Grupa Kapitałowa Apator S.A. · Information about Grupa Kapitałowa 1.1.1. Name of Grupa...
Transcript of Grupa Kapitałowa Apator S.A. · Information about Grupa Kapitałowa 1.1.1. Name of Grupa...
Grupa Kapitałowa Apator S.A.
Opinion and Report of the Independent Statutory Auditor
Year ending December 31, 2012
Opinion contains 3 pages.
Report supplementing the opinion contains 13 pages
Opinion of the statutory auditor and report supplementing the opinion on the audit of the separate financial
statement for the year ended December 31, 2012
OPINION OF THE INDEPENDENT STATUTORY AUDITOR
For the General Meeting of Apator S.A.
Opinion on consolidated financial statement
We have audited the consolidated financial statement of Grupa Kapitałowa, where the parent entity is Apator
S.A. with the registered office in Toruń, ul. Gdańska 4A, room C4 (“Grupa Kapitałowa”), composed of the
consolidated statement of financial position prepared as at December 31, 2012, consolidated statement of
comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows
for the fiscal year ended on this day and additional notes to the financial statement concerning the applied
accounting principles and other explanatory notes.
Responsibility of the Management and the Supervisory Board
The Management Board of the Parent Entity is responsible the preparation and fair presentation of this
consolidated financial statement pursuant to the International Financial Reporting Standards as adopted by the
European Union and other applicable regulations and for preparation the Management Report. The
Management Board of the Parent Entity is also responsible for internal control as management deems it
necessary to enable the preparation of the financial statements that are free of material misstatements, whether
due to fraud or error.
Pursuant to the Accounting Act of September 29, 1994 (Dz. U. of 2009 No. 152, item 1223 as amended)
(“Accounting Act”) the Management Board of the Parent Entity and the members of the Supervisory Board are
required to ensure that the consolidated financial statement and the management report are in compliance with
the requirements set forth in the Accounting Act.
Responsibility of the Statutory Auditor
Our task was to express the opinion about this financial statement on the basis of this audit. The audit of the
consolidated financial statement was conducted pursuant to provisions of the chapter 7 of the Accounting Act,
national financial reporting standards issued by the National Board of Statutory Auditors in Poland and
International Financial Reporting Standards. Those regulations require that we comply with ethical requirements
and to plan and perform the audit to obtain the reasonable assurance about whether that the financial statements
are free of material misstatements.
The audit involves performing procedures to obtain audit evidence about amounts and disclosures in the
consolidated financial statements. The procedures selected depend on our judgment, including the assessment of
the risk of material misstatement of the consolidated financial statement whether due to fraud or error. In
making those risk assessment, we consider the internal control relevant to the entity’s preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating appropriateness of accounting principles used and the reasonableness
of accounting estimates made by management, as well as evaluating the overall consolidated financial statement
presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion the attached consolidated financial statements of Grupa Kapitałowa of Apator S.A. have been
prepared and present fairly, in all material respects, the financial position of the Company as of December 31,
2012, the results of its operations and its cash flows for the fiscal year ending this day in conformity with the
International Financial Reporting Standards as adopted by the European Union, are compliant with all
regulations that apply to the consolidated financial statement.
Special explanations on other law requirements and regulations
Management Report of Grupa Kapitałowa
As required under the Accounting Act, we also report that the Management Report of Grupa Kapitałowa
includes the information required by Art. 49 of the Accounting Act and of the Ordinance of the Minister of
Finances dated 19 February 2009 on the current and periodic information provided by the issuers of securities
and conditions of considering as equal the information required by the legal provisions of the non-member
country (Dz. U. 2009 No. 33, item 259 as amended) and information is consistent with the consolidated financial
statement.
On behalf of KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k.
Registration No. 3546
Chłodna 51
00-867 Warszawa
Rafał Wiza Marek Gajdziński
Key Statutory Auditor Statutory auditor
Registration No. 11995 Registration No. 90061
Limited Partner, Proxy Limited Partner, Proxy
Poznań, April 22, 2013
Grupa Kapitałowa Apator S.A.
