Interim condensed consolidated. financial report. for the period January 1st June 30th The KRUK Group. June 30th 2014.

Interim condensed consolidated financial report for the period January 1st June 30th 2014 June 30th 2014

2 Table of contents I. Financial highlights... 4 1. Consolidated financial data... 4 2. Separate financial data of KRUK S.A.... 5 II. Auditor's report on the review of the interim condensed consolidated financial statements for the period January 1st June 30th 2014... 6 III. Interim condensed consolidated financial statements for the period January 1st June 30th 2014 7 Interim condensed consolidated statement of financial position... 7 Interim condensed consolidated statement of profit or loss... 8 Interim condensed consolidated statement of comprehensive income 9 Interim condensed consolidated statement of changes in equity... 10 Interim condensed consolidated statement of cash flows... 12 Notes to the interim condensed consolidated financial statements 13 1. Organisation of the KRUK Group... 13 2. Period covered by the financial statements... 16 3. Statement of compliance... 16 4. Significant accounting policies... 17 5. Accounting estimates and judgements... 20 6. Financial risk management... 20 7. Reporting and geographical segments... 21 8. Seasonality or cyclicality of operations... 23 9. Type and amounts of changes in estimates presented in previous financial years, with a material effect on the current period 23 10. Type and amounts of items affecting the assets, equity and liabilities, net profit/loss or cash flows, which are material due to their type, size or effect... 25 11. Financial instruments... 31 12. The Group's material achievements or failures in the reporting period, along with the most significant events related to such achievements or failures... 34 13. Factors and events, in particular of non-recurring nature, with a material bearing on the Group's financial performance 34 14. Issue, redemption and repayment of non-equity and equity securities 35 15. Dividend paid out (or declared)... 37 16. Events subsequent to the reporting date, not disclosed in these financial statements, but potentially having a material bearing on the Group's future performance... 37 17. Information on changes in contingent liabilities or contingent assets subsequent to the end of the previous financial year 39 IV. Auditor's report on the review of the interim condensed separate financial statements for the period January 1st June 30th 2013... 41 V. Interim condensed separate financial statements for the period January 1st June 30th 2014 42 Interim condensed separate statement of financial position... 42 Interim condensed separate statement of profit or loss... 43 Interim condensed separate statement of comprehensive income. 44 Interim condensed separate statement of changes in equity... 45 Interim condensed separate statement of cash flows... 47 Notes to the interim separate consolidated financial statements... 48 1. Company details... 48 2. Period covered by the financial statements... 48 3. Statement of compliance... 48 4. Significant accounting policies... 49 5. Type and amounts of changes in estimates presented in previous financial years, with a material effect on the current period 50 6. Type and amounts of items affecting the assets, equity and liabilities, net profit/loss or cash flows, which are material due to their type, size or effect... 51

3 7. Fair value... 57 8. Factors and events, in particular of non-recurring nature, with a material bearing on the Group's financial performance 58 9. Issue, redemption and repayment of non-equity and equity securities 59 10. Dividend paid out (or declared)... 59 11. Information on changes in contingent liabilities or contingent assets subsequent to the end of the previous financial year 59 12. Events subsequent to the reporting date, not disclosed in these financial statements, but potentially having a material bearing on the Group's future performance... 60 VI. Report on the Group's operations... 62 1. Effects of changes in the structure of the Group, including through business combinations, acquisitions or divestments of Group entities, long-term investments, divisions, restructurings or discontinuation of operations 62 2. Management Board s position on the feasibility of meeting previously published forecasts for a given year 62 3. Members of the management or supervisory personnel holding Company shares or rights to Company shares as at the date of issue of this interim report, and changes in their holdings after the issue of the previous interim report 65 4. Litigation, arbitration or administrative proceedings.68 5. Sureties for repayment of loans and guarantees issued by KRUK S.A. or its subsidiary 71 6. Other information relevant to the assessment of the staffing levels, assets, financial standing and financial performance, or changes in any of the foregoing, and information relevant to the assessment of the Company s ability to meet its obligations 71 7. Factors with a potential bearing on the Group's results in the next quarter or in a longer term 71 8. Representation by the Management Board... 71

4 I. Financial highlights 1. Consolidated financial data Financial highlights PLN '000 EUR '000 For the period 2014 2013 2014 2013 Revenue 263,728 198,924 63,116 47,206 Operating profit 128,612 76,036 30,780 18,044 Profit before tax 99,494 50,630 23,811 12,015 Net profit attributable to owners of the Parent 100,023 50,591 23,938 12,006 Net cash from operating activities (77,209) (39,912) (18,478) (9,471) Purchase of debt portfolios at prices as per agreement (313,308) (184,314) (74,982) (43,739) Cash recoveries 360,416 239,581 86,256 56,854 Net cash from investing activities (4,601) (3,315) (1,101) (787) Net cash from financing activities 115,985 29,270 27,758 6,946 Change in net cash 34,175 (13,957) 8,179 (3,312) Average number of shares ('000) 16,962 16,900 16,962 16,900 Earnings per share (PLN/EUR) 5.90 2.99 1.41 0.71 Diluted earnings per share (PLN/EUR) 5.74 2.95 1.37 0.70 Jun 302014, Dec 312013 Jun 302014, As at Dec 312013 Total assets 1,411,790 1,162,825 339,299 280,388 Non-current liabilities 717,489 513,451 172,436 123,807 Current liabilities 165,125 233,819 39,685 56,380 Equity 529,176 415,555 127,178 100,201 Share capital 17,023 16,959 4,091 4,089 Book value per ordinary share (PLN/EUR) 31.09 24.50 7.47 5.91 The financial highlights have been translated into the euro as follows: - items of or related to the statement of profit or loss and the statement of cash flows have been translated using the arithmetic mean of mid rates quoted by the National Bank of Poland for the last day of each month in the period; the exchange rates thus calculated are: for the current period 4.1784 for the comparative period 4.2140 - items of or related to the statement of financial position have been translated using the midrate quoted by the National Bank of Poland for the end of the reporting period; the exchange rates thus calculated are: for the current period 4.1609 for the comparative period 4.1472

