ZPUE S.A. Capital Group in Włoszczowa · - sales of distribution transformers, - sales of scrap...

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ZPUE S.A. Capital Group in Włoszczowa

Consolidated interim financial statements

for the period from 01.01.2012 to 30.06.2012

together with

Separate interim financial statements for the period from 01.01.2012 to 30.06.2012

prepared in accordance with International Financial Reporting

Standards

including:

1. Introduction to consolidated interim financial statements

2. Consolidated interim statement of the financial standing

3. Consolidated interim profit and loss account,

4. Consolidated interim statement of total revenue,

5. Consolidated interim cash flow statement

6. Consolidated interim statement of changes in equity capital

7. Additional information and clarifications

8. Introduction to separate interim financial statements

9. Separate interim statement of the financial standing

10. Separate interim profit and loss account

11. Separate interim cash flow statement

12. Separate interim statement of changes in equity capital

13. Additional information and clarifications

Włoszczowa, August 2012

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Introduction to consolidated interim financial statements

1. The financial statements cover consolidated data of ZPUE SA Capital Group, which comprises the

following entities:

a) Parent Company:

ZPUE Spółka Akcyjna in Włoszczowa, ul. Jędrzejowska 79c, 29-100 Włoszczowa, the core business of

which includes:

manufacture of concrete construction products, except for prefabricated buildings,

manufacture of metal structures,

manufacture of parts for construction joinery,

manufacture of switchgear and controlgear, except for services,

services of installation, repair and maintenance of switchgear and controlgear,

civil engineering works aimed at construction of the switchgear line structures: local cable pipelines,

power engineering lines and telecommunications lines,

Freight transport by road by universal vehicles.

Authority with which the Parent Company is registered:

District Court in Kielce, 10th Commercial Division of the National Court Register

KRS number – 0000052770;

Life of the Company: perpetual

Period covered by the financial statements: 01.01.2012-30.06.2012, together with comparable data

for the period: 01.01.2011-30.06.2011

Structure of the authorities:

The following are Company's authorities: General Shareholders' Meeting, Supervisory Board and

Management Board.

Supervisory Board

As at 30 June 2012 the Supervisory Board of ZPUE SA in Włoszczowa comprised the following

members:

President of the Supervisory Board – Bogusław Wypychewicz

Vice President of the Supervisory Board – Małgorzata Wypychewicz

Member of the Supervisory Board – Krzysztof Jamróz

Member of the Supervisory Board – Tomasz Stępień.

Member of the Supervisory Board – Piotr Kukurba

Management Board

As at 30 June 2012, the Management Board of ZPUE SA in Włoszczowa comprised the following

members:

President of the Board – Andrzej Grzybek

Member of the Board – Stanisław Toborek

Member of the Board – Mariusz Synowiec

COMMERCIAL PROXIES

As at 30 June 2012, the following persons acted as the Commercial Proxies of ZPUE S.A.:

Commercial Proxy – Piotr Zawadzki

Commercial Proxy – Katarzyna Kusa

Commercial Proxy – Iwona Dobosz

Commercial Proxy – Henryk Arkit

Commercial Proxy – Aneta Lichosik

Commercial Proxy – Jadwiga Zawisza

Commercial Proxy – Wojciech Pyka

Commercial Proxy – Dariusz Górski

(b) subsidiaries:

1. ZPUE Gliwice Spółka z ograniczoną odpowiedzialnością, with its registered office in 44-100

Gliwice, ul. Portowa 14, the core business of which includes manufacture of power engineering

equipment, as well as repair and measuring services for electro-engineering industry.

The Production Department undertook the following tasks:

- production of thermosetting LV cable connectors,

- installation of cable connectors, test and street lighting cabinets,

- installation of container transformer stations,

- manufacture of LV, RSW type chemically hardened resin switchgear enclosures

The Repairs and Measurements Department undertook the following tasks:

- maintenance of tap changers of HV / MV transformers,

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- measurements of HV/MV and MV/LV transformers,

- measurements of HV devices,

- maintenance and repair of distribution transformers,

- thermal video measurements of transformer stations

- measurements of safety equipment,

- analysis of transformer oil.

The company also conducted commercial activity in the following fields:

- sales of LV and MV switchgears,

- sales of container and pole transformer stations,

- sales of accessories for overhead power lines and power poles

- sales of distribution transformers,

- sales of scrap iron and nonferrous metals,

- sales of electrical insulation safety equipment.

- Authority with which the Subsidiary is registered: District Court in Katowice

- Life of the Company: perpetual

- Period covered by the financial statements: 01.01.2012-30.06.2012, together with

comparable data for the period: 01.01.2011-30.06.2011

Structure of the governing bodies


Management Board.

Supervisory Board

As at 30 June 2012 the Supervisory Board of ZPUE Gliwice Sp. z o.o. in Gliwice comprised the

following members:

President of the Supervisory Board – Andrzej Grzybek

Vice President of the Supervisory Board – Tomasz Stępień

Member of the Supervisory Board – Iwona Dobosz

Member of the Supervisory Board – Stanisław Toborek

Member of the Supervisory Board – Krzysztof Jamróz

Member of the Supervisory Board – Leszek Gluziński

Resolution No 26/06/2012 of 27 June 2012 introduced amendments to the Deed of the Company.

The current provision referring to the “Chairman and Deputy Chairman of the Supervisory Board”

shall be repealed, and a provision referring to the “President and Vice President of the Supervisory

Board” shall be introduced

Management Board

As at 30 June 2012, the Management Board of ZPUE Gliwice Sp. z o.o in Gliwice comprised the

following members:

President of the Board – Damian Asztabski,

Member of the Board – Joanna Baran

Member of the Board – Grzegorz Kalinowski

2. Elektromontaż-1 Katowice S.A.

Elektromontaż-1 Katowice S.A. manufactures power engineering equipment, including medium and

low voltage switchgears, switchgear and control cabinet enclosures, transformer enclosures, low and

medium voltage bus bars, automatic transfer switching equipment as well as capacitor banks for

compensation of reactive power. Elektromontaż-1 Katowice S.A. has operated on the market as a

manufacturer of electrical equipment since 1948. In 1992, it was transformed into a sole-shareholder

company of the State Treasury and in 1995 incorporated into the Mass Privatisation Programme. In

1998, the controlling stake of Elektromontaż was taken over by Klöckner-Moeler based in Germany.

In 2004, the said stake was purchased by Transforma Project Management GmbH based in Germany

and in 2007 Bogusław Wypychewicz was the main shareholder. On 23 May 2007, the company's

name was changed to Elektromontaż-1 Katowice Spółka Akcyjna.

Elektromontaż-1 Katowice Spółka Akcyjna with its registered office in Katowice was established

based on Articles of Association evidenced by a notarial act. The Company began operating in 1992

on the day it was first entered on the Commercial Register of the District Court in Katowice under

the no. RHB – 8398. It was entered into the National Court Register on 25 January 2002 under KRS

number: 0000083973. The entity keeping the register is the District Court Katowice-Wschód in

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Katowice, 8th Commercial Division of the National Court Register. According to the Polish

Classification of Economic Activities, the Company's core business is the manufacture of switchgear

and controlgear (PKD 27.12.Z).

The share capital of Elektromontaż-1 Katowice S.A. amounts to PLN 6,628,902.72 PLN and is

divided into 1,883,211 shares of the value of PLN 3.52 per share. ZPUE S.A. holds 1,870,439 shares

of Elektromontaż-1 Katowice S.A., representing 99.32% of its share capital and entitled to exercise

99.32% of the votes at the General Shareholders' Meeting of Elektromontaż-1 Katowice S.A.

- Authority with which the Subsidiary is registered: District Court Katowice-Wschód in

Katowice


- Period covered by the financial statements: 01.01.2012-30.06.2012

Supervisory Board

As at 30 June 2012 the Supervisory Board of ZPUE Katowice S.A. comprised the following

members:

President of the Supervisory Board – Andrzej Grzybek

Vice President of the Supervisory Board – Krzysztof Jamróz

Member of the Supervisory Board – Iwona Dobosz

Member of the Supervisory Board – Tomasz Stępień

Member of the Supervisory Board – Mariusz Synowiec

Member of the Supervisory Board – Leszek Gluziński

Management Board

As at 30 June 2012, the Management Board of ZPUE Katowice S.A. comprised the following

members:

President of the Board – Jan Wiatowski

Member of the Board – Leszek Wójtowicz

3. ZPUE Tools Sp. z o.o. in Włoszczowa

Owing to its modern machine park, ZPUE Tools Sp. z o.o. specializes in manufacture of blanking

dies, injection moulds, press moulds. Furthermore, ZPUE Tools Sp. z o.o. offers machining services.

It prepares moulds for our Group for the manufacture of thermosetting plastic components such as

casings for cable connectors as well as the moulds for manufacture of spun concrete poles, a wide

range of tools (moulds, die blocks, trimming dies), various components and minor elements used in

the manufacture of the power engineering equipment.

It was entered into the National Court Register on 21 March 2006 under KRS number: 0000253345.

The entity keeping the register is the District Court in Kielce, 10th Commercial Division of the

National Court Register.

According to the Polish Classification of Economic Activities, the Company's core business is the

wholesale of other semi-products (PKD 4676Z).

The share capital of ZPUE Tools Sp. z o.o. amounts to PLN 60,000.00 and is divided into 12 shares

of the value of PLN 5,000.00 per share. ZPUE S.A holds 12 shares of ZPUE Tools Sp. z o.o.

representing 100% of the share capital of the said company and authorizing to 100% of votes at the

Shareholders' Meeting of ZPUE Tools Sp. z o.o.




The following are Company's authorities: General Shareholders' Meeting and Management Board.

Management Board

As at 30 June 2012, the Management Board of ZPUE Tools Sp. z o.o in Włoszczowa comprised the

following members:

President of the Board – Mariusz Synowiec

COMMERCIAL PROXIES

As at 30 June 2012, the following persons acted as the Commercial Proxies of ZPUE Tools Sp. z

o.o.:


Commercial Proxy – Wojciech Pyka

Commercial Proxy – Marian Wójcik

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4. ZPUE Poles Sp. z o.o. in Włoszczowa

ZPUE Poles Sp z o.o. manufactures the pre-tensioned spun concrete poles used as “poles” i.e. the

element on which the support structures for the medium and low voltage overhead power lines are

installed. The poles are manufactured on the optimized and automated production line. The current

production capacity of ZPUE Poles Sp. z o.o. is 16,000 spun concrete poles per year. The

incorporation of ZPUE Poles Sp. z o.o. into ZPUE S.A. Capital Group facilitates complex

performance of the contracts for the development of the overhead power lines and street lighting.

It was entered into the National Court Register on 4 May 2011 under KRS number: 0000385172. The

entity keeping the register is the District Court in Kielce, 10th Commercial Division of the National

Court Register.

According to the Polish Classification of Economic Activities, the Company's core business is the

manufacture of concrete construction products (PKD 2361Z).

The share capital of ZPUE Poles Sp. z o.o. amounts to PLN 15,000.00, and is divided into 300 shares

of the value of PLN 50.00 per share. ZPUE S.A holds 300 shares of ZPUE Poles Sp. z o.o.

representing 100% of the share capital of the said company and authorizing to 100% of votes at the

Shareholders' Meeting of ZPUE Poles Sp. z o.o.





Management Board.

Supervisory Board

As at 30 June 2012 the Supervisory Board of ZPUE Poles Sp. z o.o. in Włoszczowa comprised the

following members:

Chairman of the Supervisory Board – Bogusław Wypychewicz

Deputy Chairman of the Supervisory Board – Małgorzata Wypychewicz

Member of the Supervisory Board – Michał Wypychewicz

Management Board

As at 30 June 2012, the Management Board of ZPUE Poles Sp. z o.o. in Włoszczowa comprised the

following members:

President of the Board – Stanisław Toborek

COMMERCIAL PROXIES

As at 30 June 2012, the following persons acted as the Commercial Proxies of ZPUE Poles Sp. z

o.o.:


Commercial proxy – Krzysztof Motyl

Other unconsolidated subsidiaries

Below there is information on ZPUE S.A.'s subsidiaries, which currently are of no significance for

the Capital Group's activities:

“Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy” OOO (The Plant of

Complete Unit Transformer Substations) at the Urban Settlement of Tolmachevo (Leningrad

Oblast, Russian Federation) manufactures stations in concrete casings as well as complete

transformer stations in concrete casings. The company's legal form corresponds to a Polish

limited liability company and its share capital amounts to RUB 10,000.00. ZPUE S.A. holds

the interest of RUB 5,100.00, representing 51% of the share capital of the said company and

authorizing ZPUE S.A. to 51% of votes at the Shareholders' Meeting of the company.

“Promyshlennye investicii” OOO (Industrial Projects) at the Urban Settlement of Tolmachevo

(Leningrad Oblast, Russian Federation) leases real properties and maintains operation of

ZBKTP. The company's legal form corresponds to a Polish limited liability company and its

share capital amounts to RUB 85,000,000.00. ZPUE S.A. holds the interest of RUB

43,350,000.00, representing 51% of the share capital of the said company and authorizing

ZPUE S.A. to 51% of votes at the Shareholders' Meeting of the company.

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OOO ZPUE Ukraina (ZPUE Ukraine) based in Synelnykove (Ukraine) is engaged in trading

activity in the Ukraine. The company's legal form corresponds to a Polish limited liability

company and its share capital amounts to EUR 8,000. ZPUE S.A. holds the interest of EUR

6,400, representing 80% of the share capital of the said company and authorizing ZPUE S.A. to

80% of votes at the Shareholders' Meeting of the company.

ZPUE Trade s.r.o. (ZPUE Trade) based in Napajedla (Czech Republic) is engaged in trading

activity in the Czech Republic. The company's legal form corresponds to a Polish limited

liability company and its share capital amounts to CZK 210,000.00. ZPUE S.A. holds the

interest of CZK 154,000.00, representing 73.33% of the share capital of the said company and

authorizing ZPUE S.A. to 73.33% of votes at the Shareholders' Meeting of the company.

ZPUE Balkani, EOOD (ZPUE Balkans) based in Sofia (Republic of Bulgaria) pursues sales

activities as well as manufactures concrete enclosures in Bulgaria. The company's legal form

corresponds to a Polish limited liability company and its share capital amounts to BGN 300. ZPUE

S.A. holds 300 shares of the total value of BGN 300, representing 100% of the share capital of the

said company and authorizing ZPUE S.A. to 100% of votes at the Shareholders' Meeting of the

company.

Data for the first six months of 2012 cover financial information of the Parent Company and of the

following Subsidiaries: ZPUE Gliwice Sp. z o.o., Elektromontaż-1 Katowice S.A., ZPUE Poles Sp. z

o.o. and ZPUE Tools Sp. z o.o. Financial statements for the first six months of 2011 include

consolidated financial statement of the Parent Company and of ZPUE Gliwice Sp. z o.o.

Other companies of ZPUE S.A. Capital Group have not been consolidated due to minor importance

thereof and the difficulties related to procurement of reliable financial data.

Shares in other entities

As at 30 June 2012, ZPUE S.A. owns 28 shares in Przedsiębiorstwo Aparatów i Konstrukcji

Energetycznych ZMER Sp. z o.o. in Kalisz, entitling it to 28 votes at the Shareholders' Meeting, which

constitutes 3.92% of the total number of votes. This entity is not, however, part of ZPUE S.A. Capital

Group and is not subject to consolidation.

The statements have been prepared on the assumption that the business activity will be continued in the

foreseeable future. The Management Boards are not aware of any circumstances threatening the continuation

of the business activity.

Data presented in the consolidated financial statements have been prepared in accordance with IAS/IFRS.

The consolidated financial statements of ZPUE S.A. Capital Group cover financial statements of the Parent

Company and Subsidiaries for the period between 01.01.2012 and 30.06.2012 and comparable data for the

period between 01.01.2011 to 30.06.2011. Comparable data cover the consolidated financial statements of

the Parent Company (ZPUE S.A.) and subsidiary (ZPUE Gliwice Sp. z o.o.).

Description of the adopted accounting principles (policy), including valuation of assets and liabilities

(together with depreciation), determination of financial result and the method of preparation of

financial statements.

The accounting policies applied by the entity are adapted to the requirements of International Accounting

Standards, International Financial Reporting Standards and related interpretations published in the form of

regulations of the European Commission (hereafter IFRS), and where not covered in these Standards under

the Accounting Act and the resultant executive legislation (hereafter UOR).

2.1.The current rules for measuring assets and liabilities

Principles of recognising property, plant and equipment

The property, plant and equipment are such assets which:

- are held by the business entity for use in the production process or for the supply of goods and

services, in order to be released for the use of other entities under the lease agreement or for administrative

purposes, and

- which are expected to be used for more than one period.

The item of property, plant and equipment is recognized as an asset if it is probable that the entity will gain

future economic benefits associated with this asset and that the purchase price or cost of that asset can be

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measured reliably.

The fixed assets include;

land (including perpetual usufruct right to the land),

buildings,

civil engineering facilities,

machinery, equipment,

means of transport,

other items.

The fixed assets also include the entity's foreign fixed assets used under the rental or lease agreement

or other agreement of a similar nature, provided that other provisions of law allow depreciation write-

offs (amortization) by the party benefiting from these assets. Items priced up to PLN 3,500.00 are

recognised as materials. Upon release for use their value is written down in costs of materials and

recorded off the balance sheet (in the quantity and value register). The materials are recorded off the

balance sheet by place of use. The criterion to include materials in records was their use for more than

one year.

Fixed assets for a unit price of more than PLN 3,500.00 are entered into the register of fixed assets.

The fixed assets records allow to enter differentiators distinguishing assets financed from other

sources (e.g. from the state budget, EU subsidies.) Fixed assets are recorded in analytical positions in

accordance with Classification of Fixed Assets.

Intangible assets shall be assets suitable for commercial use at the date of acceptance for use, such as:

property rights, copyrights, licences, concessions, the rights to: designs, inventions, patents,

trademarks, decor or utility designs,

successful development costs, spending on R&D,

goodwill,

know-how

with the expected lifetime of more than one year, used for the related business activity or put into use

under lease agreement or other agreement of similar nature.

An item of property, plant and equipment which qualifies for recognition as an asset, is initially valued at

purchase price or production cost. The cost of purchase or production of property, plant and equipment

consists of the purchase price, including import duties and non-reimbursable taxes on the purchase and

all other directly attributable costs incurred to bring the asset to a fit for use condition, which is

consistent with its intended use. In the case of in-house production it is the cost of production, which

shall be the value of property used and external services, the costs of salaries including related costs and

other costs attributable to the value of manufactured fixed assets or intangible assets. The cost of

production does not include general administrative costs, sales costs, other operating and financial costs

and costs of excessive deficiencies, excessive labour and other resources during the construction,

installation or improvement of fixed assets and the adaptation for use;

In case of acquisition by inheritance or donation or otherwise free of charge, the initial value of an asset

or an intangible asset is the selling price of the same or similar item on the day of purchase, unless the

donation agreement or a free of charge transfer determines the value at a lower amount. The market price

shall be the price used in a given locality in the trade in components of the same type, kind taking into

account its condition and degree of wear.

In the case of difficulties in determining the cost of production of an asset, its initial value is determined

by an expert appraiser taking into account the market prices on the date of putting the component to use.

The basic tool for recording fixed assets is “The Inventory Book of Fixed Assets” divided into groups of

fixed assets.

“The Inventory Book of Fixed Assets” includes following items:

A separate inventory number for each item,

date of recording, evidence number, the type of evidence,

year of construction (purchase),

name of the fixed asset,

classification symbol of the asset,

initial value,

changes in value during use,

annual rate of depreciation,

annual and monthly amount of depreciation,

depreciation to date,

net value,

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the date of withdrawal from use and evidence number,

other data (department, cost position, type of funding obtained, etc.).

The basic tool for recording of intangible assets is the “Book of intangible assets”.

“The Book of intangible assets” includes the following items:

inventory number,

name,

date of purchase or manufacture,

date of booking and proof of purchase number,

date of putting to use,

initial value,


the annual, monthly, and total depreciation value,

net value,

the date of full depreciation,

date and number of withdrawal from records

other data (department, cost position, etc.).

Foreign fixed assets are recognized as off balance in account 090.”

Subsequent expenditures relating to an item of property, plant and equipment which have been already

recognized as an asset are added to the carrying value of the asset, if it is probable that the entity will obtain

future economic benefits that outweigh the benefits possible to be achieved within the originally estimated

benefits from the asset already owned. All other subsequent expenditures are recognized as an expense in the

period in which they are incurred. Expenditures for repairs and maintenance of property, plant and equipment

incurred to restore or maintain future economic benefits, which the entity can expect based on the originally

estimated benefits, are recognized as expenses when incurred.

Major components of some items of property, plant and equipment are recognized as separate assets,

including the independent period of their economic use.

Redemption

The depreciable amount of property, plant and equipment is distributed in a systematic manner over a

period of use. Depreciation method used reflects the mode of consumption by the business entity of

economic benefits from the asset.

Depreciation is recognized as an expense during the period.

The useful life of property, plant and equipment and depreciation method is reviewed annually and, if

expectations are significantly different from previous estimates, depreciation write-offs for the current

and future periods are adjusted.

The basis of depreciation write-offs (amortization) of fixed and intangible assets is a current depreciation

schedule drawn up on the first day of each financial year, setting out the rates and amounts of the annual

impairment of individual assets.

The depreciation schedule includes:

inventory number,

generic classification symbol,

item name,

date put into use,

initial value,

depreciation method,

annual depreciation rate,

annual and monthly amount of depreciation write-offs,

In the case of assets put to use on the basis of operating lease agreements which, under the

provisions of the Accounting Act are classified as fixed assets - depreciation period shall be based

on useful life.

In the event of changes in production techniques, liquidation, withdrawal from the use or other

reasons causing permanent loss of economic usefulness of an asset, appropriate unplanned

depreciation write-offs are charged to other operating costs.

Valuation of fixed assets and intangible assets

Fixed assets and intangible assets are valued at purchase price or production cost or revalued amount (after

revaluation) less depreciation write-offs and permanent impairment loss write-offs. Fixed assets and

intangible assets are redeemed using the methods set out in the preceding paragraph.

Fixed assets belonging to group 0,1 and 2 are valued by the fair value. Fixed assets belonging to other groups

are valued by the purchase prices or cost of production.

In the case of real estate (group 0) — land is valued by the fair value. They are not subject to depreciation.

Group 1 — Buildings and commercial premises valued by the fair value are redeemed for 720 months at a

rate of 1.66% per annum. Other assets comprising this group — 120-480 months.

Group 2 — Civil engineering facilities valued by the fair value are redeemed for 720 months at a rate of

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1.66% per annum. Other fixed assets — 120-300 months.

Valuation of other assets and liabilities

Fixed assets under construction are valued at total costs directly attributable to the cost of purchase or production reduced by permanent

impairment loss write-offs.

The value of assets under construction is increased by foreign exchange losses and interest on loans for the

fixed asset construction period, and is reduced by the permanent impairment loss write-offs.

Real estate are recorded and measured in accordance with the rules relating to fixed assets and intangible assets and

rights, i.e. according to the purchase price or production cost, or revalued amount, less depreciation and

permanent impairment loss write-offs.

Intangible assets classified as investments are recorded and measured in accordance with the rules relating to fixed assets and intangible assets and



Shares (stocks) in other entities and other investments classified as current assets are measured at cost less


Inventories of materials, goods, finished products, intermediates and products in progress are measured at purchase price or production cost or recoverable net value, depending on which is the lower amount.

With regard to the inventory of materials, an entity has a record of:

quantity and value of inventory.

Inventory is reconciled with the records kept by the accounting department at the end of each month.

With regard to the inventory of goods, an entity has a record of:



With regard to the inventory of finished goods, an entity has a record of:



Materials received by the warehouse are recorded by:

actual purchase prices.

Materials released from the warehouse are measured using:

First in, first out (FIFO) method.

Materials received by the warehouse are recorded by actual purchase prices.

Goods released from the warehouse are measured using:


Finished goods from production received by the warehouse are recorded by:

registration price, the ratio of value of inventories to production costs is adjusted by deviation, which are

accounted for stocks and the issued stocks based on the deviation index.

Finished goods issued from warehouse if records are kept in accordance with:

actual production cost is measured by:


Stocks of production in progress at the balance date are measured at:

direct production costs, which include costs directly related to the manufacturing entity, such as direct

labour and direct materials. They also include the uniformly distributed fixed and variable production

costs incurred in processing the materials to obtain finished products. Fixed indirect production costs are

those indirect costs of production that remain relatively constant regardless of the volume of production,

such as depreciation and cost of maintenance of factory buildings and equipment, and manufacturing

(factory) cost of management and administration. Variable indirect production costs are those indirect

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costs of production that vary directly or nearly directly with the volume of production, such as indirect

materials and labour costs.

Short-term investments are measured at the lower of two values: purchase price or market value.

Short-term investments, for which there is no active market are measured at fair value.

Receivables are measured at the amount due, taking in account the prudence principle, after impairment of their value. The receivables are revalued taking into consideration the probability of their

payment. With respect to:

• receivables from debtors in liquidation or bankruptcy – up to the amount of receivables not covered by

the guarantee or another collateral of the receivables, submitted to the liquidator or a bankruptcy judge

in the bankruptcy proceedings, upon receipt of the relevant information,

• receivables from debtors whose bankruptcy file has been rejected, if the debtor's assets are insufficient

to meet the costs of bankruptcy proceedings - in the full value, upon receipt of the court's decision,

• debt disputed by the debtors or debt overdue, when according to the assessment of the debtor's financial

position, the repayment of the contractual amounts is unlikely – up to the amount not covered by a

guarantee or another security upon referral of the debt for the enforcement proceedings pursuant to a

legally binding court's decision.

