MEDIATEL SPÓŁKA AKCYJNA GROUPmediatel.pl/en/...Skr...2012-31-03-2012_GKMediatel.pdf · 3/31/2012...

Mediatel S.A. Group Abridged midyear consolidated financial statements for the period from January 1st, 2012 to March 31st, 2012 (unless indicated otherwise, all figures are stated in thousand zlotys)

© 2012 FIGURES Kancelaria Rachunkowa Sp. z o.o. 1

MEDIATEL SPÓŁKA AKCYJNA GROUP ABRIDGED MIDYEAR CONSOLIDATED FINANCIAL STATEMENT

FOR THREE MONTHS FROM JANUARY 1st, 2012 TO MARCH 31st, 2012



Table of contents Page

I. SELECTED FINANCIAL DATA ........................................................................ 3 II. GENERAL INFORMATION .............................................................................. 4 III. CONSOLIDATED FINANCIAL STATEMENTS .............................................. 10 1. CONSOLIDATED STATEMENT OF INCOME ...................................................................................................................... 10 2. CONSOLIDATED FINANCIAL CONDITION STATEMENT ................................................................................................... 11 3. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................................ 13 4. CONSOLIDATED CASH FLOW STATEMENT ..................................................................................................................... 14 IV. NOTES TO FINANCIAL STATEMENTS ........................................................ 16 1. OPERATING SEGMENTS ................................................................................................................................................... 16 2. INCOME .............................................................................................................................................................................. 18 3. GENERAL ADMINISTRATION COSTS ................................................................................................................................ 18 4. EMPLOYEE BENEFITS PAYABLE ...................................................................................................................................... 19 6. SUBSIDY ............................................................................................................................................................................. 20 7. OTHER OPERATING EXPENSES ....................................................................................................................................... 20 8. FINANCIAL INCOME ........................................................................................................................................................... 20 9. FINANCIAL EXPENSES ...................................................................................................................................................... 20 10. DIVIDENDS ......................................................................................................................................................................... 20 11. EARNINGS/LOSS PER SHARE ........................................................................................................................................... 21 12. INCOME TAX INCLUDED IN THE FINANCIAL RESULT FOR THE CURRENT PERIOD ..................................................... 21 13. DEFERRED TAX ................................................................................................................................................................. 22 14. INTANGIBLE ASSETS ......................................................................................................................................................... 23 15. TANGIBLE FIXED ASSETS ................................................................................................................................................. 24 16. ASSETS HELD FOR SALE .................................................................................................................................................. 25 17. OTHER FINANCIAL ASSETS .............................................................................................................................................. 25 18. INVENTORY ........................................................................................................................................................................ 25 19. RECEIVABLES .................................................................................................................................................................... 25 20. TRADE LIABILITIES AND AGE STRUCTURE ..................................................................................................................... 26 21. OTHER LIABILITIES ............................................................................................................................................................ 26 22. EMPLOYEE BENEFITS ....................................................................................................................................................... 26 23. CREDITS AND LOANS ........................................................................................................................................................ 27 24. ISSUED BONDS .................................................................................................................................................................. 30 25. FINANCIAL LEASE LIABILITIES .......................................................................................................................................... 31 26. RESERVES ......................................................................................................................................................................... 32 27. CONTINGENT ASSETS AND LIABILITIES .......................................................................................................................... 32 28. ACTIONS IN COURT AND PROCEEDING BEFORE ADMINISTRATIVE BODIES ............................................................... 33 29. REMUNERATION OF THE MANAGEMENT BOARD AND SUPERVISORY BOARD ........................................................... 35 30. TRANSACTIONS WITH AFFILIATES................................................................................................................................... 36 31. EVENTS AFTER THE BALANCE SHEET DATE .................................................................................................................. 37



I. SELECTED FINANCIAL DATA

thousands PLN thousands PLN thousands EURO

thousands EURO

Selected financial data 01.01.2012

31.03.2012

01.01.2011

31.03.2011

01.01.2012

31.03.2012

01.01.2011

31.03.2011

consolidated financial statements data

I. Sales income: 15 306 14 728 3 666 3 706

II. Operating income/loss* 1 069 -756 256 -190

III. Gross income/loss* 702 -954 168 -240

IV. Net income/loss* 487 -974 117 -245

V. Net income/loss* attributable to shareholders 487 -974 117 -245

VI. Net cash flows from operating activities -574 635 -137 160

VII. Net investment cash flow -280 948 -67 239

VIII. Net financial cash flow 849 -1 700 203 -428

IX. Total net cash flow -5 -117 -1 -29

31.03.2012 31.12.2011 31.03.2012 31.12.2011

X. Total Assets 28 927 29 461 6 951 6 670

XI. Total liabilities 25 042 26 064 6 017 5 901

XII. Long term liabilities 0 209 0 47

XIII. Short term liabilities 25 042 25 855 6 017 5 854

XIV. Equity 3 885 3 397 934 769

XV. Equity attributable to the Company’s shareholders 3 884 3 397 933 769

XVI. Share capital 1 817 1 817 437 411

XVII. Number of shares (in units) 9 082 515 9 082 515 9 082 515 9 082 515

XVIII. Earnings/loss* per one ordinary share (in PLN/EUR)** 0,05 -0,11 0,01 -0,06

XIX. Carrying value per one ordinary share (in PLN/EUR)***

0,43 0,37 0,10 0,08

**Basic earnings/loss* per share was calculated as net earnings/loss* attributable to the Company’s shareholders divided by the weighted average number of outstanding shares during the financial year. Weighted average number of shares in 2012 was 9,082,515 and in 2011 was 9,082,515.

*** Carrying value per share was calculated as shareholders’ equity divided by the number of shares.

Selected financial data presented in the financial statements were converted into EURO as follows:

- items in the Statement of income and the cash flow statement were converted using the exchange rate constituting the arithmetic mean of the exchange rates published by NBP as of the end of every month; this exchange rate for the Q1 2012 was 4.1750 PLN; Q1 2011 – 3.9742 PLN.

- balance sheet items were converted using the average exchange rate published by NBP as of the balance sheet date; that exchange rate as of March 31st, 2012 amounted to 4.1616 PLN; and as of December 31st, 2011: 4.4168 PLN.



-

II. GENERAL INFORMATION 1. PARENT ENTITY’S DATA

Name: Mediatel

Legal form: Spółka Akcyjna (joint-stock company)

Registered office: Aleje Jerozolimskie 65/79

00-697 Warsaw

Country of registration: Poland

Primary business activities of the Company comprise:

1) telecommunications services and data transmission services, including telephone connections, Internet access, voice mail,

2) collocation centre services,

3) wholesale phone connection termination services offered to domestic and foreign telecommunication operators.

Registry: District Court of the capital city of Warsaw, 12th Commercial Department of the National Court Register.

Registration number: KRS 0000045784

Statistical number REGON: 012512021

2. PARENT COMPANY’S DURATION

The Company’s duration is unspecified.

3. PRESENTED PERIODS

The consolidated financial statement includes data for the period from January 1st, 2012 to March 31st, 2012. Comparative data are presented on the basis of the entries as of December 31st, 2011 for the consolidated balance sheet, for the period from January 1st, 2011 to March 31st, 2011 for the profit and loss account, cash flow statement and the statement of changes in equity.

4. COMPOSITION OF THE PARENT COMPANY'S MANAGEMENT BOAR D AS OF MARCH 31 st, 2012

Management Board

Mirosław Janisiewicz – Chairman of the Board

Marek Nowakowski – Management Board member

Zbigniew Kazimierczak – Management Board Member

At the Company Supervisory Board’s meeting held on December 20th, 2011 Zbigniew Kazimierczak was appointed as the Company’s Management Board member as of January 2nd, 2012.

Supervisory Board

Jarosław Mikos Chairman of the Supervisory Board

Jarosław Michalik Secretary of the Supervisory Board

Marcin Łolik Supervisory Board Member

Marcin Frączek Supervisory Board Member

Krzysztof Urbański Member of the Supervisory Board,

Piotr Nadolski Supervisory Board Member



Changes in the composition of the Supervisory Board in the reporting period

- The Extraordinary Shareholders Meeting on January 12th, 2012 approved the Supervisory Board’s appointment of Jarosław Mikos as a Supervisory Board member.

- On January 12th, 2012 the Company received Albert Kuźmicz’s from the Supervisory Board of Mediatel, effective as of January 12th, 2012.

- On January 12th, 2012 the Company’s Extraordinary Shareholders Meeting due to Albert Kuźmicz’s resignation from the Supervisory Board the Supervisory Board appointed Marcin Frączek as the Supervisory Board member, effective as of January 12th, 2012.

5. STATUTORY AUDITORS

Currently the Company is selecting the statutory auditor to audit the annual and review the biannual consolidated and separate financial statements for the year 2012.

6. SHARES LISTED ON THE REGULATED MARKET

Stock Exchange: Giełda Papierów Wartościowych w Warszawie S.A. (WSE)

ul. Książęca 4 00-498 Warsaw

Symbol at the WSE: MTL

Sector at the WSE: Telecommunication

Deposit - clearing system: Krajowy Depozyt Papierów Wartosciowych S.A. (KDPW)

ul. Książęca 4

00-498 Warsaw

7. MAJOR SHAREHOLDERS

As of May 11th, 2012.

No. Number of shares

Shareholder’s Name Share in the share capital Number of votes

1 6 994 459 NFI Magna Polonia S.A. 63,11% 6 994 459

2 639 205 Cezary Grzegorczuk 5,77% 639 205

3 3 448 851 Other shareholders 31,12% 3 448 851

As of March 31st, 2012 the share capital amounted to 1,816,503 PLN and was divided into 9,082,515 shares of 0.20 PLN of par value each.

On April 20th, 2012 the District Court of the capital city of Warsaw in Warsaw, the 12th Commercial Department of the National Court Register registered the increase in the Mediatel’s share capital by the amount of 400 k PLN. After the registration the Company’s share capital amounted to 2,216,503.00 PLN and was divided into 11,082,515 shares of 0.20 PLN of par value each.