5 2. Separate financial data of KRUK S.A. Financial highlights PLN '000 EUR '000 For period 2014 2013 2014 2013 Revenue 51,318 54,030 12,282 12,822 Operating loss (16,805) (6,907) (4,022) (1,639) Profit/(loss) before tax 140,155 (27,616) 33,542 (6,553) Net profit/(loss) 140,932 (27,214) 33,728 (6,458) Net cash from operating activities (11,014) (1,256) (2,636) (298) Net cash from investing activities (114,948) 19,345 (27,510) 4,591 Net cash from financing activities 127,779 (22,974) 30,581 (5,452) Change in net cash 1,817 (4,885) 435 (1,159) Average number of shares ('000) 16,962 16,900 16,962 16,900 Earnings per share (PLN/EUR) 8.31-1.61 1.99-0.38 Diluted earnings per share (PLN/EUR) 8.22-1.59 1.97-0.38 Jun 302014 Dec 312013 Jun 302014 As at Dec 312013 Total assets 1,133,042 842,706 272,307 203,199 Non-current liabilities 713,477 502,301 171,472 121,118 Current liabilities 134,752 200,897 32,385 48,442 Equity 284,813 139,508 68,450 33,639 Share capital 17,023 16,959 4,091 4,089 Book value per ordinary share (PLN/EUR) 16.73 6.95 4.02 1.68 The financial highlights have been translated into the euro as follows: - items of or related to the statement of profit or loss and other comprehensive income and the statement of cash flows have been translated using the arithmetic mean of mid rates quoted by the National Bank of Poland for the last day of each month in a given period; the exchange rates thus calculated are: for the current period 4.1784 for the comparative period 4.2140 - items of or related to the statement of financial position have been translated using the midrate quoted by the National Bank of Poland for the end of the reporting period; the exchange rates thus calculated are: for the current period 4.1609 for the comparative period 4.1472

6 II. Auditor's report on the review of the interim condensed consolidated financial statements for the period January 1st June 30th 2014

7 III. Interim condensed consolidated financial statements for the period January 1st June 30th 2014 Interim condensed consolidated statement of financial position As at June 30th 2014, PLN 000 Jun 30 2014 Dec 31 2013 Jun 30 2013 Assets Cash and cash equivalents 69,433 35,258 28,772 Other receivables 18,846 17,768 7,141 Trade receivables 22,122 9,045 11,268 Current tax asset - - 1,025 Investments in debt portfolios and loans 1,262,319 1,063,841 1,004,699 Inventories 453 529 738 Property, plant and equipment 21,409 20,079 17,409 Other intangible assets 11,313 10,408 9,375 Goodwill 1,024 1,024 1,024 Deferred tax asset 3,224 2,421 2,064 Other assets 1,647 2,452 1,917 Total assets 1,411,790 1,162,825 1,085,432 Equity and liabilities Liabilities Hedge derivatives 1,993 634 - Trade and other payables 28,063 35,572 33,445 Employee benefit obligations 23,886 23,242 20,123 Current tax liability - 99 - Liabilities under borrowings and other debt instruments 828,408 687,459 653,783 Liabilities 264 264 264 Total liabilities 882,614 747,270 707,615 Equity Share capital 17,023 16,959 16,900 Share premium 49,876 47,381 45,107 Cash flow hedging reserve (1,993) (634) - Exchange differences on translating foreign operations 1,586 (7,726) 5,076 Other capital reserves 51,462 48,289 46,536 Retained earnings 411,180 311,157 264,123 Equity attributable to owners of the 529,134 415,426 377,742 Parent non-controlling interests 42 129 75 Total equity 529,176 415,555 377,817 Total equity and liabilities 1,411,790 1,162,825 1,085,432

8 Interim condensed consolidated statement of profit or loss For the reporting period from January 1st to June 30th 2014 PLN 000 Jan 1 Jun 30 2014 2013 Revenue 263,728 198,924 Other income 859 674 Employee benefits expense (67,174) (54,194) Depreciation and amortisation expense (5,522) (4,460) Services (22,044) (23,310) Other expenses (41,235) (41,598) (135,975) (123,562) Operating profit 128,612 76,036 Finance income 283 280 Finance costs (29,401) (25,686) Net finance costs (29,118) (25,406) Profit before tax 99,494 50,630 Income tax 570 36 Net profit for the period 100,064 50,666 Net profit attributable to: owners of the Parent 100,023 50,591 non-controlling interests 41 75 Net profit for the period 100,064 50,666 Earnings per share Basic (PLN) 5.90 2.99 Diluted (PLN) 5.74 2.95

9 Interim condensed consolidated statement of comprehensive income For the reporting period from January 1st to June 30th 2014 PLN 000 2014 2013 Net profit for the period 100,064 50,666 Other comprehensive income Items that may be reclassified to profit or loss Exchange differences on translating foreign operations 9,312 8,850 Cash flow hedges (1,993) - Other comprehensive income, net, for the period 7,319 8,850 Total comprehensive income for the period 107,383 59,516 Total comprehensive income attributable to: owners of the Parent 107,342 59,441 non-controlling interests 41 75 Total comprehensive income for the period 107,383 59,516

