CONSOLIDATED QUARTERLY REPORT FOR THE FIRST QUARTER OF 2014/15

Transcription

1 CONSOLIDATED QUARTERLY REPORT FOR THE FIRST QUARTER OF 2014/15 Warsaw/August

2 Kredyt Inkaso Spółka Akcyjna Capital Group in Warsaw ABBREVIATED INTERIM CONSOLIDATED 2 FINANCIAL REPORTS OF KREDYT INKASO S.A. CAPITAL GROUP FOR THE I QUARTER OF THE FINANCIAL YEAR 2014/15 (period from to ) Drawn up according to the IAS 34 approved by the European Union 2 Warsaw, August

3 SELECTED CONSOLIDATED FINANCIAL DATA SELECTED FINANCIAL DATA WITH CONVERSION INTO EURO in PLN thousand in EUR thousand PROFIT AND LOSS ACCOUNT Net income Operating profit (loss) Profit (loss) before tax Net profit (loss) Net profit (loss) falling to the shareholders of the dominant company Profit per share (in PLN) 0,56 0,63 0,14 0,15 Diluted profit (loss) per one share (in PLN) 0,59 0,63 0,14 0,15 Average exchange rate PLN/EUR in the period X X 3 4,1674 4,2541 CASH FLOW STATEMENT Net operating cash flows Net investment cash flows (195) (47) 259 Net financial cash flows (12 692) (2 983) Net change to cash and cash equivalents (9 479) (2 228) Average exchange rate PLN/EUR in the period X X 4,1674 4,2541 BALANCE SHEET Assets Long-term liabilities Short-term liabilities Equity Equity falling to the shareholders of the dominant company Average exchange rate PLN/EUR as of the end of the period X X 4,1609 4, Conversion into EURO was calculated in the following way: 1. For items from the Profit and Loss Account and the Cash Flow Statement the average rate of exchange for a given period was applied, calculated as the arithmetic average of the National Bank of Poland rates of exchange (table A) binding as of the last day of each month in a given period. In the period from 01 April 2014 to 30 June 2014, the average amounts to PLN/EUR 4,1674 and in the period from 01 April 2013 to 30 June 2014 it is PLN/EUR 4, For items from the Balance Sheet the average rate of exchange of NBP (table A) as of the last day of the period, i.e. as of 30 June 2014, was applied, which was equal to PLN/EUR 4,1609 and as of 31 March 2014 the rate of exchange equal to PLN/EUR 4,1713 was applied. 3

4 CONTENTS ABBREVIATED INTERIM CONSOLIDATED FINANCIAL REPORTS OF... 2 SELECTED CONSOLIDATED FINANCIAL DATA... 3 CONSOLIDATED BALANCE SHEET... 5 CONSOLIDATED TOTAL INCOME STATEMENTS... 7 CONSOLIDATED CASH FLOW STATEMENTS... 9 CONSOLIDATED CHANGE TO SHAREHOLDER S EQUITY ADDITIONAL INFORMATION TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS13 4 NOTES TO THE CONSOLIDATED TOTAL INCOME STATEMENT KREDYT INKASO S.A. QUARTERLY FINANCIAL INFORMATION SELECTED STAND ALONE FINANCIAL DATA STAND ALONE BALANCE SHEET STAND ALONE TOTAL INCOME STATEMENT STAND ALONE CASH FLOW STATEMENT CHANGE TO THE STAND ALONE EQUITY ADDITIONAL INFORMATION TO THE INTERIM FINANCIAL STATEMENT NOTES TO THE STAND ALONE TOTAL INCOME STATEMENT

5 CONSOLIDATED BALANCE SHEET ASSETS Fixed assets Goodwill Intangible assets Tangible fixed assets Investment real estate Investments in subsidiaries Investments in affiliates Receivables and loans Derivatives Other long term financial assets Long-term prepayments and accruals Deferred income tax assets Fixed assets Current assets Stock Receivables due from construction services agreements Trade receivables and other receivables Receivables due from current income tax Receivables due from awarded costs of proceedings Debts purchased Loans Other short-term financial assets Short-term prepayments and accruals Cash and cash equivalents Assets qualified as designated for sale Current assets Total assets

6 LIABILITIES Equity Equity falling to the shareholders of the dominant company: Share capital Own shares (-) (500) (500) Equity from sale of shares above their nominal value Equity from revaluation of financial assets available for sale Other equity (226) (334) Retained profit: Net profit (loss) attributed to shareholders of the dominating undertaking Profit (loss) brought forward - Supplementary reserve established out of profit - Capital reserve established out of profit Share capital attributed to shareholders of the dominating undertaking Non-controlling interests Share capital Liabilities Long-term liabilities Credits, loans, other debt instruments Financial leasing Derivatives Other liabilities Reserve due to deferred income tax Liabilities and reserves due to employee benefits Other long-term reserves Long term prepayments and accruals Long-term liabilities Short-term liabilities Trade liabilities and other liabilities Liabilities due to current income tax 3 79 Credits, loans, other debt instruments Financial leasing Derivatives Liabilities and reserves due to employee benefits Other short-term reserves Short-term prepayments and accruals Liabilities related to assets designated for sale Short-term liabilities Liabilities Total liabilities