Report supplementing the opinion on the audit of the consolidated financial statement for the year ending
December 31, 2012
,
Report supplementing contains 13 pages
Report supplementing the opinion on the audit of the consolidated financial statement for the year ending
December 31, 2012
Table of contents
1. General 3
1.1. Information about Grupa Kapitałowa 3
1.1.1. Name of Grupa Kapitałowa 3
1.1.2. Registered office 3
1.1.3. Registration of the parent entity in the National Court Register 3
1.1.4. Management of the Parent Entity 3
1.2. Information on entities belonged to Grupa Kapitałowa 3
1.2.1. Entities covered by the consolidated financial statement 3
1.2.2. Entities not covered by the consolidated financial statement
1.3. Information about the statutory auditor and entity authorized to audit financial statements 4
1.3.1. Information about the statutory auditor 4
1.3.2. Information about the authorized entity 4
1.4. Information about the consolidated financial statement for the previous fiscal year 5
1.5. Scope of activities and responsibilities 5
1.6. Information on audited entities included in the scope of consolidation 6
1.6.1. Parent entity 6
1.6.2. Other entities included in the scope of consolidation 7
2. Financial analysis of Grupa Kapitałowa 8
2.1. General analysis of the consolidated financial statement 8
2.2. 2.1.1. Consolidated statement of financial condition 8
2.3. 2.1.1. Consolidated statement of comprehensive income 10
2.4. Selected financial ratios 11
3. Detailed report 12
3.1. Accounting principles 12
3.2. The basis of preparation of the consolidated financial statement 12
3.3. Method of consolidation 12
3.4. Goodwill from consolidation 12
3.5. Consolidation of capitals and determining of NCI 12
3.6. Consolidation exclusions 13
3.7. Additional notes to the consolidated financial statement 13
3.8. Management Report of Grupa Kapitałowa 13
1. General
1.1. Information about Grupa Kapitałowa
1.1.1. Name of Grupa Kapitałowa
1.1.2. Grupa Kapitałowa Apator SA.
1.1.3. Registered office of the Parent Entity
ul. Gdańska 4A, room C4
87-100 Toruń
1.1.3. Registration of the parent entity in the National Court Register
Registering Court: District Court in Toruń, 7th Commercial Division of the National
Court Register
Date: October 24, 2001
Registration No.: KRS 0000056456
Share capital
as of the end of the period: PLN 3 510 702.80
1.1.4. Management of the Parent Entity
The position of the manager of the Parent Entity is held by the Management Board.
The Management Board of the Parent Entity as of December 31, 2012 consisted of:
• Mr Janusz Niedźwiecki- President of the Management Board
• Mr Tomasz Habryka- Member of the Management Board
• Mr Jerzy Kuś - Member of the Management Board
1.2. Information on entities belonged to Grupa Kapitałowa
1.2.1. Entities covered by the consolidated financial statement
As at December 31, 2012 the following entities belonging to Grupa Kapitałowa were included in the
scope of consolidation:
Parent entity:
• Apator S.A.
Subsidiaries included to the full method of consolidation:
• Apator Control Sp. z o.o.,
• Apator Mining Sp. z o.o.,
• FAP Pafal S.A.,
• Apator Metrix S.A.,
• Apator GmbH (Germany),
• Apator Rector Sp. z o.o.,
• Apator Powogaz S.A.,
• Apator Telemetria Sp. z o.o.,
• Apator Metra s. r. o. (Czech),
• Apator Metroteks TOV (Ukraine),
• Newind Sp. z o.o.
Joint-controlled entities measured by equity method:
• Apator Elektro (Russia),
• Apator Elektro LCC (Russia),
• ZAO Teplovodomer (Russia
• George Wilson Industries Ltd. (Great Britain).
The following subsidiaries have been included in the scope of consolidation for the first time in the
fiscal year ending on December 31, 2012 due to taking up the control by the Parent Entity:
• George Wilson Industries Ltd. (Great Britain) - the entity included in the consolidated financial
statement for the period from June 5 to December 3, 2012.
1.2.2. The entities not included in the scope of consolidation
As at December 31, 2012 all entities belonging to Grupa Kapitałowa were included in the scope of
consolidation.
1.3. Information about the statutory auditor and entity authorized to audit financial statements
1.3.1. Information about the statutory auditor
Name and surname: Rafał Wiza
Register No.: 11995
1.3.2. Information about the authorized entity
Company: KPMG Spółka z ograniczoną odpowiedzialnością
Sp.k.
Registered office: ul. Chłodna 51, 00-867 Warszawa
Registration No.: KRS 0000339379
Registering Court: District Court for the capital city of Warsaw in Warsaw
12th Commercial Division of the National Court Register, NIP [Tax
Identification Number]: 527-26-15-362
KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. is entered into the list of the entities
authorized to audit the financial statements kept by the National Chamber of Statutory Auditors with the
number 3546.