10 Interim condensed consolidated statement of changes in equity porting period from January 1st to June 30th 2014 Share capital Share premium Cash flow hedging reserve Translation reserve Other capital reserves Retained earnings Equity attributable to owners of the Parent Noncontrolling interests Total equity Equity as at Jan 12013 16,900 45,107 - (3,774) 45,711 213,532 317,476 156 317,632 Net profit for the period - - - - 50,591 50,591 75 50,666 Other comprehensive income Exchange differences on translating foreign 8,850 8,850 operations - - - - - 8,850 Total comprehensive income for the period - - - 8,850-50,591 59,441 75 59,516 Contributions from and distributions to owners - Payment of dividend - - - - - - (156) (156) - Share-based payments - - - 825-825 - 825 Total contributions from and distributions to owners - - - - 825-825 (156) 669 Total equity as at Jun 30 2013 16,900 45,107-5,076 46,536 264,123 377,742 75 377,817 Equity as at Jan 12013 16,900 45,107 - (3,774) 45,711 213,532 317,476 156 317,632 Net profit for the period - - - - 97,625 97,62510 129 97,754 Other comprehensive income - Exchange differences on translating foreign (3,952) (3,952) operations - - - - - - (3,952) - Valuation of hedging instruments - - (634) - - - (634) - (634) Other comprehensive income - - (634) (3,952) - - (4,586) - (4,586) Total comprehensive income for the period - - (634) (3,952) - 97,625 93,039 129 93,168 Contributions from and distributions to owners - Payment of dividend - - - - - - - (156) (156) - Issue of shares 59 2,274 - - - - 2,333-2,333 - Share-based payments - - - - 2,578-2,578-2,578 Total contributions from and distributions 59 2,274 - - 2,578-4,911 (156) 4,755

to owners Financial Report Total equity as at Dec 312013 16,959 47,381 (634) (7,726) 48,289 311,157 415,426 129 415,555 Equity as at Jan 12014 16,959 47,381 (634) (7,726) 48,289 311,157 415,426 129 415,555 Comprehensive income for the period Net profit for the period - - - - - 100,023 100,023 41 100,064 Other comprehensive income - - - - - - - - - - Exchange differences on translating foreign operations - - - 9,312 - - 9,312-9,312 - Valuation of hedging instruments - - (1,359) - - - (1,359) - (1,359) Other comprehensive income - - (1,359) 9,312 - - 7,953-7,953 Total comprehensive income for the period - - (1,359) 9,312-100,023 107,976 41 108,017 - Payment of dividend - - - - - - (128) (128) - Issue of shares 64 2,495 - - - 2,559-2,559 - Share-based payments - - - 3,173-3,173-3,173 Total contributions from and distributions to owners 64 2,495 - - 3,173-5,732 (128) 5,604 11 Total equity as at Jun 30 2014 17,023 49,876 (1,993) 1,586 51,462 411,180 529,134 42 529,176

Interim condensed consolidated statement of cash flows For the reporting period from January 1st to June 30th 2014 PLN 000 2014 2013 Cash flows from operating activities Net profit for the period 100,064 50,666 Adjustments Depreciation of property, plant and equipment 3,978 2,676 Amortisation of intangible assets 1,784 1,784 Net finance costs 24,366 25,136 Gain on sale of property, plant and equipment (237) (80) Equity-settled share-based payment transactions 3,173 825 Income tax (570) (36) Change in other investments (271) (886) Change in debt portfolios purchased (189,025) (115,107) Change in inventories 76 141 Change in receivables (14,155) (197) Change in prepayments and accrued income 805 465 Change in current liabilities, excluding financial liabilities (6,150) (5,063) Change in employee benefit obligations (715) 1,480 Income tax paid (332) (1,716) Net cash from operating activities (77,209) (39,912) Cash flows from investing activities Interest received 283 280 Sale of intangible assets and property, plant and equipment 619 251 Purchase of intangible assets and property, plant and equipment (5,503) (3,846) Net cash from investing activities (4,601) (3,315) Cash flows from financing activities: Net proceeds from issue of shares - - Proceeds from issue of debt securities 2,561 135,000 Increase in borrowings 890,434 219,400 Repayment of borrowings (698,089) (255,382) Payments under finance lease agreements (1,536) (1,389) Redemption of debt securities (53,400) (43,000) Interest paid (23,985) (25,359) Net cash from financing activities 115,985 29,270 Total net cash flows 34,175 (13,957) Cash and cash equivalents at beginning of the period 35,258 42,729 Cash and cash equivalents at end of the period 69,433 28,772 Due to the limited amount of information on revenue from debt collection and spending on debt portfolio purchases, this consolidated statement of cash flows should be read in conjunction with Note 9 to these interim condensed consolidated financial statements.

13 Notes to the interim condensed consolidated financial statements 1. Organisation of the KRUK Group Parent Name: KRUK Spółka Akcyjna ( KRUK S.A. or Parent ) Registered office: ul. Legnicka 56 54-204 Wrocław, Poland Registration in the National Court Register: District Court for Wrocław-Fabryczna in Wrocław, 6th Commercial Division of the National Court Register, ul. Poznańska 16-17, 53-230 Wrocław, Poland Date of entry: September 7th 2005 Entry number: KRS 0000240829 Principal business activities of the Parent and subsidiaries The principal business activities of the Parent and most of its subsidiaries consist primarily in the restructuring and recovery of debts purchased by the Group companies and the provision of outsourced debt collection services to financial institutions and other clients. Following the transfer of lending activities from Novum Finance Sp. z o.o. of Wrocław to KRUK S.A. in 2013, on March 17th 2014 the Extraordinary General Meeting of Novum Finance Sp. z o.o. passed a resolution to dissolve the company by liquidation. Michał Zasępa, President of the Management Board of NOVUM Finance Sp. z o.o. w likwidacji (in liquidation), was appointed the company's liquidator. By virtue of a decision dated March 31st 2014, the District Court for Wrocław-Fabryczna of Wrocław, 6th Commercial Division of the National Court Register entered the changes referred to above in the register. Rejestr Dłużników ERIF Biuro Informacji Gospodarczej S.A. (RD ERIF BIG S.A.), a subsidiary of Kruk S.A., is a credit reference agency which stores, manages and provides credit information on consumers and businesses. On April 11th 2014, ROCAPITAL IFN S.A. of Bucharest, Romania, was registered in Romania. It is an operating company whose principal business activities consist in purchasing and servicing mortgage-backed debt portfolios. KRUK S.A. holds 99% of the company's share capital, with the remaining 1% held by KRUK Romania S.r.l. of Bucharest, Romania, a subsidiary of KRUK S.A. ProsperoCapital Sp. z o.o. of Wrocław, another subsidiary of KRUK S.A., was registered on July 4th 2014. The company s principal business activity comprises other financial service activities n.e.c., including trade in receivables and debt collection, except insurance and pension funding. KRUK S.A. holds 100% of shares in the company's share capital. On August 19th 2014, the Articles of Association of KRUK Deutschland GmbH of Berlin were executed. The company's principal business activities consist in credit management services, collection of debt portfolios purchased by the KRUK Group in Germany and other European countries, as well as debt trading. KRUK S.A. holds 100% of shares in the company's share capital. These interim condensed consolidated financial statements for the reporting period from January 1st to June 30th 2014 include the financial statements of the Parent and its subsidiaries (jointly the Group ). KRUK S.A. is the Parent of the Group.

