agreement with PKO Bankowy Leasing Sp. z o.o. The gross value of the property is PLN thousand and the accumulated depreciation has equaled PLN 904 thousand. The monthly lease payment is ca. PLN 320 thousand, while monthly depreciation charge is ca. PLN 301 thousand. The Company is a party to a lease agreement with TAURON Wytwarzanie S.A. (the lessee) valid until 30 April 2018, specifying terms and conditions of subleasing buildings and structures discussed in the lease agreement mentioned above. In the, the revenue from investment property lease reached PLN thousand. 18

19 15. Non-current intangible assets Software and licenses Energy certificates Other intangible assets Intangible assets not made available for use Intangible assets, total COST Opening balance Direct purchase Allocation of intangible assets not made available for use (64) - Sales (53) - - (1 742) (1 795) Reclassification - (16 182) - - (16 182) Closing balance ACCUMULATED AMORTIZATION Opening balance (21 949) - (696) - (22 645) Amortization for the period (3 855) - (60) - (3 915) Sales Closing balance (25 785) - (756) - (26 541) NET CARRYING AMOUNT AT THE BEGINNING OF THE PERIOD NET CARRYING AMOUNT AT THE END OF THE PERIOD In the, the Company sold intangible assets with the gross value of PLN thousand and amortization of PLN 19 thousand to its subsidiary, TAURON Obsługa Klienta Sp. z o.o. In the, the Company reclassified energy certificates held for surrendering for 2014 with the value of PLN thousand to current intangible assets. Additionally, under the amended Energy Law, industrial buyers are entitled to surrender energy certificates for redemption or pay a substitution fee independently, therefore energy certificates in the amount of PLN thousand were reclassified to inventories due to the intended sale to industrial buyers. 31 March 2013 Software and licenses Energy certificates Other intangible assets Intangible assets not made available for use Intangible assets, total COST Opening balance Direct purchase Allocation of intangible assets not made available for use (3 216) - Other changes (161) (161) Closing balance ACCUMULATED AMORTIZATION Opening balance (10 410) - (558) - (10 968) Amortization for the period (4 051) - (51) - (4 102) Closing balance (14 461) - (609) - (15 070) NET CARRYING AMOUNT AT THE BEGINNING OF THE PERIOD NET CARRYING AMOUNT AT THE END OF THE PERIOD

20 16. Shares Changes in the balance of long-term investments from 1 January 2014 to No. Company Opening balance Increases/ Decreases Closing balance 1 TAURON Wytwarzanie S.A ( ) TAURON Dystrybucja S.A TAURON Ciepło S.A TAURON Ekoenergia Sp. z o.o TAURON Sprzedaż Sp. z o.o TAURON Obsługa Klienta Sp. z o.o Polska Energia Pierwsza Kompania Handlowa Sp. z o.o TAURON Czech Energy s.r.o TAURON Sprzedaż GZE Sp. z o.o TAURON Wydobycie S.A TAURON Wytwarzanie GZE Sp. z o.o CONCORDE INVESTISSEMENT S.A CC Poland Plus Sp. z o.o Energopower Sp. z o.o Enpower Service Sp. z o.o Enpower Sp. z o.o TAURON Ubezpieczenia Sp. z o.o Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. w Tychach Total Changes in the balance of long-term investments in the resulted from the following events: Separation of ZEC Bielsko Biała from TAURON Wytwarzanie S.A. to TAURON Ciepło S.A. On 2 January 2014, the division of TAURON Wytwarzanie S.A. through spin-off, pursuant to Article of the Code of Commercial Companies, involving a transfer of separated assets, i.e. an organized part of the enterprise, i.e. Zespół Elektrociepłowni Bielsko Biała, to TAURON Ciepło S.A., was entered into the National Court Register. As a result, the issued capital of TAURON Wytwarzanie S.A. was decreased from PLN thousand to PLN thousand, while the issued capital of TAURON Ciepło S.A. was increased from PLN thousand to PLN thousand. As a result of the separation the interests in TAURON Wytwarzanie S.A. held by TAURON Polska Energia S.A. decreased to 99.76% (in the issued capital) and 99.79% (in the total number of votes at the General Shareholders Meeting), while the interests in TAURON Ciepło S.A. held by TAURON Polska Energia S.A. increased to 96.57% (in the issued capital) and 97.14% (in the total number of votes at the General Shareholders Meeting). TAURON Polska Energia S.A. reclassified the book value of its investments in TAURON Wytwarzanie S.A. to investments in TAURON Ciepło S.A of PLN thousand. Acquisition of shares in TAURON Wydobycie S.A. On 10 December 2013, an agreement concerning acquisition of registered shares in TAURON Wydobycie S.A. by TAURON Polska Energia S.A. from Kompania Węglowa S.A. was signed. The shares in question represent 47.52% of the entity s issued capital and give 31.99% of the total voting rights at the General Shareholders Meeting. The total acquisition price was PLN thousand. The amount of PLN thousand was paid at the agreement date and the parties agreed that the remaining PLN thousand would be paid following the transfer of the title to the shares onto the Company, i.e. after Kompania Węglowa S.A. has been authorized by its General Shareholders Meeting to sell the shares and the seller has been authorized by TAURON Wydobycie S.A. to dispose of the shares. The Management Board of TAURON Wydobycie S.A. approved the sale of the entity s shares on 19 December On 15 January 2014, the General Shareholders Meeting of Kompania Węglowa S.A. authorized the disposal of shares in TAURON Wydobycie S.A. Hence, the conditions precedent for the transfer of the title to TAURON Wydobycie S.A. s shares were satisfied. Following the payment of the remaining amount, i.e. PLN thousand, to Kompania Węglowa S.A. the title to shares in TAURON Wydobycie S.A. held by Kompania Węglowa S.A. was transferred onto the Company on 22 January