7 CONSOLIDATED TOTAL INCOME STATEMENTS Note 1. quarter from to quarter (comparative) from to Continued activity Net income XX Gross profit (loss) on sales Cost of sales Overheads Other costs of core business Other operating income 6 - Other operating costs Operating profit (loss) Financial income Financial costs Profit (loss) before tax Income tax (1 126) 82 Net Profit (loss) from continued activity Ceased activity Net profit (loss) on ceased activity Net profit (loss) Net Profit (loss) falling to: - shareholders of the dominating undertaking non-controlling interests NET PROFIT (LOSS) PER ONE ORDINARY SHARE Particulars 1. quarter from to PLN / share 1. quarter (comparative) from to PLN / share From continued activity - basic 0,56 0,63 - diluted 0,59 0,63 From continued and discontinued activity - basic 0,56 0,63 - diluted 0,59 0,63 7 7

8 Note 1. quarter quarter (comparative) Net profit (loss) Other total revenue Valuation of fixed assets ID6 Financial assets available for sale: - income (losses) assigned to other total revenues in the period - amounts assigned to the financial result Instruments securing cash flow: ID9 - income (losses) assigned to other total revenues in the period - amounts assigned to the financial result - amounts included in the initial value of the secured items Foreign exchange gains (losses) from valuation of foreign entities Foreign exchange gains (losses) assigned to the financial result sale of foreign entities Share in other total revenues of entities valuated by virtue of the property rights method Income tax relative to components of other total revenues ID10 Other total revenue after tax Total revenue Total revenue falling to: - shareholders of the dominating undertaking non-controlling interests

9 CONSOLIDATED CASH FLOW STATEMENTS 1. quarter from to quarter (comparative) from to Operating cash flow Profit (loss) before tax Adjustments: Amortization and write-offs updating tangible fixed assets Amortization and write-offs intangible assets Change of the fair value of investment real estate Profit (loss) on financial assets (liabilities) valued at the fair value through the profit and loss account Purchased receivables amortization from the results account Purchased receivables purchases and outlays for portfolios Profit (loss) on sale of intangible fixed assets (122) (24 883) (20 288) 9 Profit (loss) on sale of financial assets (other than derivatives) Profit (loss) due to exchange rate differences Financial cost Financial revenues Other adjustments Total adjustments Change in stock Change in receivables Change in liabilities Change in prepayments and accrual Changes to current capital Inflows (expenditures) from settlement of derivatives Paid interest on operational activity Paid income tax Net operating cash flow Cash flow from investment activity Expenditures for purchase of intangible assets Inflows from sale of intangible assets Expenditures for purchase of tangible fixed assets Inflows from sale of fixed tangible assets Expenditures for purchase of investment properties Inflows from sale of investment properties Net expenditures for purchase of subsidiaries Net inflows from sale of subsidiaries Received repayments of granted loans Granted loans Expenditures for purchase of other financial assets Inflows from sale of other financial assets Inflows from received government subsidies (352) (7 638) (4 703) (193) (7 931) (1 357) (140) (72) (499) (455) (322) (1 892) - (909) (485) (340)

10 Interest received Dividends received Net cash from investment activity (195) Cash flow from financial activity Net inflows on account of issue of shares Purchase of own shares - (117) Foreign exchange gains (losses) - 63 Inflows on account of issue of debt securities Buy-out of debt securities - (4 000) Inflows on account of incurred credits and loans Repayment of credits and loans (522) - Payment on account of finance lease (146) (187) Interest paid (4 402) (8 450) Dividends paid Net cash from financial activity (12 692) Net change of cash flow and cash flow equivalents (9 479) Cash and cash equivalents at the beginning of the period Change due to exchange rate differences (127) - Cash and cash equivalents at the end of the period

11 SKONSOLIDOWANY RAPORT KWARTALNY ZA I KWARTAŁ 2014/15 CONSOLIDATED CHANGE TO SHAREHOLDER S EQUITY Equity falling to the shareholders of the dominant company Equity relative Equity to sale relative to Own of revaluation Share Other Retained shares shares of financial capital equities profit (-) above assets their available nominal for sale value Total Noncontrolling interests Opening balance as of (500) (334) Change of accounting policy and adjustments of basic error - Opening balance after adjustments (500) (334) Change to equity in the period from to Issue of shares - Issue of shares due to realization of options (program of payment with shares) - Valuation of options (payment with shares option) - Equity total 1 1 Changes in the capital group structure (transactions with non-controlling interests) - Dividends - Assignment of financial result to equity (21) 60 Total transactions with owners (21) 60 Net profit for the period from to Other total income after tax for the period from to Total income Assignment to retained profit (sale of overestimated fixed assets) - Opening balance as of (500) (226)

12 SKONSOLIDOWANY RAPORT KWARTALNY ZA I KWARTAŁ 2014/15 Share capital Own shares (-) Equity falling to the shareholders of the dominant company Equity relative to sale of shares above their nominal value Equity relative to revaluation of financial assets available for sale Noncontrolling interests Equity total Opening balance as of (382) (41) Change of accounting policy - ( ) - (896) ( ) - ( ) Adjustment of basic error - Opening balance after adjustments (382) (41) Other equities Retained profit Total Issue of shares - (117) (117) - (117) Foreign exchange gain (loss) on valuation of foreign entities Valuation of options (payment with shares option) - Changes in the capital group structure (transactions with non-controlling interests) - Dividends - Assignment of financial result to equity - Total transactions with owners - (117) Net profit for the period from to Other total income after tax for the period from to Total income Assignment to retained profit (sale of overestimated fixed assets) - Opening balance as of (500)