14 As at June 30th 2014, the Management Board of the Parent consisted of: Piotr Krupa, Agnieszka Kułton, Urszula Okarma, Iwona Słomska, Michał Zasępa, President of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board. In H1 2014 and by the date of issue of this interim report, the composition of the Management Board of KRUK S.A. did not change. In H1 2014 and by the date of issue of this interim report, the composition of the Supervisory Board of KRUK S.A. did not change and was as follows: Piotr Stępniak, Katarzyna Beuch, Tomasz Bieske, Arkadiusz Orlin Jastrzębski, Krzysztof Kawalec, Robert Koński, Józef Wancer, Chairman of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board. As at the date of issue of this report, the Group comprised KRUK S.A. of Wrocław and 16 subsidiaries: Kancelaria Prawna RAVEN Krupa & Stańko sp.k. of Wrocław, a law firm providing comprehensive services to support litigation and enforcement, exclusively in connection with the debt collection process carried out by the KRUK Group and its partners; Rejestr Dłużników ERIF Biuro Informacji Gospodarczej S.A. of Warsaw, a credit reference agency serving as a platform for collection, processing and provision of information on natural persons and businesses, both delinquent debtors and timely payers; KRUK România s.r.l. of Bucharest, Romania, a company which operates on the market of credit management services and debt purchase; Secapital S.a.r.L. of Luxembourg, a special-purpose securitisation vehicle whose business consists chiefly in investing in debt or debt-backed assets; Prokura NS FIZ and Prokulus NS FIZ securitisation funds which are securitisation and investment vehicles which employ professional risk assessment and credit management methodologies. All certificates issued by the securitisation funds are held by Secapital S.a.r.l.; Secapital Polska Sp. z o.o. of Wrocław, a company acting as a servicer of securitised debt; ERIF Business Solutions Sp. z o.o. of Wrocław, a company whose principal business activities consist in the provision of financial and agency services, and support for small and medium-sized enterprises; NOVUM FINANCE Sp. z o.o. (w likwidacji) of Wrocław, a company in liquidation; KRUK Česká a Slovenská republika s.r.o. of Hradec Kralove, Czech Republic, a company which operates on the market of credit management services and debt purchase; KRUK Towarzystwo Funduszy Inwestycyjnych S.A. of Wrocław, a fund management company; KRUK International Z.r.t. of Budapest, Hungary, a company in liquidation. InvestCapital Malta Ltd. of Malta, an investment company whose business purpose is to invest in equity assets, including shares in KRUK Group companies; RoCapital IFN S.A. of Bucharest, Romania, an operating company, whose principal business activities consist in purchasing and servicing mortgage-backed debt portfolios; ProsperoCapital Sp. z o.o. of Wrocław, a debt collection company, whose principal business activities consist in other financial service activities n.e.c., including trade in receivables and debt collection, except insurance and pension funding;

15 KRUK Deutschland GmbH of Berlin, a company whose principal business activities consist in credit management services, collection of debt portfolios purchased by the KRUK Group in Germany and other European countries, as well as debt trading. All the subsidiaries listed above, except ProsperoCapital Sp. z.o.o. and KRUK Deutschland GmbH, were consolidated in these condensed consolidated financial statements as at June 30th 2014 and for the period from January 1st to June 30th 2014.

16 The ownership interests held by the Parent in the subsidiaries as at the date of issue of this report were as follows: PLN 000 Share capital held (%) Country 31.08.2014 Dec 312013 Secapital S.a.r.l. ** Luxembourg 93.8% 93.8% ERIF Business Solutions Sp. z o.o. Poland 100% 100% Secapital Polska Sp. z o.o. Poland 100% 100% Rejestr Dłużników ERIF Biuro Informacji Gospodarczej S.A. Poland 100% 100% Novum Finance Sp. z o.o. (in liquidation) Poland 100% 100% KRUK Romania S.r.l. Romania 100% 100% Kancelaria Prawna RAVEN Krupa & Stańko Spółka komandytowa Poland 98% 98% KRUK Towarzystwo Funduszy Inwestycyjnych S.A. Poland 100% 100% KRUK Česká a Slovenská republika s.r.o. Czech Republic 100% 100% Prokura NS FIZ* Poland 100% 100% Prokulus NS FIZ* Poland 100% 100% KRUK International Z.r.t. (in liquidation) Hungary 100% 100% InvestCapital Malta Ltd ** Malta 99.5% 99.5% ProsperoCapital Sp. z o.o. Poland 100% - RoCapital IFN S.A.** Romania 99% - KRUK Deutschland GmbH Germany 100% - * subsidiaries of Secapital Sarl ** subsidiaries in which the Company indirectly holds 100% of the share capital 2. Period covered by the financial statements The financial statements cover the period from January 1st to June 30th 2014, with the comparative data presented for the period from January 1st to June 30th 2013. The consolidated statement of financial position was prepared as at June 30th 2014, while the comparative data was presented as at June 30th 2013 and December 31st 2013. The consolidated statement of changes in equity was prepared for the period from January 1st to June 30th 2014, while the comparative periods were the six-month period from January 1st 2013 to June 30th 2013, and the twelve-month period from January 1st 2013 to December 31st 2013. 3. Statement of compliance These interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting endorsed by the European Union. In the opinion of the Management Board, there are no facts or circumstances which could pose a significant threat to the Group's companies continuing as going concerns. Therefore, these financial statements have been prepared on a going concern basis. These financial statements do not contain all the information required to prepare full-year financial statements and therefore should be read in conjunction with the Group's consolidated financial statements prepared as at and for the financial year ended December 31st 2013.