• debt equivalent to the amounts which increase the value of debt, which previously were written down -

equal to these amounts, until receipt or write-down thereof, upon receipt of the relevant information,

• overdue debt (overdue for a period exceeding 365 days) or non-overdue debt with a significant

probability of default, in cases justified by the type of the pursued activity or the customer structure - in

the amount of a reliably estimated write-down upon referral of the debt for the enforcement proceedings

pursuant to a legally binding court's decision.

Liabilities are measured in accordance with IAS 39, i.e. at amortized cost.

Financial liabilities for which maturity is specified are measured in accordance with IAS 36, i.e., at amortized cost.

Cash at hand and on bank accounts is measured at its nominal value.

Provisions for losses and liabilities are measured at a reasonable, reliably estimated value. The reserves are created when:

an entity is subject to any existing legal or customary obligation resulting from past events,

it is likely that fulfilling this obligation would lead to an outflow of resources embodying economic

benefits,

a reliable estimate of that obligation can be made.

Provisions are reduced when the obligation, which required the provisions, is fulfilled and the unused

provisions (due to the cessation or reduction in the risk of losses for which they were created) are dissolved

and credit the accounts of other operating income and financial revenue.

Valuation of financial instruments:

in the case of financial instruments for which there is an active market, fair value is determined in

accordance with their current purchase/sale price.

If there is no active market for the given item of assets or financial liabilities (and also in the case of

non-traded securities), fair value is determined using appropriate valuation techniques.

The fair value of non-traded debt securities is determined as the current value of future cash flows from

such securities, further discounted with the current interest rate.

The fair value of share units in open, cash investment funds is determined in accordance with valuation

made by these funds.

The fair value of shares in closed investment funds is determined in accordance with data included in

financial statements issued by these funds.

Own shares (stocks) are measured at their purchase price.

Capital and other assets and liabilities are valued at nominal value.

Valuation of assets and liabilities denominated in foreign currencies

11 I PAGE

On the balance date:

assets (excluding shares in subsidiaries under the equity method) and liabilities denominated in foreign

currency are measured at the average foreign exchange rate determined for that date by the National Bank of

Poland; this shall not apply to non-cash items, i.e. to the received and paid advances.

During the financial year:

1) currency sale and purchase transactions and receivables or liabilities payment operations are measured

at the buy or sell rate or the bank, whose services the entity uses or at the negotiated rate; If the bank

whose services are used by the company publishes more than one table, the company shall adopt - in

the case of publication of two tables - the exchange rates from the first published table, and in the case

of more than two tables - the exchange rates from the second exchange rate table published on a

particular date.

2) assets and liabilities denominated in foreign currencies are converted into Polish Zlotys at average

exchange rate announced by the National Bank of Poland on the last working day preceding the date

of incurred cost, unless the customs declaration or other document that binds the entity sets a different

rate;

3) currency withdrawn from the account for business trip allowances is measured at the average exchange

rate of the National Bank of Poland, and if it is purchased, at its purchased price (selling price of the

entity's bank)

4) currency outflows from foreign currency account shall be recorded according to the FIFO method

5) advances collected on foreign business trip allowances paid in Polish Zlotys are settled according to

foreign currency rates:

- average rate of National Bank of Poland from the day advances in PLN are withdrawn for the

currency, for which the company operates separate currency accounts, i.e., EURO or USD,

- sale rate on the day advances in PLN are withdrawn for other currencies.

Principles of valuation of contingent liabilities

A contingent liability is a possible liability that arises from past events and whose existence will be

confirmed only in the future at the time of uncertain events (over which the entity does not have full control).

Contingent liability may also be entity's current liability that arises from past events and which cannot be

measured with sufficient reliability or is not likely that fulfilling this liability would lead to an outflow of

resources embodying economic benefits. In connection with this, such liability is not presented in the balance

sheet, but it is described in additional information and notes to financial statements.

Liabilities resulting from guarantees or sureties granted by the entity may be the examples of contingent

liabilities.

Contingent liabilities are measured at the value of guarantees, sureties or otherwise reliably estimated value.

Principles of measuring derivative instruments hedging assets

The entity may have derivative financial instruments (e.g. forward contracts) with the following

characteristics:

their value depends on changes in the value of the underlying instrument (interest rate, base rate,

exchange rate, etc.)

initial purchase expenses do not occur or are very low,

instrument will be settled in the future.

Forward contracts may be concluded in order to protect the entity against adverse changes to its foreign

exchange rate, interest rates, stock indices.

An entity may use derivative hedging instruments in order to:

hedge fair value, that is to reduce the risk of changes in the fair value affecting the financial result

resulting from a particular risk associated with assets and financial liabilities or a specific part

thereof booked on the accounts,

hedge cash flow, that is, reduce the risk of impact of changes in cash flows on the financial result

resulting from a particular risk associated with assets and liabilities, likely future liabilities or

planned transactions, which are booked on the accounts.

Contracts associated with financial instruments reduce the risks associated with the entity's assets or

liabilities, i.e. hedge these assets or liabilities, if at least:

before the conclusion of the contract its purpose is established and assets or liabilities to be hedged

are identified,

financial hedging instrument which is the subject of the contract and the hedged assets or liabilities

are characterized by similar features, in particular the nominal value, maturity date, the impact of

changes in interest rates or currency exchange rate,

likelihood of the expected cash flows is significant.

If these conditions are met, then the valuation of the hedged assets or liabilities takes into account the value

of financial hedging instruments and changes in their value.

Hedged item can be a single booked asset or liability or the likely future liabilities or transactions not booked

into the accounts.

12 I PAGE

Hedged item may also be a group of assets or liabilities. The hedge may relate to one of the risk factors

threatening changes in fair value or cash flows, provided that the effectiveness of such risk factors can be

effectively measured.

The specific accounting principles relating to derivative financial instruments, which are not covered in this

chapter of the study, are governed by the principles set out in the Ordinance of the Minister of Finance of 12

December 2001 on detailed rules for the recognition, valuation, disclosure and presentation of financial

instruments (Official Journal No 149, item 1674).

Reserves and assets from income tax

The reserves for income tax are established in the amount of income tax payable in the future in connection

with the occurrence of positive temporary differences. Temporary differences result in an increase in the

income tax base in the future.

The amount of reserve from deferred income tax shall be determined taking into account the income tax rates

applicable when tax obligation arose, i.e. the year temporary differences are settled.

When determining the reserve, the negative difference (if occurred) settlements booked on the "Deferred tax

assets" account should be taken into account, as at the last day of the previous financial year.

Assets from deferred income tax are determined as an amount for future deduction from income tax, in

connection with negative temporary differences, which will cause in the future the reduction of income tax

base and of tax loss available for deduction, as determined taking account of the prudence principle.

The amount of assets from deferred income tax shall be determined taking into account the income tax rates


When determining the assets from the deferred income tax, the positive difference (if occurred) settlements

booked on the "Reserve for income tax" account should be taken into account, as at the last day of the

previous financial year.

Reserve for income tax and assets from deferred tax are recognised separately in the balance sheet. Reserve

and assets can be compensated if there is the title allowing for the simultaneous recognition when calculating

the amount of tax liability.

Accruals and deferred costs

Accruals and deferred costs are recognised at the amount of likely liabilities in the current reporting period,

resulting from (in particular):

1) value of the services provided by contractors, the amount of which can be estimated reliably,

2) the obligation to provide future services resulting from current operations, whose amount can be

estimated, although the date of their creation is not yet known and which could include, among others:

the costs of the auditing the financial statements and other costs for the reporting period,

other items justified by the economic risk and commercial practices.

Accruals and deferred costs are presented in the balance sheet as item B.I.3 Other short-term reserves.

Principles of valuation of deferred charges and accruals of revenue and expenses

Accruals and deferred income

Revenue accruals represent the nominal revenue (short- and long-term) on the balance date, which is settled

in future periods. Revenue accruals include, among others:

collected payments or booked receivables from contractors for the services to be performed in the

next financial year,

received grants related to the acquisition or construction of fixed assets or intangible assets. Grants

or other subsidies are recorded in correspondence with the settlement account 246, which contains a

detailed analysis of grants received. Grants booked on the account of revenue accruals are settled in

other operating income in proportion to the depreciation of fixed assets funded from grants

received. Booking fixed assets in fixed assets register in the "Fixed assets" module allows the

introduction of marking allowing the distinction of fixed assets financed by subsidy and to

determine the value of depreciation of the corresponding part funded from the grant.

Accrued costs/expenses

Deferred expenditure

Accrued expenses consist of the indirect costs. During the reporting period, accrued expenses include the

following:

cost of rents and leases paid in advance,

energy costs paid in advance,

cost of property insurance,

fees for perpetual usufruct of land,

property tax,

assets from deferred taxes,

other costs relating to subsequent reporting periods (subscription, prepayment for fairs, etc.).

13 I PAGE

Expenses to be activated on the account accruals are settled in proportion to the passage of time in

subsequent financial periods to which they relate.

Records for purposes of determining taxable income In order to properly determine the corporate tax base, the entity's accounts plan differentiates, on the one

hand, the analytical accounts grouping the basic operating costs, financial costs and other operating expenses

not deductible for the purposes of the Income Tax Act, and on the other hand the accounts grouping together

financial revenue and other operating revenue which are not revenue or are exempt from taxation. The

analytical distinction in balance sheet accounts is confirmed by the off balance grouping of costs and

revenues in accounts of group "9". In addition, the accounts group "9" records the costs and revenues that

have not been booked on the balance sheet accounts, and affect the determination of the tax base. These

include salaries, social security contributions and other employee benefits, as well as interest paid, which

were paid during the reporting period and that relate to the previous period.

2.2. The choice of the profit and loss account

ZPUE S.A. draws up profit and loss as multiples step variant.

Net result consists of:

sales revenue,

result from other operating activities

result of financial operations,

compulsory charging of financial result by corporate income tax.

Records of costs are maintained by type using the account "490 - Settlement of costs" and by function in the

group "5".

2.3. The method of drawing up a cash flow statement

The entity draws up a cash flow statement using the indirect method. Cash flow statement provides

information on cash flows occurring during the reporting period, broken down by operating, investing and

financing activities.

2.4. Statement of changes in equity

The Company prepares the statement of changes in equity.

2.5. Detail of the financial statements

The Management Board is responsible for drawing up and presenting financial statements. The report

contains the following individual components:

a) statement of the financial standing,

b) profit and loss account,

c) statement of changes in equity capital,

d) cash flow account,

e) statement of total revenue,

f) information on accounting policies and explanatory notes.

Financial statements present information that is:

(a) relevant to its users in the decision making process,

(b) reliable, that is, through which the financial statements:

- faithfully presents the financial results and financial position,

- reflects the economic substance of events and transactions and not merely their legal form,

- is objective and impartial,

- is consistent with the prudence principle,

- is complete in all material respects.

When drawing up financial statements, guiding accounting principles are used, i.e.:

- going concern principle;

- accrual principle,

- continuity of presentation principle;

- the materiality principle.

2.6. The materiality principle

It is agreed that for a true and fair presentation of the entity's financial position and profit or loss, the relevant

amounts shall be those that exceed 1% of total assets for the previous reporting period for balance sheet items

or those amounts which exceed 5% of gross earnings for amounts pertaining to the result.

14 I PAGE

The final decision as to the significance of an amount is taken by the person responsible for keeping the

books in consultation with the entity's general manager.

2.7. The following changes to the standards and interpretations were introduced over the first six

months of 2012:

Amendments to IFRS 7 Financial Instruments - Disclosures

– transfers of Financial Assets, approved in the EU on 22 November 2011 (effective for annual

periods beginning on or after 1 July 2011).

The aforesaid standards, interpretations and amendments to the standards did not significantly affect the

accounting policies pursued hitherto by the entity.

Standards and interpretations that have been published and approved by the EU, but that have not yet

entered into force

Amendments to IAS 1 "Presentation of Financial Statements" - presentation of components of other comprehensive income (effective for annual periods beginning on or after 1 July 2012), Amendments to IAS 19 "Employee Benefits" - amendments to accounting of benefits in the post-employment period (effective for annual periods beginning on or after 1 January 2013),

Standards and interpretations that have been approved by ISAB, but that have not yet been approved by

the EU

IFRS 9 "Financial Instruments" (effective for annual periods beginning on or after 1 January 2015), IFRS 10 "Consolidated Financial Statements" (effective for annual periods beginning on or after 1 January 2013), IFRS 11 "Joint Arrangements" (effective for annual periods beginning on or after 1 January 2013), IFRS 12 "Disclosure of Interests in Other Entities" (effective for annual periods beginning on or after 1 January 2013), IFRS 13 "Fair Value Measurement" (effective for annual periods beginning on or after 1 January 2013), IAS 27 (amended in 2011) "Separate Financial Statements" (effective for annual periods beginning on or after 1 January 2013), IAS 28 (amended in 2011) "Investments in Associates and Joint Ventures" (effective for annual periods beginning on or after 1 January 2013), Amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards" –

Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (effective for annual periods

beginning on or after 1 July 2011),

Amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards" –

Government loans (effective for annual periods beginning on or after 1 January 2013),

Amendments to IFRS 7 "Financial Instruments: Disclosures" - Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2013), Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" - mandatory date of entry into force and transitional provisions, Amendments to IAS 12 "Income Taxes" - Deferred Tax: Recovery of Underlying Assets (effective for annual periods beginning on or after 1 January 2012), Amendments to IAS 32 "Financial Instruments: Presentation" - Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2014), Amendments to various standards "Amendments to IFRS (2012)” - amendments introduced within the procedures for implementation of annual amendments to IFRS published on 17 May 2012 (IFRS 1, IAS 1, IAS 16, IAS 32 and IAS 34) focused primarily on resolving inconsistencies and clarifying vocabulary (effective for annual periods beginning on or after 1 January 2013),

Interpretation of IFRIC 20 "Settlement of waste removal costs incurred in surface mining activity

during the production phase of the mine" (effective for annual periods beginning on or after 1 January

2013).

The Management Boards of the Companies comprising ZPUE S.A. Capital Group did not take advantage of

the possibility of early adoption of these standards, amendments to standards and interpretations. In the

opinion of the Group the aforesaid standards, interpretations and amendments to the standards would not

exercise a material impact on the consolidated financial statements, if the same had been applied as at the

balance sheet date.

15 I PAGE

Consolidated interim statement of financial position of ZPUE S.A.

Capital Group (thousands PLN) 30.06.2011 31.12.2011 30.06.2012

A. Fixed assets 147,114 160,832 197,752

I Intangible assets 17,175 17,293 16,454

1. Cost of completed development work 12,541 12,998 12,472

2. Goodwill 0 0 0

3. Other intangible assets 4,634 4,295 3,982

II. Property, plant and equipment 117,770 119,587 155,563

1. Fixed assets 107,774 115,131 148,488

a) land (including perpetual usufruct right to the land) 7,554 7,554 17,503

b) buildings, commercial premises and civil engineering facilities 61,312 66,011 77,173

c) equipment and machinery 28,368 31,177 43,341

d) means of transport 9,402 8,248 7,912

e) other fixed assets 1,138 2,141 2,559

2. Fixed assets under construction 9,996 4,456 7,075

III. Long-term receivables 123 97 55

1. From associates 0 0 0

2. From other entities 123 97 55

IV. Long-term investments 11,378 23,097 24,134

1. Real estate 6,100 6,076 6,023

2. Intangible assets 0 0 0

3. Long-term financial assets 48 8,438 9,051

a) in associates 0 8,390 8,943

shares 0 8,390 8,943

other securities 0 0 0

granted loans 0 0 0

other long-term financial assets 0 0 0

b) in other entities 48 48 108

shares 48 48 108


granted loans 0 0 0

other long-term financial assets 0 0 0

4. Other long-term investments 5,230 8,583 9,060

V. Long-term deferred charges and accruals 668 758 1,546

1. Assets from deferred taxes 668 758 1,546

2. Other deferred charges and accruals 0 0 0

B. Current assets 143,562 172,319 177,678

I. Inventory 36,056 39,910 54,740

1. Materials 9,716 10,496 13,761

2. Semi-finished products and products in progress 24,316 27,065 36,016

3. Finished products 1,789 2,131 4,512

4. Goods 235 218 451

II. Short-term receivables 98,535 116,556 104,107

1. Receivables from associates 0 2,035 3,332

a) for deliveries and services, maturing within: 0 2,035 3,332

up to 12 months 0 2,035 3,332

in excess of 12 months 0 0 0

b) others 0 0 0

2. Receivables from other entities 98,535 114,521 100,775

a) for deliveries and services, maturing within: 89,507 108,644 94,697

up to 12 months 83,634 108,644 94,445

in excess of 12 months 5,873 0 252

b) from tax, subsidy, customs, social security and other benefits 81 244

398

c) others 8,947 5,633 5,680

d) claimed in court 0 0

III. Short-term investments 6,475 11,217 15,332

1. Short-term financial assets 6,475 11,217 15,332

a) in associates 0 0 0

shares 0 0 0

16 I PAGE


granted loans 0 0 0

other short-term financial assets 0 0 0


shares 0 0 0


granted loans 0 0 0

other short-term financial assets 0 0 0

c) cash and other cash assets 6,475 11,217 15,332

cash in hand and at bank 390 4,987 9,193

other cash 6,085 6,230 6,139

other cash assets 0 0 0

2. Other short-term investments 0 0 0

IV. Short-term deferred charges and accruals 2,496 4,636 3,499

Total assets: 290,676 333,151 375,430

A. Equity capital (fund) 149,477 164,960 183,358

I. Stated capital (fund) 8,990 8,990 12,362

II. Called up stated capital (negative value) 0 0 0

III. Own shares for sale (negative value) 0 0 0

IV. Supplementary capital (fund) 102,254 101,722 166,263

Supplementary capital (capital adjustment) -2,464 -2,464 -41,681

V. Revaluation reserve capital (fund) 21,587 21,894 21,894

VI. Other reserve capital (fund) 936 936 936

VII. Profit (loss) from previous years 13,792 14,314 14,272

VIII. Net profit (loss) 4,372 19,558 9,239

IX. Write-offs on net profit during the financial year (negative value) 0 0 0

X. Uncontrolled shares 10 10 73

B. Liabilities and reserves for liabilities 141,199 168,191 192,072

I. Reserves for liabilities 9,465 9,556 13,096

1. Reserves for deferred income tax 8,325 8,607 11,377

2. Social security reserves (and similar reserves) 1,081 697 1,581

long-term 1,081 646 1,388

short-term 0 51 193

3. Other reserves 59 252 138

long-term 0 0 0

short-term 59 252 138

II. Long term liabilities 17,756 21,050 16,229

1. To associates 0 0 0

2. To other entities 17,756 21,050 16,229

a) credits and loans 14,587 19,268 15,277

b) issuance of debt securities 0 0 0

c) other financial liabilities 3169 1,782 952

d) others 0 0 0

III. Short-term liabilities 107,025 131,071 145,174


a) for deliveries and services, maturing within: 0 0 40

up to 12 months 0 0 40


b) others 0 0 0

2. To others 107,025 131,071 145,134



c) other financial liabilities 3,612 3,073 2,099

d) for deliveries and services, maturing within: 62,323 84,598 77,545

up to 12 months 62,323 84,598 77,545


e) received advance payments for deliveries 1,245 4,231 1,724

f) liabilities on bills of exchange 0 0 0

g) from tax, customs, social security and other benefits 5,501 7,537 5,197

h) from remuneration 3,569 4,248 4,414

i) others 46 285 9,611

17 I PAGE

Consolidated interim profit and loss account of ZPUE S.A. Capital

Group (thousands PLN)

01.01.2011-

30.06.2011

01.01.2011-

31.12.2011

01.01.2012-

30.06.2012

A. Net revenue from sales of products, goods and materials,

including: 156,991 381,399 191,996

0 from associates 0 1,677 1,872

I. Net revenue from sale of products 123,493 310,682 172,384

II. Net revenue from sales of products, goods and materials 33,498 70,717 19,612

B. Cost of products, goods and materials sold, including: 128,259 307,983 151,578

0 to associates 0 1,408 1,637

I. Cost of producing goods sold 98,167 245,334 133,841

II. Value of goods and materials sold 30,092 62,649 17,737

C. Gross profit (loss) on sales (A-B) 28,732 73,416 40,418

D. Cost of sales 6,210 15,037 8,446

E. General administrative expenses 16,767 33,312 20,844

F. Profit (loss) on sales (C-D-E) 5,755 25,067 11,128

G. Other operating revenue 2,595 5,852 2,656

I. Profit on sales of non-financial fixed assets 1 187 15

II. Subsidies 609 1,364 1,496

III. Other operating revenue 1,985 4,301 1,145

H. Other operating costs 2,127 4,448 1,280

I. Loss on sales of non-financial fixed assets 39 0 45

II. Revaluation of non-financial fixed assets 623 1,606 140

III. Other operating costs 1,465 2,842 1,095

I. Operating profit (loss) (F+G-H) 6,223 26,471 12,504

J. Financial revenue 1,436 5,098 2,015

I. Share dividends, including: 2 2 2

0 from associates 0 0

II. Interest, including: 747 3,108 946

0 from associates 0 0 85

III. Profit on sale of investments 0 0

IV. Revaluation of investments 0 0

V. Others 687 1,988 1,067

K. Financial costs 2,161 6,559 3,097

I. Interest, including: 1,169 2,949 1,731

0 from associates 0 0

II. Loss on sale of investments 0 0

III. Revaluation of investments 0 0

IV. Others 992 3,610 1,366

L. Gross profit (loss) (L+/-M) 5,498 25,010 11,422

M. Income tax 1,125 5451 2,173

P. Net profit (loss) (N-O-P) 4,373 19,559 9,249

R. Financial result allocated to minority shareholders 1 1 10

S Financial result allocated to the group 4,372 19,558 9,239

IV. Accruals and deferred income 6,953 6,514 17,573

1. Negative goodwill 0 0 0

2. Other deferred charges and accruals 6,953 6,514 17,573

long-term 386 322 15,293

short-term 6,567 6,192 2,280

Total liabilities: 290,676 333,151 375,430

18 I PAGE

Consolidated interim statement of comprehensive income of ZPUE

S.A. Capital Group (in thousand PLN)

from 01.01.2011

to 30.06.2011

from 01.01.2011 to

31.12.2011

from 01.01.2012

to 30.06.2012

Net profit (loss) 4,373 19,559 9,249

Other total revenue: 0 0 0

Financial assets available for sale 0 0 0

Collateral on cash flow 0 0 0

Change in the surplus from reappraisal 0 0 0

Other income 0 0 0

Income tax on other elements of total income 0 0 0

Total other revenue after tax 0 0 0

Total income 4,373 19,559 9,249

Consolidated interim cash flow statement of ZPUE S.A. Capital Group

(thousands PLN) 30.06.2011 31.12.2011 30.06.2012

A. Cash flows from operating activities

I. Gross profit (loss) 5,498 25,010 11,422

II. Total adjustments: 6,803 13,441 -14,635

1. Depreciation 5,927 11,973 8,226

2. Exchange gains (losses) -13 13 20

3. Interest and profit sharing (dividend) 1,582 2,823 1,652

4. Profit (loss) on investment activities 39 -187 31

5. Change in reserves -213 -394 -489

6. Change in inventory -7,693 -11,546 -7,895

7. Change in receivables 12,131 -5,874 7,422

8. Change in short-term liabilities (excluding credits and loans) -4,424 24,570 -21,504

9. Change in prepayments and accruals 85 -2,544 -99

10. Income tax paid -672 -5,435 -1,999

11. Other adjustments 53 42 0

III. Net cash flows from operating activities (I+/-II) 12,301 38,451 -3,213

B. Cash flows from investment activities 0 0

I. Inflows 208 619 247

1. Disposal of intangible assets and property, plant and equipment 206 617 229

2. Disposal of investments in real property and in intangible assets 0 0 0

3. Inflows from financial assets 2 2 18

4. Other inflows from investment activities 0 0 0

II. Outflows 17,668 37,540 12,986

1. Acquisition of intangible assets and property, plant and equipment 17,668 29,150 12,509

2. Investments in real property and in intangible assets 0 0 0

3. Spending on financial assets 0 8,390 449

4. Other outflows from investment activities 0 0 28

III. Net cash flows from investment activities (I-II) -17,460 -36,921 -12,739

C. Cash flows from financial activities

I. Inflows 26,573 38,666 33,210

1. Net inflows from issuance of shares and other instruments 0 0 0

2. Credits and loans 26,573 38,666 22,486

19 I PAGE

3. Issuance of debt securities 0 0 0

4. Other inflows from financial activities 0 0 10,724

II. Outflows 15,086 29,212 13,963

1. Purchase of own shares 0 0 0

2. Dividends and other payments to shareholders 0 0 0

3. Profit distribution liabilities other than profit distribution payments

to shareholders 0 0 0

4. Repayment of credits and loans 11,476 22,631 9,031

5. Redemption of debt securities 0 0 0

6. From other financial liabilities 0 0 0

7. Payment of liabilities arising from financial leases 2,026 3,876 3,202

8. Interest 1,584 2,705 1,730

9. Other outflows from financial activities 0 0 0

III. Net cash flows from financial activities (I-II) 11,487 9,454 19,247

D. Total net cash flows (A.III+/-B.III+/-C.III) 6,328 10,984 3,295

E. Balance sheet change in cash, including: 6,228 10,971 3,273

0 change in cash due to exchange rate differences 100 13 22

F. Cash opening balance 161 161 11,087

G. Closing balance of cash (F+/-D), including: 6,489 11,145 14,382

0 of limited disposability 0 0

Consolidated interim statement of changes in equity of ZPUE

S.A.Capital Group (in thousand PLN) (thousands PLN)

30.06.2011 31.12.2011 30.06.2012

I. Opening balance of equity (OB) 144,977 144,977 164,960

- valuation adjustments 0 0

I.a. Opening balance of equity capital (fund) (OB), adjusted 144,977 144,977 164,960

1. Opening balance of stated capital (fund) 8,990 8,990 8,990

1.1. Changes in stated capital (fund) 0 0 3,372

a) increase (due to) 0 0 3,372

- share issue (stock issue) 0 0 0

- increases in capital from net profit 0 0 3,372

b) decrease (due to) 0 0 0

- redemption of shares 0 0 0

1.2. Closing balance of stated capital (fund) 8,990 8,990 12,362

2. Opening balance of called up stated capital 0 0 0

2.1. Change in called up stated capital 0 0 0

a) increase (due to) 0 0 0


2.2. Closing balance of called up stated capital 0 0 0

3. Opening balance of own shares 0 0 0

a) increase 0 0 0

b) decrease 0 0 0

3.1. Closing balance of own shares 0 0 0

4. Opening balance of supplementary capital (fund) 87,174 87,174 101,722

4.1. Changes in supplementary capital (fund) 15,080 14,548 64,541

a) increase (due to) 15,081 15,081 64,541

- issue of shares above face value 0 0 53,909

- from profit distribution (statutory) 0 0 0

- from profit distribution (above the statutory value) 15,081 15,081 10,632

- other increases 0 0 0


- loss coverage 1 1 0

- consolidation adjustments 0 532 0

4.2. Closing balance of supplementary capital (fund) 102,254 101,722 166,263

5.0

Supplementary capital (capital adjustment) from the

application of the merger method other than defined in

IFRS 3 to Opening Balance -2,464 -2,464 -2,464

20 I PAGE

5.1.