On April 2nd, 2012 NFI Magna Polonia S.A. entered with the Company into a subscription agreement concerning 1 million series K shares issued by the Company in order to increase the share capital as a part of the authorised capital, while waiving the pre-emptive rights. On April 24th, 2012 the Company received a notice from NFI Magna Polonia concerning the purchase of the shares.

On April 24th, 2012 the Company received a notice from Mr Cezary Grzegorczuk concerning his purchase of 500,000 of the Company’s shares. As a result of that transaction Mr Grzegorczuk now holds more than 5% votes at the Company’s General Shareholders Meeting.



8. RELATED COMPANIES

As of March 31st, 2012 Mediatel S.A. had the following related companies:

- Elterix S.A. - stake in share capital: 99.16%

- Sieci Cyfrowe Sp. z o.o. - stake in share capital: 99.16%

- Telepin S.A. - stake in share capital: 99.08%

- Velvet Telecom LLC - stake in share capital: 100%

9. INFORMATION ABOUT TYPE OF AFFILIATION

The Mediatel S.A. Group (the “Group”) comprises Mediatel S.A. as the Parent Company from the legal point of view and subsidiaries, in which the Company holds shares directly and indirectly.

CONSOLIDATED COMPANIES

No Company Name Scope of the Company Business

Direct shares of the Parent

Company in the share capital

Total share of the Parent Company (direct and indirect in the total number of votes)

1 Elterix SA

The main line of business of Elterix comprises in provisioning of telecommunications services, namely fixed telephony connections and Internet access for business and individual customers and wholesale of fixed and mobile telephony services. Elterix has its own fibre network and also copper and radio access network in the area of Tricity. 99,16% 99,16%

2 Telepin SA Is a company separated from Elterix S.A. It provides telecommunication services. 21,48% 99,08%

3 Sieci Cyfrowe Sp. z

o.o. The Company’s main business activities include wired, wireless and satellite telecommunications. 0,00% 99,16%

4 Velvet Telecom LLC

The main business activity of Velvet Telecom comprises in the wholesale exchange of telecommunications traffic. The Company mainly operates on the territory of the USA. The services provided by Velvet Telecom include mainly termination of calls generated in the USA to destinations outside its telecommunications traffic, mainly to Latin America and Asia.Currently the Company is not conducting operating activities. 100,00% 100,00%

CONSEQUENCES OF CHANGES IN THE GROUP’S STRUCTURE, INCLUDING RESULTS OF BUSINESS COMBINATIONS, ACQUISITION OR SALE OF GROUP ENTITIES, LONG-TERM IN VESTMENTS, DIVISION, RESTRUCTURING AND DISCONTINUATION OF ACTIVITY

In the first quarter of 2012 there were no changes in the structure of the Mediatel S.A. Group.



10. COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING S TANDARDS

This Abridged Midyear Consolidated Financial Statements of the Group were prepared in accordance with the International Accounting Standard (“IAS”) 34 - Interim Financial Reporting (“IAS 34”) and in accordance with the accounting standards applicable to interim financial reporting in the form adopted by the European Union, published and valid during the preparation of the Midyear Consolidated Financial Statements. The financial statements were prepared in accordance with the historical cost concept, except for revaluation of certain financial assets. The accounting principles adopted to prepare these abridged midyear financial statements are compliant with the principles adopted at drawing up of the most recent annual consolidated financial statements for the financial year ended December 31st, 2011 except for new accounting standards applied as of January 1st, 2012.

The financial statements were presented in Polish zlotys. Rounding level – PLN thousands.

The abridged midyear consolidated financial statements for Q1 2012 were not audited by the statutory auditor.

11. CHANGES IN THE APPLIED ACCOUNTING PRINCIPLES

The Company changes its accounting policy only if there are changes in the accounting standards or if the changes are made in order to ensure reliable presentation of data in the financial statements. In order to ensure comparability of the financial data the Company applies the changed accounting principles also to the comparable data (usually for the previous year) presented in the financial statements for the current year, except for a situation when it is impossible to reliably determine the amounts resulting from the changes in relation to the previous accounting periods. The adjustments resulting from the change in the accounting policy should be stated as adjustments of the income/loss carried forward. The comparable data are converted, except for a situation when it is impractical. The presentation of comparative data is governed by the principles defined for the presentation of comparative data in the case of an error in previous years. The comparability is ensured by converting the financial data for the previous year in accordance with the principles used in the current year.

If the data for the previous year are made comparable the Company does not make adjustments in the accounting ledgers for the previous year (in order to ensure comparability). The comparable data are recognised directly in the financial condition statement and in the comprehensive income statement, by describing the changes in the notes.

STANDARDS AND INTERPRETATIONS APPLICABLE THE FIRST TIME TO REPORTING PERIODS STARTING ON JANUARY 1 st, 2012

In the presented period the International Accounting Standards Board did not publish any new standards that might by adopted by the Group for the first time.

As of the signing of these financial statements the following standards, revisions and interpretations were published but have not entered in force yet and the Company has not decided to adopt them prematurely.

- Revisions to IFRS 7 “Financial Instruments: Disclosures” - financial assets transfers, approved by the EU on November 22nd, 2011 (applicable to annual periods starting on or after July 1st, 2011). The purpose of the revisions is to improve the quality of information about the transferred financial assets, which, at least their parts, are recognised by the entity, since they were not subject to reversal; and about financial assets not presented by the entity, since they fulfilled the requirements of reversal, but are still used by the entity.

the aforementioned standards, interpretations and revisions to the standards did not apply to the Company or did not have a material impact on the previously applied accounting policy.

IFRS in the form adopted by the European Union currently do not differ significantly from the regulations adopted by the International Accounting Standards Board (IASB), except for the following standards, revisions to standards and interpretations, which have not been adopted yet on the date of the signing of the financial statements:

IFRS 9 “Financial Instruments” (applicable to annual periods starting on or after January 1st, 2015) published by IASB on November 12th, 2009 and revised on September 28th, 2010 IFRS 9 introduces new principles of qualification and measurement of financial assets and liabilities and it is likely that it will affect the Company’s ledgers in terms of the financial instruments. As of the date of the financial statements the Company has not yet assessed the impact of this standard on the financial statements.

IFRS 10 “Consolidated financial statements” (applicable to annual periods starting on or after January 1st, 2013).

IFRS 11 “Joint Arrangements” (applicable to annual periods starting on or after January 1st, 2013).

IFRS 12 “Disclosure of Interests in Other Entities” (applicable to annual periods starting on or after January 1st, 2013).

IFRS 13 “Fair Value Measurement” (applicable to annual periods starting on or after January 1st, 2013), published by IASB on May 12th, 2011. This standard defines the fair value; it contains guidelines concerning the fair value measurement and requires the disclosure of information about the fair value measurement, but it does not change the requirements concerning the elements to be measured or disclosed in fair value.

IAS 27 (amended in 2011) “Separate Financial Statements” (applicable to annual periods starting on or after January 1st, 2013). Requirements concerning separate financial statements did not change and are included in the amended IAS 27. Other parts of IAS 27 were replaced by IFRS 10.

IAS 28 (amended in 2011) “Investments in Associates and Joint Ventures” (applicable to annual periods starting on or after January 1st, 2013).

Revisions to IFRS 1 “First-time Adoption of IFRS” - Severe Hyperinflation and elimination of fixed deadlines for first-time IFRS adopters (applicable to annual periods starting on or after July 1st, 2011).

Revisions to IFRS 9 “Financial Instruments” and IFRS 7 “Financial Instruments: Disclosures” - compulsory adoption date and transitional regulations; published by IASB on December 16th, 2011. The revision postpones the compulsory adoption date from January 1st, 2013 to January 1st, 2015. The revision also removes the obligation to convert comparative data in the financial statements due to the adoption of IFRS 9. The release from the obligation was previously available only to the entities that decided to adopt IFRS 9 before 2012. Now additional requirements are required in terms of the consequences of the adoption of the new standards, prepared in order to enable the investors to understand the impact of the first-time adoption of IFRS 9 on the classification and measurement of financial instruments.

Revisions of IAS 1 “Presentation of Financial Statements” - presentation of other comprehensive income elements (applicable to annual



periods starting on or after July 1st, 2012). The revisions required from entities preparing IFRS-compliant financial statements to jointly present those elements in other comprehensive income which can be transferred to the profit and loss account. The changes also confirm that other comprehensive income and profit and loss account elements are presented in a single statement or in two consecutive statements.

Revisions to IAS 12 “Income Taxes” - Deferred Tax: Recovery of Underlying Assets (applicable to annual periods starting on or after January 1st, 2011).

Amendments of IAS 19 “Employee Benefits” - post-employment benefits accounting (applicable to annual periods starting on or after January 1st, 2013).

Interpretation IFRIC 20 “Stripping Costs in the production Phase of a Surface Mine” (applicable to annual periods starting on or after January 1st, 2013).



Amendments to IAS 32 “Financial Instruments: Presentation” applicable to periods starting on or after January 1st, 2014. On December 16th, 2011 the International Accounting Standards Board published amendments to IAS 32 in the scope of netting of financial assets and liabilities indicating inconsistencies related to the use of the financial instruments netting.

Amendments to IFRS 7 “Financial Instruments: Disclosures” were published along with the amendment to IAS 32 related to the financial assets and liabilities netting. The amendments enter in force on January 1st, 2013.

Amendments to IFRS 1 “First-time Adoption of International Financial Standards” include release from the obligation to retrospectively apply the IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance” of entities adopting IFRS for the first time in the case of initial measurement of government loans, the interest rate of which is below the market interest rate. The amendment applies to periods starting on January 1st, 2013.

The Group believes that the application of the aforementioned standards, amendments and interpretations will not have a significant impact on the Group’s financial statements during the initial period of their application.