17 These consolidated financial statements were approved by the Management Board of the Parent (the Management Board ) on August 27th 2014. The data contained in these interim condensed consolidated financial statements is presented in the Polish złoty (PLN), rounded to the nearest thousand. The Polish złoty is the functional currency of the Parent. 4. Significant accounting policies Except for the changes discussed below, the accounting policies applied to prepare these condensed interim financial statements are consistent with those applied to prepare the most recent full-year consolidated financial statements as at and for the year ended December 31st 2013. The Group prepares its statement of financial position using a liquidity criterion. With respect to all assets and liabilities, an entity discloses in the notes an amount which is expected to be paid or settled within 12 months following the end of the reporting period (current assets and liabilities), or after 12 months since the end of the reporting period (non-current assets and liabilities). Amendments to current standards and interpretations The following amendments to International Financial Reporting Standards and their interpretations, endorsed by the European Union (the EU IFRS ) apply to reporting periods beginning on January 1st 2014: IFRS 10 Consolidated Financial Statements and Separate Financial Statements IFRS 10 replaces the part of the former IAS 27 Consolidated and Separate Financial Statements concerning consolidated financial statements, and introduces a new definition of control. IFRS 10 may cause changes within a consolidated group with respect to the possibility of consolidating entities which have been consolidated so far, or conversely, does not introduce any changes in consolidation procedures or transaction accounting methods in consolidated financial statements. These changes had no impact on the Group's financial position or results of operation. IFRS 11 Joint Arrangements and IAS 28 Investments in Associates and Joint Ventures IFRS 11 relates to joint arrangements. It defines two categories of joint arrangements: joint operations and joint ventures, and indicates the appropriate methods to account for them. Application of the standard may result in a change of the method of accounting for joint arrangements (for instance, arrangements previously classified as jointly-controlled entities and accounted for using the proportional consolidation method may now be classified as joint ventures, which are accounted for using the equity method). IAS 28 has been amended and provides guidelines for applying the equity method to account for joint ventures. These changes had no impact on the Group's financial position or results of operation. IFRS 12 Disclosure of Interests in Other Entities

18 IFRS 12 requires a wide range of disclosures about an entity's interests in subsidiaries, joint arrangements or associates. Application of this standard may result in more extensive disclosures in the financial statements, including for instance: key financial information, including information on the risks associated with the Group's undertakings, disclosure of interests in unconsolidated structured entities and the risks associated with such investments, information on each undertaking in which there are material non-controlling interests, disclosure of any significant judgements and assumptions made in classifying an entity as a subsidiary, a jointly-controlled entity or an associate. These changes had no impact on the Group's financial position or results of operation. Investment Entities Amendments to IFRS 10, IFRS 12 and IAS 27 These amendments introduce the concept of investment entities which are exempt from the requirement to consolidate subsidiaries, instead measuring those investments at fair value through profit or loss. These changes had no impact on the Group's financial position or results of operation. Offsetting Financial Assets and Financial Liabilities Amendments to IAS 32 The amendments to IAS 32 clarify the concept and the consequences of a legally enforceable right to set off a financial asset and a financial liability, and provide additional guidelines as to the offsetting criteria for gross settlement systems (such as clearing houses). These changes had no impact on the Group's financial position or results of operation. Recoverable Amount Disclosures for Non-Financial Assets Amendments to IAS 36 These amendments removed the unintended consequences of IFRS 13 concerning disclosures required under IAS 36. Also, these amendments have additionally introduced the requirement of disclosure of the recoverable amount of an asset or cash-generating unit (CGU) for which impairment loss was recognised or reversed in the period if the value in use was determined as fair value less costs to sell. These changes had no impact on the Group's financial position or results of operation. Novation of Derivatives and Continuation of Hedge Accounting Amendments to IAS 39 Under the amendments to IAS 39, there is no need to discontinue hedge accounting if a hedging derivative was novated, provided that certain criteria specified in IAS 39 are met. These changes had no effect on the Group's financial position or performance or on the scope of information presented in the Group's condensed consolidated financial statements.