Changes in supplementary capital (capital adjustment)

from the application of the merger method other than

defined in IFRS 3 to Opening Balance 4 0 -39,217


b) decrease (due to) 0 39,217

5.2.

Supplementary capital (capital adjustment) from the

application of the merger method other than defined in

IFRS 3 to Closing Balance -2,460 -2,464 -41,681

5. Opening balance of revaluation reserve capital (fund) 0 21,587 21,894

5.1. Changes in revaluation reserve capital (fund) 0 307 0



- disposal of property, plant and equipment 0 0 3

5.2. Closing balance of revaluation reserve capital (fund) 0 21,894 21,894

6. Opening balance of other reserve capitals (funds) 936 936 936

6.1. Changes in other reserve capitals (funds) 0 0 0



6.2. Closing balance of other reserve capitals (funds) 936 936 936

7. Opening balance of Minority capital 9 9 10

Changes in capital 1 1 63

increase 1 1 63

decrease 0 0 0

7.1 Minority capital at the end of the year 10 10 73

8. Opening balance of previous years' profit (loss) 50,333 28,746 33,872

8.1. Opening balance of previous years' profit 50,333 28,746 33,872

- adjustments of fundamental errors 0 0

8.2. Opening balance of previous years' profit after adjustments 50,333 28,746 33,872


- distribution of previous years'� profit 107 0 34

- revaluation of fixed assets 15 0 0

b) decrease from/of profit division 15,081 14,549 19,633

-other decrease 0 0 0

8.3. Closing balance of previous years' profit 35,374 14,314 14,273

8.4. Opening balance of previous years' loss 0 0 0

- adjustments of fundamental errors 0 0 0

8.5. Opening balance of previous years' loss after adjustments 0 0 0


- re-booking of previous years' loss to be covered 0 0 0


8.6. Closing balance of previous years' loss 0 0 0

8.7. Closing balance of previous years' profit (loss) 35,374 14,314 14,273

9. Net result 4,372 19,558 9,239

a) net profit 4,372 19,558 9,239

b) net loss 0 0 0

c) write-offs on profit 0 0 0

II. Closing balance of equity (CB) 149,477 164,960 183,358

Equity capital attributable to the Capital Group 149,467 164,950 183,285

Equity capital attributable to uncontrolled shares 10 10 73

Selected consolidated financial data thousands PLN thousands EUR

21 I PAGE

30.06.2011 30.06.2012 30.06.2011 30.06.2012

I. Consolidated net revenue from sales

of products, goods and material 156,991 191,996 39,571 45,447

II. Profit (loss) on operating activities 6,223 12,504 1,569 2,960

III. Gross profit (loss) 5,498 11,422 1,386 2,704

IV. Net profit (loss) 4,373 9,249 1,102 2,189

V. Net cash flows from operating

activities 12,301 -3,213 3,101 -761

VI. Net cash flows from investment

activities -17,460 -12,739 -4,401 -3,015

VII. Net cash flows from financial

activities 11,487 19,247 2,895 4,556

VIII. Total net cash flows 6,328 3,295 1,595 780

IX. Number of shares 1,018,127 1,400,000 1,018,127 1,400,000

X. Profit (loss) per ordinary share 4.15 6.57 1.05 1.56

XI. Diluted profit (loss) per ordinary

share 4.15 6.57 1.05 1.56

XII. Declared or paid dividend per

ordinary share 0.00 6.40 0.00 1.51

Selected consolidated financial data thousands PLN thousands EUR

31.12.2011 30.06.2012 31.12.2011 30.06.2012

I. Total assets 333,151 375,430 75,428 88,102

II. Liabilities and reserves for

liabilities 168,191 192,072 38,080 45,074

III. Long term liabilities 21,050 16,229 4,766 3,808

IV. Short-term liabilities 131,071 145,174 29,676 34,068

V. Equity capital 164,960 183,358 37,348 43,029

VI. Share capital 8,990 12,362 2,035 2,901

VII. Number of shares 1,018,127 1,400,000 1,018,127 1,400,000

VIII. Book value per share 162.02 130.97 36.68 30.73

IX. Diluted book value per share 117.83 130.97 26.68 30.73

Selected consolidated financial data included in the financial statements for the first six months of 2012 were

calculated according to the following PLN/EUR exchange rates:

- individual balance sheet assets and liabilities of the statement of financial position are calculated

according to the average EUR rate applicable on 29 June 2012, as set by the National Bank of

Poland, i.e. 4.2613 PLN and on 31 December 2011 – 4.4168 PLN.

- individual items on the profit and loss account and cash flow account are converted to EUR

according to the rate which was the arithmetical average of the average rates set by the National

Bank of Poland and applicable on the last day of each financial year:

- for the period January - June 2012 – 4.2246 PLN.


EUR exchange rate to calculate the items of profit and loss account and cash flow statement:

Arithmetic mean of average NBP EUR exchange rates at the end of each month for the period 01.01-

30.06.2012

22 I PAGE

Table Month EUR rate

21/A/NBP/2012 dated 31.01.2012 January 4.2270

42/A/NBP/2012 dated 29.02.2012 February 4.1365

64/A/NBP/2012 dated 30.03.2012 March 4.1616

84/A/NBP/2012 dated 30.04.2012 April 4.1721

105/A/NBP/2012 dated 31.05.2012 May 4.3889

125/A/NBP/2012 dated 29.06.2012 June 4.2613

Average EUR rate 4.2246

Arithmetic mean of average NBP EUR rates at the end of each month for the period 01.01.-30.06.2011




63/A/NBP/2011 dated 31.03.2011 March 4.0119

83/A/NBP/2011 dated 29.04.2011 April 3.9376

104/A/NBP/2011 dated 31.05.2011 May 3.9569

125/A/NBP/2011 dated 30.06.2011 June 3.9866


The exchange rates adopted for the valuation of the assets and liabilities expressed in foreign currencies as of

the balance sheet date:

NBP average EUR rate on 29.06.2012 – Table 125/A/NBP/2012 – 4.2613 PLN

NBP average USD rate on 29.06.2012 – Table 125/A/NBP/2012 – 3.3885 PLN

NBP average LVL rate on 29.06.2012 – Table 125/A/NBP/2012 – 6.1182 PLN







Consolidated earnings per ordinary share for the first six months of 2012 were calculated by dividing the

consolidated net profit attributable to ordinary shares in the capital group, i.e. PLN 8,539,000, by the number

of ordinary shares: 1,300,000 Consolidated earnings per ordinary share as at 30.06.2012 amounts to PLN

6.57.

Consolidated earnings per ordinary share for the first six months of 2011 were calculated by dividing the

consolidated net profit attributable to ordinary shares in the capital group, i.e. PLN 1,737,000, by the number

of ordinary shares: 418,127 Consolidated earnings per ordinary share as at 30.06.2011 amounts to PLN 4.15.

It is the opinion of the Management Board of ZPUE S.A. that there were/there will be no events diluting the

consolidated earnings per ordinary share both during the first six months of 2012 and during the first six

months of 2011.

Consolidated book value per share during the first six months of 2012 was calculated as the ratio of

consolidated equity capital of PLN 183,358,000 and the total number of shares: 1,400,000. Consolidated

book value per share as at 30.06.2012 amounted to PLN 130.97.

Consolidated book value per share in 2011 was calculated as the ratio of consolidated equity capital of PLN

164,960,000 and the total number of shares: 1,018,127. Consolidated book value per share as at 31.12.2011

amounted to PLN 162.02.

Diluted consolidated book value per share in 2011 was calculated as the ratio of the equity capital of PLN

164,960,000 and the total number of shares after dilution i.e. 1,400,000. Diluted book value per share as at

31.12.2011 amounted to PLN 117.83.

It is the opinion of the Management Board of ZPUE S.A. that there will be no events diluting the

consolidated earnings per ordinary share during the first six months of 2012.

Explanatory notes to the Statement of the Financial Standing

23 I PAGE

1. Changes in intangible assets

Consolidated intangible assets

thousands PLN

30.06.2011 30.06.2012

a) costs of completed development work 12,541 12,473

b) goodwill 0 0

c) concessions, patents, licences and other assets, including: 4,189 3,512

-computer software 1,859 1,455

d) other intangible assets 445 469

Total intangible assets 17,175 16,454

24 I PAGE

CHANGES IN CONSOLIDATED INTANGIBLE ASSETS (BY TYPE)

thousands PLN

a b c d e

total intangible assets

cost of completed development work

goodwill

concessions, patents, license and other

assets, including other intangible

assets

advance payments

towards intangible

assets -computer software

a) opening balance of gross value of intangible assets 19,589 0 7,768 4,723 1,820 0 29,177

b) increases (due to) 521 0 0 0 0 0 521

- purchase 521 0 0 0 0 0 521

-developed by the company 0 0 0 0 0 0 0

c) deductions (due to) 0 0 14 14 0 0 14

-liquidation 0 0 14 14 0 0 14

-sales 0 0 0 0 0 0 0

d) closing balance of gross value of intangible assets 20,110 0 7,754 4,709 1,820 0 29,684

e) opening balance of accumulated depreciation 6,518 0 3,681 2,830 1,413 0 11,613

f) depreciation for the period (due to) 1,119 0 442 306 56 0 1,617

-write-offs 1,119 0 442 306 56 0 1,617

-decreases (sale, liquidation) 0 0 0 0 0 0 0

g) closing balance of accumulated depreciation 7,637 0 4,123 3,135 1,469 0 13,230

h) opening balance of write-offs due to permanent impairment loss 0 0 0 0 0 0 0

-increases 0 0 0 0 0 0 0

-decreases 0 0 0 0 0 0 0

i) closing balance of write-offs due to permanent impairment loss 0 0 0 0 0 0 0

j) closing balance of net value of intangible assets 12,473 0 3,631 1,574 351 0 16,454

25 I PAGE

CONSOLIDATED INTANGIBLE ASSETS (OWNERSHIP STRUCTURE)

thousands PLN

30.06.2011 30.06.2012

a) proprietary 17,175 16,454

b) used based under the tenancy, rental or other agreement, including lease agreement, including: 0 0


2. Changes in fixed assets

CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT

thousands PLN

30.06.2011 30.06.2012

a) fixed assets, including 107,774 148,488

-land (including perpetual usufruct right to the land) 7,554 17,503

-buildings, commercial premises and civil engineering facilities 61,312 77,173

-equipment and machinery 28,368 43,341

-means of transport 9,402 7,912

-other fixed assets 1,138 2,559

b)fixed assets under construction 9,996 7,075

Property, plant and equipment, total 117,770 155,563

26 I PAGE

CHANGES IN CONSOLIDATED FIXED ASSETS (BY TYPE)

thousands PLN

-land (including perpetual usufruct right to the land)

-buildings, commercial

premises and civil

engineering facilities

-equipment and machinery

-means of transport

-other fixed assets

Fixed assets, total

a)opening balance of gross value of fixed assets 15,995 81,094 70,901 15,552 5,224 188,766

b) increases (due to) 1,548 1,199 6,440 3,647 429 13,263

-purchase 1,548 1,199 6,309 2,992 429 12,477

-developed by the company 0 0 0 0 0 0

- adoption of the lease 0 0 131 655 0 786

c) deductions (due to) 0 0 577 3,362 21 3,961

- value adjustments 0 0 309 2,696 18 3,023

-sales 0 0 268 666 4 937

d) closing balance of gross value of fixed assets 17,543 82,292 76,764 15,837 5,632 198,068

e)opening balance of accumulated depreciation 0 4,311 30,314 7,052 2,773 44,451

f) depreciation for the period (due to) 0 808 3,108 873 300 5,089

-write-offs 0 808 3,486 1,123 319 5,736

-decreases (sale, liquidation) 0 0 -378 -249 -19 -647

g)closing balance of accumulated depreciation 0 5,119 33,422 7,925 3,073 49,540

h)opening balance of write-offs due to permanent impairment loss 39 0 0 0 0 39

-increases 0 0 0 0 0 0

-decreases 0 0 0 0 0 0

i) closing balance of write-offs due to permanent impairment loss 39 0 0 0 0 39

j) closing balance of net value of fixed assets 17,503 77,173 43,341 7,912 2,559 148,488

27 I PAGE

Consolidated balance sheet fixed assets (ownership structure)

thousands PLN

30.06.2011 30.06.2012


b) used under the tenancy, rental or other agreement, including lease agreement 10,323 7,740

Balanced fixed assets, total 107,774 148,488

Consolidated fixed assets recognised off-balance sheet

thousands PLN

30.06.2011 30.06.2012

Used under the tenancy, rental or other agreement, including lease agreement 550 550

Fixed assets recognised off-balance sheet, total 550 550

3. Long-term receivables

Consolidated long-term receivables thousands PLN

30.06.2011 30.06.2012

a) from associates 0 0

b) from other entities 123 55

Net long-term receivables 123 55

c) allowance for uncollectible accounts 16 7

Gross long-term receivables 139 62

Changes in long-term allowance for uncollectible accounts (thousands PLN)

30.06.2011 30.06.2012

a) opening balance 58 13

b) increases due to: 0 0

c) deductions due to 42 6

d) closing balance of long-term allowance for uncollectible accounts 16 7

4. Long-term investments

4.1 Real estate

Change in the consolidated value of the real property thousands PLN

30.06.2011 30.06.2012

a) opening balance 6,150 6,076


c) decreases 50 53

d) closing balance 6,100 6,023

28 I PAGE

4.2. Long-term financial assets

As at the balance sheet date, ZPUE SA holds:

• 28 shares in: Przedsiębiorstwo Aparatów i Konstrukcji Energetycznych ZMER Sp. z o.o. in Kalisz, having the

total value of PLN 47,600.00. The shares owned by ZPUE SA represent 3.92% of the share capital and entitle to exercise

3.92% of votes in the total number of votes at the AGM. In 2012, ZPUE SA received from: Przedsiębiorstwo Aparatów i

Konstrukcji Energetycznych ZMER Sp. z o.o. in Kalisz, a dividend of PLN 2,490.00.

• 14,986 shares of ZPUE Gliwice sp. z o.o. representing 99.91% of the share capital of the said company and

entitling to 99.91% of votes at the Shareholders' Meeting of ZPUE Gliwice sp. z o.o. The value of the acquired shares

amounts to PLN 12,118,928.00. The share capital of ZPUE Gliwice sp. z o.o. amounts to PLN 1,500,000.00 and is

divided into 15,000 shares of the value of PLN 100.00 per share.

• 1,870,439 shares of Elektromontaż-1 Katowice S.A., representing 99.32% of its share capital and entitling to

99.32% of the votes at the General Shareholders' Meeting of Elektromontaż-1 Katowice S.A. The value of the acquired

shares amounts to: PLN 26,074,288.44; and following the appraisal made by the independent auditor, the value of the

acquired shares amounts to: PLN 34,026,050.00. The share capital of Elektromontaż-1 Katowice SA amounts to PLN

6,628,902.72 and is divided into 1,883,211 shares of the value of PLN 3.52 PLN.

• 2 shares of ZPUE Tools Sp. z o.o. representing 100% of the share capital of the said company and entitling to

100% of votes at the Shareholders' Meeting of ZPUE Tools Sp. z o.o. The value of the acquired shares amounts to: PLN

17,676,901.17; and following the appraisal made by the independent auditor, the value of the acquired shares amounts to:

PLN 23,063,290.00. The share capital of ZPUE Tools Sp. z o.o. amounts to PLN 60,000.00 and is divided into 12 shares

of the value of PLN 5,000.00 per share.

• 300 shares of ZPUE Poles Sp. z o.o. representing 100% of the share capital of the said company and entitling to

100% of votes at the Shareholders' Meeting. The value of the acquired shares amounts to: PLN 13,529,760.39; and

following the appraisal made by the independent auditor, the value of the acquired shares amounts to: PLN

17,653,210.00. The share capital of ZPUE Poles Sp. z o.o. amounts to PLN 15,000.00, and is divided into 300 shares of

the value of PLN 50.00 per share.

• The share in "Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy" OOO at the Urban Settlement

of Tolmachevo (Leningrad Oblast, Russian Federation) representing 51% of the share capital of the said company and

authorizing ZPUE S.A. to 51% of votes at the Shareholders' Meeting of the company. The value of the acquired share

amounts to PLN 1,131,469.62. The share capital of: "Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy"

OOO amounts to RUB 10,000.00.

• The share in "Promyshlennye investicii" OOO at the Urban Settlement of Tolmachevo (Leningrad Oblast,

Russian Federation) representing 51% of the share capital of the said company and entitling ZPUE S.A. to 51% of votes

at the Shareholders' Meeting of the company. The value of the acquired shares amounts to: PLN 7,231,469.62. The share

capital of the company "Promyshlennye investicii" OOO amounts to RUB 85,000,000.00.

• The share in ZPUE Ukraina Sp. z o.o. (Dnipropetrovsk Oblast, Ukraine) representing 80% of the share capital

of the said company and entitling ZPUE S.A. to 80% of votes at the Shareholders' Meeting of the company. The value of

the acquired shares amounts to: PLN 36,644.72. The share capital of "ZPUE Ukraina Sp. z o.o." amounts to EUR

8,000.00.

• The share in ZPUE Trade, s.r.o. (ZPUE Trade) in Napajedla (Czech Republic), representing 73.33% of the

share capital of the said company and entitling ZPUE S.A. to 73.33% of votes at the Shareholders' Meeting of the

company. The value of the acquired shares amounts to: PLN 442,447.05. Share capital of the company amounts to CZK

210.000,00.

• The interest in ZPUE Balkani, EOOD in Sofia (Republic of Bulgaria), representing 100% of the share capital of

the said company and authorizing ZPUE S.A. to 100% of votes at the Shareholders' Meeting of the company. Share

capital of the company amounts to BGN 300. The value of the acquired shares amounts to: 1,179.34

The following financial statements have been subject to consolidation: of ZPUE S.A., of ZPUE Gliwice Sp. z o.o., of

Elektromontaż-1 Katowice S.A., of ZPUE Tools Sp Z o.o., and of ZPUE Poles Sp. Z o.o. Shares in the above companies

have been excluded from the consolidated financial statements. Financial statements of the following subsidiaries have

not been subject to consolidation: "Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy" OOO,

"Promyshlennye investicii" OOO, ZPUE Ukraina Sp. z o.o. (Dnipropetrovsk Oblast, Ukraine), ZPUE Trade, s.r.o. (ZPUE

Trade) and ZPUE Balkani, EOOD. This has been due to their minor significance for the Group's consolidated statements

and due to the fact that the costs of procuring reliable financial information would exceed the economic benefits from

procurement and presentation thereof.

29 I PAGE

Consolidated long-term financial assets thousands PLN

30.06.2011 30.06.2012

a) in subsidiaries 0 8,943

b) in related entities 0 0

c) in affiliates 0 0

d) in a significant investor 0 0

e) in partner of a related entity 0 0

f) in other entities 48 108

- shares 48 108

Long-term financial assets, total 48 9,051

Change to long-term consolidated financial assets

thousands PLN

30.06.2011 30.06.2012

a) opening balance 48 8,597


c) decreases due to 0 0

d) closing balance 48 9,051

Consolidated securities, shares and other long-term financial assets (by

transferability)

thousands PLN

30.06.2011 30.06.2012

A. with unlimited transferability, listed on stock exchanges (carrying value) 0 0

a) shares 0 0

b) bonds 0 0

c) others 0 0

B. with unlimited transferability, listed on the Over-The-Counter market

(carrying value) 0 0

a) shares 0 0

b) bonds 0 0

c) others 0 0

C. with unlimited transferability, not listed on a regulated market (carrying

value) 48 9,051

a) shares 48 9,051

b) bonds 0 0

c) others 0 0

D. with limited transferability (carrying value) 0 0

a) shares 0 0

b) bonds 0 0

c) others 0 0

The value at cost, total 48 9,051

Opening balance, total 48 8,437

Value adjustments (for the period), total 0 0

Total carrying value 48 9,051

Consolidated securities, shares and other long-term financial assets

(currency structure) unit currency

thousands PLN

30.06.2011 30.06.2012

a) in Polish currency 48 9,051

b) in foreign currency (by currency and after conversion to PLN) 0 0

- other currencies 0 0

Securities, shares and other long-term financial assets, total 48 9,051

30 I PAGE

4.3. Other long-term investments

Other consolidated long-term investments (by type) thousands PLN

30.06.2011 30.06.2012

Other long-term investments, total 5,230 9,060

Change in consolidated other long-term investments (by type)

thousands PLN

30.06.2011 30.06.2012


b) increases due to: 1,581 0

c) decreases due to 917 2,212


Consolidated other long-term investments (currency structure) unit currency thousands PLN

30.06.2011 30.06.2012

a) in Polish currency 5,230 9,060


- other currencies


5. Long-term deferred charges and accruals:

5.1. Assets from deferred taxes:

Change in consolidated assets from deferred income tax thousands PLN

30.06.2011 30.06.2012

1. Opening balance of assets from deferred income tax, including: 718 1,603

a) reflected in financial result 718 1,603

b) reflected in equity capital 0 0

c) reflected in goodwill or negative goodwill 0 0

2.Increases 101 97

a) reflected in financial result of the period due to negative temporary differences,

due to: 101 97

b) reflected in financial result of the period due to loss on taxes 0 0

c) reflected in equity due to negative temporary differences (due to provisions for

retirement and death benefits) 0 0

d) reflected in equity capital due to loss on taxes (due to) 0 0

e) reflected in goodwill or negative goodwill due to negative temporary differences

(due to) 0 0

3.Decreases 151 154

a) reflected in financial result of the period due to the settlement costs that were not

tax deductible expenses in previous year 151 154


c) reflected in equity capital due to negative temporary differences 0 0


e) reflected in goodwill or negative goodwill due to negative temporary differences

(due to) 0 0

4. Total closing balance of assets from deferred income tax, including: 668 1,546

a) reflected in financial result 668 1,546

31 I PAGE

5.2. Other deferred charges and accruals

Other consolidated deferred charges and accruals thousands PLN

30.06.2011 30.06.2012

a) prepaid costs 0 0

b) other deferred charges and accrual 0 0

Other deferred charges and accruals, total 0 0

Current assets

I. Inventory

Consolidated stocks thousands PLN

30.06.2011 30.06.2012

a)materials 9,734 13,761

b)semi-finished products and production in progress 24,104 36,016

c)finished goods 1,983 4,512

d)goods 235 451

Total inventory 36,056 54,740

II. Short-term receivables

Consolidated short-term receivables thousands PLN

30.06.2011 30.06.2012

a)from associates 0 3,332

b)receivables from other entities 98,535 100,775

-for goods and services, maturing within: 89,507 94,697

- up to 12 months 83,634 94,445

- in excess of 12 months 5,873 252

from tax, subsidy, customs, social security and other benefits 81 398

- claimed at court 0 0

-others 8,947 5,680

Net short-term receivables, total 98,535 104,107

c)allowance for uncollectible accounts 6,176 9,835

Gross short-term receivables, total 104,711 113,942

Short-term receivables from associates thousands PLN

30.06.2011 30.06.2012

a)for deliveries and services, including: 0 3,332

b)other, including 0 0

d)claimed at court, including 0 0

Total net short-term receivables from associates 0 3,332

c)allowance for uncollectible accounts from associates 0 814

Total gross short-term receivables from associates 0 4,146

Changes in consolidated short-term allowance for uncollectible accounts

thousands PLN

30.06.2011 30.06.2012

Opening balance 6,118 10,118

a) increase (due to) - write-down 1,283 1,024

b) decrease (due to) 1,225 1,307

- dissolution 1,225 1,307

Closing balance of short-term allowance for uncollectible accounts 6,176 9,835

32 I PAGE

Consolidated gross short-term liabilities (currency

structure) unit currency

thousands PLN

30.06.2011 30.06.2012


b) in foreign currency (by currency and after conversion to PLN) 5,017 8,960

- 1 EUR 4,925 8,661

- 1 LVL 91 126

- 1 USD 1 173

Total short-term receivables 104,711 113,942

Consolidated gross receivables from deliveries and services -

maturing after balance date

thousands PLN

30.06.2011 30.06.2012

a)up to 1 month 30,635 36,890

b)1 to 3 months 22,961 29,327

c)3 to 6 months 3,051 16

d)6 months to 1 year 610 30

e)more than 1 year 5,890 241

f)overdue receivables 32,270 41,282

Gross receivables from deliveries and services, total 95,417 107,786

g)allowances for uncollectible accounts from deliveries and services 5,910 9,757

Net receivables from provision of deliveries and services, total 89,507 98,029

Trade receivables and services associated with the normal course of sales are the receivables maturing within

one month.