VOLUNTARY CHANGES IN ACCOUNTING PRINCIPLES

Preparing this consolidated financial statements the Group did not change voluntarily any previously applied accounting principles.

12. CHANGES IN ESTIMATED VALUES

In the period ended on March 31st, 2012 the Group did not make any material changes in the estimated values.

13. DESCRIPTION OF MAJOR ACHIEVEMENTS OR FAILURES OF TH E GROUP

Information was presented in point 5 of the Mediatel S.A. Group activity report for Q1 2012.

14. MAJOR EVENTS SIGNIFICANTLY AFFECTING THE GROUP’S FI NANCIAL RESULTS IN Q1 2012 AND FACTORS AND EVENTS, IN PARTICULAR OF UNTYPICAL NATURE, SIGNIFIC ANTLY AFFECTING THE GENERATED FINANCIAL RESULTS.

Information was presented in points 3 to 6 of the Mediatel S.A. Group activity report for Q1 2012.

15. SEASONAL OR CYCLIC NATURE OF THE GROUP’S ACTIVITIES IN THE PRESENTED PERIOD

The Group is not affected by seasonality.

16. INFORMATION ABOUT ISSUE, REDEMPTION AND REPAYMENT O F DEBT AND EQUITY SECURITIES :

Information was presented in point 12 of the Mediatel S.A. Group activity report for Q1 2012.

17. INFORMATION ABOUT DISTRIBUTED (OR DECLARED) DIVIDEN D

The Group did not declare and did not distribute any dividend in 2012.

18. GOING CONCERN ASSUMPTION AND COMPARABILITY OF FINAN CIAL STATEMENTS

Financial statements of the Mediatel S.A. Group have been drafted on the going concern assumption that the business activities would be continued for at least 12 months after the balance sheet date despite the indications of a threat to the continuation of business activities by Mediatel S.A. and Elterix S.A. Justification of the decision to continue business activities and the Group’s plans and strategy were presented in the Group’s activity report for Q1 2012.

19. APPROVAL OF THE FINANCIAL STATEMENT

These consolidated financial statements were accepted by the Parent Company’s Management Board on May 11th, 2012.



III. CONSOLIDATED FINANCIAL STATEMENTS

1. CONSOLIDATED STATEMENT OF INCOME

for the period for the period

Note 01.01.2012

31.03.2012

01.01.2011

31.03.2011

Continued operations

Income on sales 2 15 306 14 728

Costs of goods sold 3 -13 122 -13 715

Gross income / loss on sales 2 184 1 013

Cost of sales 3 -331 -351

General and administration expenses 3 -957 -1 592

Income/loss on sales 896 -930

Other operating income 5 287 229

Other operating expenses 7 -114 -55

Operating income/loss 1 069 -756

Financial income 8 88 46

Financial costs 9 -455 -245

Income/loss before taxes 702 -954

Current income tax 12 -36 -23

Deferred income tax 13 -179 3

Round ups/downs 0

Net income / loss on continued activities 487 -974

Discontinued operations

Net income / loss on discontinued activities 0 0

Net income/loss 487 -974

Other comprehensive income

Foreign exchange differences from foreign units conversion 0 0

Other net comprehensive income 0 0

Net comprehensive income 487 -974

Net income / loss attributable to:

parent entity's shareholders 0,05 -0,11

non -controlling shares 0 0

Total c omprehensive income attributable to:

parent entity's shareholders 0,05 -0,11

non -controlling shares 0 0



2. CONSOLIDATED FINANCIAL CONDITION STATEMENT

As of As of As of

Balance Sheet - Assets Note 31.03.2012 31.12.2011 31.03.2011

Fixed assets 14 520 14 278 19 307

Intangible assets 14 1 156 1 452 2 394

Fixed tangible assets 15 11 501 11 743 14 569

Other receivables 19 0 441 544

Other assets 1 400 0 0

Deferred tax assets 13 463 642 1 800

Current assets 14 407 15 183 16 813

Inventories 18 104 107 42

Trade receivables 19 11 143 10 848 9 968

Other receivables 19 2 652 3 748 5 026

Income tax receivables 61 31 0

Financial Assets 17 3 0 0

Cash and cash equivalents 444 449 1 778

Round ups/downs 0 0 -1

Total assets 28 927 29 461 36 120



Balance Sheet - Equity & Liabilities Note 31.03.2012 31.12.2011 31.03.2011

Equity

3 885 3 397 4 575

Equity attributable to the parent company’s shareho lders 3 884 3 397 4 575

Share capital 1 817 1 817 1 817

Share premium reserve 537 537 33 350

Reserve capital 5 286 5 286 5 286

Supplementary capital 2 096 2 096 1 987

Foreign exchange differences from foreign units conversion -885 -885 -885

Retained earnings, including: -4 967 -5 454 -36 980

- carried forward -5 454 -3 192 -36 006

- from the current period 487 -2 262 -974

Non-controlling shares 1 0 0

Long term liabilities 0 209 3 607

Loans and credits 23 0 0 1 628

Deferred tax reserve 13 0 0 1 123

Finance lease obligations 25 0 209 856

Short term liabilities 25 042 25 855 27 938

Loans and credits 23 3 624 3 584 4 267

Employee benefits payable 22 683 704 1 581

Income tax liabilities 14 6 23

Reserves 26 807 748 657

Trade liabilities 20 14 585 16 580 18 257

Other liabilities 21 77 96 2 025

Deferred income 133 34 0

Finance lease obligations 25 978 1 057 1 128

Issued bonds 24 4 141 3 046 0

Round ups/downs 0 0 0

Total liabilities 28 927 29 461 36 120



3. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Statement of changes in equity

Share capital

Share premium reserve Reserve capital

Supplementary capital

Total income Minority share Total

01.01.2012 1 817 537 5 286 2 096 -6 339 0 3 397

Net income for the current period 0 0 0 0 487 1 488

31.03.2012 1 817 537 5 286 2 096 -5 852 1 3 885

Statement of changes in equity Share capital

Share premium reserve Reserve capital

Supplementary capital

Total income Minority share Total

01.01.2011 1 817 33 350 5 286 1 987 -36 890 0 5 550

Net loss for the current period 0 0 0 0 -2 262 0 -2 262

loss brought forward 0 -32 813 0 0 32 813 0 0

Reserve from revaluation of the employee motivational scheme 0 0 0 109 0 0 109

31.12.2011 1 817 537 5 286 2 096 -6 339 0 3 397



4. CONSOLIDATED CASH FLOW STATEMENT

01.01.2012-31.03.2012

01.01.2011

31.03.2011

Operating cash flow

Pre-tax profit adjusted with the balance sheet value of cash and cash equivalents 702 -954

Total adjustments 1 159 1 858

Depreciation 818 1 185

Interest 198 10

Income/loss on sale of fixed assets 1 57

Movements in deferred settlements 97 638

Change in the reserves 59 -31

Other adjustments -14 -1

Net Cash flows from operating activities prior to c hanges in the working capital 1 861 904

Change in trade receivables and other receivables. -1 041 -2 118

Change in trade liabilities and other liabilities. -1 379 1 781

Change in the inventory 22 68

Cash flows from operating activities -537 635

Paid income tax -37 0

Net cash flows from operating activities -574 635

Cash flows from investment activities

Interest received 0 10

Proceeds from the sale of tangible and intangible assets 0 122

Proceeds from the redemption of financial assets kept until maturity 0 2 937

Purchased fixed assets -280 0

Purchase of securities 0 -2 121

Net investment cash flow -280 948



Cash flows from financial activities 01.01.2012

31.03.2012

01.01.2011

31.03.2011

Received loans and borrowings 1 030 490

Proceeds from the issue of debt securities 1 000 0

Interest repayment -57 -66

Repayment of liabilities under financial lease -288 -328

Change in overdrafts -166 -1 496

Repayment of credits and loans -670 -300

Net financial cash flow 849 -1 700

Total net cash flow -5 -117

Opening cash, including cash attributable to discon tinued activities 449 177

changes in cash due to foreign exchange differences 0 0

Round ups/downs 0 0

Cash at the end of the period 444 60



IV. NOTES TO FINANCIAL STATEMENTS

1. OPERATING SEGMENTS

The Group’s activities are divided according to operating criteria i.e. a separable area of the Group's activities, as a part of which services are provided or products are supplied, which is subject to risk and is characterised by the return on investment rate that differ from those inherent in other operating segments and are used within the Group by the decision-making body to assess the results of the operating segments and the distribution of resources.

Operating activities of the Mediatel S.A. Group was divided into the following reporting segments:

Carriers Segment - wholesale customers,

Business - small and medium sized enterprises

Home – individual customers

The segment results are evaluated on the basis of income, EBITDA, EBIT and CAPEX. EBITDA constitutes operating income before depreciation and reversal/disclosure of impairment of goodwill and other fixed assets. EBIT is the operating income. The Group’s financing and income taxes are managed at the Group level and are not allocated to business segments.