1.4. Information about the consolidated financial statement for the previous fiscal year
The consolidated financial statement of the parent entity for the fiscal year ending December 31, 2011
was audited by KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. the entity authorized to
audit financial statements and obtained the opinion without any reservations.
The consolidated financial statement has been approved by the General Meeting on June 18, 2012.
The consolidated financial statement has been submitted to the Registering Court on June 22, 2012 and
published in Monitor Polski B No. 1984 of September 7, 2012.
1.5. Scope of activities and responsibilities
This report was prepared for the General Meeting of Apator S.A., seated in Toruń, ul. Gdańska 4A,
room C4 and refers to consolidated financial statements composed of the consolidated statement of
financial position prepared as at December 31, 2012, consolidated statement of comprehensive income,
consolidated statement of changes in equity and the consolidated statement of cash flows for the fiscal
year ended on this day and additional notes to the financial statement concerning the applied accounting
principles and other explanatory notes.
The parent entity prepares the consolidated financial statement pursuant to the International Financial
Reporting Standards, which were approved by the European Union based on resolution of the
Extraordinary General Meeting of Shareholders of December 20, 2004.
The audit of the consolidated financial statement was conducted pursuant to the agreement of June 6,
2012 concluded under Resolution of the Supervisory Board of January 23, 2012 referring to the
selection of the entity authorized to audit the financial statement.
The audit of the consolidated financial statement was carried our pursuant the provisions of the chapter 7
of the Accounting Act of September 29, 1994 (Dz. U. of 2009 No. 152, item 1223 as amended)
(“Accounting Act”), National Financial Reporting Standards issued by the National Chamber of
Statutory Auditors and International Financial Reporting Standards.
The audit of the consolidated financial statement was carried out in the entities belonging to Grupa
Kapitałowa in the period from February 25, 2013 to March 15, 2013.
The Management Board of the Parent Entity is responsible for accuracy of the accounting books, for
preparing and reliable presentation of the consolidated financial statement pursuant to the International
Financial Reporting Standards, which were adopted by the European Union and other applicable
regulations and for preparation the Management Report.
Our task was to express the opinion and to prepare the supplementing report referred to this
consolidated financial statement on the basis of the audit.
On date of this report the Management Board of the Parent Entity submitted the statement on fairness
ad clearness of the attached financial statement and that there are not any events not disclosed in the
consolidated financial statement which could have an influence on information presented in the
consolidated financial statement for the year.
During the audit of the consolidated financial statement the Management Board of the Parent Entity
submitted all the required statements, explanations and information and provided us with all documents
and information necessary to issue the opinion and to prepare the report. The scope of planned and
executed works has not been limited in any manner. The scope and manner of the audit result from the
prepared working documents, which are held in the registered office of the authorized entity.
The Key Statutory Auditor and the entity authorized meet the requirement of being independent of the
entities belonging to the audited Grupa Kapitałowa in the meaning of Art. 56 sec. 3 and 4 of the Act of
May 7, 2009 on the on Statutory Auditors, Their Self-Governing Organisation, and Entities Authorised
to Audit Financial Statements and on Public Oversight (Dz. U. of 2009, No. 77 item 649 as amended).
1.6. Information on audited entities included to the scope of consolidation
1.6.1. Parent entity
The separate financial statement of the parent entity for the fiscal year ending December 31, 2011 was
audited by KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. the entity authorized to audit
financial statements and obtained the opinion without any reservations.
1.6.2. Other entities included in the scope of consolidation
Entity's name The entity authorized to audit Reporting date Status of the opinion of the statutory auditor
Apator Control Sp. z 0.0. KPMG Audyt Spółka z
ograniczoną
odpowiedzialnością sp.k.
December, 31,
2012
No reservations.
Apator Mining Sp. z 0.0. KPMG Audyt Spółka z
ograniczoną
odpowiedzialnością sp.k.
December, 31,
2012
No reservations.
FAP Pafal S.A. KPMG Audyt Spółka z
ograniczoną
odpowiedzialnością sp.k.
December, 31,
2012
No reservations.
Apator Metrix S.A, KPMG Audyt Spółka z ograniczoną
odpowiedzialnością sp.k.
December, 31,
2012
No reservations.
Apator GmbH It does not require audit. December, 31,
2012
Not applicable.
Apator Rector Sp. z 0.0. KPMG Audyt Spółka z
ograniczoną
odpowiedzialnością sp.k.
December, 31,
2012
No reservations.
Newind Sp. z 0.0. KPMG Audyt Spółka z
ograniczoną
odpowiedzialnością sp.k.