Consolidated gross receivables from deliveries and services - with a

breakdown of receivables outstanding during the period

thousands PLN

30.06.2011 30.06.2012

a)up to 1 month 9,893 14,697

b)1 to 3 months 7,997 9,427

c)3 to 6 months 6,163 5,865

d)6 months to 1 year 4,484 3,168

e)more than 1 year 3,733 8,125

Overdue gross receivables from deliveries and services (total) 32,270 41,282

g) allowance for uncollectible accounts from deliveries and services,

overdue 5,910 9,757

Overdue net receivables from deliveries and services, total 26,360 31,525

III. Short-term investments

3.1. Short-term financial assets

Consolidated short-term financial assets thousands PLN

30.06.2011 30.06.2012

a)in subsidiaries 0 0.00

b) in related entities 0 0.00

c) in affiliates 0 0.00

d) in a significant investor 0 0.00

e) in partner of a related entity 0 0.00

b) in Parent Company 0 0.00

g) cash and other cash assets 6,475 15,332

-cash in hand and at bank (PLN) 390 9,172

-other cash 6,085 6,160

Short-term financial assets, total 6,475 15,332

33 I PAGE

Consolidated cash and other cash assets (currency

structure) unit currency

in PLN

30.06.2011 30.06.2012


b) in foreign currency (by currency and after conversion to PLN) 65 3,126

Total cash and other cash assets 6,475 15,332

3.2. Other short-term investments

Other consolidated long-term investments (by type) thousands PLN

30.06.2011 30.06.2012

Other short-term investments, total 0 0

IV. Short-term deferred charges and accruals

Consolidated short-term deferred charges and accruals thousands PLN

30.06.2011 30.06.2012

a) prepaid costs, including: 801 1,711

- settlement of insurance 298 378

- settlement related to the prepayment of subscriptions 20 233

- banking services to be settled 23 14

- property tax 0 423

- unperformed services 0 460

other 460 203

b) VAT to be settled in subsequent periods 1,695 1,788

Short-term deferred charges and accruals, total 2,496 3,499

Liabilities

Structure of share capital as at 30.06.2012:

series Type of shares Type of privilege Number of

shares

Value of issue by

its nominal value

Method of

paying the

capital

A registered,

preference

voting rights:

One share entitles to cast five

votes at the AGM,

dividend:

2 units above the rediscount

rate of the domestic bills of

exchange issued by National

Bank of Poland

100,000 PLN 883,000.00. contribution

in kind

A ordinary bearer

shares none 500,000 PLN 4,415,000.00.

Contribution

in kind

(conversion

from

registered

shares)

34 I PAGE

B ordinary bearer

shares none 233,250 PLN 2,059 597.50 cash

C ordinary bearer

shares none 106,750 PLN 942,602.50 cash

D ordinary bearer


E ordinary bearer


f. ordinary bearer

shares none 381,873 PLN 3,371,938.59

Contribution

(shares)

Total 1,400 000 PLN

12,362,000.00

Nominal value of one share = PLN 8.83

As a result of payment for the F Shares, the Company's Management Board issued to KORONEA S.à r.l. a

collective certificate covering 381,873 ordinary F bearer shares. Upon issue of the certificate of shares,

pursuant to article 452 of the Code of Commercial Companies, the Company's share capital has been

increased by PLN 3,371,938.59.

As a result, the share capital of ZPUE S.A. amounts to PLN 12,362,000.00, and consists of 1,400,000 shares

with a nominal value of PLN 8.83.

The 1.400.000 shares consisted of: 100,000 A series registered privileged shares and 1,300,000 ordinary

bearer shares.

The increased capital was paid with a non-cash contribution, i.e. with shares of Elektromontaż 1 Katowice

S.A., ZPUE Poles Sp. z o.o. and ZPUE Tools Sp. z o.o. The value resulting from the investment agreement of

14 November 2011, i.e. the amount equal to the total value of F shares issue (PLN 57,280,950.00), was

assumed as the pooling cost with respect to the accepted shares. However, taking account of the appraisal

made by the independent auditor, the value of the acquired asset was revaluated to the fair value resulting

from the appraisal, i.e. to PLN 74,496,628.34.

The revaluation results were recognized under the revaluation capital. The revaluation reserve capital was

adjusted by the reserve for deferred tax from the revaluation of the assets.

A. Liabilities and reserves for liabilities

Reserves for deferred income tax

Change in consolidated reserves from deferred income tax thousands PLN

30.06.2011 30.06.2012

1. Opening balance of reserve from deferred taxes, including: 8,493 11,415

a) reflected in financial result 2,443 5,662

b) reflected in equity due to adjustments of depreciation of fixed assets 6,050 5,753


2.Increases 42 269

a) reflected in financial result due to positive temporary differences 42 269

b) reflected in equity capital due to positive temporary differences (due to depreciation) 0 0

c) reflected in goodwill or positive temporary differences 0 0

3.Decreases 210 307

a) reflected in financial result due to positive temporary differences (due to

depreciation) 210 307

b) reflected in equity capital due to positive temporary differences 0 0

c) reflected in goodwill or negative goodwill due to positive temporary differences (due to) 0 0

4. Closing balance of reserve from deferred taxes, total

8,325 11,377


35 I PAGE

b) reflected in equity capital 6,050 5,753


Reserves for liabilities

Changes in consolidated long-term provisions for pensions and similar benefits

(by title)

thousands PLN

30.06.2011 30.06.2012


b)increases 33 75

c) use 0 0

d) dissolution 0 54

e)closing balance 1,081 1,581

Changes in other consolidated long-term provisions by title thousands PLN

30.06.2011 30.06.2012


b)increases 0 0

c) use 0 0

d) dissolution 0 0

e)closing balance 0 0

Changes in other consolidated short-term provisions by title thousands PLN

30.06.2011 30.06.2012


b)increases 70 159

c) use 316 669

d) as at the balance closing 59 138

Long term liabilities

Consolidated long-term liabilities thousands PLN

30.06.2011 30.06.2012

a) to subsidiaries 0 0.00

b) to subsidiaries 0 0.00

c) to affiliates 0 0.00

d) to significant investor 0 0.00

e) to a partner of a related entity 0 0.00

f) to the Parent Company 0 0.00

g) to other entities 17,756 16,229

-credits and loans 14,587 15,277

- other liabilities from financial leasing 3,169 952

Long-term liabilities, total 17,756 16,229

Consolidated long-term liabilities maturing after the balance sheet date

thousands PLN

30.06.2011 30.06.2012

a) 1 to 3 years 17,746 16,229

b) 3 to 5 years 10 0

c) more than 5 years 0 0


36 I PAGE

Consolidated long-term liabilities (currency structure) unit currency thousands PLN

30.06.2011 30.06.2012


b) in foreign currency (by currency and after conversion to

PLN) 410 0


Long-term liabilities from loans and advances:

The value of the long-term liabilities arising from loans and credits are the liabilities incurred by the Parent

Company ZPUE S.A.

Details Value of credit

granted

Debt as at

1.01.2012

Situation as at

30.06.2012 Loan collateral

Credit Agreement with PKO BP SA

(No 67 1020 2629

0000 9796 0046 0568) of 7 October

2010 for investment

credit (hereinafter: Agreement) amended

pursuant to the

annexes: No 1 of 30

December 2010, No

2 of 31 January

2011, No 3 of 31 March 2011, No 4 of

20 April 2011, No 5

of 24 May 2011, No 6 of 3 June 2011, No

7 of 22 November

2011 and No 8 of 25 April 2012.

23,065

in t

hou

sand

PL

N

14,775

in t

hou

sand

PL

N

12,276

The security of the Bank's receivables from the

Company includes:

-- joint mortgage up to the amount of PLN 39,210,000 on the Company's title to the real

property situated in Włoszczowa, for which the

District Court in Włoszczowa, 4th Land and Mortgage Register Division maintains the land

and mortgage registers No KI1W/00028347/2

and KI1W/00031436/7 and the transfer of monetary receivables from the property insurance

agreement,

- registered pledge on the purchased fixed assets, which are the subject of the investment and the

transfer of monetary receivables from the

insurance agreements for these fixed assets,

- transfer of title ("under a condition precedent")

to fixed assets until the effective execution of

such pledge, - a declaration of being subject to bank

enforcement procedures,

- a blank bill of exchange along with a bill of exchange declaration,

- deduction clause for accounts held for the

Company in the Bank, - a transfer of receivables under the contract for

subsidising the investment project to the Bank and the authorization for administering the

account to which the subsidy is transferred;

- surety from Stolbud Włoszczowa S.A. up to the amount of PLN 9,590 000,00. PLN

37 I PAGE

The value of liabilities under financial leases to be repaid within the period longer than a year from the

balance sheet date constitutes other consolidated financial liabilities.

Short-term liabilities

Consolidated liabilities

thousands PLN

30.06.2011 30.06.2012

a) to subsidiaries 0 40

b) to related entities 0 0

c) to affiliates 0 0

d) to significant investor 0 0

e) to a partner of a related entity 0 0

credits and loans, including: 0 0

long-term during repayment period 0 0

from the issuance of securities 0 0

from dividends 0 0

other financial liabilities, including: 0 0

for deliveries and services, maturing within: 0 0

up to 12 months 0 0

in excess of 12 months 0 0

received advance payments for deliveries 0 0

liabilities on bills of exchange 0 0

other (by type) 0 0

f) to the Parent Company 0 0


-credits and loans, including: 30,729 44,544

- long-term during repayment period 0 0

Credit Agreement with PKO BP SA in

the form of a multi-

purpose credit limit No 75 1020 2629

0000 9602 0229

7216 (No 202-127/LW/I/13/2007)

of 5 September 2007

for amended pursuant to the

annexes: No 1 of 2 June 2008, No 2 of 4

June 2008, No 3 of 3

September 2010, No 4 of 6 September

2010 and No 5 of 7

October 2010 (hereinafter:

Agreement)

The multi-purpose credit limit (in

PLN) in the

amount of PLN 17,000,000,

whereby the Bank

granted to the Company:

- current account

overdraft - up to the amount of

9,000,000 PLN,

- Non-renewable working capital

loan - up to the amount of

12,000,000 PLN,

- bank guarantees for domestic and

foreign

transactions - up

to the amount of

5,100,000 PLN

in t

hou

sand

PL

N

3,855

in t

hou

sand

PL

N

2,470

The security of the Bank's receivables from the Company includes:

- joint capped rate mortgage up to the amount of

PLN 20,400,000 on the Company's real property situated in Włoszczowa, for which the District

Court in Włoszczowa, 4th Land and Mortgage

Register Division maintains the land and mortgage registers No 28347 and 31436 and the


insurance agreement for the aforesaid real property,

- a borrower blank bill of exchange along with a

bill of exchange declaration; i) bill of exchange endorsements:

ZPUE M.B. Wypychewicz spółka jawna,

Stolbud Włoszczowa S.A.,

ZPUE Holding sp. z o.o., - deduction clause for accounts held in PKO BP

S.A.

- a declaration of being subject to execution

proceedings by the Company and the sureties

Credit Agreement

with PKO BP SA (No 06 1020 2629

0000 9196 0054

2373) for the Investment Credit in

PLN of 20 April

2011 (hereinafter: Agreement).

850

in t

hou

sand

PL

N

638

in t

hou

sand

PL

N

531


Company includes: - joint mortgage up to the amount of PLN

1,896,000 on the real property for which the



and KI1W/00031436/7 and the transfer of monetary receivables from the insurance

agreement for the real property,

- Company's declaration of being subject to bank enforcement procedures,

- Company's blank bill of exchange endorsed

with a bill of exchange declaration; - deduction clause for accounts held in the Bank.

38 I PAGE

- other financial liabilities, including: 3,612 2,098

-for deliveries and services, maturing within: 62,323 77,545

- up to 12 months 62,323 77,545

-received advance payments for deliveries 1,245 1,724

-from tax, customs, social security and other benefits 5,501 5,197

- from remuneration 3,569 4,415

- other (by title) 46 9,611

h) special funds (by title) 0 0

Short-term liabilities, total 107,025 145,174

Consolidated gross short-term liabilities by currency

structure unit currency

thousands PLN

30.06.2011 30.06.2012



- 1 EUR 4,356 5,499

- 1 USD 192 553



Short-term liabilities as at 30.06.2012 from credits and loans:

Liabilities from credits and loans in the Parent Company ZPUE SA


granted Debt as at 1.01.2011

Situation as at


Credit Agreement with PKO BP SA in

the form of a multi-

purpose credit limit No 75 1020 2629

0000 9602 0229 7216

(No 202-127/LW/I/13/2007) of

5 September 2007 for

amended pursuant to the annexes: No 1 of 2


June 2008, No 3 of 3 September 2010, No 4

of 6 September 2010

and No 5 of 7 October 2010 (hereinafter:

Agreement)

The multi-purpose

credit limit (in PLN) in the

amount of PLN

17,000,000,

whereby the Bank

granted to the

Company: - current account

overdraft - up to

the amount of PLN 9,000,000,

- Non-renewable

working capital loan - up to the

amount of PLN

12,000,000, - bank guarantees

for domestic and foreign

transactions - up to

the amount of PLN

5,100,000

in t

hou

sand

PL

N

3,002

in t

hou

sand

PL

N

3,002

The security of the Bank's receivables from the Company

includes:

- a joint capped rate mortgage up to the amount of PLN 20,400,000 on the Company's real property situated in

Włoszczowa, for which the District Court in

Włoszczowa, 4th Land and Mortgage Register Division maintains the land and mortgage registers No 28347 and

31436 and the transfer of monetary receivables from the

insurance agreement for the aforesaid real property; - a borrower blank bill of exchange along with a bill of

exchange declaration;

i) bill of exchange endorsements:



ZPUE Holding sp. z o.o.,

- deduction clause for accounts held in PKO BP S.A. - a declaration of being subject to execution proceedings

by the Company and the sureties

39 I PAGE

Credit Agreement

with PKO BP SA (No

67 1020 2629 0000 9796 0046 0568) of 7

October 2010 for

investment credit (hereinafter:

Agreement) amended

pursuant to the annexes: No 1 of 30

December 2010, No 2 of 31 January 2011,

No 3 of 31 March

2011, No 4 of 20 April 2011, No 5 of

24 May 2011, No 6 of

3 June 2011, No 7 of

22 November 2011

and No 8 of 25 April

2012.

23,065

in t

hou

sand

PL

N

4,325

in t

hou

sand

PL

N

4,836


-joint mortgage up to the amount of PLN 39,210,000 on

the Company's title to the real property situated in Włoszczowa, for which the District Court in

Włoszczowa, 4th Land and Mortgage Register Division

maintains the land and mortgage registers No KI1W/00028347/2 and KI1W/00031436/7 and the

transfer of monetary receivables from the property

insurance agreement; - registered pledge on the purchased fixed assets, which

are the subject of the investment and the transfer of

monetary receivables from the insurance agreements for these fixed assets,

- transfer of title ("under a condition precedent") to fixed assets until the effective execution of such pledge,

- a declaration of being subject to bank enforcement

procedures, - a blank bill of exchange along with a bill of exchange

declaration,

- deduction clause for accounts held for the Company in

the Bank,

- a transfer of receivables under the contract for

subsidising the investment project to the Bank and the authorization for administering the account to which the

subsidy is transferred;

- surety from Stolbud Włoszczowa S.A. up to the amount of 9,590,000 PLN.

Credit Agreement

with PKO BP SA (No

06 1020 2629 0000 9196 0054 2373) for

the Investment Credit

in PLN of 20 April 2011 (hereinafter:

Agreement).

850

in t

hou

sand

PL

N

212

in t

hou

sand

PL

N

230


includes:

- joint mortgage up to the amount of PLN 1,896,000 on the real property for which the District Court in



transfer of monetary receivables from the insurance

agreement for the real property, - Company's declaration of being subject to bank


- Company's blank bill of exchange endorsed with a bill of exchange declaration;

- deduction clause for accounts held in the Bank.

Working capital credit

agreement (in PLN)

with Kredyt Bank SA No

3683273ŁD20041100

of 22 April 2011 (hereinafter:

Agreement), amended

by annex No 1 of 28 September 2011 and

by annex No 2 of 23

April 2012.

35,000

in t

hou

sand

PL

N

14,519

in t

hou

sand

PL

N

24,302


includes: - Company's blank bill of exchange;

- contractual joint mortgage up to the amount of PLN

20,000,000 on the Company's developed property situated in Włoszczowa, for which the District Court in


maintains the land and mortgage registers No KI1W/00048108/1 and KI1W/00022541/0 as well as the

assignment of rights arising from the policy

- contractual mortgage up to the amount of PLN 20,000,000 on the developed property situated in


Włoszczowa, 4th Land and Mortgage Register Division maintains the land and mortgage register No

KI1W/00035880/2, as well as the assignment of rights

arising from the policy, - Registered pledge on the assets identified by type, of the

value of PLN 35,265,000 as at 31 December 2011 – the

subject of the pledge includes the warehouse inventory/work in progress located at the warehouses at

ul. Jędrzejowska 79C, Włoszczowa, as well as

assignment of rights under the policy, excluding the risk of theft

- Company's declaration of being subject to execution proceedings with respect to the Bank's claims arising

from the Agreement that in case of a failure to satisfy the

obligations stipulated in the Agreement, the Bank shall be entitled to issue a bank enforceable instrument up to the

total amount of PLN 43,400,000 PLN. PLN The bank is

entitled to apply an enforcement clause to the bank's enforceable instrument by 06 April 2016.

40 I PAGE

Liabilities from credits and loans in subsidiary ZPUE Gliwice Sp. z o.o. as at 30.06.2012

Liabilities from credits and loans in subsidiary Elektromontaż-1 Katowice SA as at 30.06.2012.

Multi-purpose credit line agreement with

BNP PARIBAS

BANK POLSKA SA No

WAR/2001/11/167/C

B of 5 July 2011

8,000

in t

hou

sand

PL

N

0.00

in t

hou

sand

PL

N

4,286


- blank bill of exchange;

- registered pledge on the machines of the net book value of 1,021,987.01 PLN as of 31.05.2011, as well as the

assignment of rights arising from the insurance policy, up

to the amount of PLN 1,000,000. - mortgage up to the amount of PLN 12,000,000 on the

developed property situated in Włoszczowa, for which

the District Court in Włoszczowa, 4th Land and Mortgage Register Division maintains the land and

mortgage register No KI1W/00020387/8, as well as the

assignment of rights arising from the policy, up to the amount of PLN 2,400,000.

- Company's declaration of being subject to bank



granted

Debt as at

1.01.2011

Situation as at


Multi-purpose credit

line agreement No

WAR/2001/11/168/CB of 22 July 2011

(hereinafter:

Agreement), amended pursuant to annex No

1 of 29 August 2011,

entered into with BNP Paribas Bank Polska

Spółka Akcyjna with

registered office in Warsaw

6,500

in t

hou

san

d P

LN

5,040

in t

hou

san

d P

LN

6,307

The security of the Bank's receivables from

ZPUEG includes:

- a blank bill of exchange along with a bill of

exchange declaration issued by ZPUEG;

- ZPUEG's declaration of being subject to the


- mortgage up to the amount of PLN 1,500,000

established on the real property to which ZPUEG

owns perpetual usufruct rights, which is situated

in Gliwice, and for which the District Court in

Gliwice, 8th Land and Mortgage Register

Division maintains the land and mortgage register

NO GL1G/00082375/4,

- mortgage up to the amount of PLN 9,750,000

established on the real property to which ZPUEG

owns perpetual usufruct rights, which is situated

in Gliwice, and for which the District Court in

Gliwice, 8th Land and Mortgage Register

Division maintains the land and mortgage register

No GL1G/00082375/4,

- assignment of rights arising from the insurance

policy for the aforesaid real property in the

amount not less than 6,500,000 PLN


granted

Debt as at

1.01.2011

Situation as at


Multi-purpose credit line agreement no.

WAR/2001/11/220/C

B of 30 September 2011 with BNP

Paribas Bank Polska

S.A. with its registered office in

Warsaw

7,000

in t

hou

san

d P

LN

1,127

in t

hou

san

d P

LN

1,581

The security of the Bank's receivables includes:

- a blank bill of exchange along with a bill of

exchange declaration issued by Elektromontaż-1

Katowice;

- declaration of being subject to the enforcement

procedures,

- contractual joint mortgage up to the amount of

PLN 10,500,000 established on the real property

situated in Katowice, for which the District Court

Katowice-Wschód in Katowice, 11th Land and

41 I PAGE


Other deferred charges and accruals

Consolidated deferred charges and accruals thousands PLN

30.06.2011 30.06.2012

a) accruals and deferred cost 0

b) accruals and deferred income 6,953 17,573

- short-term (by title) - settlement of grants 141 2,280

- long-term (by title) - settlement of grants 6,812 15,293

Other deferred charges and accruals, total 6,953 17,573

Contingent receivables and liabilities

Contingent receivables from associates thousands PLN

30.06.2011 30.06.2012

a) obtained surety and guarantees 0 0

b) others 0 0

Contingent receivables from associates, total 0 0

Contingent liabilities to associates thousands PLN

30.06.2011 30.06.2012

a) granted surety and guarantees 9,500 15,500

b) others 0 0

Contingent liabilities to associates, total 9,500 15,500

The value of contingent liabilities, as at 30.06.2012, amounted to: PLN 15,500,000

This value represents:

Surety for repayment of the liabilities arising from the Agreement No 270-1/4/RB/2007

concluded with PKO BP S.A. for a current account credit of PLN 5,000,000

Surety of repayment based on a patronage declaration with regard to repaying the liabilities of

STOLBUD Włoszczowa S.A. up to PLN 4,500,000, resulting from Contract No 202-

Mortgage Register Division maintains the land

and mortgage registers No KA1K/00030861/4,

KA1K/00029972/5, KA1K/00029974/9, and

KA1K/00029973/2

- contractual mortgage up to the amount of PLN

10,500,000 established on the perpetual usufruct

right to the real property situated in Katowice and

on the title to buildings and structures erected on

this property, for which the District Court

Katowice-Wschód in Katowice, 11th Land and

Mortgage Register Division maintains land and

mortgage register KW KA1K/00116680/8

- transfer of receivables from the insurance

agreement against fire and other accidents with

respect to buildings and structures erected on the

secured real property, up to the amount of PLN

6,700,000

- general assignment of the future receivables due

to the Company from any and all of its debtors,

- agreement on subordinating financial obligations

- declaration of being subject to the enforcement

procedures

42 I PAGE

127/3/I/10/2007 signed with PKO BP S.A. for a non-renewable working capital loan of PLN

7,000,000.

The contingent liabilities in question were granted with the consent of the Supervisory Board

(Resolution no. 11/2010) and will be binding until 30 June 2014.

Surety granted on 14 March 2011 to STOLBUD Włoszczowa S.A. for repayment of the

liabilities up to PLN 6,000,000 towards Alior Bank S.A., arising from the Current Account

Credit Agreement U0001631804685. The Management Board of ZPUE S.A. issued the surety

in the form of a deposit paid for the period from 14 March 2011 to 9 March 2012. In order to

secure ZPUE S.A.'s receivables from the property surety issued to STOLBUD Włoszczowa

S.A., which consists of the main receivable, interest receivables and other potential charges,

STOLBUD Włoszczowa S.A. will establish ordinary mortgage of up to PLN 6,340,000 for the

benefit of the Issuer.