01.01.2011-31.12.2011

Carriers Business Home Total business

segments Unallocated Total


Total income on sales 56 439 0 4 079 60 518 0 60 518

Segment income 56 439 0 4 079 60 518 0 60 518

EBITDA 2 075 0 1 281 3 356 0 3 356

Depreciation 3 355 0 494 3 849 0 3 849

Operating income (loss) -1 280 0 786 -494 0 -494

Financial income 191 191

Financial costs -1 771 -1 771

Income tax -188 -188

Net profit (loss) -1 280 0 786 -494 -1 768 -2 262



01.01.2012-31.03.2012

Carriers Business Home Total

business segments

Unallocated Total


Total income on sales 14 704 0 602 15 306 0 15 306

Segment income 14 704 0 602 15 306 0 15 306

EBITDA 2 225 0 -338 1 887 0 1 887

Depreciation 625 0 193 818 0 818

Operating income (loss) 1 600 0 -531 1 069 0 1 069


Financial costs -455 -455

Income tax -215 -215

Net profit (loss) 1 600 0 -531 1 069 -582 487



2. INCOME For the period For the period

01.01.2012

31.03.2012

01.01.2011

31.03.2011

Income on sales of telecommunications services 15 179 14 728

Income on sales of goods 98 0

Other services 29 0

15 306 14 728

Other operating income 287 229


375 275

Total: 15 681 15 003

3. GENERAL ADMINISTRATION COSTS

For the period For the period

01.01.2012

31.03.2012

01.01.2011

31.03.2011

Tangible assets depreciation, intangible assets amortisation 818 1 185

Raw materials and supplies used 104 35

Third party services 12 556 13 242

Taxes and charges 14 47

Wages and salaries 824 1 062

Other general management expenses 8 87

Total costs by type 14 324 15 658

Cost of sale (negative value) -331 -351

General management and administration expenses (negative value) -957 -1 592

Total costs of products and services sold 13 036 13 715

Cost of goods sold 86 0

Total costs of goods sold 13 122 13 715



4. EMPLOYEE BENEFITS PAYABLE

The table below presents information about average employment (including the Management Board).

01.01.201231.03.2012

01.01.201131.03.2011

Number

of employees

Number

of employees

Management Board 4 3

Employees 26 46

Total: 30 49

External consultants working on the basis of cooperation contracts 2 4

Total personnel: 32 53

The Group incurred the following costs of employment:


01.01.2012-31.03.2012

01.01.2011

31.03.2011

Remuneration 707 921

Social insurance premiums 96 141

Other employee benefits 3 19

Total: 806 1 081

Remuneration for external consultants employed under cooperation agreement (managers contracts) 18 0

Total employment expenses: 824 1 081

The Group ha no share-based payment scheme.

5. OTHER OPERATING INCOME For the period For the period

01.01.2012

-31.03.201201.01.2011

-31.03.2011

Reversal of receivables revaluation write-downs 0 148

Liabilities written off 95 0

Reversal of reserves for operating expenses 33 0

Profit on the sale of non-financial fixed assets 0 57

Proceedings from re-invoicing 20 13

Liabilities written off 30 0

Restatement of previous years 99 0

Other 10 11

Total: 287 229



6. SUBSIDY

In the reporting and the comparative period the Group did not receive subsidies.

7. OTHER OPERATING EXPENSES For the period For the period

01.01.2012

31.03.2012

01.01.2011

31.03.2011

Receivables revaluation write-down 0 55

Re-invoiced expenses 20 0

Restatement of previous years 37 0

Other 57 0

Total: 114 55

8. FINANCIAL INCOME


01.01.2012

31.03.2012

01.01.2011

31.03.2011

Interest income from bank deposits 1 11

Income from interest on acquired bonds 2 32

FX gains and losses 70 0

Interest on paid guarantee bonds and deposits 15 0

Other 0 3

Total financial income 88 46

9. FINANCIAL EXPENSES


01.01.2012

31.03.2012

01.01.2011

31.03.2011

Costs of credit and loan interest 115 77

Finance lease interest costs 9 27

Costs of interest on delayed payments 223 20

Cost of interest on issued bonds 95 53

FX gains and losses 0 68

Other 13 0

Total financial costs: 455 245

10. DIVIDENDS

In 2012 and in the comparative period none of the Group companies distributed or declared dividend.



11. EARNINGS/LOSS PER SHARE

Basic earnings/loss* per share was calculated as net earnings/loss* attributable to the Company’s shareholders divided by the weighted average number of outstanding shares during the financial year.

The basic earnings/loss* per share was calculated on the basis of the following information:

Profit / loss

For the period

01.01.2012

31.03.2012

For the period

01.01.2011

31.03.2011

Net loss for the year for the purpose of calculating the loss per share 487 -974

Exclusion of earnings/loss on discontinued operations - -

Net loss on continued operations for the purpose of calculating the earnings/loss per share, after the exclusion of the discontinued operations

487 -974

Number of shares

Weighted average number of ordinary shares

Weighted average number of ordinary shares used to calculate the diluted loss per share 9 082 515 9 082 515


Loss posted for the purpose of calculating the loss per share

487 -974

Loss posted for the purpose of calculating the diluted loss per share 487 -974

Discontinued operations

The Company did not discontinue any activities.

Basic loss* per share 0,05 -0,11

As of the balance sheet day the Company had no instruments effecting the dilution of the number of shares, for that reason the presented financial result was not diluted. In view of the above stated basic earnings per share equal diluted earnings per share.

Between the balance sheet date and the date of these financial statements the Company did not purchase any treasury shares.

12. INCOME TAX INCLUDED IN THE FINANCIAL RESULT FOR THE CURRENT PERIOD


01.01.201231.03.2012

01.01.2011-31.03.2011

Current income tax 36 23

Deferred income tax 179 -3

Tax burden (credit) 215 20



Current portion of the income tax was calculated using the 19% rate applied to the income tax base.

13. DEFERRED TAX

Tax rate

Financial condition statement Comprehensive income statement

As of As of For the period For the period

31.03.2012 31.12.2011 01.01.2012-31.03.2012

01.01.2011-31.03.2011

Income tax assets - elements

Reserve for indirect expenses 163 141 22 -227

Reserve for retirement benefits and anniversary bonuses 11 17 -6 0

Difference between the tax value and carrying value of tangible fixed assets

131 153 -22 18

Receivables revaluation write-down 594 594 0 21

Tangible assets revaluation write-down 23 23 0 -23

Unpaid social insurance contributions 20 13 7 -13

Unpaid remuneration 15 9 6 52

Tax loss 197 254 -57 462

Reserve for charged interest on loans, credits, bonds 378 393 -15 -273

Foreign exchange losses 14 120 -106 37

Total: 1 546 1 717

Deferred income tax reserve – elements

Accrued but not received interest 844 848 4 -655

Surplus of lease liabilities over the carrying value of leased tangible assets 187 209 22 -36

Income spread over time 0 0 0 627

Foreign exchange gains 51 18 -33 13

Other 1 0 -1 0

Total: 1 083 1 075

Total income/deferred tax costs -179 3

Presentation in the financial condition statement 31.03.2012 31.12.2011

Deferred tax assets 1 546 1 717 -171

Deferred tax reserve 1 083 1 075 -8

Deferred income tax asset after the balancing 463

Negative impact on comprehensive income -179



14. INTANGIBLE ASSETS

GROSS VALUE Software and licences Research

and Development

Other intangible

assets Total

As of 1.1.2011 1 896 0 6 511 8 407

Accruals 26 0 0 26

direct purchase 26 0 0 26

Reductions -22 0 -6 -28

sale -22 0 -6 -28

As of 31.12.2011 1 900 0 6 505 8 405

As of 1.1.2012 1 900 0 6 505 8 405

adjustment OB 3 793 0 -3 876 -83

Accruals 0 0 0 0

Reductions 0 0 0 0

As of 31.3.2012 5 693 0 2 629 8 322

REDEMPTION AND IMPAIRMENT

As of 1.1.2011 -533 0 -4 977 -5 510

Accruals -1 228 0 -243 -1 471

depreciation for the year -1 228 0 -243 -1 471

Reductions 22 0 6 28

sale 22 0 6 28

As of 31.12.2011 -1 739 0 -5 214 -6 953

REDEMPTION AND IMPAIRMENT

As of 1.1.2012 -1 739 0 -5 214 -6 953

adjustment OB -2 502 0 2 585 83

Accruals -296 0 0 -296

depreciation for the year -296 0 0 -296

Reductions 0 0 0 0

As of 31.3.2012 -4 537 0 -2 629 -7 166

NET VALUE

As of 31.12.2011 161 0 1 291 1 452

including lease 161 0 283 444

As of 31.3.2012 1 156 0 0 1 156

including lease 137 0 241 378

Research and development expenses

Research and development expenses include expenses resulting from depreciation of previously activated development work expenses.

The value of Research & Development includes the value of expenses of the Development Works conducted by the Company including the search of solutions in the scope of launching the new technology i.e. mobile TV and search for methods of implementing that technology in the Polish market.



15. TANGIBLE FIXED ASSETS

GROSS VALUE Land, building and

plant Machinery and

equipment Means of transport

Other fixed assets

Fixed assets under

construction Total

As of 1.1.2011 6 314 30 204 1 266 191 1 088 39 063

Accruals 89 0 0 8 0 8

direct purchase 0 0 0 8 0 8

revaluation 89 0 0 0 0 89

Reductions -2 282 -506 -542 -6 0 -3 336

liquidation -100 -50 0 0 0 -150

sale -2 182 -456 -467 -6 0 -3 111

other 0 0 -75 0 0 -75

As of 31.12.2011 4 121 29 698 724 193 1 088 35 824

As of 1.1.2012 4 121 29 698 724 193 1 088 35 824

Adjustment OB 0 0 0 0 0 0

Accruals 0 0 0 0 280 280

direct purchase 0 0 0 0 280 280

Reductions 0 0 0 0 0 0

As of 31.3.2012 4 121 29 698 724 193 1 368 36 104

REDEMPTION

As of 1.1.2011 -3 496 -19 607 -457 -191 0 -23 751

Accruals -372 -1 774 -232 0 0 -2 378

depreciation for the year -372 -1 774 -232 0 0 -2 378

Reductions 1 217 438 387 6 0 2 048

sale 1 117 389 372 6 0 1 884

liquidation 100 49 0 0 0 149

other 0 0 15 0 0 15

As of 31.12.2011 -2 651 -20 943 -302 -185 0 -24 081

As of 1.1.2012 -2 651 -20 943 -302 -185 0 -24 081

Adjustment OB 0 0 0 0 0 0

Accruals -68 -406 -41 -7 0 -522

depreciation for the year -68 -406 -41 -7 0 -522

Reductions 0 0 0 0 0 0

As of 31.3.2012 -2 719 -21 349 -343 -192 0 -24 603

NET VALUE

As of 31.12.2011 1 470 8 755 422 8 1 088 11 743

including lease 0 1 058 422 0 0 1 480

As of 31.3.2012 1 402 8 349 381 1 1 368 11 501

including lease 0 1 033 380 0 0 1 413

In the reporting period ended on December 31st, 2011 the Company reversed previously revaluated tangible assets in the other operating income in the amount of 88 k PLN.