December, 31,
2012
No reservations.
Apator Powogaz S.A. KPMG Audyt Spółka z
ograniczoną
odpowiedzialnością sp.k.
December, 31,
2012
No reservations.
Apator Telemetria Sp. z
0.0. Gdańska Grupa
Audytorów Sp. z 0.0. December, 31,
2012
No reservations.
Apator Metra s.r.o. KPMG Ćeska republika, s.r.o. December, 31,
2012
No reservations.
Apator Metroteks TOV It does not require audit. December, 31,
2012
Not applicable.
Apator Elektro It does not require audit December, 31,
2012
Not applicable.
Apator Elektro LCC It does not require audit December, 31,
2012
Not applicable.
ZAO Teplovodamer "Biznes-Audyt" OOO December, 31,
2012
No reservations.
George Wilson Industries
Ltd.
Grant Thomton UK LLP November 30,
2012
No reservations.
2. Financial analysis of Grupa Kapitałowa
2.1. General analysis of the consolidated financial statement
2.1.1. Consolidated statement of financial condition
ASSETS 31,12.2012 % 31.12.2011
*
%
PLN’
000
assets PLN
‘000
assets
Non-current assets
Intangible assets 4 400 0.9 4 031 0.9
Goodwill of subsidiaries 66 248 13.1 63 754 13.7
Property, plant and equipment 139 183 27.7 128 795 27.5
Investment property 1 735 0.3 1 859 0.4
Investments in affiliates and joint subsidiaries 6 571 l 3 729 0 2
measured by equity method -
Other long-term financial assets 525 0.1 - - Granted long-term loans 8 175 1.6 - -
Long- term receivables 1 590 0.3 1 988 0.4
Long-term accrued and deferred assets 61 0.0 31 0.0
Deferred tax assets 20 871 4.1 2 220 0.5
Total non-current assets 249 359 49.4 203 407 43.6
Current assets
Inventories 94 053 18.6 91 587 19.7
Trade receivables 102 711 20.4 123 704 26.5
Receivables due to corporate income tax 63 0.0 372 0.1
Receivables due to other taxes, subsidies, customs
and social insurances
5 535 1.1 7 697 1.7
Other current receivables 6 026 1.2 3 186 0.7
Other short-term financial assets 1 003 0.2 354 0.1
Cash and cash equivalents 43 719 8.7 24 090 5.1
Short-term accrued and deferred assets 1 979 0.4 1 256 0.3
Non-current assets held for re-sale - - 10 427 2.2
Total current assets 255 089 50.6 262 673 56.4
TOTAL ASSETS 504 448 100.0 466 080 100.0
* The statement transformed pursuant to the Note 8.37 to the consolidated financial statement
LIABILITIES 31.12.2012 % 31.12.2011
*
%
PLN’0
00
liabiliti
es
PLN
‘000
liabiliti
es
Equity
Share capital 3 311 0.7 3511 0.8
Other capitals 186 971 37.1 165 106 35.4
Capital from measurement of hedging transactions
and exchange differences from consolidation
961 0.2 (4 991) 1.1
Undivided financial result 107 189 21.2 71 299 15.3
Equity of the shareholders of the parent entity 298 432 59.2 234 925 50.4
NCI 1 160 0.2 1 141 0.2
Total equity 299 592 59.4 236 066 50.6
Liabilities
Long-term borrowings 12 887 2.6 21 669 4.6
Long-term liabilities 25 425 5.0 20 917 4.5
Provisions and liabilities due to employee benefits 7 012 1.4 11 134 2.4
Other long-term provisions 40 0.0 324 0.1
Total long-term liabilities 45 364 9.0 54 044 11.6
Short-term borrowings 42 833 8.5 58 299 12.5
Trade liabilities 66 263 13.1 59 356 12.7
Liabilities due to corporate income tax 7 606 1.5 2 700 0.6
Liabilities due taxes, customs and social insurances 9 246 1.8 8 862 1.9
Other short-term liabilities 18 902 3.7 26 180 5.6
Short-term provisions for liabilities due to employee
benefits
10 348 2.1 9 185 2.0
Other short-term provisions 4 294 0.9 4 388 0.9
Liabilities related to non-currents assets held for sale 7 000 1.5
Total short-term liabilities 159 492 31.6 175 970 37.8
Total liabilities 204 856 40.6 230 014 49.4
TOTAL LIABILITIES AND EQUITY 504 448 100.0 466 080 100.0
* The statement transformed pursuant to the Note 8.37 to the consolidated financial statement
2.1.1. Consolidated statement of comprehensive income
1.01.2012
- % 1.01.2011
-
%
31.12.201
2
Revenues
from sale
31.12.201
1*
Revenues
from sale
PLN’
000
PLN‘
000
Revenues 668 824 100.0 537 019 100.0
Cost of sales (483 950) 72.4 (371 688) 69.2
Gross profit from sales 184 874 27.6 165 331 30.8
Distribution expenses (31
247)
4.7 (30
445)
5.7
Administration expenses (75
980)
11.3 (66
008)
12.3
Other operating revenues 18 639 2.8 3 841 0.7
Share in profits of entities included in the scope
of consolidation by equity method