Clarification to the profit and loss account:

Consolidated net revenue from sales of products (structure - the types of

activities)

thousands PLN

30.06.2011 30.06.2012

- from the sale of products 99,784 152,836

- including from subsidiaries and affiliates 1,872

- from the sale of services 23,709 19,548

- including from associates 0

Net revenue from sale of products, total 123,493 172,384

- including from associates 0 1,872

Consolidated net revenue from sales of products (territorial structure) thousands PLN

30.06.2011 30.06.2012

a) domestic 110,286 146,186


b) export 13,207 26,198




Consolidated net revenue from sales of goods and materials (structure -

type of activity)

thousands PLN

30.06.2011 30.06.2012

- revenue from sales of materials 33,492 18,790

- including from associates 0 0

-revenue from sale of goods 6 822


Total net revenue from sales of goods and materials 33,498 19,612


43 I PAGE

Consolidated net revenue from sales of products, goods and materials

(territorial structure)

thousands PLN

30.06.2011 30.06.2012

a) domestic 33,320 18,894


b) export 178 718


Net revenue from sales of goods and materials, total 33,498 19,612


Consolidated costs by type thousands PLN

30.06.2011 30.06.2012

a)depreciation 5,279 7,346

b)use of materials and energy 71,777 101,157

c)third-party services 24,271 25,180

d)taxes and fees 813 1,262

e)salaries 21,214 29,600

f)social security and other benefits 4,338 6,695

g) other costs by type (due to) 1,422 1,103

Costs by type, total 129,116 172,343

Changes in inventory, products, prepayments and accruals -6,807 -6,945

Cost of products manufactured for the entity's own needs (negative value) -1,165 -759

Cost of sales (negative) -6,210 -9,954

General administrative expenses (negative value) -16,767 -20,844

Cost of producing goods sold 98,167 133,841

Other operating revenue

Other operating revenue thousands PLN

30.06.2011 30.06.2012

profit on sales of non-financial fixed assets 1 15

subsidies 609 1,496

Other operating revenue, including: 1,985 1,145

a) dissolution of the reserve (due to) 278 145

- to adjust the repaid receivables 210 114

- to adjust the written off receivables 68 31

- to adjust inventories 0 0

b) revenue from the lease of assets, including: 1,365 491

- revenues from the rent (with respect to investment property) 0 0

c) compensation received 77 81

d) cash bonuses received 148 113

e) other 117 315

Other operating revenue, total 2,595 2,656

Other operating costs

Other operating costs thousands PLN

30.06.2011 30.06.2012

Loss on sales of non-financial fixed assets 39 145

Revaluation of non-financial assets 623 140

Other operating costs, including: 1,465 995

a) costs of the lease of assets, including: 1,140 529

- direct operating costs relating to the investment property that generated revenue from the rent throughout a given period of time

0 0

44 I PAGE

- direct operating costs relating to the investment property that did not generate

revenue from the rent throughout a given period of time 0 0

b) compensation paid 99 42

c) cash bonuses paid 0 0

d) other 226 424

Other operating cost, total 2,127 1,280

Financial revenue

Consolidated financial revenue from dividends and other profit sharing thousands PLN

30.06.2011 30.06.2012



Financial revenue from dividends and other profit sharing, total 2 2

Financial revenue from interest thousands PLN

30.06.2011 30.06.2012

a) from loans granted 0 0

b) from cash held in bank 86 151

c) from overdue receivables - paid 126 252

c) from overdue receivables - billed, yet not paid 513 532

c) from overdue liabilities - cancelled 11 11

f) from return of VAT on fuel 11 0

Financial revenue from interest, total 747 946


Consolidated other financial revenue thousands PLN

30.06.2011 30.06.2012

a) currency translation gains, including 0 180

b) reversed reserves (due to) 651 845

b) other, including: 36 42

Other financial revenue, total 687 1,067

Financial costs

Consolidated financial expenses from interest thousands PLN

30.06.2011 30.06.2012

a) from credits and loans 928 1,551

- to other entities 928 1,397

b) other interest 241 180

- to associates 0 0

- to other entities 241 151

Financial costs from interest, total 1,169 1,731

Other consolidated financial costs thousands PLN

30.06.2011 30.06.2012

a) foreign exchange losses, including: 18 0

b) established reserves (due to) 647 879

- interest receivables 647 879


Other consolidated costs, total 992 1,366

45 I PAGE

Income tax

Consolidated current income tax thousands PLN

30.06.2011 30.06.2012

1.Gross profit (loss) 5,498 11,422

2. Consolidation adjustments 0 0

3. Difference between gross profit (loss) and income tax base (by title) 833 -350

4.Income tax base 6,543 11,073

5. Income tax at the rate of 19% 1,243 2,104

6. Increases, omissions, exemptions, deductions and tax reductions 0 0

7. Current income tax declared in tax declaration for the period, including: 1,243 2,104

- indicated in profit and loss account 1,243 2,104

- relating to items increasing or decreasing equity capital 0 0

- relating to items increasing or decreasing goodwill and negative goodwill 0 0

Consolidated deferred income tax recognized in the profit and loss account thousands PLN

30.06.2011 30.06.2012

- decrease (increase) due to occurrence and reversal of temporary differences -118 69

- decrease (increase) due to changes in tax rates 0 0

- decrease (increase) due to previously unrecognised tax loss, tax credit or temporary difference of the previous period 0 0

- decrease (increase) due to write-off of assets deferred tax or inability to use the

reserve for deferred income tax 0 0

- other components of deferred income tax (by title) 0 0

Deferred income tax, total -118 69

46 I PAGE

10. Consolidated Sensitivity Analysis

Currency Risk – 01.01.2012 – 30.06.2012 (in thousand PLN)

Book value of the

financial

instruments

Impact on the financial

result before tax

Impact on the equity

(assets available for sale)

Impact on the financial

result before tax

Impact on the equity

(assets available for sale) Financial instruments by balance sheet items

(Increase of 10%) (Increase of 10%) (Decrease of 10%) (Decrease of 10%)

Financial assets

Shares 9,051 0 0 0 0

Retained long-term deposits 0 0 0 0 0

Receivables from provision of deliveries and services 98,029 877 0 -877 0

Receivables other than those listed above which are financial assets 5,680 19 0 -19 0

Cash 15,332 313 0 -313 0

cash in hand 186 0 0 0 0

cash in bank 9,007 313 0 -313 0

other cash 6,139 0 0 0 0

Financial liabilities 0 0

Bank credits 59,821 0 0 0 0

long-term 15,277 0 0 0 0

short-term 44,544 0 0 0 0

Financial leasing 3,051 0 0 0 0

long-term 952 0 0 0 0

short-term 2,099 0 0 0 0

Liabilities from deliveries and services 77,585 -605 0 605 0

Other than financial liabilities listed above 15,749 0 0 0 0

Total 604 0 -604 0

47 I PAGE

11. Classification of consolidated financial instruments

according to IAS (in thousand PLN)

Financial assets by balance sheet items 30.06.2011 book

value

Classification of financial instruments according to IAS 39 (book value)

Other (measured at book value)

valued by their fair market price by a

financial result

measured at fair value with

changes in equity measured at amortized cost

determined upon initial recognition held for trading available for sale

hedge accounting

loans and receivables held to maturity

Financial assets

Shares 9,051 - - 9,051 - - - -

Retained long-term deposits 0 0

Receivables from provision of deliveries and services 98,029 98,029

Receivables other than those listed above which are financial assets 5,680 5,680

Cash 15,332 - - - - - - 15,332


financial result

measured at

amortized cost

measured at fair value

with changes in equity

determined upon initial

recognition held for trading hedge accounting

Financial liabilities - -

Bank credits 59,821 - - 59,821 - -

long-term 15,277 - - 15,277 - -

short-term 44,544 - - 44,544 - -

Financial leasing 3,051 - - 3,051 - -

long-term 952 - - 952 - -

short-term 2,099 - - 2,099 - -

Liabilities from deliveries and services 77,585 - - 77,585 - -

Liabilities other than those mentioned above, which are financial liabilities 15,749 - - 15,749 - -

48 I PAGE

Introduction to separate interim financial statements

Interim financial statements cover data of ZPUE Spółka Akcyjna in Włoszczowa, at ul. Jędrzejowska 79c,

29-100 Włoszczowa, the core business of which includes:

manufacture of concrete construction products, except for prefabricated buildings,

manufacture of metal structures,

manufacture of parts for construction carpentry,

Manufacture of electricity distribution and control apparatus, except for services,

services of installation, repair and maintenance of switchgear and switchboard apparatus,

civil engineering works aimed at construction of the switchgear line structures: local cable pipelines,

power engineering lines and telecommunications lines,

Freight transport by road by universal vehicles.

Authority with which the Parent Company is registered:

District Court in Kielce, 10th Commercial Division of the National Court Register

KRS number – 0000052770;

Life of the Company: perpetual

Period covered by the financial statements: 01.01.2012-30.06.2012, together with comparable data

for the period: 01.01.2011-30.06.2011

As at 30 June 2012 the Supervisory Board of ZPUE SA in Włoszczowa comprised the following members:

President of the Supervisory Board – Bogusław Wypychewicz,

Vice President of the Supervisory Board – Małgorzata Wypychewicz,

Member of the Supervisory Board – Krzysztof Jamróz,

Member of the Supervisory Board – Piotr Kukurba,

Member of the Supervisory Board – Tomasz Stępień.

During the first six months of 2012 there were changes to the composition of the Supervisory Board of ZPUE

S.A..

The General Meeting recalled Ms Teresa Wypychewicz from the post of Member of the Supervisory

Board on 20 June 2012,

The General Meeting recalled Ms Henryka Grzybek from the post of Member of the Supervisory

Board on 20 June 2012,

The General Meeting recalled Mr Czesław Wypychewicz from the post of Member of the

Supervisory Board on 20 June 2012,

The General Meeting appointed Mr Krzysztof Jamróz as Member of the Supervisory Board on 20

June 2012,

The General Meeting appointed Mr Piotr Kukurba as Member of the Supervisory Board on 20 June

2012,

The General Meeting appointed Mr Tomasz Stępień as Member of the Supervisory Board on 20

June 2012.

As at 30 June 2012, the Management Board of ZPUE SA in Włoszczowa comprised the following members:

President of the Board – Andrzej Grzybek,

Member of the Board – Mariusz Synowiec,

Member of the Board – Stanisław Toborek,

Commercial proxies:

Commercial proxy – Henryk Arkit,

Commercial proxy – Iwona Dobosz

Commercial Proxy – Dariusz Górski

Commercial proxy – Katarzyna Kusa

Authorised agent – Aneta Lichosik

Commercial proxy - Wojciech Pyka

Commercial proxy – Piotr Zawadzki

Commercial Proxy – Jadwiga Zawisza

Changes regarding commercial proxies during the first six months of 2012:

The Company's Management Board revoked the proxy authorization granted to Mr Jerzy Banyś on

16 February 2012

The Company's Management Board appointed Mr Dariusz Górski as proxy on 5 April 2012.

The Management Board of ZPUE S.A. revoked the proxy authorization granted to Mr Krzysztof

49 I PAGE

Jamróz on 19 June 2012.

The Management Board of ZPUE S.A. revoked the proxy authorization granted to Mr Tomasz

Stępień on 19 June 2012.

The statements have been prepared on the assumption that the business activity will be continued in the

foreseeable future. The Management Board is not aware of any circumstances threatening the continuation of

the business activity.

Data presented in the financial statements have been prepared in accordance with IAS/IFRS.

Data presented in the separate interim financial statements have been denominated in Polish zloty (PLN).

Polish zloty is the functional and reporting currency in the companies covered by these financial statements.

Description of the adopted accounting principles (policy), including valuation of assets and liabilities

(together with depreciation), determination of financial result and the method of preparation of

financial statements.

The accounting policies applied by the entity are adapted to the requirements of International Accounting

Standards, International Financial Reporting Standards and related interpretations published in the form of

regulations of the European Commission (hereafter IFRS), and where not covered in these Standards under

the Accounting Act and the resultant executive legislation (hereafter UOR).

2.1.The current rules for measuring assets and liabilities

Principles of recognising property, plant and equipment

The property, plant and equipment are such assets which:

- are held by the business entity for use in the production process or for the supply of goods and

services, in order to be released for the use of other entities under the lease agreement or for administrative

purposes, and

- which are expected to be used for more than one period.

The item of property, plant and equipment is recognized as an asset if it is probable that the entity will gain

future economic benefits associated with this asset and that the purchase price or cost of that asset can be

measured reliably.

The fixed assets include;

land (perpetual usufruct right to the land)

buildings,

civil engineering facilities,

machinery, equipment,

means of transport,

other items.

The fixed assets also include the entity's foreign fixed assets used under the rental or lease agreement

or other agreement of a similar nature, provided that other provisions of law allow depreciation write-

offs (amortization) by the party benefiting from these assets. Items priced up to PLN 3,500.00 are

recognised as materials. Upon release for use their value is written down in costs of materials and

recorded off the balance sheet (in the quantity and value register). The materials are recorded off the

balance sheet by place of use. The criterion to include materials in records was their use for more than

one year.

Fixed assets for a unit price of more than PLN 3,500.00 are entered into the register of fixed assets.

The fixed assets records allow to enter differentiators distinguishing assets financed from other

sources (e.g. from the state budget, EU subsidies.) Fixed assets are recorded in analytical positions in

accordance with Classification of Fixed Assets.

Intangible assets shall be assets suitable for commercial use at the date of acceptance for use, such as:

property rights, copyrights, licences, concessions, the rights to: designs, inventions, patents,

trademarks, decor or utility designs,

successful development costs, spending on R&D,

goodwill,

know-how

with the expected lifetime of more than one year, used for the related business activity or put into use

under lease agreement or other agreement of similar nature.

50 I PAGE

An item of property, plant and equipment which qualifies for recognition as an asset, is initially valued at

purchase price or production cost. The cost of purchase or production of property, plant and equipment

consists of the purchase price, including import duties and non-reimbursable taxes on the purchase and

all other directly attributable costs incurred to bring the asset to a fit for use condition, which is

consistent with its intended use. In the case of in-house production it is the cost of production, which

shall be the value of property used and external services, the costs of salaries including related costs and

other costs attributable to the value of manufactured fixed assets or intangible assets. The cost of

production does not include general administrative costs, sales costs, other operating and financial costs

and costs of excessive deficiencies, excessive labour and other resources during the construction,

installation or improvement of fixed assets and the adaptation for use;

In case of acquisition by inheritance or donation or otherwise free of charge, the initial value of an asset

or an intangible asset is the selling price of the same or similar item on the day of purchase, unless the

donation agreement or a free of charge transfer determines the value at a lower amount. The market price

shall be the price used in a given locality in the trade in components of the same type, kind taking into

account its condition and degree of wear.

In the case of difficulties in determining the cost of production of an asset, its initial value is determined

by an expert appraiser taking into account the market prices on the date of putting the component to use.

The basic tool for recording fixed assets is “The Inventory Book of Fixed Assets” divided into groups of

fixed assets.

“The Inventory Book of Fixed Assets” includes following items:

A separate inventory number for each item,

date of recording, evidence number, the type of evidence,

year of construction (purchase),

name of the fixed asset,

classification symbol of the asset,

initial value,

changes in value during use,


annual and monthly amount of depreciation,

depreciation to date,

net value,

the date of withdrawal from use and evidence number,

other data (department, cost position, type of funding obtained, etc.).

The basic tool for recording of intangible assets is the “Book of intangible assets”.

“The Book of intangible assets” includes the following items:

inventory number,

name,

date of purchase or manufacture,

date of booking and proof of purchase number,

date of putting to use,

initial value,


the annual, monthly, and total depreciation value,

net value,

the date of full depreciation,

date and number of withdrawal from records

other data (department, cost position, etc.).

Foreign fixed assets are recognized as off balance in account 090.”

Subsequent expenditures relating to an item of property, plant and equipment which have been already

recognized as an asset are added to the carrying value of the asset, if it is probable that the entity will obtain

future economic benefits that outweigh the benefits possible to be achieved within the originally estimated

benefits from the asset already owned. All other subsequent expenditures are recognized as an expense in the

period in which they are incurred. Expenditures for repairs and maintenance of property, plant and equipment

incurred to restore or maintain future economic benefits, which the entity can expect based on the originally

estimated benefits, are recognized as expenses when incurred.

Major components of some items of property, plant and equipment are recognized as separate assets,

including the independent period of their economic use.

Redemption

The depreciable amount of property, plant and equipment is distributed in a systematic manner over a

period of use. Depreciation method used reflects the mode of consumption by the business entity of

economic benefits from the asset.

51 I PAGE

Depreciation is recognized as an expense during the period.

The useful life of property, plant and equipment and depreciation method is reviewed annually and, if

expectations are significantly different from previous estimates, depreciation write-offs for the current

and future periods are adjusted.

A basis of depreciation write-offs (amortization) of fixed and intangible assets is a current depreciation

schedule drawn up on the first day of each fiscal year, setting out the rates and amounts of the annual

impairment of individual assets.

The depreciation schedule includes:

inventory number,

generic classification symbol,

item name,

date put into use,

initial value,

depreciation method,

annual depreciation rate,

annual and monthly amount of depreciation write-offs,

In the case of assets put to use on the basis of operating lease agreements which, under the

provisions of the Accounting Act are classified as fixed assets - depreciation period shall be based

on useful life.

In the event of changes in production techniques, liquidation, withdrawal from the use or other

reasons causing permanent loss of economic usefulness of an asset, appropriate unplanned

depreciation write-offs are charged to other operating costs.

Valuation of fixed assets and intangible assets

Fixed assets and intangible assets are valued at purchase price or production cost or revalued amount (after

revaluation) less depreciation write-offs and permanent impairment loss write-offs. Fixed assets and

intangible assets are redeemed using the methods set out in the preceding paragraph.

Fixed assets belonging to group 0,1 and 2 are valued by the fair value. Fixed assets belonging to other groups

are valued by the purchase prices or cost of production.

In the case of real estate (group 0) — land is valued by the fair value. They are not subject to depreciation.

Group 1 — Buildings and commercial premises valued by the fair value are redeemed for 720 months at a

rate of 1.66% per annum. Other assets comprising this group — 120-480 months.

Group 2 — Civil engineering facilities valued by the fair value are redeemed for 720 months at a rate of

1.66% per annum. Other fixed assets — 120-300 months.

Valuation of other assets and liabilities

Fixed assets under construction are valued at total costs directly attributable to the cost of purchase or production reduced by permanent

impairment loss write-offs.

The value of assets under construction is increased by foreign exchange losses and interest on loans for the

fixed asset construction period, and is reduced by the permanent impairment loss write-offs.

Real estate are recorded and measured in accordance with the rules relating to fixed assets and intangible assets and



Intangible assets classified as investments are recorded and measured in accordance with the rules relating to fixed assets and intangible assets and



Shares (stocks) in other entities and other investments classified as current assets are measured at cost less


Inventories of materials, goods, finished products, intermediates and products in progress are measured at purchase price or production cost or recoverable net value, depending on which is the lower amount.

With regard to the inventory of materials, an entity has a record of:



52 I PAGE

With regard to the inventory of goods, an entity has a record of:



With regard to the inventory of finished goods, an entity has a record of:



Materials received by the warehouse are recorded by:

actual purchase prices.

Materials released from the warehouse are measured using:


Materials received by the warehouse are recorded by actual purchase prices.

Goods released from the warehouse are measured using:


Finished goods from production received by the warehouse are recorded by:

registration price, the ratio of value of inventories to production costs is adjusted by deviation, which are

accounted for stocks and the issued stocks based on the deviation index.

Finished goods issued from warehouse if records are kept according to:

actual production cost is measured by:


Stocks of production in progress at the balance date are measured at:

direct production costs, which include costs directly related to the manufacturing entity, such as direct

labour and direct materials. They also include the uniformly distributed fixed and variable production

costs incurred in processing the materials to obtain finished products. Fixed indirect production costs are

those indirect costs of production that remain relatively constant regardless of the volume of production,

such as depreciation and cost of maintenance of factory buildings and equipment, and manufacturing

(factory) cost of management and administration. Variable indirect production costs are those indirect

costs of production that vary directly or nearly directly with the volume of production, such as indirect

materials and labour costs.

Short-term investments are measured at the lower of two values: purchase price or market value.

Short-term investments, for which there is no active market are measured at fair value.

Receivables are measured at the amount due, taking in account the prudence principle, after impairment of their value. The receivables are revalued taking into consideration the probability of their

payment. With respect to:

• receivables from debtors in liquidation or bankruptcy – up to the amount of receivables not covered by

the guarantee or another collateral of the receivables, submitted to the liquidator or a bankruptcy judge

in the bankruptcy proceedings, upon receipt of the relevant information,

• receivables from debtors whose bankruptcy file has been rejected, if the debtor's assets are insufficient

to meet the costs of bankruptcy proceedings – in the full value, upon receipt of the court's decision,

• debt disputed by the debtors or debt overdue, when according to the assessment of the debtor's financial

position, the repayment of the contractual amounts is unlikely – up to the amount not covered by a

guarantee or another security upon referral of the debt for the enforcement proceedings pursuant to a

legally binding court's decision.

• debt equivalent to the amounts which increase the value of debt, which previously were written down –

equal to these amounts, until receipt or write-down thereof, upon receipt of the relevant information,

• overdue debt (overdue for a period exceeding 365 days) or non-overdue debt with a significant

probability of default, in cases justified by the type of the pursued activity or the customer structure - in

the amount of a reliably estimated write-down upon referral of the debt for the enforcement proceedings

pursuant to a legally binding court's decision.

Liabilities are measured in accordance with IAS 39, i.e. at amortized cost.

Financial liabilities for which maturity is specified are measured in accordance with IAS 36, i.e., at amortized cost.

53 I PAGE

Cash at hand and on bank accounts is measured at its nominal value.

Provisions for losses and liabilities are measured at a reasonable, reliably estimated value. The reserves are created when:

an entity is subject to any existing legal or customary obligation resulting from past events,

it is likely that fulfilling this obligation would lead to an outflow of resources embodying economic

benefits,

a reliable estimate of that obligation can be made.

Provisions are reduced when the obligation, which required the provisions, is fulfilled and the unused

provisions (due to the cessation or reduction in the risk of losses for which they were created) are dissolved

and credit the accounts of other operating income and financial revenue.

Valuation of financial instruments:

in the case of financial instruments for which there is an active market, fair value is determined in

accordance with their current purchase/sale price.

If there is no active market for the given item of assets or financial liabilities (and also in the case of

non-traded securities), fair value is determined using appropriate valuation techniques.

The fair value of non-traded debt securities is determined as the current value of future cash flows from

such securities, further discounted with the current interest rate.

The fair value of share units in open, cash investment funds is determined in accordance with valuation

made by these funds.

The fair value of shares in closed investment funds is determined in accordance with data included in

financial statements issued by these funds.

Own shares (stocks) are measured at their purchase price.

Capital and other assets and liabilities are valued at nominal value.

Valuation of assets and liabilities denominated in foreign currencies

On the balance date:

assets (excluding shares in subsidiaries under the equity method) and liabilities denominated in foreign

currency are measured at the average foreign exchange rate determined for that date by the National Bank of

Poland; this shall not apply to non-cash items, i.e. to the received and paid advances.

During the financial year:

1) currency sale and purchase transactions and receivables or liabilities payment operations are measured

at the buy or sell rate or the bank, whose services the entity uses or at the negotiated rate; If the bank

whose services are used by the company publishes more than one table, the company shall adopt - in

the case of publication of two tables - the exchange rates from the first published table, and in the case

of more than two tables - the exchange rates from the second exchange rate table published on a

particular date.

2) assets and liabilities denominated in foreign currencies are converted into Polish Zlotys at average

exchange rate announced by the National Bank of Poland on the last working day preceding the date

of incurred cost, unless the customs declaration or other document that binds the entity sets a different

rate;

3) currency withdrawn from the account for business trip allowances is measured at the average exchange

rate of the National Bank of Poland, and if it is purchased, at its purchased price (selling price of the

entity's bank)

4) currency outflows from foreign currency account shall be recorded according to the FIFO method

5) advances collected on foreign business trip allowances paid in Polish Zlotys are settled according to

foreign currency rates:

- average rate of National Bank of Poland from the day advances in PLN are withdrawn for the

currency, for which the company operates separate currency accounts, i.e., EURO or USD,

- sale rate on the day advances in PLN are withdrawn for other currencies.

Principles of valuation of contingent liabilities

A contingent liability is a possible liability that arises from past events and whose existence will be

confirmed only in the future at the time of uncertain events (over which the entity does not have full control).

Contingent liability may also be entity's current liability that arises from past events and which cannot be

measured with sufficient reliability or is not likely that fulfilling this liability would lead to an outflow of

resources embodying economic benefits. In connection with this, such liability is not presented in the balance

54 I PAGE

sheet, but it is described in additional information and notes to financial statements.

Liabilities resulting from guarantees or sureties granted by the entity may be the examples of contingent

liabilities.

Contingent liabilities are measured at the value of guarantees, sureties or otherwise reliably estimated value.

Principles of measuring derivative instruments hedging assets

The entity may have derivative financial instruments (e.g. forward contracts) with the following

characteristics:

their value depends on changes in the value of the underlying instrument (interest rate, base rate,

exchange rate, etc.)

initial purchase expenses do not occur or are very low,

instrument will be settled in the future.

Forward contracts may be concluded in order to protect the entity against adverse changes to its foreign

exchange rate, interest rates, stock indices.

An entity may use derivative hedging instruments in order to:

hedge fair value, that is to reduce the risk of changes in the fair value affecting the financial result

resulting from a particular risk associated with assets and financial liabilities or a specific part

thereof booked on the accounts,

hedge cash flow, that is, reduce the risk of impact of changes in cash flows on the financial result

resulting from a particular risk associated with assets and liabilities, likely future liabilities or

planned transactions, which are booked on the accounts.