16. ASSETS HELD FOR SALE

As of March 31st, 2012 the Group had no assets held for sale.

17. OTHER FINANCIAL ASSETS

2012 2011

Balance sheet value as of January 1st 0 2 905

Accruals 3 32

Interest 3 32

Reductions 0 -2 937

Redemption of bonds - nominal value 0 -2 650

Interest payment 0 -287

Balance sheet value as of March 31st 3

Balance sheet value as of December 31st 0

Short term 3 0

18. INVENTORY

31.03.2012 31.12.2011

Goods (at purchase prices) 104 107

Total using the lower of the two values: historical cost or attainable net value: 104 107

The Company did not make any inventory revaluation write-downs in the current period.

19. RECEIVABLES

31.03.2012 31.12.2011

Trade receivables due within 30 days 3 315 4 230

Past due receivables collectable within 30 days 1 104 1 603

Past due receivables collectable within the period from 30 to 90 days 1 669 1 508

Past due receivables collectable within the period from 90 to 180 days 1 890 1 653

Past due receivables collectable within the period over 180 days 3 165 1 889

Uncollectable receivables and bad debt 11 305 11 269

Total gross trade receivables 22 448 22 152

Doubtful and bad debts impairment write-down -11 305 -11 304

Total net trade receivables 11 143 10 848



Other receivables 31.03.2012 31.12.2011

State budget receivables (other than income tax receivables) 1 301 1 152

Enforced in court proceedings 410 410

Deposits 792 812

Receivables from employees 4 1

Accruals 451 1 828

Receivables from the sale of fixed assets 0 350

Receivables from the sale of a subsidiary 0 0

Other receivables 84 26

Total gross other receivables 3 042 4 579

Write down of other receivables -390 -390

Net other receivables 2 652 4 189

including:

short-term 2 652 3 748

long-term 0 441

Total gross receivables: 25 490 26 731

Total write down of receivables -11 695 -11 694

Total net receivables: 13 795 15 037

20. TRADE LIABILITIES AND AGE STRUCTURE

31.03.2012 31.12.2011

Not overdue 5 064 4 683

Overdue but collectible

1 to 3 months 1 943 5 292

3 to 6 months 2 235 3 638

6 to 12 months 3 810 1 896

more than 12 months 1 533 1 071

Total: 14 585 16 580

21. OTHER LIABILITIES

31.03.2012 31.12.2011

liabilities toward the State Budget 58 51

other 19 45

Total: 77 96

22. EMPLOYEE BENEFITS

31.03.2012 31.12.2011

taxes, customs duties, insurance and other benefits 280 287

accrued payroll 204 191

holidays reserve 195 222

other employee benefits 4 4

Total: 683 704



23. CREDITS AND LOANS

Loans and credits contracted as of the end of the reporting period 31.12.2011

Value in the credit

currency PLN balance Currency Interest rate Repayment

date

Short term

NFI Magna Polonia Spółka Akcyjna 320 10 PLN 10,50% December 31st, 2012


NFI Magna Polonia Spółka Akcyjna 500 499 PLN 10,50% April 6th, 2012

NFI Magna Polonia Spółka Akcyjna 1 000 1 018 PLN 10,50% April 6th, 2012

NFI Magna Polonia Spółka Akcyjna 963 981 PLN 10,50% April 6th, 2012

Overdraft facility 1 500 1 053 PLN 6,34% December 31st, 2012

Total short -term loans and cre dits 4 973 3 584 x x x

Loans and credits contracted as at the end of the reporting period 31.3.2012

Value in the credit

currency PLN balance Currency Interest rate Repayment

date

Short term



NFI Magna Polonia Spółka Akcyjna 500 411 PLN 10,50% January 6th, 2012

NFI Magna Polonia Spółka Akcyjna 1 000 1 044 PLN 10,50% April 6th, 2012

NFI Magna Polonia Spółka Akcyjna 963 1 006 PLN 10,50% April 6th, 2012

Rasting Limited 800 478 PLN 12,00% April 2nd, 2012

BRE Bank S.A. - investment loan 1 200 918 USD - December 31st, 2012

BRE Bank S.A. - overdraft facility 1 433 PLN 6,34% December 31st, 2012

Deposit securing the credit with BRE Bank S.A. -1 700 PLN - not applicable

Total short -term loans and credits 5 473 3 624 x x x



Loan agreements concluded with NFI Magna Polonia S.A.

On March 24th, 2011 Mediatel concluded a loan agreement with NFI Magna Polonia S.A. for the amount of 320 k PLN, with maturity date falling on December 31st, 2012. The interest rate is 10.5% per annum. The loan amount was repaid in two instalments: on June 21st, 2011 in the amount of 120 k PLN and on July 13th, 2011 in the amount of 200 k PLN. Outstanding interest amounts to 10 k PLN.

On April 4th, 2011 Mediatel concluded a loan agreement with NFI Magna Polonia S.A. for the amount of 690 k PLN, with maturity date falling on December 31st, 2012. The interest rate is 10.5% per annum. The full amount of the loan was retired; 23 k PLN of interest remains outstanding.

On September 23rd, 2011 Mediatel concluded a loan agreement with NFI Magna Polonia S.A. for the amount of 500 k PLN, with maturity date falling on January 6th, 2012. The interest rate is 10.5% per annum. On October 21st, 2011 and on March 6th, 2012 the amounts of 15 k PLN and 100 k PLN respectively were repaid. Interest as of March 31st, 2012 amounted to 26 k PLN.

On October 28th, 2011 NFI Magna Polonia S.A. granted a loan to Mediatel S.A. in the amount of 963 k PLN to repay its trade liabilities. In accordance with the annex to the loan agreement the loan repayment date expired on April 6th, 2012. The loan bears interest at 10.5% per annum. Outstanding interest as of March 31st, 2012 amounted to 43 k PLN.

On October 31st, 2011 in accordance with the loan agreement Mediatel S.A. was granted a loan by NFI Magna Polonia S.A. in the amount of 1,000 k PLN. The loan bears interest at 10.5% per annum. In accordance with the annex to the loan agreement signed on April 4th, 2012 the loan repayment date falls on April 6th, 2012. Outstanding interest as of March 31st, 2012 amounted to 44 k PLN.

On January 4th, 2012 the Company concluded a loan agreement with NFI Magna Polonia S.A. for the amount of 230 k PLN. The interest rate amounts to 10.5%, and the maturity date falls onto January 11th, 2012. The loan with interest in the amount of 504.11 PLN was repaid punctually in accordance with the agreement.

On April 2nd, 2012 a receivables offset agreement was concluded between Mediatel S.A. and NFI Magna Polonia S.A. in relation to the Fund’s liabilities resulting from the acquisition of shares issued by Mediatel S.A. and the receivables resulting from the loans granted to Mediatel S.A. Detailed information was presented in note 31 “Events after the balance sheet date”.

Investment Credit Agreement with Annex 1, dated December 31st, 2009 concluded between BRE Bank and Mediatel 02/232/09/D/IN

On March 21st, 2009 Mediatel concluded an investment credit agreement No. 02/232/09/D/IN for the amount of 1,200 k USD, with maturity date falling on December 31st, 2012. The interest rate was agreed as variable annual interest rate applicable to the utilised amount of the credit and corresponding to the LIBOR rate for 1 month deposits in USD quoted two business days before the drawing date and before every subsequently interest period, plus the Bank’s margin. The agreement is secured with a blank promissory note and cash deposit in the amount of 1,700 k PLN on the terms defined in the cash deposit agreement no. 02/045/08 of March 27th, 2008. As of March 31st, 2012 the amount to 294 k USD, the equivalent of 918 k PLN, remains outstanding.

On April 27th, 2012 Annex 4 to the USD investment credit agreement no. 02/232/09/D/IN was concluded between MEDIATEL S.A. and BRE BANK S.A. The final credit repayment date was agreed as December 31st, 2012. As of April 30th, 2012 the Company has been repaying monthly instalments of 5,000.00 USD, and the last instalment shall be repaid by December 31st, 2012 in the amount of 255,500.00 USD.

In order to present the actual value of the loans and credits liabilities, the investment credit liability and the value of the current account overdraft facility at BRE Bank were balanced with the value of the cash deposit securing the credit in the amount of 1,700 k PLN, i.e. the investment loan in the amount of 918 k PLN and overdraft facility as a part of Mediatel S.A. current account in the amount of 238 k PLN and Elterix S.A. current account in the amount of 1,195 k PLN.



Current account overdraft facility agreement

On May 31st, 2011 the Company concluded with BRE Bank S.A. in Warsaw and with ELTERIX S.A. (“Borrower 2”) Annex no. 3 to the Umbrella Facility current account overdraft agreement no. 02/205/10/Z/VU (“Agreement”) of July 1st, 2010. Significant provisions of that annex include the amendment of the Agreement extending the credit limit up to the amount of 2,500 k PLN in the period from May 24th, 2011 to June 29th, 2011; the amount of 2,300 k PLN in the period from June 30th, 2011 to July 28th, 2011; the amount of 2,100 k PLN in the period from July 29th, 2011 to August 30th, 2011; the amount of 1,900 k PLN in the period from August 31st, 2011 to September 29th, 2011; the amount of 1,700 k PLN in the period from September 30th, 2011 to October 30th, 2011; the amount of 1,500 k PLN in the period from October 31st, 2011 to November 23rd, 2011; the amount of 1,300 k PLN until November 24th, 2011.