19 Standards and interpretations that have been published, but have not yet been adopted IFRS 9 Financial Instruments (published on July 24th 2014) effective for annual periods beginning on or after January 1st 2018; until the date of approval of these financial statements, the standard has not been adopted by the EU; as at the date of approval of these financial statements, the process of adoption of the standard for application within the EU was discontinued, IFRIC 21 Levies (published on May 20th 2013) effective for annual periods beginning on or after January 1st 2014; within the EU, effective at the latest for annual periods beginning on or after June 17th 2014, Amendments to IAS 19 Defined Benefit Plans: Employee Contributions (published on November 21st 2013) effective for annual periods beginning on or after July 1st 2014; not adopted by the EU by the date of approval of these financial statements, Amendments to IFRS introduced as part of the 2010-2012 improvements cycle (published on December 12th 2013) some of the amendments are effective for annual periods beginning on or after July 1st 2014, while some are effective prospectively for transactions entered into on or after July 1st 2014; until the date of approval of these financial statements, the amendments have not been adopted by the EU, Amendments to the IFRS introduced as part of the 2011-2013 improvements cycle (published on December 12th 2013) effective for annual periods beginning on or after July 1st 2014; until the date of approval of these financial statements, the amendments have not been adopted by the EU, IFRS 14 Regulatory Deferral Accounts (published on January 30th 2014) effective for annual periods beginning on or after January 1st 2016; no decision has been made as to when EFRAG will carry out the individual stages of work leading to the approval of this standard; until the date of approval of these financial statements, the amendments have not been adopted by the EU, Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations (published on May 6th 2014) effective for annual periods beginning on or after January 1st 2016; until the date of approval of these financial statements, the amendments have not been adopted by the EU, Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation (published on May 12th 2014) effective for annual periods beginning on or after January 1st 2016; until the date of approval of these financial statements, the amendments have not been adopted by the EU, IFRS 15 Revenue from Contracts with Customers (published on May 28th 2014) effective for annual periods beginning on or after January 1st 2017; until the date of approval of these financial statements, the amendments have not been adopted by the EU, Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants (published on June 30th 2014) effective for annual periods beginning on or after January 1st 2016; until the date of approval of these financial statements, the amendments have not been adopted by the EU, Amendments to IAS 27 Equity Method in Separate Financial Statements (published on August 12th 2014) effective for annual periods beginning on or after January 1st 2016; until the date of approval of these financial statements, the amendments have not been adopted by the EU,

20 5. Accounting estimates and judgements In order to prepare interim consolidated financial statements, the Management Board is required to rely on judgements, estimates and assumptions which affect the application of accounting policies and the reported amounts of assets, liabilities, income and costs, whose actual values may differ from these estimates. The material assumptions underlying the estimates made by the Group and the applied accounting policies have been presented in the most recent full-year consolidated financial statements as at and for the financial year ended December 31st 2013. The estimates and the underlying assumptions are reviewed on an ongoing basis. Any changes in accounting estimates are introduced prospectively, starting from the reporting period in which the estimate is revised. 6. Financial risk management Policies of financial risk management have been presented in the most recent full-year consolidated financial statements as at and for the financial year ended December 31st 2013. In the period from January 1st to June 30th 2014, no material changes occurred in the methods of managing financial risk.

21 7. Reporting and geographical segments Reporting segments Below, the Group presents its reporting segments. The President of the Management Board reviews internal management reports relating to each business segment at least quarterly. The Group s reporting segments conduct the following activities: Debt purchase: collection of purchased debt; Credit management: fee-based collection of debt on client's behalf. Other: financial intermediation, lending. The performance of each reporting segment is discussed below. The key performance metric for each reporting segment is gross profit, which is disclosed in the internal management reports reviewed by the President of the Management Board. A segment s gross profit is used to measure its performance, as the management believes the gross profit to be the most appropriate metric for the assessment of the segment s results against other entities operating in the industry. The Group s operating activities concentrate in a few geographical segments: Poland, Romania, the Czech Republic and Slovakia. The Group s operations are also divided into the following geographical segments: Poland Romania Other foreign markets

22 Reporting segments PLN 000 2014 2013 Revenue 263,728 198,924 Purchased debt portfolios 241,200 171,792 Credit management 16,295 22,730 Other products 6,233 4,402 Direct and indirect costs (95,939) (89,193) Purchased debt portfolios (81,999) (75,044) Credit management (9,925) (10,487) Other products (4,015) (3,662) Gross profit 167,789 109,731 Purchased debt portfolios 159,201 96,748 Credit management 6,370 12,243 Other products 2,218 740 Administrative expenses (32,644) (28,328) Depreciation and amortisation expense (5,522) (4,460) Other income 859 674 Other expenses (unallocated) (1,870) (1,581) Finance income/costs (29,118) (25,406) Profit before tax 99,494 50,630 Income tax 570 36 Net profit 100,064 50,666

23 Geographical segments PLN 000 2014 2013 Revenue 263,728 198,924 Poland 162,140 116,083 Romania 87,933 71,146 Other foreign markets 13,655 11,695 Non-financial assets PLN 000 Jun 30 2014 Dec 31 2013 Poland 24,041 24,943 Romania 8,699 5,616 Other foreign markets 1,006 952 33,746 31,511 8. Seasonality or cyclicality of operations The Group s operations are not subject to seasonal or cyclical fluctuations. 9. Type and amounts of changes in estimates presented in previous financial years, with a material effect on the current period Purchased debt portfolios In the reporting period, the Group's expenditure on purchase of debt portfolios was PLN 313,308 thousand (H1 2013: PLN 184,314 thousand), while cash recoveries were PLN 360,416 thousand (H1 2013: PLN 239,581 thousand). For a description of changes in the estimates of the debt portfolios value see Note 10 to the interim condensed consolidated financial statements. PLN 000 Jun 30 2014 Dec 31 2013 Jun 30 2013 Investments Investments in debt portfolios measured at fair value 1,252,008 1,053,913 997,178 Loans advanced to other entities 10,311 9,928 7,521 1,262,319 1,063,841 1,004,699

24 Investments in debt portfolios measured at fair value Jun 30 2014 Dec 31 2013 Jun 30 2013 Current portion of investments in debt portfolios 481,964 439,664 438,862 Non-current portion of investments in debt portfolios 770,044 614,249 558,316 1,252,008 1,053,913 997,178 PLN 000 Purchased debt portfolios as at Jan 12013 873,497 Purchase of debt portfolios 367,188 Purchase price adjustment for discount (465) Cash recoveries (537,727) Increase/(decrease) in liabilities to debtors due to overpayments (2,001) Valuation of loyalty scheme 612 Revenue from debt purchase (interest and revaluation) 355733 Fair value translation differences (*) (2,924) Purchased debt portfolios as at Dec 312013 1,053,913 Purchased debt portfolios as at Jan 12014 1,053,913 Purchase of debt portfolios at prices as per agreement 313,308 Purchase price adjustment for discount (4,345) Cash recoveries (360,416) Increase/(decrease) in liabilities to debtors due to overpayments 332 Valuation of loyalty scheme 1,071 Revenue from debt purchase (interest and revaluation) 241200 Fair value translation differences (*) 6,945 Purchased debt portfolios as at Jun 302014 1,252,008 (*) Applicable to portfolios held by the subsidiaries whose functional currencies are other than the złoty.