21 Under the agreement TAURON Polska Energia S.A. holds 100% of shares in TAURON Wydobycie S.A., which give 100% of votes at the entity s General Shareholders Meeting, where 47.52% of shares representing 31.99% of votes are held by TAURON Polska Energia S.A. directly and the remaining 52.48% of shares representing 68.01% of votes at the General Shareholders Meeting of TAURON Wydobycie S.A. are at the Company s disposal under the agreement on the use of shares in TAURON Wydobycie S.A., held by TAURON Wytwarzanie S.A. Changes in long-term investments in the 31 March 2013 were related to reorganization and resulted from the following events: Separation of EC Katowice from TAURON Wytwarzanie S.A. to TAURON Ciepło S.A.; Business combination under common control of TAURON Obsługa Klienta Sp. z o.o. and TAURON Obsługa Klienta GZE Sp. z o.o. (subsidiaries) Changes in the balance of long-term investments from 1 January 2013 to 31 March 2013 No. Company Opening balance Increases / Decreases Closing balance 1 TAURON Wytwarzanie S.A ( ) TAURON Dystrybucja S.A TAURON Ciepło S.A TAURON Ekoenergia Sp. z o.o TAURON Sprzedaż Sp. z o.o TAURON Obsługa Klienta Sp. z o.o Polska Energia Pierwsza Kompania Handlowa Sp. z o.o TAURON Czech Energy s.r.o TAURON Sprzedaż GZE Sp. z o.o TAURON Obsługa Klienta GZE Sp. z o.o (13 523) - 11 TAURON Wytwarzanie GZE Sp. z o.o CONCORDE INVESTISSEMENT S.A CC Poland Plus Sp. z o.o Energopower Sp. z o.o Enpower Service Sp. z o.o Enpower Sp. z o.o TAURON Ubezpieczenia Sp. z o.o Total Bonds Under the central financing model, TAURON Polska Energia S.A. acquires bonds issued by the TAURON Group companies. The table below presents the balances of acquired bonds and interest accrued as at the end of the reporting period, i.e. and 31 December 2013, broken down by individual TAURON Group companies issuing the bonds. Company nominal value of purchased bonds accrued interest 31 December 2013 nominal value of purchased bonds accrued interest TAURON Wytwarzanie S.A TAURON Dystrybucja S.A TAURON Ekoenergia Sp. z o.o TAURON Ciepło S.A TAURON Wydobycie S.A Enpower Serwis Sp. z o.o Total bonds: non-current current On 2 January 2014, a business combination under common control of TAURON Ekoenergia Sp. z o.o., MEGAWAT MARSZEWO Sp. z o.o. and BELS INVESTMENT Sp. z o.o. was registered. Intra-group bonds issued by subsidiaries and acquired by TAURON Polska Energia S.A., with the total par value of PLN thousand as at the end of the reporting period, including those maturing within one year and amounting to PLN thousand, have been classified as long-term instruments. Such classification reflects the nature of funding under the intra-group bond issue scheme, which enables cash management in the medium and long term. 21