The borrowers agreed to make the final repayment of the current accounts overdraft balance by November 30th, 2011. Moreover, the Company in order to secure the Agreement issued a statement on voluntary submission to enforcement on the basis of a banking enforcement title and authorised BRE Bank S.A. in Warsaw to issue a banking enforcement title up to the amount of 2,800 k PLN should Mediatel S.A. failed to fulfil its obligations resulting from the banking activities conducted under the Agreement.

On May 31st, 2011 the Company concluded with BRE Bank S.A. Annex no. 3 to the cash deposit agreement no. 02/045/08 of March 27th, 2008, on the basis of which Mediatel S.A. transferred the ownership of the amount of 1,700 k PLN to BRE Bank S.A. to secure the credit granted to Mediatel S.A. in accordance with the Agreement, as amended. Mediatel S.A. authorised BRE Bank S.A. to charge its current account with the amount of the aforementioned deposit.

On November 25th, 2011 the Company concluded with BRE Bank S.A. in Warsaw and with ELTERIX S.A. (“Borrower 2”) Annex no. 4 to the Umbrella Facility current account overdraft agreement no. 02/205/10/Z/VU (“Agreement”) of July 1st, 2010. Significant provisions of that annex include the amendment of the Agreement by extending the facility repayment period and changing the credit limit, which was granted up to the amount of 1,500 k PLN until April 26th, 2012. The borrowers agreed to make the final repayment of the current accounts overdraft balance by April 27th, 2012. Moreover, the Issuer, in order to secure the Agreement, issued a statement on voluntary submission to enforcement on the basis of a banking enforcement title and authorised BRE Bank S.A. in Warsaw to issue a banking enforcement title up to the amount of 2,000 k PLN should Mediatel S.A. failed to fulfil its obligations resulting from the banking activities conducted under the Agreement.

On April 27th, 2012 Annex 5 to the current account overdraft agreement no. 02/205/10/Z/VU was concluded between Mediatel S.A. and Elterix S.A. and BRE BANK S.A. The final overdraft balance repayment date was agreed as December 28th, 2012.

Loan agreement concluded with Rasting Limited

On January 18th, 2012 Mediatel concluded a loan agreement with Rasting Limited in Nicosia for the amount of 800 k PLN, with maturity date falling on April 2nd, 2012. The interest rate is 12% per annum. Interest as of March 31st, 2012 amounted to 18 k PLN. Outstanding principal amount is 460 k PLN.



24. ISSUED BONDS 2012 2011

As of January 1st 3 046 2 210

Accruals 1 095 5 653

issued bonds - par value, including: 1 000 4 500

issued bonds RUBICON series N 0 1 500

issued bonds CONTANGO series R 0 1 000

issued bonds QUANTUM series S 0 1 000

issued bonds QRL series T 0 1 000

issued bonds Grzegorczuk Cezary series U 1 000 0

interest on bonds, including: 95 153

interest on bonds QUANTUM series B 0 54

interest on bonds RUBICON series N 0 52

interest on bonds CONTANGO series R 30 20

interest on bonds QUANTUM series S 30 20

interest on bonds QRL series T 26 7

interest on bonds Grzegorczuk Cezary series U 9 0

Other increases, including: 0 1 000

bonds RUBICON series N rolled into series P 0 1 000

Reductions 0 -4 817

redeemed bonds - par value, including: 0 -3 770

redeemed bonds RASTING series A 0 -150

redeemed bonds QUANTUM series B 0 -2 120

redeemed bonds RUBICON series N 0 -500

redeemed bonds RUBICON series P 0 -1 000

paid interest on bonds, including: 0 -47

paid interest on bonds QUANTUM series B 0 -3

paid interest on bonds RUBICON series N 0 -44

Other decreases - rolling forward, including: 0 -1 000

Nominal value 0 -1 000

rolling forward of RUBICON series N bonds into series P nominal value 0 -1 000

As of March 31 st 4 141

As of December 31 st 3 046

short-term portion 4 141 3 046

including principal amount 4 000 3 000

including interest 141 46



Terms of issued bonds liabilities were presented in the table below:

Nominal value Interest charged

Interest rate Redemption date

Issued bonds CONTANGO series R nominal value 1 000 50 12% April 3rd, 2012

Issued bonds QUANTUM series S nominal value 1 000 50 12% April 3rd, 2012

Issued bonds QRL series T nominal value 1 000 33 10,5% January 31st, 2012

Grzegorczuk Cezary series U nominal value 1 000 8 12,0% April 2nd, 2012

Total: 4 000 141

Series S and series R bonds issued by Mediatel S.A. are secured.

Series S bonds of November 2nd, 2011 - redemption of bonds was secured with the statement on submission to enforcement in accordance with art. 777 par. 1 point 4 of the Civil Procedure Code (in the form of a notarial deed) issued by Mediatel S.A. in relation to the obligation to redeem the bonds up to the amount of 1,100 k PLN.

Series R bonds of November 2nd, 2011 - redemption of the bonds was secured with the statement on submission to enforcement in accordance with art. 777 par. 1 pt. 4 of the Civil Procedure Code (in the form of the notarial deed) issued by Mediatel S.A. in relation to the obligation to redeem bonds up to the amount of 1,100 k PLN.

Other bonds were not secured.

As of March 31st, 2012 the liabilities resulting from the series T bonds became overdue. On April 2nd Mediatel S.A. entered into an offset agreement with the bond holder, in accordance with the liability will expire. Information about the offset was presented in note 31.

25. FINANCIAL LEASE LIABILITIES

31.03.2012 31.12.2011

Less than 1 year 978 1 057

1 to 5 years 0 209

Current value of minimum lease fees 978 1 266

Future interest expense 5 52

Total minimum lease fees 983 1 318

In accordance with the Group’s policy some of the assets (mostly means of transport and machinery) are used under financial lease contracts. Average lease period is between 3 and 4 years. In the period ended on March 31st, 2012 average effective interest rate of lease liabilities was 9%. The interest rate is fixed and agreed at the start of the lease. All lease contracts have a predefined payment schedule and the Group did not enter into any contingent payment by instalment contracts. The Group’s lease liability is secured for the benefit of the lessor with the leased tangible assets.



26. RESERVES

Reserve on lawsuits Reserve for audit and preparation

of the statements

Reserve for uninvoiced expenses

Total

As of January 1st, 2011 536 0 0 536

Created reserves during the year 151 35 32 218

Utilised reserves 0 -6 0 -6

As of December 31st, 2011 687 29 32 748

Reserve on lawsuits Reserve for audit and preparation

of the statements

Reserve for uninvoiced expenses

Total

As of January 1st, 2012 687 29 32 748

Created reserves during the year 0 10 110 120

Utilised reserves 0 -29 -32 -61

As of March 31st, 2012 687 10 110 807

Reserve on lawsuits

The reserve established by the Company is related to the lawsuit by writ of payment filed by Europolis against the Company, as described in the lawsuits note.

27. CONTINGENT ASSETS AND LIABILITIES

As of March 31st, 2012 the Company is a party/guarantor to the following credit agreements:

- Elterix S.A. is the guarantor of the blank promissory note issued by Mediatel S.A. The promissory note secures the repayment of receivables of BRE Bank S.A. under the credit contracted to purchase the Velvet Telecom LLC.

- Elterix S.A. is the credit guarantor

- Elterix S.A. is a party to the Credit Agreement no. 02/205/10/Z/VU of July 1st, 2010 between BRE Bank S.A. and Mediatel S.A. and Elterix S.A., in accordance with which BRE Bank S.A. granted to the borrowers jointly a current account overdraft facility in the total amount not exceeding 5 million PLN.

Other contingent liabilities in k PLN

31.03.2012 31.12.2011

Promissory note guarantee 508 508

Lawsuit liabilities 0 472

Total 508 980

Other contingent liabilities in k EUR

31.03.2012 31.12.2011

Guarantees and suretyships 26 26

Total 26 26



Guarantees and suretyships in k PLN 31.03.2012 31.12.2011

Blank promissory note of MNI Mobile S.A. 508 508

Blank promissory note Mediatel 4B Sp. z o.o. 0 800

Blank promissory note TK Telecom Sp. z o.o. 0 200

Total 508 1 508

Details of lawsuit liabilities are presented in note no. 28.

28. ACTIONS IN COURT AND PROCEEDING BEFORE ADMINISTRATI VE BODIES

Actions in court and proceedings before competent arbitrary and administrative bodies

The action brought by Mediatel S.A. against EGT EUROTELEKOM

On February 4th, 2009 Mediatel S.A. brought an action to the District Court in Warsaw against EGT EUROTELEKOM for discontinuation of enforcement of the enforceable document – order for payment of August 27th, 2008, issued by the District Court in Gdansk, IX Commercial Division in the case file no IX GNc 315/08, (adverse action).

On June 25th, 2009, Mediatel replaced the action for discontinuation of enforcement with the action against EGT EUROTELEKOM for payment of: 637,707.86 PLN under unjust enrichment and damage sustained by Mediatel as a result of unjust enforcement effected by the enforcement officer at the District Court for the city of Warsaw, file case no KM 150/09, effected under the order of payment of 27 August 2008 issued by the District Court in Gdansk, IX Commercial Division.

In the opinion of Mediatel the enforcement was groundless as the liability, ordered to be paid by the Court in Gdansk, expired. The liability expired as a result of the offset of Mediatel receivables due from EGT EUROTELEKOM with receivables of EGT EUROTELEKOM due from Mediatel in the proceedings opened by the Regional Court in Warsaw file case no XX GNc 17/09.

On June 13th, 2011 the Circuit Court in Warsaw, the XVI Commercial Department issued a verdict in which it dismissed the proceedings in the scope of denying the enforceability of the enforcement title, ordered Eurotelekom to pay to Mediatel the amount of 404,633.78 PLN with statutory interest charged from October 12th, 2010 to the actual payment date, and dismissed the remaining portion of the lawsuit, and ordered Mediatel to pay the amount of 22,336.26 PLN as reimbursement of legal representation expenses. The verdict is not final, and on September 2nd, 2011 EGT EUROTELEKOM appealed against the verdict. The date of the hearing is yet to be determined. The Management Board is of the opinion that the action is fully grounded.