Contracts associated with financial instruments reduce the risks associated with the entity's assets or

liabilities, i.e. hedge these assets or liabilities, if at least:

before the conclusion of the contract its purpose is established and assets or liabilities to be hedged

are identified,

financial hedging instrument which is the subject of the contract and the hedged assets or liabilities

are characterized by similar features, in particular the nominal value, maturity date, the impact of

changes in interest rates or currency exchange rate,

likelihood of the expected cash flows is significant.

If these conditions are met, then the valuation of the hedged assets or liabilities takes into account the value

of financial hedging instruments and changes in their value.

Hedged item can be a single booked asset or liability or the likely future liabilities or transactions not booked

into the accounts.

Hedged item may also be a group of assets or liabilities. The hedge may relate to one of the risk factors

threatening changes in fair value or cash flows, provided that the effectiveness of such risk factors can be

effectively measured.

The specific accounting principles relating to derivative financial instruments, which are not covered in this

chapter of the study, are governed by the principles set out in the Ordinance of the Minister of Finance of 12

December 2001 on detailed rules for the recognition, valuation, disclosure and presentation of financial

instruments (Official Journal No 149, item 1674).

Reserves and assets from income tax

The reserves for income tax are established in the amount of income tax payable in the future in connection

with the occurrence of positive temporary differences. Temporary differences result in an increase in the

income tax base in the future.

The amount of reserve from deferred income tax shall be determined taking into account the income tax rates


When determining the reserve, the negative difference (if occurred) settlements booked on the "Deferred tax

assets" account should be taken into account, as at the last day of the previous financial year.

Assets from deferred income tax are determined as an amount for future deduction from income tax, in

connection with negative temporary differences, which will cause in the future the reduction of income tax

base and of tax loss available for deduction, as determined taking account of the prudence principle.

The amount of assets from deferred income tax shall be determined taking into account the income tax rates


When determining the assets from the deferred income tax, the positive difference (if occurred) settlements

booked on the "Reserve for income tax" account should be taken into account, as at the last day of the

previous financial year.

Reserve for income tax and assets from deferred tax are recognised separately in the balance sheet. Reserve

and assets can be compensated if there is the title allowing for the simultaneous recognition when calculating

the amount of tax liability.

Accruals and deferred costs

Accruals and deferred costs are recognised at the amount of likely liabilities in the current reporting period,

55 I PAGE

resulting from (in particular):

1) value of the services provided by contractors, the amount of which can be estimated reliably,

2) the obligation to provide future services resulting from current operations, whose amount can be

estimated, although the date of their creation is not yet known and which could include, among others:

the costs of the auditing the financial statements and other costs for the reporting period,

other items justified by the economic risk and commercial practices.

Accruals and deferred costs are presented in the balance sheet as item B.I.3 Other short-term reserves.

Principles of valuation of deferred charges and accruals of revenue and expenses


Revenue accruals represent the nominal revenue (short- and long-term) on the balance date, which is settled

in future periods. Revenue accruals include, among others:

collected payments or booked receivables from contractors for the services to be performed in the

next financial year,

received grants related to the acquisition or construction of fixed assets or intangible assets. Grants

or other subsidies are recorded in correspondence with the settlement account 246, which contains a

detailed analysis of grants received. Grants booked on the account of revenue accruals are settled in

other operating income in proportion to the depreciation of fixed assets funded from grants

received. Booking fixed assets in fixed assets register in the "Fixed assets" module allows the

introduction of marking allowing the distinction of fixed assets financed by subsidy and to

determine the value of depreciation of the corresponding part funded from the grant.

Accrued costs/expenses

Deferred expenditure

Accrued expenses consist of the indirect costs. During the reporting period, accrued expenses include the

following:

cost of rents and leases paid in advance,

energy costs paid in advance,

cost of property insurance,

fees for perpetual usufruct of land,

property tax,

assets from deferred taxes,

other costs relating to subsequent reporting periods (subscription, prepayment for fairs, etc.).

Expenses to be activated on the account accruals are settled in proportion to the passage of time in

subsequent financial periods to which they relate.

Records for purposes of determining taxable income In order to properly determine the corporate tax base, the entity's accounts plan differentiates, on the one

hand, the analytical accounts grouping the basic operating costs, financial costs and other operating expenses

not deductible for the purposes of the Income Tax Act, and on the other hand the accounts grouping together

financial revenue and other operating revenue which are not revenue or are exempt from taxation. The

analytical distinction in balance sheet accounts is confirmed by the off balance grouping of costs and

revenues in accounts of group "9". In addition, the accounts group "9" records the costs and revenues that

have not been booked on the balance sheet accounts, and affect the determination of the tax base. These

include salaries, social security contributions and other employee benefits, as well as interest paid, which

were paid during the reporting period and that relate to the previous period.

2.2. The choice of the profit and loss account

ZPUE S.A. draws up profit and loss as multiples step variant.

Net result consists of:

sales revenue,

result from other operating activities

result of financial operations,

compulsory charging of financial result by corporate income tax.

Records of costs are maintained by type using the account "490 - Settlement of costs" and by function in the

group "5".

2.5. The method of drawing up a cash flow statement

The entity draws up a cash flow statement using the indirect method. Cash flow statement provides

information on cash flows occurring during the reporting period, broken down by operating, investing and

financing activities.

56 I PAGE

2.6. Statement of changes in equity

The Company prepares the statement of changes in equity.

2.5. Detail of the financial statements

The Management Board is responsible for drawing up and presenting financial statements. The report

contains the following individual components:

g) statement of the financial standing,

h) profit and loss account,

i) statement of changes in equity capital,

j) cash flow account,

k) statement of total revenue,

l) information on accounting policies and explanatory notes.

Financial statements present information that is:

(a) relevant to its users in the decision making process,

(b) reliable, that is, through which the financial statements:

- faithfully presents the financial results and financial position,

- reflects the economic substance of events and transactions and not merely their legal form,

- is objective and impartial,

- is consistent with the prudence principle,

- is complete in all material respects.

When drawing up financial statements, guiding accounting principles are used, i.e.:

- going concern principle;

- accrual principle,

- continuity of presentation principle;

- the materiality principle.

2.6. The materiality principle

It is agreed that for a true and fair presentation of the entity's financial position and profit or loss, the relevant

amounts shall be those that exceed 1% of total assets for the previous reporting period for balance sheet items

or those amounts which exceed 5% of gross earnings for amounts pertaining to the result.

The final decision as to the significance of an amount is taken by the person responsible for keeping the

books in consultation with the entity's general manager.

2.7. The following changes to the standards and interpretations were introduced over the first six

months of 2012:

Amendments to IFRS 7 Financial Instruments - Disclosures

– transfers of Financial Assets, approved in the EU on 22 November 2011 (effective for annual

periods beginning on or after 1 July 2011).

The aforesaid standards, interpretations and amendments to the standards did not significantly affect the

accounting policies pursued hitherto by the entity.

Standards and interpretations that have been published and approved by the EU, but that have not yet

entered into force

Amendments to IAS 1 "Presentation of Financial Statements" - presentation of components of other comprehensive income (effective for annual periods beginning on or after 1 July 2012), Amendments to IAS 19 "Employee Benefits" - amendments to accounting of benefits in the post-employment period (effective for annual periods beginning on or after 1 January 2013),

Standards and interpretations that have been approved by ISAB, but that have not yet been approved by

the EU

IFRS 9 "Financial Instruments" (effective for annual periods beginning on or after 1 January 2015), IFRS 10 "Consolidated Financial Statements" (effective for annual periods beginning on or after 1 January 2013), IFRS 11 "Joint Arrangements" (effective for annual periods beginning on or after 1 January 2013), IFRS 12 "Disclosure of Interests in Other Entities" (effective for annual periods beginning on or after 1 January 2013), IFRS 13 "Fair Value Measurement" (effective for annual periods beginning on or after 1 January 2013),

57 I PAGE

IAS 27 (amended in 2011) "Separate Financial Statements" (effective for annual periods beginning on or after 1 January 2013), IAS 28 (amended in 2011) "Investments in Associates and Joint Ventures" (effective for annual periods beginning on or after 1 January 2013), Amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards" – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (effective for annual periods beginning on or after 1 July 2011), Amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards" –

Government loans (effective for annual periods beginning on or after 1 January 2013),

Amendments to IFRS 7 "Financial Instruments: Disclosures" - Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2013), Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" - mandatory date of entry into force and transitional provisions. Amendments to IAS 12 "Income Taxes" - Deferred Tax: Recovery of Underlying Assets (effective for annual periods beginning on or after 01 January 2012), Amendments to IAS 32 "Financial Instruments: Presentation" - Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after 1 January 2014), Amendments to various standards "Amendments to IFRS (2012)” - amendments introduced within the

procedures for implementation of annual amendments to IFRS published on 17 May 2012 (IFRS 1, IAS 1,

IAS 16, IAS 32 and IAS 34) focused primarily on resolving inconsistencies and clarifying vocabulary

(effective for annual periods beginning on or after 1 January 2013),

“Interpretation of IFRIC 20 "Settlement of waste removal costs incurred in surface mining activity

during the production phase of the mine” (effective for annual periods beginning on or after 1 January

2013).

The Company did not take advantage of the possibility of early adoption of these standards, amendments to

standards and interpretations. In the opinion of the Company, the aforesaid standards, interpretations and

amendments to the standards would not exercise a material impact on the consolidated financial statements, if

the same had been applied as of the balance sheet date.

58 I PAGE

Separate interim statement of the financial standing of the Parent Company (in thousand PLN)

Assets 30.06.2011 31.12.2011 30.06.2012

A. Fixed assets 144,728 158,802 239,589

I Intangible assets 17,170 17,291 16,171

1. Costs of development work 12,541 12,998 12,356

2. Goodwill 0 0 0

4. Other intangible assets 4,629 4,293 3,815

II. Property, plant and equipment 103,311 105,475 113,087

1. Fixed assets 93,351 101,052 106,129

a) land (including perpetual usufruct right to the land) 5,399 5,399 6,947

b) buildings, commercial premises and civil engineering facilities 53,020 57,764 58,318

c) equipment and machinery 25,141 28,123 31,401

d) means of transport 8,766 7,714 7,259

e) other fixed assets 1,025 2,052 2,204

2. Fixed assets under construction 9,960 4,423 6,958

III. Long-term receivables 123 97 55

1. From associates 0 0 0

2. From other entities 123 97 55

IV. Long-term investments 23,497 35,215 109,636

1. Real estate 6,100 6,076 6,023

2. Intangible assets 0 0 0

3. Long-term financial assets 12,167 20,556 95,753

a) in associates 12,119 20,508 95,705

- shares 12,119 20,508 95,705

- other securities 0 0 0

- granted loans 0 0 0

- other long-term financial assets 0 0 0


- shares 48 48 48




4. Other long-term investments 5,230 8,583 7,860

V. Long-term deferred charges and accruals 627 724 640

1. Assets from deferred taxes 627 724 640

2. Other deferred charges and accruals 0 0 0

B. Current assets 137,553 162,771 149,259

I. Inventory 32,422 35,264 42,118

1. Materials 7,793 7,625 7,414

2. Semi-finished products and products in progress 24,233 26,742 33,651

3. Finished products 161 679 837

4. Goods 235 218 216

II. Short-term receivables 96,238 111,770 89,390

1. Receivables from associates 3,827 4,248 7,972


- up to 12 months 3,827 4,248 7,972

- in excess of 12 months 0 0 0

b) others 0 0 0

2. Receivables from other entities 92,411 107,522 81,418


- up to 12 months 77,591 101,914 75,817

- in excess of 12 months 5,873 0 0

59 I PAGE

b) from tax, subsidy, customs, social security 0 0 185

- from corporate income tax 0 0 178

c) others 8,947 5,608 5,416

d) claimed at court 0 0 0

III. Short-term investments 6,449 11,160 14,498

1. Short-term financial assets 6,449 11,160 14,498


- shares 0 0 0





- shares 0 0 0




c) cash and other cash assets 6,449 11,160 14,498

- cash in hand and at bank 364 4,929 8,408

- other cash 6,085 6,231 6,090

- other pecuniary assets 0 0 0

2. Other short-term investments 0 0 0

IV. Short-term deferred charges and accruals 2,444 4,577 3,253

Total assets 282,281 321,573 388,848

0 0 0

A. Equity capital (fund) 151,140 165,496 233,202

I. Stated capital (fund) 8,990 8,990 12,362

II. Called up stated capital (negative value) 0 0 0

III. Own shares for sale (negative value) 0 0 0

IV. Supplementary capital (fund) 101,377 101,377 164,311

V. Revaluation reserve capital (fund) 21,587 21,894 36,038

VI. Other reserve capital (fund) 936 936 936

VII. Profit (loss) from previous years 14,273 14,273 14,273

VIII. Net profit (loss) 3,977 18,026 5,282

IX. Write-offs on net profit during the financial year (negative value) 0 0 0

B. Liabilities and reserves for liabilities 131,141 156,077 155,646

I. Reserves for liabilities 8,066 8,126 11,340

1. Reserves for deferred income tax 6,998 7,219 10,623

2. Social security reserves (and similar reserves) 1,009 655 655

- long-term 1,009 604 604

- short-term 0 51 51

3. Other reserves 59 252 62

- long-term 0 0 0

- short-term 59 252 62

II. Long term liabilities 17,364 20,772 15,788





c) other financial liabilities 2,777 1,504 511

d) others 0 0 0

III. Short-term liabilities 99,285 121,121 113,042

1. To associates 1,782 914 9,599

a) for deliveries and services, maturing within: 1,782 914 9,599

- up to 12 months 1,782 914 9,599

60 I PAGE

Separate profit and loss account of the Parent Company (thousands

PLN)

01.01.2011-

30.06.2011

01.01.2011-

31.12.2011

01.01.2012-

30.06.2012

A.

Net revenues from sales of products, services, goods and

materials 146,959 356,857 157,143

- including from associates 2,445 7,227 3,889

I. Net revenue from sale of products 116,664 287,634 130,594

II. Net revenue from sales of products, goods and materials 30,295 69,223 26,549

B. Cost of products, services, goods and materials sold 121,014 290,269 126,748

- including to associates 1,808 5,811 2,719

I. Cost of producing goods sold 93,106 226,946 101,721

II. Value of goods and materials sold 27,908 63,323 25,027

C. Gross profit / (loss) on sales 25,945 66,588 30,395

D. Cost of sales 5,825 14,219 8,543

E. General administrative expenses 14,982 29,434 15,543

F. Profit (loss) on sales 5,138 22,935 6,309

G. Other operating revenue 2,491 5,605 3,009

I. Profit on sales of non-financial fixed assets 0 178 0

II. Subsidies 539 1,223 1,265

III. Other operating revenue 1,952 4,204 1,744

H. Other operating costs 2,107 4,410 1,912

I. Loss on sales of non-financial fixed assets 40 0 17

II. Revaluation of non-financial fixed assets 623 1,606 138

III. Other operating costs 1,444 2,804 1,757

I. Profit (loss) on operating activities 5,522 24,130 7,406

J. Financial revenue 1,457 5,401 2,150

I. Dividend and profit sharing 2 2 2

- including from associates 0 0 0

II. Interest 768 3,411 1,103


III. Profit on sale of investments 0 0 0


b) others 0 0 0




c) other financial liabilities 3,218 2,718 1,549

d) for deliveries and services, maturing within: 59,924 80,119 47,522

- up to 12 months 59,924 80,119 47,522


e) received advance payments for deliveries 1,245 4,231 1,724

f) liabilities on bills of exchange 0 0 0

g) from tax, customs, social security and other benefits 4,571 6,841 3,194

- from corporate income tax 918 12 0

h) from remuneration 3,275 3,972 3,641

i) others 25 268 9,157

IV. Accruals and deferred income 6,426 6,058 15,476

1. Negative goodwill 0 0 0

2. Other deferred charges and accruals 6,426 6,058 15,476

- long-term 0 0 0

- short-term 6,426 6,058 15,476

Total liabilities: 282,281 321,573 388,848

61 I PAGE

IV. Revaluation of investments 0 0 0

V. Others 687 1,987 1,045

K. Financial costs 2,011 6,455 2,920

I. Interest 1,040 2,601 1,560


II. Loss on sale of investments 0 0 0

III. Revaluation of investments 0 0 0

IV. Others 971 3,854 1,360

L. Gross profit (loss) 4,968 23,075 6,636

Current income tax 1,109 4,735 1,185

- deferred -118 314 169

M. Net profit (loss) 3,977 18,026 5,282

Separate interim statement of the comprehensive income of the Parent

Comapny (in thousand PLN)

from 01.01.2011

to 30.06.2011

from 01.01.2011 to

31.12.2011

from 01.01.2012

to 30.06.2012

Net profit (loss) 3,977 18,026 5,282

Other total revenue: 0.00 0.00 0.00

Financial assets available for sale 0.00 0.00 0.00

Collateral on cash flow 0.00 0.00 0.00

Change in the surplus from reappraisal 0.00 0.00 0.00

Other income 0.00 0.00 0.00

Income tax on other elements of total income 0.00 0.00 0.00

Total other revenue after tax 0.00 0.00 0.00

Total income 3,977 18,026 5,282

Separate interim cash flow statement of the Parent Company (in

thousand PLN) 30.06.2011 31.12.2011 30.06.2012

A. Cash flows from operating activities - indirect method

I. Gross profit (loss) 4,968 23,075 6,636

II.Total adjustments 6,647 13,715 -8,170

1. Profit (loss) of minority shareholders 0 0 0

2.Shares in net profit (loss) of subsidiaries and affiliates consolidated by

equity method 0 0 0

3.Depreciation 5,445 10,998 6,593

- write-offs of goodwill in subsidiaries or negative goodwill in subsidiaries 0 0 0

4.Exchange gains (losses) -13 13 22

5.Interest and profit sharing (dividend) 1,416 2,457 1,397

6.Profit (loss) on investment activities 40 -178 17

7.Change in reserves -213 -374 -190

8.Change in inventory -7,447 -10,288 -6,854

9. Change in receivables 11,737 -3,780 22,418

10.Change in short-term liabilities excluding credits and loans -3,804 22,465 -30,318

62 I PAGE

11.Change in prepayments and accruals 157 -2,395 120

12. Income tax paid -672 -5,203 -1,375

13.Other adjustments 1 0 0

III. Net cash flows from operating activities (I+/-II) 11,615 36,790 -1,534

B. Cash flows from investment activities 0 0 0

I. Inflows 208 610 204

1. Disposal of intangible assets and property, plant and equipment 206 608 202

2. Disposal of investments in real property and in intangible assets 0 0 0

3.From financial assets, including: 2 2 2


- sale of financial assets 0 0 0

- dividend and profit sharing 0 0 0

- repayment of long-term loans 0 0 0

- interest 0 0 0

- other inflows from financial assets 0 0 0


- sale of financial assets 0 0 0

- dividend and profit sharing 2 2 2

- repayment of long-term loans 0 0 0

- interest 0 0 0

- other inflows from financial assets 0 0 0

4.Other inflows from investment activities 0 0 0

II. Outflows 17,202 37,010 12,336

1.Acquisition of intangible assets and property, plant and equipment 17,202 28,620 11,887

2. Investments in real property and in intangible assets 0 0 0

3.For financial assets, including: 0 8,390 449

a) in associates 0 8,390 449

- acquisition of financial assets 0 8,390 449

- granted long-term loans 0 0 0


- acquisition of financial assets 0 0 0

- granted long-term loans 0 0 0

4.Other outflows from investment activities 0 0 0

III. Net cash flows from investment activities (I-II) -16,994 -36,400 -12,132

C. Cash flows from financial activities 0 0 0

I. Inflows 26,187 33,626 25,293

1.Net inflows from issuance of shares and other capital instruments and

from capital contributions 0 0 0

2.Credits and loans 26,187 33,626 14,597

63 I PAGE

3.Issuance of debt securities 0 0 0

4.Other inflows from financial activities 0 0 10,696

II. Outflows 14,489 23,074 8,267

1.Purchase of own shares 0 0 0

2.Dividends and other payments to shareholders 0 0 0

3.Profit distribution liabilities other than profit distribution payments to

shareholders 0 0 0

4.Repayment of credits and loans 11,476 17,534 3,991

5.Redemption of debt securities 0 0 0

6.Expenditure from other financial liabilities 0 0 0

7.Payment of liabilities arising from financial leases 1,595 3,201 2,818

8.Interest 1,418 2,339 1,458

9.Other outflows from financial activities 0 0 0

III. Net cash flows from financial activities (I-II) 11,698 10,552 17,026

D. Total net cash flows (A.III+/-B.III+/-C.III) 6,318 10,942 3,360

E. Balance sheet change in cash, including: 6,218 10,929 3,338

- change in cash due to exchange rate differences 100 13 22

F. Cash opening balance 145 145 11,087

G. Closing balance of cash (F+/-D), including: 6,463 11,087 14,448

Separate interim statement of changes in equity of the Parent

Company (in thousand PLN) 30.06.2011 31.12.2011 30.06.2012

I. Opening balance of equity (OB) 147,163 147,163 165,496

- valuation adjustments 0 0 0

I.a. Opening balance of equity capital (fund) (OB), adjusted 147,163 147,163 165,496

1. Opening balance of stated capital (fund) 8,990 8,990 8,990

1.1. Changes in stated capital (fund) 0 0 3,372


- share issue (stock issue) 0 0 3,372

- increases in capital from net profit 0 0 0


- redemption of shares 0 0 0

1.2. Closing balance of stated capital (fund) 8,990 8,990 12,362

2. Opening balance of called up stated capital 0 0 0

2.1. Change in called up stated capital 0 0 0



2.2. Closing balance of called up stated capital 0 0 0

3. Opening balance of own shares 0 0 0

a) increase 0 0 0

b) decrease 0 0 0

3.1. Closing balance of own shares 0 0 0

4. Opening balance of supplementary capital (fund) 87,174 87,174 101,378

4.1. Changes in supplementary capital (fund) 14,204 14,204 62,933

a) increase (due to) 14,204 14,204 62,933

- issue of shares above face value 0 0 53,909

- from profit distribution (statutory) 0 0 0

- from profit distribution (above the statutory value) 14,204 14,204 9,024

64 I PAGE


- loss coverage 0 0 0

4.2. Closing balance of supplementary capital (fund) 101,378 101,378 164,311

5. Opening balance of revaluation reserve capital (fund) 21,587 21,587 21,894

5.1. Changes in revaluation reserve capital (fund) 0 307 14,144


b) decrease (due to) 0 52 3,318

- disposal of property, plant and equipment 0 0 0

5.2. Closing balance of revaluation reserve capital (fund) 21,587 21,894 36,038

6. Opening balance of other reserve capitals (funds) 936 936 936

6.1. Changes in other reserve capitals (funds) 0 0 0



6.2. Closing balance of other reserve capitals (funds) 936 936 936

7. Opening balance of Minority capital 0 0 0

Changes in capital 0 0 0

increase 0 0 0

decrease 0 0 0

Minority capital at the end of year 0 0 0

8. Opening balance of previous years' profit (loss) 28,477 28,477 32,298

8.1. Opening balance of previous years' profit 28,477 28,477 32,298


8.2. Opening balance of previous years' profit after adjustments 28,477 28,477 32,298


- distribution of previous years'� profit 0 0 0

- revaluation of fixed assets 0 0 0

b) decrease from/of profit division 14,204 14,204 18,025

8.3. Closing balance of previous years' profit 14,273 14,273 14,273

8.4. Opening balance of previous years' loss 0 0 0


8.5. Opening balance of previous years' loss after adjustments 0 0 0


- re-booking of previous years' loss to be covered 0 0 0


8.6. Closing balance of previous years' loss 0 0 0

8.7. Closing balance of previous years' profit (loss) 14,273 14,273 14,273

9. Net result 3,977 18,026 5,282

a) net profit 3,977 18,026 5,282

b) net loss 0 0 0

c) write-offs on profit 0 0 0

II. Closing balance of equity (CB) 151,140 165,496 233,202

III.

Equity (fund) including proposed profit distribution (loss

coverage) 151,140 165,496 233,202

65 I PAGE

Selected financial data thousands PLN thousands EUR

30.06.2011 30.06.2012 30.06.2011 30.06.2012

I. Net revenue from sales of products,

goods and material 146,959 157,143 37,042 37,197

II. Profit (loss) on operating activities 5,522 7,406 1,391 1,753

III. Gross profit (loss) 4,968 6,636 1,252 1,571

IV. Net profit (loss) 3,977 5,282 1,002 1,250

V. Net cash flows from operating

activities 11,615 -1,534 2,927 -363

VI. Net cash flows from investment

activities -16,994 -12,132 -4,283 -2,872

VII. Net cash flows from financial

activities 11,698 17,026 2,948 4,030

VIII. Total net cash flows 6,318 3,360 1,592 795

IX. Number of shares 1,018,127 1,400,000 1,018,127 1,400,000

X. Profit (loss) per ordinary share 3.78 3.76 0.95 0.89

XI. Diluted profit (loss) per ordinary

share 3.78 3.76 0.95 0.89

XII. Declared or paid dividend per

ordinary share 0 6.40 0.00 1.51

Selected financial data thousands PLN thousands EUR

31.12.2011 30.06.2012 31.12.2011 30.06.2012

I. Total assets 321,573 388,848 72,807 91,251

II. Liabilities and reserves for

liabilities 156,077 155,646 35,337 36,525

III. Long term liabilities

20,772 15,788 4,703 3,705

IV. Short-term liabilities 121,121 113,042 27,423 26,528

V. Equity capital 165,496 233,202 37,470 54,726

VI. Share capital 8,990 12,362 2,035 2,901

VII. Number of shares 1,018,127 1,400,000 1,018,127 1,400,000

VIII. Book value per share 162.55 166.57 36.80 39.09

IX. Diluted book value per share 118.21 166.57 26.76 39.09

Selected financial data included in the financial statements for the first six months of 2012 were calculated

according to the following PLN/EUR exchange rates:

- individual balance sheet assets and liabilities of the statement of financial position are calculated

according to the average EUR rate applicable on 29 June 2012, as set by the National Bank of

Poland, i.e. 4.2613 PLN and on 31 December 2011 – 4.4168 PLN.