13 ADDITIONAL INFORMATION TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS I. Legal basis of activity of Kredyt Inkaso S.A. Capital Group The dominant company of Kredyt Inkaso S.A. Capital Group ( Capital Group, Group ) is Kredyt Inkaso S.A. ( Company, Dominant Company ) with its registered office in Warsaw at Domaniewska Str. 39 A. Kredyt Inkaso S.A. was entered into the Entrepreneurs Register of the National Court Register under the number KRS , pursuant to the decision of the Regional Court in Lublin, 11th Economic Division of the National Court Register dated 28 December The Company was established as a result of transformation of Dom Obrotu Wierzytelnościami Kredyt Inkaso Sp. z o.o. sp. k. into a joint stock company. Dom Obrotu Wierzytelnościami Kredyt Inkaso sp. z o.o. sp. k. was entered into the Entrepreneurs Register of the National Court Register under the number KRS , pursuant to the decision of the Regional Court in Lublin, 11 th Economic Division of the National Court Register dated 19 April The list of companies covered by the full consolidated method as well as the changes to the organizational chart of the Group are presented in pt. VII. The Company has been listed on the WSE since It operates on the market of financial services, it specializes in investments in debt portfolios from the telecommunication and banking sector. II. Basis of drawing up and accounting principles II.I Basis of drawing up the Consolidated Financial Statements The present abbreviated interim consolidated financial statements covers the period of three months concluded on 30 June 2014 and were drawn up pursuant to the IAS 34 Interim financial reporting. The abbreviated interim consolidated financial statements does not include all information which is disclosed in the annual consolidated financial statements drawn up pursuant to the IFRS. The present abbreviated interim consolidated financial statements should be interpreted together with the consolidated financial statements of the Kredyt Inkaso S.A, Capital Group for the financial year 2013/2014. The reporting currency of the present interim abbreviated financial statements is Polish zloty and all amounts are expressed in thousands of Polish zloty (unless it was indicated otherwise) The present Financial Statements were drawn up assuming the going concern of the Group s companies in the foreseeable future. As of the Date of Approval for publication of the present interim abbreviated financial statements there are no circumstances posing a threat to the going concern of companies included in the Group. The Capital Group called the consolidated statements from the financial position the consolidated balance sheet

14 II.II Early application of standards and interpretations In the current reporting period we did not make a decision on an early adoption of changes to standards and interpretations IFRS. The Group intends to adopt the published but not binding up to the date of publication of the present abbreviated consolidated financial statements changes to the IFRS, according to the date of their coming into effect. Evaluation of the impact of these changes on the future consolidated financial statements of the Group is a subject of the carried out analysis. II.III Uncertainty of estimates While drawing up the abbreviated interim consolidated financial statements the Management Board of the dominant Company follows the judgment when performing numerous estimations and assumptions, which influence accounting principles and presented values of assets, liabilities, income and costs. The factually executed values may vary from the ones estimated by the Management Board. Information on estimations and assumptions which are of significant importance to the consolidated financial statements were presented in the consolidated financial statements for the year 2013/14. II.IV Adjustments of errors and change to accounting principles In the abbreviated interim consolidated financial statements no adjustments to the accounting principles, having effect on financial data presented for comparative periods were made. III. Clarifying commentary concerning seasonal or cyclical character of business activity in the interim period Operations of the Capital Group are not seasonal; they consist in collecting debts, first of all in court. The presented model of business generates income in the relatively short period following the debts portfolio purchase, and then in a long-term perspective in the course of executing legal procedures of debt collecting (mainly enforcement proceedings), also as a result of their re-openings after the periods of adjournment. At the same time, costs are accumulated first of all in the initial stage of purchased debt portfolios collections (first of all related to court proceedings and instituting debt enforcement proceedings). IV. Statement of the Management Board on the possibility of implementation of previously published forecasts of results for a given year in the light of results presented in the quarterly report in relation to the projected results. As of the Day of Approval of the present Abbreviated Quarterly Financial Statements we did not publish forecasts of results for the financial year 2014/

15 V. Shareholders holding directly or indirectly through subsidiaries at least 5% of the total number of votes at the Issuer s General Assembly as of the day of assignment of the quarterly report Shareholder number of shares % of votes at the GA Agnieszka Buchajska along with subsidiaries ,20% Generali Otwarty Fundusz Emerytalny ,53% Funds managed by AgioFunds TFI S.A.: AGIO RB FIZ ,65% Pioneer Pekao Investment Management S.A ,09% including: Pioneer Fundusz Inwestycyjny Otwarty ,05% Dekra Holdings Limited ,24% Other shareholders ,27% % of votes at General Assembly 9,20% Agnieszka Buchajska along with subsidiaries 47,27% 14,53% Generali Otwarty Fundusz Emerytalny 14,65% Funds managed by AgioFunds TFI S.A.: AGIO RB FIZ Pioneer Pekao Investment Management S.A Dekra Holdings Limited 7,24% 7,09% Other shareholders 15 15