2 206 0.3 364 0.1
Costs of restructuring - (1
323)
0.2
Profit from operating activities 98 492 14.7 71 760 13.4
Finance income 3 505 0.5 1 770 0.3
Finance cost (9
839)
1.4 (8 868) 1.7
Profit before tax 92158 13.8 64 662 12.0
Current income tax (16
566)
2.5 (13 233) 2.5
Deferred income tax 20 128 3.0 382 0.1
Net loss for the fiscal year 95 720 14.3 51 811 9.6
OTHER COMPREHENSIVE INCOME
Exchange differences from translation the
foreign units
(655) 0.1 1 293 0.2
Profit on hedge accounting 8 139 1.2 (7 445) 1.5
Income tax referring to other comprehensive
income
(1 546) 0.2 1415 0.3
Net other comprehensive income for the fiscal
year
5 938 0.9 (4 737) 0.8
Total comprehensive income for the fiscal year 101 658 15.2 47 074 8.8
* The statement transformed pursuant to the Note 8.37 to the consolidated financial statement
2.2. Selected financial ratios
2012 2011
1. Return on sales
Net profit x 100%
net revenues
14.3%
9.6%
2. Return on equity
Profit for the year x100%
equity-profit for the year
47.0% 28.1%
3. Debtor’s days
Average trade receivables x 365 days
net revenues
69 days 77 days
4. Debt ratio
Liabilities x 100%
equity and liabilities
40.6% 49.4%
5. Current ratio
current assets
current liabilities
1.6 1.5
* Revenues from sales are comprised of revenues from sale of products, goods and materials. *Average
trade receivables are the arithmetic average of trade receivables from the beginning to the end of the
reporting period, excluding the revaluation allowances.
3. Detailed report
3.1. Accounting principles
The Parent Entity maintains current documentation describing the applied accounting principles
adopted by Grupa Kapitałowa and approved by the Management Board of the Parent Entity.
The adopted accounting principles were presented in the notes to the consolidated financial statements
to the extent required by the International Financial Reporting Standards as approved by the European
Union.
The entities belonging to Grupa Kapitałowa apply the same accounting principles compliant with the
principles applied by the Parent Entity.
The financial statements of the entities included in the scope of consolidation were prepared at the end
of the same reporting period as the financial statement of the Parent Entity.
3.2. The basis of preparation of the consolidated financial statement
Grupa Kapitałowa Apator S.A. prepared the consolidated financial statements pursuant to the
International Standards of Financial Reporting as recommended by the European Union, and other
applicable regulations.
The consolidation documents prepared under the requirements of the Minister of Finances of 25
September 2009 on the special requirements for preparation of the consolidated financial statement by
the entities other than banks and insurance companies (Dz. U. 2009 No. 169, item 1327).
3.3. Method of consolidation
The applied consolidation method was presented in the Note 5.2. of the notes to the consolidated
financial statement.
3.4. Goodwill from consolidation
The method of determination of the goodwill from consolidation was presented in the Note 5.2. of the
notes to the consolidated financial statement.
3.5. Consolidation of capitals and determining of NCI
The share capital of Grupa Kapitałowa is the share capital of the Parent Entity.
The calculation of the other items of the equity of Grupa Kapitałowa was made by adding the relevant
items of the equity of the subsidiaries included in this financial statement to the relevant items of the
equity of the Parent Entity, corresponding to the proportionate share of the Parent Entity in the equity of
the subsidiaries as at the end of the reporting period.
The equity of Grupa Kapitałowa includes only these items of the relevant components of the
subsidiaries’ equity, which are created from the control take up date.
The calculation of the non-controlling interest in the subsidiaries included in the consolidated financial
statement was made under the proportionate share of NCI in the equity of the subsidiaries as at the end
of the reporting period.
3.6. Consolidation exclusions
The consolidation exclusions referred to the intra-group settlements were made.