22 18. Long-term loans TAURON Polska Energia S.A. Long-term loans of PLN thousand include a loan granted to Elektrociepłownia Stalowa Wola S.A., along with interest due. Under the agreements of 20 June 2012 among PGNiG S.A., TAURON Polska Energia S.A. and Elektrociepłownia Stalowa Wola S.A., TAURON Polska Energia S.A. granted a subordinated loan to Elektrociepłownia Stalowa Wola S.A. with a view to satisfying the necessary conditions for provision of funding to Elektrociepłownia Stalowa Wola S.A. by the European Bank for Reconstruction and Development and the European Investment Bank. the end of the reporting period, the amount disbursed under the subordinated loan agreement was PLN thousand, i.e. the maximum contractual amount. Interest accrued on the loan amounts to PLN thousand. The loan with interest due is to be finally repaid no later than by the end of Current intangible assets Under current intangible assets, the Company discloses energy certificates. 31 March 2013 COST Opening balance Direct purchase Cancellation (98 182) ( ) Reclassification Closing balance IMPAIRMENT ALLOWANCES Opening balance - - Closing balance - - NET CARRYING AMOUNT AT THE BEGINNING OF THE PERIOD NET CARRYING AMOUNT AT THE END OF THE PERIOD In the, the Company surrendered energy certificates of PLN thousand to fulfil the obligation for Inventories 31 December 2013 Historical cost Energy certificates Emission allowances Merchandise Materials Total Write-downs to net realizable value - - Net realizable value Energy certificates Emission allowances Merchandise Materials Total

23 21. Trade and other receivables TAURON Polska Energia S.A. 31 December 2013 Trade receivables Receivables from sales of intangible assets Loans granted under cash pool agreement with interest accrued Other loans Collateral paid TCG receivables Other financial receivables Total Trade receivables bear no interest and usually have a 30-day maturity period. Sales transactions are only entered into with clients subject to a verification procedure. As a result, the management believe that there is no additional credit risk over the level of the allowances recognized for bad debts of the Company s trade receivables. Related-party transactions as well as the related party receivables and liabilities have been presented in Note 29 hereto. The ageing analysis and allowances/write downs for trade and other receivables have been presented below. Ageing analysis of trade and other receivables as at Not past due Past due < 30 days days days >360 days Total Value of item before allowance/write-down Trade receivables Loans granted under cash pool agreement with interest accrued Other loans Other financial receivables Total Allowance/write-down Trade receivables (18) - (18) Other financial receivables (674) (674) Total (18) (674) (692) Value of item net of allowance (carrying amount) Trade receivables Loans granted under cash pool agreement with interest accrued Other loans Other financial receivables Total

24 Ageing analysis of trade and other receivables as at 31 December 2013 Not past due Past due < 30 days days days >360 days Total Value of item before allowance/write-down Trade receivables Other financial receivables Total Allowance/write-down Trade receivables (9) (9) Other financial receivables (664) (664) Total (9) (664) (673) Value of item net of allowance (carrying amount) Trade receivables Other financial receivables Total Cash and cash equivalents The balance of cash and cash equivalents disclosed in the statement of cash flows includes: 31 December 2013 Cash at bank and in hand Short-term deposits (up to 3 months) Total cash and cash equivalents presented in the statement of financial position, of which : restricted cash Cash pool ( ) ( ) Overdraft ( ) (93 645) Foreign exchange and other differences Total cash and cash equivalents presented in the statement of cash flows ( ) ( ) The balances of loans granted and taken out in cash pool transactions do not represent cash flows from investing or financing activities as they are mainly used to manage the Group s liquidity on a day-to-day basis. They are disclosed as an adjustment to the balance of cash instead. Restricted cash consists mainly of: cash held in the settlement account for sales of electricity on the Polish Power Exchange (Towarowa Giełda Energii S.A), amounting to PLN thousand, and cash held in special purpose accounts for transactions carried out on the European Energy Exchange and the European Climate Exchange of PLN thousand. Detailed information on cash pool balances has been presented in Note 24.3 to these condensed interim financial statements. 24