16 VI. Summary of ownership of issuer s shares or the right to them (options) by the persons managing and supervising the issuer as of the day of assignment of the quarterly report, along with the indication of the changes of ownership, within the period from assignment of the previous quarterly report, separately for each person. According to our knowledge, among the persons managing and supervising Kredyt Inkaso S.A., the following persons owned our shares and share options: Owner of shares State as of the Approval Day State as of 30 June 2014 no. of shares % of votes at GA no. of shares % of votes at GA Management Board: Paweł Szewczyk ,07% ,07% Supervisory Board: Ireneusz Chadaj (through the spouse Monika Chadaj) ,83% ,83% Other shareholders ,10% ,10% % of votes at General Assembly 0,07% 2,83% Paweł Szewczyk Ireneusz Chadaj (through his spouse, Monika Chadaj) 97,10% Other shareholders 16 16

17 VII. Organization of the capital group of the Issuer The Capital Group comprises Kredyt Inkaso S.A. as the Dominant Company and entities located on the territory of Poland, Luxembourg, Romania, Bulgaria and Russia. As of 30 June 2014 Kredyt Inkaso S.A. Capital Group comprises the following entities: 1) Kredyt Inkaso S.A., with its registered office in Warsaw, ul. Domaniewska 39A, Warsaw, dominant company, 2) Kredyt Inkaso Portfolio Investments (Luxembourg) Société Anonyme (S.A.), with its registered office in Luxembourg, L-2557 Luxembourg, 18, rue Robert Stumper, acting as subsidiary, 3) Kredyt Inkaso I Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty, with its registered office in Warsaw, ul. Rodziny Hiszpańskich 1, Warsaw, acting as subsidiary, 4) Kredyt Inkaso II Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty with separated sub funds, with its registered office in Warsaw, ul. Rodziny Hiszpańskich 1, Warsaw, acting as subsidiary, 5) Kancelaria Forum S.A., with its registered office in Zamość, ul. Okrzei 32, Zamość, acting as subsidiary, 6) Kancelaria Prawnicza FORUM radca prawny Krzysztof Piluś i spółka spółka komandytowa, with its registered office in Warsaw, ( KP Forum ), ul. Domaniewska 39A, Warsaw, acting as subsidiary, 7) KI Nieruchomości Sp. z o.o., with its registered office in Warsaw, ul. Domaniewska 39A, Warsaw, acting as subsidiary, 8) FINSANO Consumer Finance Spółka Akcyjna with its registered office in Warsaw ( FINSANO SA ), ul. Domaniewska 39A, Warsaw, acting as subsidiary, 9) FINSANO Consumer Finance S.A. Spółka Komandytowa with its registered office in Warsaw ( FINSANO SK ), ul. Domaniewska 39A, Warsaw, acting as subsidiary, 10) Legal Process Administration Sp. z o.o. ( LPA ) with its registered office in Zamość, subsidiary dependent indirectly 100% on the Dominating Undertaking. LPA is dependent directly on Kancelaria FORUM S.A., 11) Kredyt Inkaso Investments RO S.A., with its registered office in Bucharest, subsidiary dependent indirectly 75% and indirectly 25% on the Company (through the subsidiary Kredyt Inkaso Portfolio Investments (Luxembourg) S.A. with the registered office in Luxembourg), 12) Kredyt Inkaso Investments BG EAD S.A., with its registered office in Sophia, subsidiary dependent indirectly 100% on the company, being the entity dependent on the subsidiary Kredyt Inkaso Portfolio Investments (Luxembourg) S.A. with its registered office in Luxembourg. 13) Kredyt Inkaso RUS Limited Liability Company (LLC) with its registered office in Nemchinovka, Moscow region in Russia, subsidiary dependent indirectly 90 % on the Company, and being the subsidiary directly dependent on the subsidiary Kredyt Inkaso Portfolio Investments (Luxembourg) S.A. with its registered office in Luxembourg

18 Graphic illustration of the organizational chart of Kredyt Inkaso S.A. Capital Group: The Consolidated Interim Financial Statements of the Kredyt Inkaso S.A. Capital Croup comprises the Dominant Company and twelve subsidiaries: Name of subsidiary Kredyt Inkaso Portfolio Investments (Luxembourg) Société Anonyme (S.A.) Kredyt Inkaso I Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty Kredyt Inkaso II Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty Consolidation method Share of the Group in Equity: Degree of control full 100% 100% 100% 100% full 100% 100% 100% 100% full 100% 100% 100% 100% Kancelaria Forum S.A. full 100% 100% 100% 100% Kancelaria Prawnicza FORUM radca prawny Krzysztof Piluś i spółka spółka komandytowa full 85% 85% 85% 85% KI Nieruchomości Sp. z o.o. full 100% 100% 100% 100% FINSANO Consumer Finance S.A. full 100% 100% 100% 100% FINSANO Consumer Finance Spółka Akcyjna Spółka Komandytowa Legal Process Administration Sp. z o.o. full 100% 100% 100% 100% full 100% 100% 100% 100% Kredyt Inkaso Investments RO S.A. full 100% 100% 100% 100% Kredyt Inkaso Investments BG EAD S.A. full 100% 100% 100% 100% Kredyt Inkaso Investments BG EAD S.A. full 90% 90% 90% 90% 18 18