- individual items on the profit and loss account and cash flow account are converted to EUR

according to the rate which was the arithmetical average of the average rates set by the National

Bank of Poland and applicable on the last day of each financial year:



66 I PAGE

EUR exchange rate to calculate the items of profit and loss account and cash flow statement:

Arithmetic mean of average NBP EUR exchange rates at the end of each month for the period 01.01-

30.06.2012




64/A/NBP/2012 dated 30.03.2012 March 4.1616

84/A/NBP/2012 dated 30.04.2012 April 4.1721

105/A/NBP/2012 dated 31.05.2012 May 4.3889

125/A/NBP/2012 dated 29.06.2012 June 4.2613


Arithmetic mean of average NBP EUR rates at the end of each month for the period 01.01.-30.06.2011




63/A/NBP/2011 dated 31.03.2011 March 4.0119

83/A/NBP/2011 dated 29.04.2011 April 3.9376

104/A/NBP/2011 dated 31.05.2011 May 3.9569

125/A/NBP/2011 dated 30.06.2011 June 3.9866


The exchange rates adopted for the valuation of the assets and liabilities expressed in foreign currencies as of

the balance sheet date:










Earnings per ordinary share for the first six months of 2012 were calculated by dividing the net profit

attributable to ordinary shares, i.e. PLN 4,882,000 by the weighted average number of ordinary shares:

1,300,000. As at 30.06. 2012, earnings per ordinary share amounted to: PLN 3.76.

Earnings per ordinary share for the first six months of 2011 were calculated by dividing the net profit

attributable to ordinary shares, i.e. PLN 3,976,000 by the weighted average number of ordinary shares:

418,127. As at 30.06.2011 earnings per ordinary share amounts to PLN 3.78.

It is the opinion of the Management Board that there were/there will be no events diluting the earnings per

ordinary share both during the first six months of 2012 and during the first six months of 2011.

Book value per share during the first six months of 2012 was calculated as the ratio of equity capital of PLN

233,202,000 and the total number of shares 1,400,000.00. Book value per share as at 30.06.2012 amounted to

PLN 166.57.

Book value per share in 2011 was calculated as the ratio of equity capital of PLN 165,496,000 and the total

number of shares 1,018,127. Book value per share in 2011 amounted to PLN 162.55.

Diluted book value per share in 2011 was calculated as the ratio of the equity capital of PLN 165,496,000

and the total number of shares after dilution i.e. 1,400,000.00. Diluted book value per share in 2011

amounted to PLN 118.21.

It is the opinion of the Management Board of ZPUE S.A. that there will be no events diluting the earnings per

ordinary share during the first six months of 2012.

67 I PAGE

Explanatory notes to the Statement of the Financial Standing

6. Changes in intangible assets

Intangible assets (of the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) costs of completed development work 12,541 12,356

b) goodwill 0 0

c) concessions, patents, licences and other assets, including: 4,184 3,476

-computer software 1,854 1,419

d) other intangible assets 445 339


68 I PAGE

CHANGES IN INTANGIBLE ASSETS (BY TYPE) - (in the Parent Company)

thousands PLN

a b c d e

total intangible

assets cost of completed

development work goodwill

concessions, patents, licences and other

assets, including other intangible

assets

advance payments

towards intangible assets -computer software

a) opening balance of gross value of intangible assets 19,507 0.00 6,295 3,660 1,787 27,589

b) increases (due to) 468 0.00 0 0 0 0 468

- purchase 468 0.00 0 0 0 468

-developed by the company 0 0.00 0 0 0 0

c) deductions (due to) 0 0.00 14 14 0 0 14

-liquidation 0 0.00 14 14 0 14

-sales 0 0.00 0 0 0 0

d) closing balance of gross value of intangible assets 19,975 0.00 6,281 3,646 1,787 0 28,043

e) opening balance of accumulated depreciation 6,509 0.00 2,394 1,952 1,395 10,298

f) depreciation for the period (due to) 1,110 0.00 411 275 53 0 1,574

-write-offs 1,110 0.00 411 275 53 1,574

-decreases (sale, liquidation) 0 0.00 0 0 0 0

g) closing balance of accumulated depreciation 7,619 0.00 2,805 2,227 1,449 0 11,872

h) opening balance of write-offs due to permanent impairment loss 0 0.00 0 0 0 0 0

-increases 0 0.00 0 0 0 0

-decreases 0 0.00 0 0 0 0

i) closing balance of write-offs due to permanent impairment loss 0 0.00 0 0 0 0

j) closing balance of net value of intangible assets 12,356 0.00 3,476 1,419 339 0 16,171

69 I PAGE

7. Changes in fixed assets

PROPERTY, PLANT AND EQUIPMENT (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) fixed assets, including 93,351 106,129

-land (including perpetual usufruct right to the land) 5,399 6,947

-buildings, commercial premises and civil engineering facilities 53,020 58,318

-equipment and machinery 25,141 31,401

-means of transport 8,766 7,259

-other fixed assets 1,025 2,204

b)fixed assets under construction 9,960 6,958

Property, plant and equipment, total 103,311 113,087

INTANGIBLE ASSETS (ownership structure at the Parent Company) thousands PLN

30.06.2011 30.06.2012


b) used based under the tenancy, rental or other agreement, including lease agreement, including: 0 0


70 I PAGE

CHANGES IN FIXED ASSETS (BY TYPE) - in the Parent Company

thousands PLN

-land (including

perpetual usufruct

right to the land)

-buildings,

commercial premises and civil engineering

facilities

-equipment and machinery

-means of transport

-other fixed assets

Fixed assets, total

a)opening balance of gross value of fixed assets 5,399 61,093 48,896 13,366 4,100 132,854

b) increases (due to) 1,548 1,154 5,894 3,647 409 12,652

-purchase 1,548 1,154 5,894 2,992 409 11,997

-developed by the company 0 0 0 0 0 0

- adoption of the lease 0 0 0 655 0 655

c) deductions (due to) 0 0 356 3,324 21 3,701

- value adjustments 0 0 309 2,696 18 3,023

-sales 0 0 47 627 4 678

d) closing balance of gross value of fixed assets 6,947 62,247 54,434 13,689 4,488 141,805

e)opening balance of accumulated depreciation 0 3,330 20,772 5,652 2,048 31,802

f) depreciation for the period (due to) 0 599 2,261 778 237 3,874

-write-offs 0 599 2,459 989 255 4,302

-decrease (liquidation, sale, lease) 0 0 -198 -211 -19 -428

g)closing balance of accumulated depreciation 0 3,929 23,033 6,430 2,284 35,676

h)opening balance of write-offs due to permanent impairment loss 0 0 0 0 0 0

-increases 0 0 0 0 0 0

-decreases 0 0 0 0 0 0

i) closing balance of write-offs due to permanent impairment loss 0 0 0 0 0 0

j) closing balance of net value of fixed assets 6,947 58,318 31,401 7,259 2,204 106,129

71 I PAGE

Balanced fixed assets/ownership structure (in the Parent Company) thousands PLN

30.06.2011 30.06.2012


b) used under the tenancy, rental or another agreement, including lease agreement 8,767

5,168

Total balance sheet fixed assets 93,351 106,129

Fixed assets recognised off-balance sheet (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

Used under the tenancy, rental or other agreement, including lease agreement 0 0

Fixed assets recognised off-balance sheet, total 0 0

8. Long-term receivables

Long-term receivables (in the Parent Company) thousands PLN

30.06.2011 30.06.2012



Net long-term receivables 123 55

c) allowance for uncollectible accounts 16 7

Gross long-term receivables 139 62

Long-term receivables (foreign currency structure) in the Parent

Company unit currency

thousands PLN

30.06.2011 30.06.2012

a) in Polish currency 123 55


Long-term receivables, total 123 55

Changes in long-term allowance for uncollectible accounts thousands PLN

30.06.2011 30.06.2012




d) closing balance of long-term allowance for uncollectible accounts 16 7

9. Long-term investments

4.1 Real estate

Change in the value of the real property (in the Parent Company) thousands PLN

30.06.2011 30.06.2012



c) decreases 50 53


4.2. Long-term financial assets

As at the balance sheet date, ZPUE SA holds:

• 28 shares in: Przedsiębiorstwo Aparatów i Konstrukcji Energetycznych ZMER Sp. z o.o. in Kalisz, having the total

72 I PAGE

value of PLN 47,600.00. The shares owned by ZPUE SA represent 3.92% of the share capital and entitle to exercise 3.92% of

votes in the total number of votes at the AGM. In 2012, ZPUE SA received from: Przedsiębiorstwo Aparatów i Konstrukcji

Energetycznych ZMER Sp. z o.o. in Kalisz, a dividend of PLN 2,490.00.

• 14,986 shares of ZPUE Gliwice sp. z o.o. representing 99.91% of the share capital of the said company and entitling

to 99.91% of votes at the Shareholders' Meeting of ZPUE Gliwice sp. z o.o. The value of the acquired shares amounts to PLN

12,118,928.00. The share capital of ZPUE Gliwice sp. z o.o. amounts to PLN 1,500,000.00 and is divided into 15,000 shares

of the value of PLN 100.00 per share.

• 1,870,439 shares of Elektromontaż-1 Katowice S.A., representing 99.32% of its share capital and entitling to

99.32% of the votes at the General Shareholders' Meeting of Elektromontaż-1 Katowice S.A. The value of the acquired shares

amounts to: PLN 26,074,288.44; and following the appraisal made by the independent auditor, the value of the acquired

shares amounts to: PLN 34,026,050.00 The share capital of Elektromontaż-1 Katowice SA amounts to PLN 6,628,902.72 and

is divided into 1,883,211 shares of the value of PLN 3.52 PLN.

• 2 shares of ZPUE Tools Sp. z o.o. representing 100% of the share capital of the said company and entitling to 100%

of votes at the Shareholders' Meeting of ZPUE Tools Sp. z o.o. The value of the acquired shares amounts to: PLN

17,676,901.17; and following the appraisal made by the independent auditor, the value of the acquired shares amounts to:

PLN 23,063,290.00 The share capital of ZPUE Tools Sp. z o.o. amounts to PLN 60,000.00 and is divided into 12 shares of

the value of PLN 5,000.00 per share.

• 300 shares of ZPUE Poles Sp. z o.o. representing 100% of the share capital of the said company and entitling to

100% of votes at the Shareholders' Meeting. The value of the acquired shares amounts to: PLN 13,529,760.39; and following

the appraisal made by the independent auditor, the value of the acquired shares amounts to: PLN 17,653,210.00 The share

capital of ZPUE Poles Sp. z o.o. amounts to PLN 15,000.00, and is divided into 300 shares of the value of PLN 50.00 per

share.

• The share in "Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy" OOO at the Urban Settlement of

Tolmachevo (Leningrad Oblast, Russian Federation) representing 51% of the share capital of the said company and

authorizing ZPUE S.A. to 51% of votes at the Shareholders' Meeting of the company. The value of the acquired share

amounts to PLN 1,131,469.62. The share capital of: "Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy" OOO

amounts to RUB 10,000.00.

• The share in "Promyshlennye investicii" OOO at the Urban Settlement of Tolmachevo (Leningrad Oblast, Russian

Federation) representing 51% of the share capital of the said company and entitling ZPUE S.A. to 51% of votes at the

Shareholders' Meeting of the company. The value of the acquired shares amounts to: PLN 7,231,469.62. The share capital of

the company "Promyshlennye investicii" OOO amounts to RUB 85,000,000.00.

• The share in ZPUE Ukraina Sp. z o.o. (Dnipropetrovsk Oblast, Ukraine) representing 80% of the share capital of the

said company and entitling ZPUE S.A. to 80% of votes at the Shareholders' Meeting of the company. The value of the

acquired shares amounts to: PLN 36,644.72. The share capital of "ZPUE Ukraina Sp. z o.o." amounts to EUR 8,000.00.

• The share in ZPUE Trade, s.r.o. (ZPUE Trade) in Napajedla (Czech Republic), representing 73.33% of the share

capital of the said company and entitling ZPUE S.A. to 73.33% of votes at the Shareholders' Meeting of the company. The

value of the acquired shares amounts to: PLN 442,447.05. Share capital of the company amounts to CZK 210,000,00.

• The interest in ZPUE Balkani, EOOD in Sofia (Republic of Bulgaria), representing 100% of the share capital of the

said company and authorizing ZPUE S.A. to 100% of votes at the Shareholders' Meeting of the company. Share capital of the

company amounts to BGN 300. The value of the acquired shares amounts to: 1,179.34

The following financial statements have been subject to consolidation: of ZPUE S.A., of ZPUE Gliwice Sp. z o.o., of

Elektromontaż-1 Katowice S.A., of ZPUE Tools Sp Z o.o., and of ZPUE Poles Sp. Z o.o. Shares in the above companies have

been excluded from the consolidated financial statements. Financial statements of the following subsidiaries have not been

subject to consolidation: "Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy" OOO, "Promyshlennye

investicii" OOO, ZPUE Ukraina Sp. z o.o. (Dnipropetrovsk Oblast, Ukraine), ZPUE Trade, s.r.o. (ZPUE Trade) and ZPUE

Balkani, EOOD. This has been due to their minor significance for the Group's consolidated statements and due to the fact that

the costs of procuring reliable financial information would exceed the economic benefits from procurement and presentation

thereof.

Long-term financial assets (the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) in subsidiaries 12,119 95,705





f) in other entities 48 48

73 I PAGE

- shares 48 48

Long-term financial assets, total 12,167 95,753

Change to long-term financial assets (in the Parent Company) thousands PLN

30.06.2011 30.06.2012


b) increases due to: 0 75,197



Securities, shares and other long-term financial assets (currency structure) -

in the Parent Company unit currency

thousands PLN

30.06.2011 30.06.2012




Securities, shares and other long-term financial assets, total 12,167 95,753

Securities, shares and other long-term financial assets (by transferability)

- in the Parent Company

thousands PLN

30.06.2011 30.06.2012

A. with unlimited transferability, listed on stock exchanges (carrying value) 0.00 0.00

a) shares 0.00 0.00

b) bonds 0.00 0.00

c) others 0.00 0.00

B. with unlimited transferability, listed on the Over-The-Counter market (carrying value) 0.00 0.00

a) shares 0.00 0.00

b) bonds 0.00 0.00

c) others 0.00 0.00

C. with unlimited transferability, not listed on a regulated market (carrying

value) 12,167 78,291

a) shares 12,167 78,291

b) bonds 0 0

c) others 0 0

D. with limited transferability (carrying value) 0 0

a) shares 0 0

b) bonds 0 0

c) others 0 0

The value at cost, total 12,167 78,291

Opening balance, total 48 20,556

Value adjustments (for the period), total 0 17,462

Total carrying value 12,167 95,753

4.3. Other long-term investments

Other long-term investments (by type) - in the Parent Company thousands PLN

30.06.2011 30.06.2012


Change in other long-term investments (by type) - in the Parent

Company

thousands PLN

30.06.2011 30.06.2012





74 I PAGE

Other long-term investments (currency structure) - in the Parent


thousands PLN

30.06.2011 30.06.2012




10. Long-term deferred charges and accruals:

5.3. Assets from deferred taxes:

Changes in assets from deferred income tax

(in the Parent Company)

thousands PLN

30.06.2011 30.06.2012

1. Opening balance of assets from deferred income tax, including: 677 723

a) reflected in financial result 677 723



2.Increases 101 44

a) reflected in financial result of the period due to negative temporary differences,

due to: 101 44


c) reflected in equity due to negative temporary differences (due to provisions for

retirement and death benefits) 0 0


e) reflected in goodwill or negative goodwill due to negative temporary differences (due to) 0 0

3.Decreases 151 127

a) reflected in financial result of the period due to the settlement costs that were not tax deductible expenses in previous year 151 127


c) reflected in equity capital due to negative temporary differences (due to) 0 0


e) reflected in goodwill or negative goodwill due to negative temporary differences (due to) 0 0

4. Total closing balance of assets from deferred income tax, including: 627 640

a) reflected in financial result 627 640



Current assets

I. Inventory

Inventories (Parent Company) thousands PLN

30.06.2011 30.06.2012

a)materials 7,793 7,414

b)semi-finished products and production in progress 24,233 33,651

c)finished goods 161 837

d)goods 235 216

Total inventory (carrying value) 32,422 42,118

Allowance on inventories 528 961

Total inventory 32,950 43,079

Allowance on inventories was applied to materials which have been in the warehouse for more than 1 year.

75 I PAGE

Allowance on inventories thousands PLN

30.06.2011 30.06.2012

Allowances on inventories at the beginning of the year 541 903

increases 0 59

decreases 13 0

The value of allowances on inventories 528 961

II. Short-term receivables

Short-term receivables (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a)from associates 3,827 7,972

b)receivables from other entities 92,411 81,418

-for goods and services, maturing within: 83,464 75,817

- up to 12 months 77,591 75,817

- in excess of 12 months 5,873 0

from tax, subsidy, customs, social security and other benefits 0 185

- claimed at court 0 0

-others 8,947 5,416

Net short-term receivables, total 96,238 89,390

c)allowance for uncollectible accounts 6,118 7,065

Gross short-term receivables, total 102,356 96,455

Short-term receivables from associates (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a)for deliveries and services, including: 3,827 7,972

b)other, including 0 0

d)claimed at court, including 0 0

Total net short-term receivables from associates 3,827 7,972

c)allowance for uncollectible accounts from associates 186 814

Total gross short-term receivables from associates 4,013 8,786

Changes in short-term allowance for uncollectible accounts

(in the Parent Company)

thousands PLN

30.06.2011 30.06.2012

Opening balance 5,863 7,385

a) increases (due to) - write-down 1,283 987

b) decreases (due to) 1,028 1,307

- winding-up 1,028 1,307

Closing balance of short-term allowance for uncollectible accounts 6,118 7,065

Gross short-term receivables by currency structure (the

Parent Company) unit currency

thousands PLN

30.06.2011 30.06.2012



PLN) 4,962 7,263

- 1 EUR 4,870 6,963

- 1 LVL 91 126

- 1 USD 1 174

- other currencies

Total short-term receivables 102,356 96,455

Receivables from deliveries and services - maturing after balance thousands PLN

76 I PAGE

date (in the Parent Company) 30.06.2011 30.06.2012

a)up to 1 month 30,922 30,886

b)1 to 3 months 19,867 23,268

c)3 to 6 months 3,051 0

d)6 months to 1 year 610 0

e)more than 1 year 5,890 80

f)overdue receivables 32,803 36,541

Gross receivables from deliveries and services, total 93,143 90,775

g)allowances for uncollectible accounts from deliveries and services 5,852 6,986

Net receivables from provision of deliveries and services, total 87,291 83,789

Trade receivables and services associated with the normal course of sales are the receivables maturing within one

month.

Gross overdue receivables from deliveries and services - with a

breakdown of receivables outstanding during the period (in the

Parent Company)

thousands PLN

30.06.2011 30.06.2012

a)up to 1 month 9,438 11,723

b)1 to 3 months 8,252 6,034

c)3 to 6 months 7,098 5,658

d)6 months to 1 year 4,339 8,010

e)more than 1 year 3,676 5,116

Overdue gross receivables from deliveries and services (total) 32,803 36,541

g) allowance for uncollectible accounts from deliveries and services,

overdue 5,852 6,986

Overdue net receivables from deliveries and services, total 26,951 29,555

III. Short-term investments

3.1. Short-term financial assets

Short-term financial assets (the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) in subsidiaries 0 0





b) in Parent Company 0 0

g) cash and other cash assets 6,449 14,498

-cash in hand and at bank (PLN) 364 8,408

-other cash 6,085 6,090

Short-term financial assets, total 6,449 14,498

Cash and other cash assets (currency structure) - (in the Parent

Company) unit currency

thousands PLN

30.06.2011 30.06.2012


b) in foreign currency (by currency and after conversion to PLN) 65 2,740

EUR 18 1,693

USD 22 51

LVL 25 996

Total cash and other cash assets 6,449 14,498

V. Short-term deferred charges and accruals

77 I PAGE

Short-term deferred charges and accruals (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) prepaid costs, including: 749 1,499

- settlement of insurance 267 315

- settlement related to the prepayment of subscriptions 19 230

- banking services to be settled 20 12

- property tax 343 423

- unperformed services 100 459

other 0 60

b) VAT to be settled in subsequent periods 1,695 1,754

Short-term deferred charges and accruals, total 2,444 3,253

Liabilities

Structure of share capital as at 30.06.2012:

series Type of shares Type of privilege Number of

shares

Value of issue by

its nominal value

Method of

paying the

capital

A registered,

preference

voting rights:

One share entitles to cast five

votes at the AGM,

dividend:

2 units above the rediscount

rate of the domestic bills of

exchange issued by National

Bank of Poland

100,000 PLN 883,000.00 contribution

in kind

A ordinary bearer

shares none 500,000 PLN 4,415,000.00

Contribution

in kind

(conversion

from

registered

shares)

B ordinary bearer

shares none 233,250 PLN 2,059 597.50 cash

C ordinary bearer

shares none 106,750 PLN 942,602.50. cash

D ordinary bearer


E ordinary bearer


f. ordinary bearer

shares none 381,873 PLN 3,371,938.59

Contribution

(shares)

Total 1,400 000 PLN

12,362,000.00

Nominal value of one share = PLN 8.83

On 16 March 2012, as a result of payment for the F Shares, the Company's Management Board issued to

KORONEA S.à r.l. a collective certificate covering 381,873 ordinary F bearer shares. Upon issue of the

certificate of shares, pursuant to article 452 of the Code of Commercial Companies, the Company's share capital

has been increased by PLN 3,371,938.59.

As a result, the share capital of ZPUE S.A. amounts to PLN 12,362,000.00, and consists of 1,400,000 shares with

a nominal value of PLN 8.83.

The 1,400,000 shares consisted of: 100,000 A series registered privileged shares and 1,300,000 ordinary bearer

shares.

The increased capital was paid with a non-cash contribution, i.e. with shares of Elektromontaż 1 Katowice S.A.,

ZPUE Poles Sp. z o.o. and ZPUE Tools Sp. z o.o. The value resulting from the investment agreement of 14

November 2011, i.e. the amount equal to the total value of F shares issue (PLN 57,280,950.00), was assumed as

78 I PAGE

the pooling cost with respect to the accepted shares. However, taking account of the appraisal made by the

independent auditor, the value of the acquired asset was revaluated to the fair value resulting from the appraisal,

i.e. to PLN 74,496,628.34.

The revaluation results were recognized under the revaluation capital. The revaluation reserve capital was

adjusted by the reserve for deferred tax from the revaluation of the assets.

B. Liabilities and reserves for liabilities

Reserves for liabilities

Changes in reserves from deferred income tax (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

1. Opening balance of reserve from deferred taxes, including: 7,166 7,219


b) reflected in equity due to adjustments of depreciation of fixed assets 4,773 4,466

c) reflected in goodwill or negative goodwill 0 0.00

2.Increases 42 3,539

a) reflected in financial result due to positive temporary differences 42 222

b) reflected in equity capital due to positive temporary differences (due to

depreciation) 0 3,318

c) reflected in goodwill or negative goodwill due to positive temporary differences 0 0.00

3.Decreases 210 135

a) reflected in financial result due to positive temporary differences (due to

depreciation) 210 135

b) reflected in equity capital due to positive temporary differences 0 0

c) reflected in goodwill or negative goodwill due to positive temporary differences

(due to) 0 0

4. Closing balance of reserve from deferred taxes, total 6,998 10,623


b) reflected in equity capital 4774 7,784

c) reflected in goodwill or negative goodwill 0.00 0.00

Changes in provisions for pensions and similar benefits (by title) - in the Parent

Company

thousands PLN

30.06.2011 30.06.2012


b)increases 33 0

c) use 0 0

d) dissolution 0 0

e)closing balance 1,009 655

Changes in other consolidated long-term provisions by title - in the Parent

Company

thousands PLN

30.06.2011 30.06.2012


b)increases 0 0

c) use 0 0

d) dissolution 0 0


Changes in other short-term provisions by title thousands PLN

30.06.2011 30.06.2012


- provision for the audit of financial statements 21 29

- provision for intermediary sales services 120 125

- provision for performance bond 6 6

79 I PAGE

- provision for transport services 158 93

b)increases 70 42

- provision for the audit of financial statemenrs 0 19




c) dissolution/use 316 232










Long term liabilities

Long-term liabilities (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) to subsidiaries 0 0







-credits and loans 14,587 15,277

- other liabilities from financial leasing 2,777 511


Long-term liabilities maturing after the balance sheet date - in the Parent

Company

thousands PLN

30.06.2011 30.06.2012

a) 1 to 3 years 17,364 15,788

b) 3 to 5 years 0 0

c) more than 5 years 0 0


Long-term liabilities, currency structure - in the Parent


thousands PLN

30.06.2011 30.06.2012



PLN) 410 0


80 I PAGE

Long-term liabilities from loans and advances:

The value of the long-term liabilities arising from loans and credits are the liabilities incurred by the Parent

Company ZPUE S.A.


granted

Debt as at

1.01.2012

Situation as at



(No 67 1020 2629

0000 9796 0046 0568) of 7 October

2010 for investment

credit (hereinafter: Agreement) amended

pursuant to the

annexes: No 1 of 30 December 2010, No

2 of 31 January

2011, No 3 of 31 March 2011, No 4 of

20 April 2011, No 5

of 24 May 2011, No 6 of 3 June 2011, No

7 of 22 November

2011 and No 8 of 25 April 2012.