The action brought by Mediatel against the EUROPOLIS Bitwy Warszawskiej Sp. z o.o. (“Europolis”)

On November 10th, 2010 a lawsuit was filed against Europolis to invalidate the lease between Mediatel and Europolis of July 27th, 2010 due to the termination of the lease by Mediatel on April 30th, 2010. The value of object in dispute was 1,544,630.88 PLN and was calculated in accordance with art. 23 of the Civil Procedure Code as annual lease rent. The court merged this lawsuit for joint examination with the lawsuit filed by Europolis Bitwy Warszawskiej sp. z o.o. against Mediatel filed on November 17th, 2010 for the payment of 332,799.00 PLN of lease rent, which was previously being examined as case no. XX GC 53/11.

On January 26th, 2012 the court issued a verdict in both lawsuits, in which it dismissed the lawsuit filed by Mediatel and ordered Mediatel to pay to Europolis Bitwy Warszawskiej Sp. z o.o. the amount of 328,280.42 PLN with interest, and 7,217 PLN as reimbursement of costs of legal representation and the amount of 23,744 PLN as reimbursement of the costs of the proceedings and the amount of 7,200 PLN as reimbursement of the costs of legal representation. The verdict became final on April 27th, 2012.

Guarantees and suretyships in k EUR

31.03.2012 31.12.2011

Blank promissory note LIM JV Sp. z o.o. 26 26

Total 26 26



The payment lawsuit filed by Mediatel against Mediatel 4B sp. z o.o. (currently UPC Polska Sp. z o.o.)

On April 5th, 2011 Mediatel filed a lawsuit in court for the payment of 478,657 PLN. The parties to the proceedings are Mediatel (claimant) and UPC Polska Sp. z o.o. (as successor of Aster Sp. z o.o. in Warsaw being the successor of Mediatel 4B Sp. z o.o.) (defendant). In the lawsuit against UPC Polska Sp. z o.o. Mediatel is demanding payment of the principal amount of 478,656.53 PLN plus interest, which the amount results from sale invoices for telecommunication services provided by Mediatel on the basis of the telecommunication services agreement of July 2nd, 2010 by and between Mediatel and Mediatel 4B Sp. z o.o. On June 7th, 2011 the Court issued a writ of payment in the proceedings based on claims of the parties for the amount demanded by the claimant. The defendant appealed against the writ of payment. The date of the first hearing is yet to be determined. The Management Board is of the opinion that the action is fully grounded.

Proceedings against Mediatel and Elterix before the Arbitration Court

On June 10th, 2011 Aster Sp. z o.o. in Warsaw (the legal successor of which is UPC Polska Sp. z o.o. as of January 2nd, 2012) instituted two separate proceedings against Mediatel and Elterix jointly and severally: (1) for the amount of 133,825.93 PLN as compensation for the lost income from six not transferred business customers for the period from July 3rd, 2010 to March 31st, 2011 and (2) for the amount of 338,662.32 PLN as a result of the breach of ban on competition in relation to 39 entities.

In both cases on March 8th, 2012 the Arbitration Court at the Polish Chamber of Commerce in Warsaw issued two verdicts. In the verdict of the Arbitration Court in the case for the payment of 338,662.32 PLN as a result of the breach of the ban on competition in relation to 39 entities, the court dismissed entirely the lawsuit filed by Aster Sp. z o.o. (currently UPC Polska Sp. z o.o.) and ordered UPC Polska Sp. z o.o. to pay the amount of 11,259.50 PLN to Mediatel as reimbursement of legal representation costs.

The verdict of the Arbitration Court in the case for the payment of 133,825.93 PLN of damages for the lost income from six not transferred business customers for the period from July 3rd, 2010 to March 31st, 2011 the court ordered Mediatel and Elterix S.A. as joint debtors to pay to UPC Polska Sp. z o.o. the amount of 122,429.60 PLN with statutory interest as of April 24th, 2011 to the actual payment date and dismissed the remaining part of the case and also awarded UPC Polska Sp. z o.o. the amount of 11,006.10 PLN of reimbursement of the arbitration fee and registration fee and the amount of 4,603.05 PLN as reimbursement of legal representation costs. The aforementioned verdicts of the Arbitration Court of March 8th, 2012 are final.

The proceedings before the Polish Financial Supervision Authority based on the Mediatel S.A. petition for re-examination

On September 6th, 2011 the Financial Supervision Authority (KNF) decided to impose a fine in the amount of 30,000 PLN on Mediatel S.A. because it found that the Company failed to comply with the obligation defined in art. 56 par. 1 point 1 of the Act on the Public Offer and Terms and Conditions of Introducing Financial Instruments into Organised Turnover and on Public Companies, as a result of the publication of a confidential information concerning the signing of a letter of intent by the Company with MNI S.A. on January 17th, 2011 regulating terms of future cooperation in the scope of consolidation or sale of selected assets without annotation that the letter of intent was concluded with a condition subsequent.

On October 4th, 2011 the Company filed a petition with the Polish Financial Supervision Authority for re-examination of the aforementioned case in which the KNF issued its decision on September 6th, 2011. On February 7th, 2012 KNF upheld its decision of September 6th, 2011.

On February 22nd, 2012 the Company filed an appeal with the Voivodeship Administrative Court against the KNF decision of 7 February 2012 with a request to suspend the execution of the KNF’s decision of February 7th, 2011.

The lawsuit by writ of payment filed by Elterix S.A. against GRUPA Onet.pl S.A.

On March 31st, 2011 Elterix S.A. filed a lawsuit by writ of payment with the Court against Grupa ONET.pl S.A. on the basis of the sale invoices issued to Grupa ONET.pl on the basis of cooperation agreement of July 4th, 2006 with Grupa ONET.pl S.A. The value of the object in dispute amounted to 50 k PLN. On April 8th, 2011 the Court issued a writ of payment against Grupa ONET.pl for the amount of 50 k PLN with statutory interest for the period from December 31st, 2010 to the actual payment date and the amount of 3,042 PLN of costs of the proceedings.



On May 8th, 2011 Grupa ONET.pl S.A. appealed against the aforementioned writ of payment. The Court transferred the case to be examined during a trial. The Company is waiting for the next court hearing. Meanwhile on December 28th, 2011 Elterix S.A. filed a petition with the court to call Grupa ONET.pl S.A. to a settlement attempt in the lawsuit by writ of payment concerning the remaining amount resulting from the sales invoices issued to Grupa ONET.pl on the basis of the cooperation agreement of July 4th, 2006, i.e. up to the amount of 1,164,649.00 PLN with statutory interest from 31 December 2010 to the payment date.

Due to the aforementioned petition the court set a date of the reconciliatory hearing as April 17th, 2012. If an agreement with Grupa ONET.pl is not reached during the proceedings Elterix S.A. intends to sue for 1,164,649.00 PLN by filing a lawsuit by writ of payment against Grupa ONET.pl.

Payment lawsuit filed by Mediatel against Cesia Mobile Marketing, Inc.

On March 21st, 2012 Mediatel S.A. filed a payment lawsuit in court against Dynamic Analojix, Inc. in New York, currently operating as Cesia Mobile Marketing, Inc. (defendant). The value of the object of dispute is 1,258,008.58 USD (say: one million two hundred fifty eight thousand and eight American dollars and 58 cents). In the lawsuit against Cesia Mobile Marketing, Inc. Mediatel is claiming payment of the principal amount of 1,258,008.58 USD with interest charged from July 16th, 2010; the amount results from the sale invoices for telecommunication services provided by Mediatel under the telecommunication services agreement of September 26th, 2007 between Mediatel and Dynamic Analojix, Inc. The Management Board is of the opinion that the action is fully grounded.

The lawsuit by writ of payment filed by Elterix against Telecom.

On March 21st, 2012 Elterix filed a lawsuit by writ of payment against in court against: (1) Liberty Telecom, Inc. in New York, (2) Liberty Telecom Solutions International, LLC in New York and (3) Liberty Telecom Solutions, LLC in New York. The value of the object in dispute is 1,229,209.00 USD (say: one million two hundred twenty nine thousand two hundred and nine American dollars). In the lawsuit filed against the aforementioned companies, Elterix is claiming payment of the principal amount of 1,229,209.00 USD with interest charged from July 16th, 2010; the amount results from the sale invoices for telecommunication services provided by Mediatel under the telecommunication services agreement of September 2nd, 2008 between Elterix and Liberty Telecom, Inc. The Elterix S.A. Management Board is of the opinion that the action is fully grounded.

Payment lawsuit filed by Mediatel against Polska Telefonia Regionalna Sp. z o.o.

On April 25th, 2012 the Company filed a lawsuit by writ of payment against Polska Telefonia Regionalna Sp. z o.o. for the payment of the amount of 61,690.71 PLN for the provided telecommunication services and the amount of 9,142.56 PLN of capitalised interest as of 20 April 2012 on the aforementioned unpaid amount with statutory interest for default as of the date of the lawsuit to the date of actual payment.

On May 11th, 2012 the Company filed a lawsuit by writ of payment in court against Polska Telefonia Regionalna Sp. z o.o. for the amount of 125,887.00 PLN with statutory interest charged from the date of the lawsuit to the date of payment, costs of proceedings and costs of legal representation, in relation to the loan granted on the basis of the loan agreement of November 5th, 2009. In accordance with the agreement the defendant was bound to repay the loan in the amount of 100,000 PLN by December 25th, 2011.

29. REMUNERATION OF THE MANAGEMENT BOARD AND SUPERVISOR Y BOARD

Remuneration of the Management Board members, key m anagerial staff and supervising bodies of the domin ant entity

Remuneration of the Management Board Members

Costs arising from remuneration paid to the managerial staff in three months ended on March 31st, 2012 and March 31st, 2010 amounted to 115 k PLN and 168 k PLN respectively.