19 Term of the Dominant Company and the entities comprising the Capital Group covered by consolidation is indefinite. The core activity of the Dominating Undertaking and its subsidiaries is trade in debt portfolios on the domestic market and the legal activity. Objects of activity of the Dominating Undertaking according to the Statutes: a. other financial service activity, not classified elsewhere, except insurance and pension funds in PKD Z; b. financial leasing in PKD Z; c. other forms of granting credits in PKD Z; d. other activity supporting finance services, except insurance and pension funds in PKD Z; e. execution of building projects related to building construction in PKD Z; f. purchase and disposal of immovable property on the company s own account in PKD Z; g. rental and management of own or leased immovable property in PKD Z; h. legal activity in PKD Z, i. other consultancy services in the fields of business activity and management - in PKD Z, j. photocopying, preparing documents and other specialized activity supporting handling office in PKD Z, k. activity performed by collection agencies and credit bureaus in PKD Z, l. operating call centres in PKD Z, m. other out of school forms of education, not classified elsewhere in PKD B; n. brokerage activity connected with securities and stock exchange products market - in PKD Z; o. activity connected with funds management - in PKD Z. p. accounting and bookkeeping activities; tax consulting in PKD Z. r. activities of financial holding companies in PKD Z. s. activities of head offices and holdings excluding financial holdings - in PKD Z. VIII. Types and sums of items impacting assets, liabilities, equity, net financial result or cash flows, which appear unusual due to their type, value or impact. Unusual events and amounts did not occur

20 IX. Types and sums of changes of the estimated values in the reporting period. a. assets due to deferred income tax State as of the beginning of the period Increases Decreases State as of the end of the period b. reserves due to deferred income tax State as of the beginning of the period Increases Decreases State as of the end of the period a) revaluating write-offs of receivables State as of the beginning of the period Increases Decreases State as of the end of the period b) reserves for liabilities State as of the beginning of the period Increases Decreases State as of the end of the period X. Issue, redemption and repayment of debt and capital securities. On 9 May 2014 the subsidiary Kredyt Inkaso I Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty with its registered office in Warsaw issued K series secured bearer bonds of the nominal value of PLN 1 000,00 each, of the total nominal value of PLN 50 mil. The date of bonds redemption was set for the day falling 36 days months from the date of issue and the interest on bonds will be paid out every 6 months. The fund is authorized to an early redemption of Bonds at its request. The bonds are secured, within the meaning of regulations of the Act on bonds, with the registered pledge established on the set of receivables purchased by the Fund on the basis of the sale agreement dated 9 December The valuation of the subject matter of the pledge performed by the certified auditor states that the estimated fair value of the subject matter of the pledge constitutes the amount not less than PLN 94 mil. No day of repayment of bonds issued up till now fell for the period from 1 April 2014 to 30 June In the reporting period we regularly paid interest to the owners of series S02, S03, S04 and S05 bonds issued by Kredyt Inkaso S.A. and the I series bonds issued by the subsidiary Kredyt Inkaso FIZ I. The total amount of the paid interest was over PLN 4,4 million

21 XI. Dividends paid (jointly or per one share) divided into ordinary shares and other shares. Dividends paid out in the last 3 financial years Financial year Profit earned Allocated for payments Converted per one share 2011/12 PLN thousand PLN 0 thousand PLN 0 - including cash dividend - - including dividend in the form of shares - PLN 0 thousand PLN /13 PLN thousand PLN 0 thousand PLN 0 - including cash dividend - - including dividend in the form of shares /14 PLN thousand PLN 0 thousand PLN 0 thousand - including cash dividend - - including dividend in the form of shares - The Company s dividend policy is based on the assumption that its amount should depend on gained financial results and capital needs connected with the purchase of further debt portfolios as well as other strategic investments. The Management Board is of the opinion that in the next years it will be possible to pay out a cash dividend at least at the level of 1/5 part of the generated profit. The Management Board also assumes that it will pay the remaining part of the net profit as a dividend in the form of the Company s shares. In the situation when a decision on payment of a dividend in the form of shares is made, granting to the current shareholders of bonus stocks will result in the increase of the Company s share capital. The increase of the Company s share capital will be carried out using funds accumulated in the Company s capital reserve established for the purposes of financing the issue of bonus stocks. If the shareholders were to be granted the fractional part of shares, then such parts will fall to the shareholders and the Company will pay the difference between the issue price and the nominal value of the fractional parts of shares attributable to them, but not assumed. These payments will be made using the capital reserve established for the purposes of financing the issue of bonus stocks. In the situation, when the issue price of bonus stocks exceeds their nominal value, the surplus will be covered using the capital reserve established for the purposes of financing the issue of bonus stocks by way of transferring the equivalent of the amount of the surplus to the Company s supplementary reserve. As a result of the above events, there will be amounts transferred from the capital reserve established for the purpose of financing the issue of bonus stocks into the Company s share capital and the supplementary reserve as well as for the payment of the equivalent for the non-attributable to the shareholders fraction parts and possible costs related to the issue. Therefore the shareholders will pay neither nominal nor issue price for the shares because these payments will be made by the Company using the capital reserve, established for the purposes of financing the issue of bonus stocks. Bonus stocks attributable to the shareholders will not require to be assumed by them (record). The day when the list of shareholders entitled to profit sharing is made, will be the same day of payment of the dividend in cash and in the form of granting bonus stocks, making the circle of shareholders the same for both forms. Historical data do not effect or change the Company s dividend policy