23,065

in t

hou

sand

PL

N

14,775

in t

hou

sand

PL

N

12,276


Company includes:

-- joint mortgage up to the amount of PLN 39,210,000 on the Company's title to the real

property situated in Włoszczowa, for which the



and KI1W/00031436/7 and the transfer of monetary receivables from the property insurance

agreement;

- registered pledge on the purchased fixed assets, which are the subject of the investment and the


insurance agreements for these fixed assets, - transfer of title ("under a condition precedent")

to fixed assets until the effective execution of

such pledge, - a declaration of being subject to bank



- deduction clause for accounts held for the

Company in the Bank, - a transfer of receivables under the contract for

subsidising the investment project to the Bank

and the authorization for administering the

account to which the subsidy is transferred;

- surety from Stolbud Włoszczowa S.A. up to the

amount of PLN 9,590 000,00. PLN

Credit Agreement

with PKO BP SA in

the form of a multi-purpose credit limit

No 75 1020 2629

0000 9602 0229 7216 (No 202-

127/LW/I/13/2007)

of 5 September 2007 for amended

pursuant to the

annexes: No 1 of 2 June 2008, No 2 of 4


September 2010, No 4 of 6 September

2010 and No 5 of 7

October 2010 (hereinafter:

Agreement)

The multi-purpose

credit limity (in

PLN) in the amount of PLN

17,000,000,

whereby the Bank granted to the

Company:

- current account overdraft - up to

the amount of

PLN 9,000,000, - Non-renewable

working capital

loan - up to the

amount of PLN

12,000,000, PLN,


foreign

transactions - up to the amount of

5,100,000 PLN

in t

hou

sand

PL

N

3,855

in t

hou

sand

PL

N

2,470


- a joint capped rate mortgage up to the amount

of PLN 20,400,000 on the Company's real property situated in Włoszczowa, for which the

District Court in Włoszczowa, 4th Land and

Mortgage Register Division maintains the land and mortgage registers No 28347 and 31436 and

the transfer of monetary receivables from the insurance agreement for the aforesaid real

property;

- a borrower blank bill of exchange along with a bill of exchange declaration;


ZPUE M.B. Wypychewicz spółka

jawna,


ZPUE Holding sp. z o.o.,

- deduction clause for accounts held in PKO BP S.A.

- a declaration of being subject to execution

proceedings by the Company and the sureties

81 I PAGE

The value of liabilities under financial leases to be repaid within the period longer than a year from the balance

sheet date constitutes other consolidated financial liabilities.

Short-term liabilities

Short-term liabilities (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) to subsidiaries 1,782 9,599





credits and loans, including: 0 0

long-term during repayment period 0 0

from the issuance of securities 0 0

from dividends 0 0

other financial liabilities, including: 0 0

for deliveries and services, maturing within: 0 0

up to 12 months 0 0

in excess of 12 months 0 0

received advance payments for deliveries 0 0

liabilities on bills of exchange 0 0

other (by type) 0 0



-credits and loans, including: 25,246 36,656

- long-term during repayment period 0 0

- other financial liabilities, including: 3,217 1,549

-for deliveries and services, maturing within: 59,924 47,522

- up to 12 months 59,924 47,522

-received advance payments for deliveries 1,245 1,724

-from tax, customs, social security and other benefits 4,571 3,194

- from remuneration 3,275 3,641

- other (by title) 25 9,157

Liabilities arising from dividend (for 2011) 0 9,001

h) special funds (by title) 0 0


Gross short-term liabilities (currency structure) in the Parent


thousands PLN

30.06.2011 30.06.2012



- 1 EUR 3,830 5,134

- 1 USD 192 553


(No 06 1020 2629

0000 9196 0054 2373) for the

Investment Credit in

PLN of 20 April 2011 (hereinafter:

Agreement).

850

in t

hou

sand

PL

N

638

in t

hou

sand

PL

N

531


- joint mortgage up to the amount of PLN

1,896,000 on the real property for which the District Court in Włoszczowa, 4th Land and

Mortgage Register Division maintains the land

and mortgage registers No KI1W/00028347/2 and KI1W/00031436/7 and the transfer of

monetary receivables from the insurance

agreement for the real property, - Company's declaration of being subject to bank


- Company's blank bill of exchange endorsed with a bill of exchange declaration;

- deduction clause for accounts held in the Bank.

82 I PAGE

- 1 LVL


Short-term liabilities as at 30.06.2012 from credits and loans:

Liabilities from credits and loans in the Parent Company ZPUE SA


granted Debt as at 1.01.2011

Situation as at


Credit Agreement

with PKO BP SA in the form of a multi-

purpose credit limit

No 75 1020 2629 0000 9602 0229 7216

(No 202-

127/LW/I/13/2007) of 5 September 2007 for

amended pursuant to

the annexes: No 1 of 2 June 2008, No 2 of 4


September 2010, No 4 of 6 September 2010

and No 5 of 7 October 2010 (hereinafter:

Agreement)

The multi-purpose

credit limity (in

PLN) in the amount of PLN

17,000,000,

whereby the Bank granted to the

Company:

- current account overdraft - up to

the amount of

9,000,000 PLN, - Non-renewable

working capital

loan - up to the amount of

12,000,000 PLN,


foreign transactions - up to

the amount of

5,100,000 PLN

in t

hou

sand

PL

N

3,002 in

th

ou

sand

PL

N

3,002


includes:

- a joint capped rate mortgage up to the amount of PLN

20,400,000 on the Company's real property situated in Włoszczowa, for which the District Court in


maintains the land and mortgage registers No 28347 and 31436 and the transfer of monetary receivables from the

insurance agreement for the aforesaid real property;

- a borrower blank bill of exchange along with a bill of exchange declaration;




ZPUE Holding sp. z o.o., - deduction clause for accounts held in PKO BP S.A.

- a declaration of being subject to execution proceedings by the Company and the sureties

Credit Agreement

with PKO BP SA (No

67 1020 2629 0000 9796 0046 0568) of 7

October 2010 for

investment credit (hereinafter:

Agreement) amended

pursuant to the annexes: No 1 of 30

December 2010, No 2

of 31 January 2011, No 3 of 31 March

2011, No 4 of 20

April 2011, No 5 of 24 May 2011, No 6 of

3 June 2011, No 7 of

22 November 2011 and No 8 of 25 April

2012.

23,065

in t

hou

sand

PL

N

4,325

in t

hou

sand

PL

N

4,836


- joint mortgage up to the amount of PLN 39,210,000 on

the Company's title to the real property situated in Włoszczowa, for which the District Court in



transfer of monetary receivables from the property

insurance agreement; - registered pledge on the purchased fixed assets, which

are the subject of the investment and the transfer of

monetary receivables from the insurance agreements for these fixed assets,

- transfer of title ("under a condition precedent") to fixed

assets until the effective execution of such pledge, - a declaration of being subject to bank enforcement

procedures,


- deduction clause for accounts held for the Company in

the Bank, - a transfer of receivables under the contract for

subsidising the investment project to the Bank and the

authorization for administering the account to which the subsidy is transferred;

- surety from Stolbud Włoszczowa S.A. up to the amount

of PLN 9,590 000,00. PLN

Credit Agreement

with PKO BP SA (No 06 1020 2629 0000

9196 0054 2373) for

the Investment Credit in PLN of 20 April

2011 (hereinafter:

Agreement).

850

in t

hou

sand

PL

N

212

in t

hou

sand

PL

N

230


- joint mortgage up to the amount of PLN 1,896,000 on

the real property for which the District Court in Włoszczowa, 4th Land and Mortgage Register Division

maintains the land and mortgage registers No

KI1W/00028347/2 and KI1W/00031436/7 and the transfer of monetary receivables from the insurance

agreement for the real property,

83 I PAGE


Other deferred charges and accruals

Other deferred charges and accruals - in the Parent Company thousands PLN

30.06.2011 30.06.2012

a) accruals and deferred cost 0 0

b) accruals and deferred income 6,426 15,476

- short-term (by title) - settlement of grants 0 1,820

- long-term (by title) - settlement of grants 6,426 13,656

Other deferred charges and accruals, total 6,426 15,476

- Company's declaration of being subject to bank enforcement procedures,

- Company's blank bill of exchange endorsed with a bill

of exchange declaration; - deduction clause for accounts held in the Bank.

Working capital credit

agreement (in PLN)

with Kredyt Bank SA

No 3683273ŁD20041100

of 22 April 2011

(hereinafter: Agreement), amended

by annex No 1 of 28

September 2011 and by annex No 2 of 23

April 2012.

35,000

in t

ho

usa

nd

PL

N

14,519

in t

hou

sand

PL

N

24,302


- Company's blank bill of exchange;

- contractual joint mortgage up to the amount of PLN 20,000,000 on the Company's developed property

situated in Włoszczowa, for which the District Court in

Włoszczowa, 4th Land and Mortgage Register Division maintains the land and mortgage registers No

KI1W/00048108/1 and KI1W/00022541/0 as well as the

assignment of rights arising from the policy - contractual mortgage up to the amount of PLN

20,000,000 on the land real property situated in



maintains the land and mortgage register No KI1W/00035880/2, as well as the assignment of rights

arising from the policy,

- Registered pledge on the assets identified by type, of the value of PLN 35,265,000 as at 31 December 2011 – the

subject of the pledge includes the warehouse

inventory/work in progress located at the warehouses at ul. Jędrzejowska 79C, Włoszczowa, as well as

assignment of rights under the policy, excluding the risk

of theft - Company's declaration of being subject to execution

proceedings with respect to the Bank's claims arising

from the Agreement that in case of a failure to satisfy the obligations stipulated in the Agreement, the Bank shall be

entitled to issue a bank enforceable instrument up to the

total amount of PLN 43,400,000. PLN The bank is entitled to apply an enforcement clause to the bank's

enforcement title by 6 April 2016.

Multi-purpose credit

line agreement with

BNP PARIBAS BANK POLSKA SA

No

WAR/2001/11/167/CB of 5 July 2011

8,000

in t

hou

sand

PL

N

0

in t

hou

sand

PL

N

4,286


includes:

- blank bill of exchange; - registered pledge on the machines of the net book value

of PLN 1,021,987.01, as at 31.05.2011, as well as the

assignment of rights arising from the insurance policy, up to the amount of PLN 1,000,000.

- mortgage up to the amount of PLN 12,000,000 on the

developed property situated in Włoszczowa, for which the District Court in Włoszczowa, 4th Land and

Mortgage Register Division maintains the land and

mortgage register No KI1W/00020387/8, as well as the assignment of rights arising from the policy, up to the

amount of PLN 2,400,000.

- Company's declaration of being subject to bank


84 I PAGE

Contingent receivables and liabilities

Contingent receivables from associates thousands PLN

30.06.2011 30.06.2012

a) obtained surety and guarantees 0 0

b) others 0 0

Contingent receivables from associates, total 0 0

Contingent liabilities to associates thousands PLN

30.06.2011 30.06.2012

a) granted surety and guarantees 9,500 15,500

b) others 0 0

Contingent liabilities to associates, total 9,500 15,500

The value of contingent liabilities, as at 30.06.2012, amounted to: PLN 15,500,000

This value represents:

Surety for repayment of the liabilities arising from the Agreement No 270-1/4/RB/2007 concluded

with PKO BP S.A. for a current account credit of PLN 5,000,000

Surety of repayment based on a patronage declaration with regard to repaying the liabilities of

STOLBUD Włoszczowa S.A. up to PLN 4,500,000, resulting from Contract No 202-

127/3/I/10/2007 signed with PKO BP S.A. for a non-renewable working capital loan of PLN

7,000,000.

The contingent liabilities in question were granted with the consent of the Supervisory Board

(Resolution no. 11/2010) and will be binding until 30 June 2014.

Surety granted on 14 March 2011 to STOLBUD Włoszczowa S.A. for repayment of the liabilities

up to PLN 6,000,000 towards Alior Bank S.A., arising from the Current Account Credit Agreement

U0001631804685. The Management Board of ZPUE S.A. issued the surety in the form of a deposit

paid for the period from 14 March 2011 to 9 March 2012. In order to secure ZPUE S.A.'s

receivables from the property surety issued to STOLBUD Włoszczowa S.A., which consists of the

main receivable, interest receivables and other potential charges, STOLBUD Włoszczowa S.A. will

establish ordinary mortgage of up to PLN 6,340,000 for the benefit of the Issuer.

Clarification to the profit and loss account:

Net revenues from sales of products (structure - the types of activities) -

in the Parent Company

thousands PLN

30.06.2011 30.06.2012

- from the sale of products 93,374 113,494

- including from associates 2,305 3,196

- from the sale of services 23,290 17,100




Net revenues from sales of products (territorial structure) (in the Parent

Company)

thousands PLN

30.06.2011 30.06.2012

a) domestic 103,457 109,435


b) export 13,207 21,159




85 I PAGE

Net revenue from sales of goods and materials (structure - type of

activity) - in the Parent Company

thousands PLN

30.06.2011 30.06.2012

- revenue from sales of materials 30,289 26,545


-revenue from sale of goods 6 4


Total net revenue from sales of goods and materials 30,295 26,549


Net revenue from sales of goods and materials (territorial structure) - in

the Parent Company

thousands PLN

30.06.2011 30.06.2012

a) domestic 30,125 26,203


b) export 170 346

- including from associates

Net revenue from sales of goods and materials, total 30,295 26,549


Costs by type - in the Parent Company thousands PLN

30.06.2011 30.06.2012

a)depreciation 4,951 5,874

b)use of materials and energy 67,579 78,108

c) third-party services 24,484 21,468

d)taxes and fees 730 827

e)salaries 19,196 21,567

f)social security and other benefits 3,948 4,846

g) other costs by type (due to) 1,331 908

Costs by type, total 122,219 133,598

Changes in inventory, products, prepayments and accruals -7,141 -7,067

Cost of products manufactured for the entity's own needs (negative value) -1,165 -724

Cost of sales (negative) -5,825 -8,543

General administrative expenses (negative) -14,982 -15,543

Cost of producing goods sold 93,106 101,721

Other operating revenue

Other operating revenue thousands PLN

30.06.2011 30.06.2012

profit on sales of non-financial fixed assets 0 0

subsidies 539 1,265

Other operating revenue, including: 1,952 1,744

a) dissolution of the reserve (due to) 278 145

- to adjust the repaid receivables 210 114

- to adjust the written off receivables 68 31

- to adjust inventories 0 0

b) revenue from lease of assets, including: 1,365 1,334

- revenues from the rent (with respect to investment property) 44 71

c) compensation received 67 70

d) cash bonuses received 148 113

e) other 94 82

Other operating revenue, total 2,491 3,009

Other operating costs

Other operating costs thousands PLN

30.06.2011 30.06.2012

86 I PAGE

Loss on sales of non-financial fixed assets 40 117

Revaluation of non-financial assets 623 138

Other operating costs, including: 1,444 1,657

a) costs of the lease of assets, including: 1,140 1,212

- direct operating costs relating to the investment property that generated

revenue from the rent throughout a given period of time 53 53

- direct operating costs relating to the investment property that did not generate revenue from the rent throughout a given period of time 0 0

b) compensation paid 87 37

c) cash bonuses paid 0 0

d) other 217 408

Other operating cost, total 2,107 1,912

Financial revenue

Financial revenue from interest, total thousands PLN

30.06.2011 30.06.2012

a) from loans granted 0 0

b) from cash held in bank 86 149

c) from overdue receivables - paid 110 237

c) from overdue receivables - billed, yet not paid 550 705

c) from overdue liabilities - cancelled 11 12

f) from return of VAT on fuel 11 0

Financial revenue from interest, total 768 1,103


Other financial revenue (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) currency translation gains, including 0 164

b) reversed reserves (due to) 0 846


Other financial revenue, total 687 1,045

Financial costs

Financial revenue from interest (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) from credits and loans 794 1,339

- to other entities 794 1,339

b) other interest 246 221

- to associates 0 87

- to other entities 246 134

Financial costs from interest, total 1,040 1,560

Other financial costs (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

a) foreign exchange losses, including: 9 0

b) established reserves (due to) 647 908

- interest receivables 647 908


Other costs, total 971 1,360

Financial revenue from dividends and other profit sharing (in the

Parent Company)

thousands PLN

30.06.2011 30.06.2012



Financial revenue from dividends and other profit sharing, total 2 2

87 I PAGE

Income tax

Current income tax (in the Parent Company) thousands PLN

30.06.2011 30.06.2012

1.Gross profit (loss) 4,968 6,636

2. Consolidation adjustments

3. Difference between gross profit (loss) and income tax base (by title) 870 -405

4.Income tax base 5,838 6,232

5. Income tax at the rate of 19% 1,109 1,184

6. Increases, omissions, exemptions, deductions and tax reductions 0 1

7. Current income tax declared in tax declaration for the period, including: 1,109 1,185

- indicated in profit and loss account 1,109 1,185

- relating to items increasing or decreasing equity capital 0 0

- relating to items increasing or decreasing goodwill and negative goodwill 0 0

Detailed reconciliation of the tax result as at 30.06.2012

GROSS PROFIT 6,636

Non-tax-deductible costs, including: 10,601

- depreciation of operational activities 5,874

- depreciation in other activities 719

- salaries 0

- Unpaid wages excluding salaries 20

- consumption of materials 10

- social security contributions 1,445

- taxes and fees including contributions to State Fund for Rehabilitation of Disabled

Persons (PFRON) 396

- business travel 0

- representation and advertising expenses 35

- Other including: car insurance in excess of €20,000 17

- third-party services 184

- allowance for interest receivables 908

- unpaid interest on liabilities 7

- donations 6

- other costs 980

TAX COSTS, including: 8,733

- tax depreciation 5,598

- examination of the balance sheet (within the reserve established) 29

- commissions (within the reserve established) 112

- other reserves 25

- Interest on liabilities due in the previous year and paid in the current year 134

- operating lease payments 1,426

- salaries and wages paid under employment agreement and paid business travel

allowances 35

- salaries and wages paid under agreements for specific work 1

- social security contributions paid 1,373

REVENUE INCREASING INCOME TAX BASE 534

REVENUE NOT RECOGNISED AS REVENUE, including: 1,573

- financial revenue 1,533

- other operating revenue 40

88 I PAGE

NON-TAXABLE REVENUE, including: 1,225

- The amount of amortization of financing 1,225

DEDUCTIBLE DONATIONS 6

TAX BASE 6,235

INCOME TAX (19% OF BASE) 1,185

Deferred income tax recognized in the profit and loss account in the Parent

Company

thousands PLN

30.06.2011 30.06.2012

- decrease (increase) due to occurrence and reversal of temporary differences -118 169

- decrease (increase) due to changes in tax rates 0 0

- decrease (increase) due to previously unrecognised tax loss, tax credit or temporary difference of the previous period 0 0

- decrease (increase) due to write-off of assets deferred tax or inability to use the

reserve for deferred income tax 0 0

- other components of deferred income tax (by title) 0 0

Deferred income tax, total -118 169

Additional clarifications regarding cash flow statement

Change in short-term liabilities excluding credits and loans thousands PLN

30.06.2011 30.06.2012

Change in the balance of short-term liabilities excluding credits and loans 10,068 -13,064

Adjustments by items: -13,869 -17,255

- change in liabilities due to leasing 1,167 2,163

- change in liabilities arising from income tax -437 190

- change in liabilities arising from interest on loan -14,598 -10 6067

- change in liabilities due to dividend 0 -9,001

Change in short-term liabilities excluding borrowings disclosed in the cash flow

statement -3,804 -30,318

89 I PAGE

10. Sensitivity analysis of ZPUE SA

Currency Risk – 01.01.2012 – 30.06.2012 (in thousand PLN)

Book value Impact on the Impact on the Impact on the Impact on the

Financial instruments of the financial financial result equity (assets financial result equity (assets

by balance sheet items instruments before tax available for sale) before tax available for sale)

(Increase of 10%) (Increase of 10%) (Decrease of 10%) (Decrease of 10%)

Financial assets

Shares 95,752 0 0 0 0

Retained long-term deposits 62 0 0 0 0

Receivables from provision of deliveries and services 83,789 707 0 -707 0

Receivables other than those listed above which are financial assets 5,416 19 0 -19 0

Cash 14,498 274 0 -274 0

cash in hand 158 0 0 0 0

cash in bank 8,251 274 0 -274 0

other cash 6,090 0 0 0 0

Financial liabilities

Bank credits 51,933 0 0 0 0

long-term 15,277 0 0 0 0

short-term 36,656 0 0 0 0

Financial leasing 2,060 0 0 0 0

long-term 511 0 0 0 0

short-term 1,549 0 0 0 0

Liabilities from deliveries and services 57,121 --587 0 567 0

Other than financial liabilities listed above 14,521 0 0 0 0

Total 432 0 -432 0

90 I PAGE

Classification of financial instruments according to

IAS 39 (in the Parent Company - in thousand PLN)

Financial assets by balance sheet items 30.06.2011 book

value

Classification of financial instruments according to IAS 39 (book value)

Other

(measured at book value)


financial result

measured at fair value with changes

in equity measured at amortized cost

determined upon

initial recognition held for trading available for sale

hedge accounting

loans and receivables held to maturity

Financial assets

Shares 95,752 - - 95,752 - - - -

Retained long-term deposits 62 62

Receivables from provision of deliveries and services 83,789 83,789

Receivables other than those listed above which are financial assets 5,416 5,416

Cash 14,498 - - - - - - 14,498


financial result

measured at amortized cost

measured at fair value with

changes in equity

determined upon

initial recognition held for trading hedge accounting

Financial liabilities - -

Bank credits 51,933 - - 51,933 - -

long-term 15,277 - - 15,277 - -

short-term 36,656 - - 36,656 - -

Financial leasing 2,060 - - 2,060 - -

long-term 511 - - 511 - -

short-term 1,549 - - 1,549 - -

Liabilities from deliveries and services 57,121 - - 57,121 - -

Liabilities other than those mentioned above, which are financial liabilities 14,521 - - 14,521 - -

91 I PAGE

Transactions with subsidiaries during the first six months of 2012 (thousand PLN)

ZPUE Gliwice Sp. z o.o. in Gliwice.

Net revenue from sale of finished products and services 1,319

Net revenue from sale of materials - 27

Costs of sale of finished products and services - 1,047

Costs of sale of materials - 20

Value of receivables - 1,266

Value of liabilities - 858

ZPUE Tools Sp. z o.o. in Włoszczowa (from the date of acquiring the control)

Net revenue from sale of finished products and services 81


Costs of sale of finished products and services - 5


Value of receivables - 112

Value of liabilities - 2,452

ZPUE Poles Sp. z o.o. in Włoszczowa (from the date of acquiring the control)







Elektromontaż-1 Katowice SA (from the date of acquiring the control):






Value of liabilities - 2,211

"Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy" OOO at the Urban

Settlement of Tolmachevo (Leningrad Oblast, Russian Federation) (from the date of

acquiring the control):

Net revenue from sale of finished products and services 1,754


Costs of sale of finished products and services - 1,505


Value of receivables - 2,853


"Promyshlennye investicii" OOO at the Urban Settlement of Tolmachevo (Leningrad

Oblast, Russian Federation) (from the date of acquiring the control):




Costs of sale of materials - 0.



ZPUE Ukraina Sp. z o.o.







ZPUE Trade s.r.o. (from the date of acquiring the control)


92 I PAGE






ZPUE Bałkany (from the date of acquiring the control)







Transactions with associates

Associate

Method of association Transaction type

Value of the turnover

with the entity in the

period January-June

2012 (in PLN)

ZPUE Holding sp. z o.o..

entity in which the members of ZPUE S.A. authorities

acted as the members of managing and supervising

authorities

Sale of services and materials by

ZPUE S.A. 1,688

Purchase of services and materials by

ZPUE S.A. 7,379

Stolbud Włoszczowa S.A.

entity in which the members of ZPUE S.A. authorities

acted as the members of supervising authority


ZPUE S.A. 53


ZPUE S.A.

2,837 (including PLN

2,7000,000 for the

purchase of an

investment property in

order to manufacture

insulating elements)

Kortrak sp. z o.o.

entity controlled by the person supervising the control over

ZPUE S.A.


ZPUE S.A. 275


ZPUE S.A. 1,950

Villa Aromat Małgorzata Wypychewicz sp.j.

entity jointly controlled by the person supervising the

control over ZPUE S.A.


ZPUE S.A. 1


ZPUE S.A. 171

Balance of receivables from the associates as at 30.06.2012 6,003

Balance of liabilities towards the associates as of

30.06.2012 897

Events after the balance sheet date affecting the financial statements for the first six months of 2012

After the balance sheet date there were no significant events affecting the financial statements for the first 6

months of 2012

ZPUE S.A. Capital Group in Włoszczowa · - sales of distribution transformers, - sales of scrap...

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