25 10. Type and amounts of items affecting the assets, equity and liabilities, net profit/loss or cash flows, which are material due to their type, size or effect Revenue PLN 000 2014 2013 Revenue from debt purchase 241,200 171,792 Revenue from fee-based credit management services 16,295 22,730 Revenue from other products 6,233 4,189 Revenue from sale of merchandise and materials - 213 263,728 198,924 PLN 000 2014 2013 Interest income adjusted for actual recoveries 240,792 163,907 Revaluation of debt portfolios 18,163 7,885 Cost of debts sold (17,755) - 241,200 171,792 - - Revaluation of debt portfolios PLN 000 Jun 30 2014 Jun 30 2013 Revision of forecast 7,123 (3,652) Change due to change in discount rate 11,040 11,537 18,163 7,885 - - The revaluation of debt portfolios pertains to changes in the fair value of purchased debt portfolios which were designated as measured at fair value through profit or loss at the time of their initial recognition.

26 Employee benefits expense PLN 000 2014 2013 Salaries and wages (51,246) (43,443) Other social security contributions (4,758) (4,277) Old-age and disability pension contributions (7,420) (5,261) Contribution to the State Fund for the Disabled (577) (388) Equity-settled cost of stock option plan (3,173) (825) (67,174) (54,194) Finance income PLN 000 2014 2013 Interest income on bank deposits 283 280 283 280 Finance costs 2014 2013 Interest expense on financial liabilities measured at amortised cost (24,810) (24,898) Settlement of discount (4,522) - Net foreign exchange gains/(losses) (69) (788) (29,401) (25,686) PLN 000 2014 2013 Total interest income on financial assets 283 280 Total interest expense on financial liabilities (24,810) (24,898) PLN 000 2014 2013 Exchange differences on translating foreign operations 9,312 8,850 Attributable to: owners of the Parent 9,312 8,850 Finance income/(cost) recognised in other comprehensive income 9,312 8,850

27 Income tax PLN 000 Jan 1 Jun 30 2014 2013 Current income tax 215 406 Current income tax expense 215 406 Deferred income tax (785) (442) Origination/reversal of temporary differences (785) (442) Tax expense in profit/(loss) (570) (36) PLN 000 Jan 1 Jun 302014 2013 Profit/(loss) before tax 99,494 50,630 Pre-tax profit for the period (assuming 19% tax rate) 118,189 88,256 Pre-tax loss for the period (assuming 16% tax rate) (10,640) (6,048) Pre-tax loss for the period (assuming 19% tax rate) (8,055) (31,578) Tax calculated at the tax rate applicable in Poland (19%) 21,992 11,272 Tax calculated at the tax rate applicable in Romania (16%) (1,702) (968) Tax calculated at the tax rate applicable in the Czech Republic (19%) (1,386) (684) Non-tax-deductible expenses 18,394 7,266 Tax-exempt income (36,728) (16,484) Income tax at effective tax rate 570 402 Acquisition and sale of property, plant and equipment In the reporting period, the Group did not acquire or sell any material items of property, plant and equipment or intangible assets. Cash PLN 000 Jun 30 2014 Dec 31 2013 Jun 30 2013 Cash at banks and cash in hand 67,779 34,299 27,813 Short-term deposits 1,654 959 959 69,433 35,258 28,772

28 Borrowings and finance lease liabilities PLN 000 Jun 30 2014 Dec 31 2013 Jun 30 2013 Non-current liabilities Secured borrowings 268,161 50,464 56,043 Liabilities under debt securities (unsecured) 437,676 454,076 404,433 Finance lease liabilities 9,659 8,277 6,558 715,496 512,817 467,034 Current liabilities Current portion of secured borrowings 24,894 50,044 69,549 Liabilities under debt securities (unsecured) 83,754 120,463 114,035 Current portion of finance lease liabilities 4,264 4,135 3,165 112,912 174,642 186,749 PLN 000 Currency Nominal interest rate Maturity Jun 30 2014 Dec 31 2013 Jun 30 2013 Borrowings secured on the Group's assets Liabilities under debt securities (unsecured) Finance lease liabilities PLN PLN PLN EUR 1M WIBOR + margin of 1.0-4.25 pp 3M WIBOR + margin 3.5-5.0 pp 3M WIBOR or 1M EURIBOR + margin 0.68-4.0 pp 2024 2018 2018 293,055 100,508 125,592 521,430 574,539 518,468 13,923 12,412 9,723 828,408 687,459 653,783

29 Earnings per share '000 2014 Jan 1 2013 Dec 31 2013 2013 Number of ordinary shares as at Jan 1 16,959 16,900 16,900 Effect of cancellation and issue of shares 3 14 - Weighted average number of ordinary shares 16,962 16,914 16,900 PLN Earnings per share 5.90 5.77 2.99 '000 2014 Jan 1 2013 Dec 31 2013 2013 Weighted average number of ordinary shares 16,962 16,900 16,900 Effect of share option issue 449 323 248 Weighted average number of ordinary shares (diluted) 17,411 17,223 17,148 PLN Earnings per share (diluted) 5.74 5.66 2.95