22 XII. Significant events following conclusion of the interim period which were not reflected in the financial report for a given interim period. Did not occur XIII. Changes of contingent liabilities or contingent assets, which have taken place from the time of conclusion of the last financial year. During the period from 1 April 2014 to 30 June 2014 no changes to contingent liabilities or assets took place. XIV. Lawsuits before the court, the authority competent for matters related to arbitral proceedings or the public administration agency, considering information as regards: Court and enforcement proceedings Kredyt Inkaso S.A. Capital Group business model assumes purchasing portfolios of debts coming from mass services (several or between ten and twenty thousand debts in a portfolio) and collecting them in court. Due to this, conducting a great number of legal proceedings in court and before court enforcement officer is a natural thing for our operations. However, taking into consideration small amounts of debts there is no risk of concentration (one or several bad debts i.e. with the considerably worse characteristic than the calculated one). As of 30 June 2014, within the pursued business activity Kredyt Inkaso S.A. is the party to, among others, about 24 thousand of legal proceedings in courts of the total value of the subject matter of litigation of around PLN 225 million and to over 102 thousand of enforcement proceedings of the total value of over PLN 880 million. Tax proceedings In the reporting period, there were neither inspection proceedings nor tax inspections carried out in the Company. XV. Information on concluding by the Issuer of one or several transactions with related entities on terms other than the arm s length. No transactions with related entities on conditions other than the arm s length occurred

23 XVI. Information on granting by the issuer of the credit or loan guarantee or on granting a guarantee. Did not occur. XVII. Other information, which, according to the issuer is of substantial importance to the judgment of his personnel situation, financial standing, financial result and their changes as well as the information significant for the judgment of Issuer s capability to perform his obligations. Did not occur. XVIII. Addressing factors, which, in the opinion of the Issuer, shall impact the results achieved by him in the perspective of at least another quarter. Both, in the current and in the previous financial year we invested significant funds in portfolios of receivables purchasing them from banks. The increase of the portfolio of receivables will increase earnings achieved by the Company. We are also anticipating the increase of the scale of revenue due to including in the active management of the debt portfolios purchased abroad through our branches in Romania, Bulgaria and Russia. XIX. Information on the segment The Group s operating activity is allocated to: - segment of trade in receivables that comprises wholesale trade in receivables arising from mass services, - segment of legal activity, consisting in representing the Group s companies in court and enforcement proceedings and providing external entities services of legal counsel and representation in proceedings at law in civil and commercial cases. - corporate functions (CF) constituting reconciliation item and including activity relative to the activity connected with management and administration and other support functions and other activity not included into distinguished segments

24 Allocation of companies of Kredyt Inkaso S.A. Capital Group to operating segments is presented in the table below. Company name Operating segment Kredyt Inkso S.A. Kredyt Inkaso Portfolio Investments (Luxembourg) Société Anonyme (S.A.) Kredyt Inkaso I Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty Kredyt Inkaso II Niestandaryzowany Sekurytyzacyjny Fundusz Inwestycyjny Zamknięty Kancelaria Forum S.A. Kancelaria Prawnicza FORUM radca prawny Krzysztof Piluś i spółka spółka komandytowa KI Nieruchomości Sp. z o.o. FINSANO Consumer Finance Spółka Akcyjna FINSANO Consumer Finance S.A. Spółka Komandytowa Legal Process Administration Sp. z o.o. Kredyt Inkaso Investments RO S.A. Kredyt Inkaso Investments BG EAD S.A. Kredyt Inkaso RUS Limited Liability Company (LLC) trade in receivables, CF trade in receivables trade in receivables trade in receivables CF legal activities CF CF CF CF trade in receivables trade in receivables trade in receivables Operating segments - for the period from to OPERATING SEGMENTS Segment of trade in receivables Segment of legal services Corporate functions Consolidated exclusions Total For the period from to External sale Sale between segments Total revenues (5 675) (5 675) Total operating costs (5 675) Other operating revenues Other operating costs Segment s operating result Financial revenues 352 Financial cost (-) Profit before tax Income tax (1 126) Net profit

25 Segment of trade in receivables Segment of legal services Corporate functions Other information: Amortization Loss of value of nonfinancial fixed assets Assets of the reporting segment Liabilities and capital of reporting segment Outlays for fixed assets of the operating segment Total Operating segments - for the comparative period from to OPERATING SEGMENTS Segment of trade in receivables Segment of legal services Corporate functions Consolidated exclusions Total For the period from to External sale Sale between segments (2 100) - Total revenues (2 100) Total operating costs (2 100) Other operating revenues - Other operating costs Segment s operating result Financial revenues 487 Financial cost (-) Profit before tax Income tax 82 Net profit Other information: Segment of trade in receivables Segment of legal services Corporate functions Total Amortization Loss of value of nonfinancial fixed assets Assets of the reporting segment Liabilities and capital of reporting segment Outlays for fixed assets of the operating segment All assets, except financial assets and income tax (current and deferred) assets are allocated to reporting segments. Goodwill was allocated to reporting segments. Assets utilized jointly by reporting segments are allocated on the grounds of revenues generated by individual reporting segments. All liabilities, except tax (current and deferred) are allocated to reporting segments. Liabilities attributable to various reporting segments are allocated proportionally to the value of segments assets