Remuneration of the Supervisory Board Members

in the period of three months ended on March 31st, 2012 and March 31st, 2011 no remuneration was paid to the Issuer’s supervisors.



30. TRANSACTIONS WITH AFFILIATES

31.03.2012 31.12.2011

Investment in subsidiaries: 454 454

Consolidated entities 454 454

Elterix 355 355

TelePin 99 99

Other short-term receivables from: 4 914 4 914

Consolidated entities 4 914 4 914

Elterix 4 914 4 914

Short-term trade receivables from: 2 220 8 470


Elterix 2 021 1 644

Velvet Telecom LLC 144 6 797

TelePin 16 12

Sieci Cyfrowe 0 13

Other entities 39 4

NFI Magna Polonia 0 4

Info TV* 39 0

Short-term trade liabilities due to: 93 41


Velvet Telecom LLC 85 5

Other entities 8 36


Liabilities resulting from received loans: 2 494 2 531

Other entities 2 494 2 531

NFI Magna Polonia 2 494 2 531

Issued bonds: 9 518 9 427


Elterix 886 886

Sieci Cyfrowe 7 599 7 534

Other entities 1 033 1 007

Rasting Limited 1 033 1 007

01.01.2012-31.03.2012

01.01.2011-31.03.2011

Net income on sale of products and services from re lated parties: 353 557


Elterix 299 440

Other entities 54 117

Info TV* 54 117



01.01.2012 31.03.2012

01.01.2011-31.03.2011

Costs of products and services sold to related part ies: 264 389


Elterix 256 389

Other entities 8 0


Other operating income: 19 35


Elterix 15 28

TelePin 2 4

Sieci Cyfrowe 2 3

Other operating costs: 64 0


Elterix 64 0

Financial income: 0 50


Elterix 0 10

TelePin 0 8

Other entities 0 32


Financial costs: 267 192


Sieci Cyfrowe 147 138

Elterix 13 51

Other entities 107 3


Rasting Limited 44 0

Mutual transactions between the parent company’s subsidiaries (consolidated entities) were excluded from the consolidated financial statements.

The group stated in this note also disclosed transactions with NFI Magna Polonia S.A., Info TV OPERATOR Sp. z o.o. and Rasting Limited (other entities). NFI Magna Polonia S.A. is the parent company of Mediatel S.A. Info TV OPERATOR Sp. z o.o. is a subsidiary of NFI Magna Polonia S.A. Rasting Limited is the major shareholder of NFI Magna Polonia S.A.

Due to the sale of shares held by NFI Magna Polonia S.A. in INFO TV FM Sp. z o.o. in 2012 and the acquisition of shares in INFO TV OPERATOR the comparative data include the transaction with INFO TV FM and the current period data include the transactions with INFO TV OPERATOR Sp. z o.o.

31. EVENTS AFTER THE BALANCE SHEET DATE

On April 2nd, 2012 Mediatel prematurely redeemed for cancellation 2 unsecured registered bond series U numbers 1-2 issued by Mediatel on March 5th, 2012 of 1 m PLN of nominal value. The series U bonds were redeemed by Mediatel for the total amount of 1,024,985.56 PLN.



On April 2nd, 2012 the Mediatel Management Board adopted a resolution concerning the issue, while waiving pre-emptive rights inuring to the Company’s current shareholders, of 2 million series B subscription warrants entitling to subscription for 2 million series K shares for the issuing price of 2 PLN per each series K share. The issue of the series B subscription warrants is free of charge and exclusively to be offered to not more than three designated entities.

On April 2nd, 2012 the Mediatel Management Board adopted a resolution to increase the Company’s share capital as a part of the authorised capital while waiving the pre-emptive rights, and to amend the Company’s Statute. By virtue of the aforementioned resolution the Management Board increased the share capital by 400,000.00 PLN i.e. from 1,816,503.00 PLN to 2,216,503.00 PLN. The funds obtained from the series K shares issue will be used to restructure the Company’s debt.

On April 2nd, 2012 a receivables offset agreement was concluded between Mediatel S.A. and NFI Magna Polonia S.A. As a result of the agreement, receivables of NFI Magna Polonia S.A. in the nominal amount of 2,348,358.49 PLN resulting from the following agreements:

a. loan of September 23rd, 2011 in the nominal amount of 500,000 PLN, which matured on April 6th, 2012 and repaid by Mediatel on October 21st, 2011 in the amount of 15,000 PLN and on March 5th, 2012 in the amount of 100,000 PLN

b. loans of October 28th, 2011 in the nominal amount of 963,358.49 PLN, which matured on April 6th, 2012,

c. loans of October 31st, 2011 in the nominal amount of 1,000,000 PLN, which matured on April 6th, 2012

were balanced with the Mediatel S.A. receivables resulting from the acquisition by NFI Magna Polonia S.A. of 1,000,000 series K ordinary bearer’s shares in the share capital of Mediatel S.A. Mediatel S.A. agreed to repay the amount of 348,358.49 PLN remaining after the offset with interest on the aforementioned loans to NFI Magna Polonia S.A. by June 30th, 2012.

On April 2nd, 2012 a receivables offset agreement was concluded between Mediatel S.A. and QRL Investments Limited. In accordance with the agreement receivables of QRL Investments Limited resulting from the issued bonds series T numbers 1 to 10 of total value of 1,000,000.00 PLN were balanced with the receivables of Mediatel S.A. resulting from the QRL Investment Limited’s acquisition of ordinary bearer’s shares series K.

On April 3rd, 2012 Mediatel redeemed for cancellation 1 unsecured registered bond series S issued on November 2nd, 2011 by Mediatel of 1 million PLN of nominal value. The series S bond was redeemed by Mediatel for the total amount of 1,052,177.81 PLN.

On April 3rd, 2012 Mediatel redeemed for cancellation 1 unsecured registered bond series R issued on November 2nd, 2011 by Mediatel of 1 million PLN of nominal value. The series R bond was redeemed by Mediatel for the total amount of 1,052,177.81 PLN.

On April 3rd, 2012 Mediatel issued 1 unsecured registered bond series W of 600 k PLN of nominal value. The series W bond issue is used to finance the Company’s activities. The bond interest rate is 12% per annum, and the redemption date is May 15th, 2012.

On April 20th, 2012 the District Court of the capital city of Warsaw in Warsaw, the 12th Commercial Department of the National Court Register registered the increase in the Mediatel’s share capital by the amount of 400 k PLN. After the registration the Company’s share capital totals 2,216,503.00 PLN.

On April 25th, 2012 the Company received Piotr Nadolski’s resignation from the Supervisory Board of Mediatel.

On April 25th, 2012 the Company filed a lawsuit by writ of payment against Polska Telefonia Regionalna Sp. z o.o. for the payment of the amount of 61,690.71 PLN for the provided telecommunication services and the amount of 9,142.56 PLN of capitalised interest as of 20 April 2012 on the aforementioned unpaid amount with statutory interest for default as of the date of the lawsuit to the date of actual payment.

On April 26th, 2012 the Extraordinary Stockholders Meeting of Mediatel S.A. was convened that adopted the following resolutions:

- acceptance of the Management Board's report on the Company's activities for the period from January 1st, 2011 to December 31st, 2011

- acceptance of the Management Board's report on the activities of the Mediatel S.A. Group for the period from January 1st, 2011 to December 31st, 2011

- acceptance of the Company's financial statements for the financial year from January 1st, 2011 to December 31st, 2011



-

- acceptance of the Mediatel S.A. Group’s consolidated financial statements for the financial year from January 1st, 2011 to December 31st, 2011

- acceptance of the Mediatel S.A. Supervisory Board’s report for the financial year 2011

- discharging the Management Board members from their duties performed in the year 2011

- discharging the Supervisory Board members from their duties performed in the year 2011

- absorption of the Company’s loss for the financial year from January 1st, 2011 to December 31st, 2011

- absorption of the Company’s loss for the financial year from January 1st, 2011 to December 31st, 2011 and further existence of the Company

On April 27th, 2012 the verdict issued by the Circuit Court in Warsaw, the 20th Commercial Division in the case no. XX GC 768/10 became non-appealable. The verdict dismisses Mediatel’s lawsuit to deny the lease and to award Mediatel with the amount of 328,280.42 PLN with statutory interest charged as of October 21st, 2010 and the amount of 23,744.50 PLN of legal representation cost reimbursement from Europolis Bitwy Warszawskiej Sp. z o.o.

On April 27th, 2012 Annex 4 to the USD investment credit agreement no. 02/232/09/D/IN was concluded between Mediatel S.A. and BRE BANK S.A. The final credit repayment date was agreed as December 31st, 2012. As of April 30th, 2012 the Company will be repaying monthly instalments of 5 k USD, and the last instalment shall be repaid by December 31st, 2012 in the amount of 255,500.00 USD.

On April 27th, 2012 Annex 5 to the current account overdraft agreement no. 02/205/10/Z/VU was concluded between Mediatel S.A. and Elterix S.A. and BRE BANK S.A. The final overdraft balance repayment date was agreed as December 28th, 2012.

On May 11th, 2012 the Company filed a lawsuit by writ of payment in court against Polska Telefonia Regionalna Sp. z o.o. for the amount of 125,887.00 PLN with statutory interest charged from the date of the lawsuit to the date of payment, costs of proceedings and costs of legal representation, in relation to the loan granted on the basis of the loan agreement of November 5th, 2009. In accordance with the agreement the defendant was bound to repay the loan in the amount of 100,000 PLN by December 25th, 2011.

Signatures of all Executive Directors

Mirosław Janisiewicz – Chairman of the Board

...................................................................................

Zbigniew Kazimierczak – Management Board Member Marek Nowakowski - Członek Zarządu

................................................................................... ...................................................................................

Signature of person entrusted with accounting ledge rs

Sandra Łosiak - Accounting Team Manager

FIGURES Kancelaria Rachunkowa Sp. z o.o.

...................................................................................

Poznań, May 11th, 2012

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