30 The statement of financial position is divided into current and non-current items As at June 30th 2014, PLN 000 Jun 30 2014 Dec 31 2013 Jun 30 2013 Assets Non-current assets Property, plant and equipment 21,409 20,079 17,409 Other intangible assets 11,313 10,408 9,375 Goodwill 1,024 1,024 1,024 Investments in debt portfolios 963,298 614,249 558,316 Deferred tax asset 3,224 2,421 2,064 Total non-current assets 1,000,268 648,181 588,188 Current assets Inventories 453 529 738 Investments in debt portfolios and loans 299,021 449,592 446,383 Trade receivables 22,122 9,045 11,268 Current tax asset - - 1,025 Other receivables 18,846 17,768 7,141 Other assets 1,647 2,452 1,917 Cash and cash equivalents 69,433 35,258 28,772 Total current assets 411,522 514,644 497,244 Total assets 1,411,790 1,162,825 1,085,432 Equity and liabilities Equity Share capital 17,023 16,959 16,900 Share premium 49,876 47,381 45,107 Cash flow hedging reserve (1,993) (634) - Exchange differences on translating foreign operations 1,586 (7,726) 5,076 Other capital reserves 51,462 48,289 46,536 Retained earnings 411,180 311,157 264,123 Equity attributable to owners of the Parent 529,134 415,426 377,742 Non-controlling interests 42 129 75 Total equity 529,176 415,555 377,817 Non-current liabilities Non-current liabilities under borrowings and other debt instruments 715,496 512,817 467,034 Hedge derivatives 1,993 634 Total non-current liabilities 717,489 513,451 467,034 Current liabilities Current liabilities under borrowings and other debt instruments 112,912 174,642 186,749 Trade and other payables 28,063 35,572 33,445 Current tax liability - 99 - Employee benefit obligations 23,886 23,242 20,123 Current provisions 264 264 264 Total current liabilities 165,125 233,819 240,581 Total liabilities 882,614 747,270 707,615 Total equity and liabilities 1,411,790 1,162,825 1,085,432

31 11. Financial instruments Fair value Fair values and carrying amounts of financial assets and liabilities are presented below: PLN 000 June 30th 2014 Dec 312013 Carrying Fair value Carrying Fair value amount amount Financial assets and liabilities measured at fair value Financial instruments at fair value through profit or loss 1,252,008 1,252,008 1,053,913 1,053,913 Hedge derivatives (1,993) (1,993) (634) (634) 1,250,015 1,250,015 1,053,279 1,053,279 Financial assets and liabilities not measured at fair value Loans and receivables (*) 51,279 51,279 36,741 36,741 Cash and cash equivalents (*) 69,433 69,433 35,258 35,258 Secured bank borrowings (*) (293,055) (293,055) (100,508) (100,508) Unsecured bonds in issue (*) (521,430) (521,430) (574,539) (574,539) Finance lease liabilities (*) (13,923) (13,923) (12,412) (12,412) Trade and other payables (*) (28,063) (28,063) (35,572) (35,572) (735,759) (735,759) (651,032) (651,032) (*) Where financial assets and liabilities are not measured at fair value, their carrying amounts are their approximate fair values, given the close due dates and floating interest rates. Hierarchy of financial instruments PLN 000 June 30th 2014 Level 3 Financial assets at fair value through profit or loss 1,252,008 Total 1,252,008 PLN 000 June 30th 2014 Level 2 Hedge derivatives 1,993 Total 1,993 Financial assets at fair value through profit or loss

32 Financial assets are classified as an investment measured at fair value through profit or loss if they are held for trading or were designated as measured at fair value through profit or loss at their initial recognition. Financial assets are designated as measured at fair value through profit or loss if the Group actively manages such investments and adopts decisions concerning their purchase or sale based on their fair value. At initial recognition, transaction cost relating to an investment is recognised in profit or loss of the period at the time it is incurred. All profits or losses relating to such investments are recognised in profit or loss of the period. Purchased debt portfolios Purchased debt portfolios comprise high-volume portfolios of overdue consumer debt ( such as debt under consumer loans, unpaid utility bills, etc.) purchased by the Group under claim assignment agreements. Prices paid by the Group for such debt portfolios are significantly lower than their nominal value. The Group recognises purchased debt portfolios as financial assets designated as measured at fair value through profit or loss, because the Group manages such portfolios and the results of these operations are assessed based on their fair value. Purchased debt portfolios are initially recognised at acquisition price, which is equal to their fair value. Costs and expenses relating to debt purchase transactions are recognised in profit or loss of the period. The Group measures purchased debt portfolios at least four times in a given annual reporting period, not later than as at the end of each calendar quarter. The value of a purchased debt portfolio is determined, as at the measurement date, on the basis of reliably estimated fair value, calculated using an estimation model relying on expected discounted cash flows. A purchased debt portfolio contains a large number of debt items. Each purchased debt portfolio is divided into sub-portfolios with similar parameters (type, nominal value, delinquency period), and separate cash flows are estimated for each sub-portfolio. Discount rates applied to expected cash flows reflect the credit risk relating to a given portfolio. At initial recognition, the discount rate is the expected internal rate of return reflecting the purchase price and the estimated inflows, determined as at the portfolio purchase date. As at each measurement date, the Group verifies the adopted discount rates to ensure that they reflect the then current risk-free rate and risk premium relating to credit risk of a given portfolio. On June 28th 2013, the KRUK Management Board passed a resolution to amend the Debt Portfolio Valuation Policy, which forms an appendix to the Accounting Policies. The amendments extended the catalogue of instruments used to determine the risk-free rate. The catalogue was extended to include the possibility to use IRS contracts for the purpose of determining the risk-free rate. IRS contracts are designated as an underlying instrument for determining the risk-free rate applied to measure debt portfolios at fair value. Estimated inflows from debt portfolios are divided into principal recoveries and interest determined at the discount rate. Recovered principal is recognised as a reduction of carrying amount of the debt portfolios, while the interest received is recognised as revenue earned in a given period. Moreover, changes in fair value resulting from changes in estimated future cash flows for a given debt portfolio and changes in the adopted discount rate are disclosed as revenue earned in a given period. These amounts are disclosed as operating income, because the collection of purchased debt portfolios is conducted with resources whose use is disclosed under operating expenses.