26 INFORMATION ON GEOGRAPHICAL REGIONS Fixed Revenues Assets Fixed Revenues Assets Poland Romania Other countries Total NOTES TO THE CONSOLIDATED TOTAL INCOME STATEMENT XX. Net income Net income: 1. quarter from to quarter (comparative) from to Payments from debtors Amortization of portfolios (9 589) (8 855) Revaluation of portfolios Other income Cost of other income (549) (440) Net Income:

27 Kredyt Inkaso Spółka Akcyjna Capital Group In Warsaw KREDYT INKASO S.A. QUARTERLY FINANCIAL INFORMATION Warsaw, August

28 SELECTED STAND ALONE FINANCIAL DATA SELECTED FINANCIAL DATA WITH CONVERSION INTO EURO in PLN thousand in EUR thousand PROFIT AND LOSS ACCOUNT Net revenues Operating profit (loss) (1 628) (391) 332 Profit (loss) before tax (453) 648 (109) 152 Net profit (loss) Net profit (loss) falling to shareholders of the dominant entity Earnings per share (in PLN) 0,06 0,05 0,01 0,01 Diluted earnings per share (in PLN) 0,06 0,05 0,01 0,01 Average exchange rate PLN/EUR in the period X X 4,1674 4,2541 CASH FLOW STATEMENT Net operating cash flows (1 406) (331) Net investment cash flows (66 495) (15 956) Net financial cash flows (4 208) (8 257) (1 010) (1 941) Net change in cash and cash equivalents (276) (66) 790 Average exchange rate PLN/EUR in the period X X 4,1674 4,2541 BALANCE SHEET Assets Long-term liabilities Short-term liabilities Equity Equity falling to the shareholders of the dominant company Average exchange rate PLN/EUR as of the end of the period Conversion into EURO was calculated in the following way: X X 4,1609 4, For items from the Profit and Loss Account and the Cash Flow Statement the average rate of exchange for a given period was applied, calculated as the arithmetic average of the National Bank of Poland rates of exchange (table A) binding as of the last day of each month in a given period. In the period from 01 April 2014 to 30 June 2014, the average amounts to PLN/EUR 4,1674 and in the period from 01 April 2013 to 30 June 2014 it is PLN/EUR 4, For items from the Balance Sheet the average rate of exchange of NBP (table A) as of the last day of the period, i.e. as of 30 June 2014, was applied, which was equal to PLN/EUR 4,1609 and as of 31 March 2014 the rate of exchange equal to PLN/EUR 4,1713 was applied

29 STAND ALONE BALANCE SHEET ASSETS Fixed Assets Goodwill Intangible assets Tangible fixed assets Investment properties Investments in subsidiaries Investments in affiliates Receivables and loans Derivatives Other long term financial assets Long term prepayments and accruals Assets on account of deferred income tax Fixed assets Current assets Stock Receivables due to construction services agreements Trade receivables and other receivables Receivables due to current income tax Receivables from awarded costs of proceedings Purchased receivables Loans Other short term financial assets Short term prepayments and accruals Cash and cash equivalents Assets classified as designated for sale Current assets Total assets

30 LIABILITIES Equity Equity falling to the shareholders of the dominant company: Share capital Own shares (-) (500) (382) Equity from sale of shares above their nominal value Equity from revaluation of financial assets available for sale Other equity Retained profit: - net profit (loss) falling to the shareholders of the dominant company - profit (loss) brought forward - supplementary reserve established out of profit - capital reserve established out of profit Equity (4 418) (14 053) Liabilities Long term liabilities Credits, loans, other debt instruments Financial leasing Derivatives Other liabilities Reserves due to deferred income tax Liabilities and reserves on account of employee benefits Other long tern reserves Long term prepayments and accruals Long term liabilities Short term liabilities Trade liabilities and other liabilities Liabilities due to current income tax Credits, loans, other debt instruments Financial leasing Derivatives Liabilities and reserves due to employee benefits Other short term reserves Short term prepayments and accruals Liabilities due to fixed assets available for sale Short term liabilities Liabilities Total liabilities

31 STAND ALONE TOTAL INCOME STATEMENT Continued activity Note 1 quarter quarter (comparative) Net revenues XXI Gross sales profit (loss) Cost of sales Overheads Other costs of core activity Other operating revenues Other operating costs Profit (loss) from operating activity (1 628) Financial revenues Financial costs Profit (loss) before tax (453) 648 Income tax (1 177) 14 Net profit (loss) from continued activity Discontinued activity Net profit (loss) from discontinued activity Net profit (loss) NET PROFIT (LOSS) PER ONE ORDINARY SHARE From continued activity Particulars 1. quarter 1. quarter (comparative) from to PLN / share from to PLN / share - basic 0,06 0,05 - diluted 0,06 0,05 From continued and ceased activity - basic 0,06 0,05 - diluted 0,06 0,

32 Note 1. quarter quarter (comparative) Net profit (loss) Other total revenue Valuation of fixed assets Financial assets available for sale: - income (losses) assigned to other total revenues in the period - amounts assigned to the financial result Instruments securing cash flow: - income (losses) assigned to other total revenues in the period - amounts assigned to the financial result - amounts included in the initial value of the secured items Foreign exchange gains (losses) from valuation of foreign entities Foreign exchange gains (losses) assigned to the financial result sale of foreign entities Share in other total revenues of entities valuated by virtue of the property rights method Income tax relative to components of other total revenues Other total revenue after tax Total revenue Total revenue falling to: - shareholders of the dominating undertaking non-controlling interests 32 32

33 STAND ALONE CASH FLOW STATEMENT Operational cash flow 1. quarter 1. quarter (comparative) from to from to Profit (loss) before tax (453) 648 Adjustments: Amortization and write-offs updating tangible fixed assets Amortization and write-offs updating intangible assets Change of the fair value of investment real estate Profit (loss) on financial assets (liabilities) valued at the fair value through the profit and loss account Purchased receivables amortization from the results account Purchased receivables purchases and outlays for portfolios Profit (loss) from sale of intangible fixed assets Profit (loss) due to exchange rate differences Financial cost Financial revenues Other adjustments Total adjustments Change in inventory Change in receivables Change in liabilities Change in reserves and accruals (6 505) (137) (706) (100) (194) 123 (2 673) Change due to construction agreements Change to current capital Paid income tax Net cash flow from operating activity Cash flow from investment activity Outflows for purchase of intangible assets Inflows from sale of intangible assets Expenditures for purchase of fixed tangible assets Inflow from sale of fixed tangible assets Expenditures for purchase of investment properties Inflows from sale of investment properties Net expenditures for purchase of subsidiaries Net inflow from sale of subsidiaries Received repayment of granted loans Granted loans Expenditures for purchase of other financial assets Inflows from sale of other financial assets Interest received Dividends received Net cash from investment activity (3 573) (1 406) - - (177) (113) (66) (500) - (71 000) (2 500) (66 495)

34 Cash flow from financial activity Net inflows on account of issue of shares Purchase of own shares Foreign exchange gain (loss) Inflows on account of issue of debt securities Buy-out of debt securities Inflows on account of incurred loans and credits Repayments of credits and loans Repayment of liabilities on account of financial leasing Interest paid interest Dividends paid Net cash flow from financial activity Net change of cash flow and cash equivalents Cash flow and cash equivalents at the beginning of the period Change due to exchange rate differences Cash flow and cash equivalents at the end of the period - (117) (144) (187) (4 064) (7 953) (4 208) (8 257) (276)

35 SKONSOLIDOWANY RAPORT KWARTALNY ZA I KWARTAŁ 2014/15 CHANGE TO THE STAND ALONE EQUITY Equity attributed to the shareholders of the dominating undertaking Equity relative Equity to sale relative to Own of revaluation Share Other Retained shares shares of financial capital equities profit (-) above assets Total their available nominal for sale value Noncontrolling interests Opening balance as of (500) Change of accounting policy and adjustment of basic error - Balance after adjustments (500) Change to equity in the period from to Issue of shares - Foreign exchange gain (loss) - Valuation of options (program of payment with shares) - Total equity 3 5 Change of the capital group structure (transactions with non-controlling interests) - Dividends - Assignment of financial result to equity - Total transactions with owners - Net profit for the period from to Other total revenue after tax from to Total revenue Assignment to the retained profit (sale of overestimated fixed assets) - Opening balance as of (500)

36 SKONSOLIDOWANY RAPORT KWARTALNY ZA I KWARTAŁ 2014/15 Share capital Equity attributed to the shareholders of the dominating undertaking Own shares (-) Equity relative to sale of shares above their nominal value Equity relative to revaluation of financial assets available for sale Noncontrolling interests Opening balance as of (382) Change of accounting policy - (22 127) (20 950) - (20 950) Adjustment of basic error - Balance after adjustments (382) Other equities Retained profit Total Total equity Issue of shares - (117) (117) - (117) Foreign exchange gain (loss) - Valuation of options (program of payment with shares) - Change of the capital group structure (transactions with non-controlling interests) - Dividends - Assignment of financial result to equity - Total transactions with owners - (117) (117) - (117) Net profit for the period from to Other total revenue after tax from to Total revenue Assignment to the retained profit (sale of overestimated fixed assets) - Opening balance as of (500)

37 SKONSOLIDOWANY RAPORT KWARTALNY ZA I KWARTAŁ 2014/15 ADDITIONAL INFORMATION TO THE INTERIM FINANCIAL STATEMENT NOTES TO THE STAND ALONE TOTAL INCOME STATEMENT XXI. Net income Net income comprises: 1. quarter od do quarter (comparative) od do Payments from debtors Amortization of portfolios - (2 940) Revaluation of portfolios Other income Cost of other income (94) (4 440) Net income:

38 SKONSOLIDOWANY RAPORT KWARTALNY ZA I KWARTAŁ 2014/15 Approval for publication The Management Board of Kredyt Inkaso S.A. approved for publication the present abbreviated interim consolidated financial reports of Kredyt Inkaso S.A. Capital Group together with Kredyt Inkaso S.A. Quarterly Financial Information from 1 April 2014 to 30 June 2014, along with comparable data on 13 August 2014 ( Approval Date ). President of the Management Board Vice-President of the Management Board Paweł Szewczyk Jan Paweł Lisicki Signature of the person in charge of drawing up the financial statements: Signature of the person in charge of keeping accounting books : Piotr Podłowski Director of Accounting Department, Budgeting and Financial Reporting Agnieszka Chrzanowska Leader of the Capital Group Accountancy Team