During the consolidation the exclusions of the sales between the entities of the Group, other intra-group
revenues and operating expenses and the financial costs and revenues were made.
The data, the basis for these exclusions, were derived from the accounting records of Apator S.A. and
were reconciled with the information received from the subsidiaries.
3.7. Additional notes to the consolidated financial statement
Information included in the explanatory notes to the separate financial statement including the
description of the material accounting principles and other explanatory notes was presented completely
and accurately in all material respects. This information should be read in conjunction with the
consolidated financial statements.
3.8. Management Report of Grupa Kapitałowa
The Management Board of Grupa Kapitałowa includes, in all material respects, information required by
Art. 49 of the Accounting Act and of the Ordinance of the Minister of Finances dated 19 February 2009
on the current and periodic information provided by the issuers of securities and conditions of
considering as equal the information required by the legal provisions of the non-member country (Dz.
U. 2009 No. 33, item 259 as amended) and information is consistent with the consolidated financial
statement.
On behalf of KPMG Audyt Spółka z ograniczoną
odpowiedzialnością sp.k. , Reg. No. 3546,
ul. Chłodna 51, 00, 867- Warszawa
Rafał Wiza Marek Gajdziński
Key Statutory Auditor Statutory auditor
Registration No. 11995 Registration No. 90061
Limited Partner, Proxy Limited Partner, Proxy
Poznań, April 22, 2013
Letter of the President of Executive Board
Dear Shareholders, Customers and Collaborators!
It is my pleasure and satisfaction to submit you Annual Report being the summary of market
and business activity with included financial results achieved in 2012.
Last year was extremely important one. It will be engraved on our memory when one of the
most important undertakings in the history of Apator was completed- I have in mind the
construction of the modern manufacturing company in Pomeranian Special Economic Zone.
Owing to the investment, Apator became more modern company with optimal
manufacturing processes of products at possible lowest consumption of utility services and
at the same time it became more competitive company.
The wide investment plan that included both machine park, technological processes and IT
systems will provide that Apator will meet not only the objectives determined in the strategy
but also – due to its strong foundations – it will grow further intensively.
The most important challenge for Apator is preparation for implementation of smart metering
and smart grids processes in Poland. In spite of the delay in performance of nationwide
project of implementation of smart metering in relation to the original plans , the involvement
and investments of Apator in this area are continued. From one hand, we conduct intensified
research and development that effect are new production lines for electricity metres, water
metres, gas metres, heat metres and on the other hand we participate actively in studies and
consultations regarding many projects concerning the idea of smart metering in Poland and
Europe. That is just our initiative to establish the Baltic Smart Grid Meeting, sector
conference that is the platform for the exchange of experience of entities participating in
implementation of smart metering. We can be also proud of successful completion of AMI
system implementation in distribution company - Tauron Dystrybucja.
The growth of Apator’s group is based both on extension of the product offer, export and
acquisition. In 2012, export reached the value of 36%. We have been strengthening the
position of Apator’s group on British market that is resulted of the take over the shares by
Apator Metrix SA in George Wilson Industries Ltd. with headquarters in Coventry. It is very
important long- term investment due to the development of smart metering on that market.
Based on analysis of financial results achieved and the performance of the forecast for 2012,
the results can be considered as very good ones. Apator’s group achieved over 24% increase
of revenues from sales in relations to 2011 and almost 85% increase of net profit. In activity of
Apator’s group we are guided permanently by the interest of shareholders. From the profit
Apator will make payment of dividend in gross amount of 1,2 PLN per share from the profit
for financial year 2012.
The achievements of the recent year give the cause for satisfaction. Such good results of
Apator’s group is the effect of consequent strategy being performed where the core element
of strategy like in previous years is building of the value for customers, shareholders and
employees. I am convinced that Apator’s group skilfully will make use of the experience
achieved and face further challenges.
Dear Sirs, my tenure as the President of Executive Board is coming to the end this year.
After thirteen years of my management of the Company I made the decision not to apply for
re-election. Taking the opportunity, I would like to thank the shareholders, Supervisory
Board, business partners and all the stakeholders for great trust and support since without
them my activity would be very difficult. I am convinced that Apator’s group will grow
dynamically by performance of the vision and meeting expectations of the shareholders.
Yours faithfully,
Janusz Niedźwiecki President of Executive Board of Apator SA
Annual report 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 1
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Consolidated Annual Report
RS - 2012
Consolidated annual financial statement
for the period since 1st January till 31st December 2012
Toruń, 2013-04-22
Annual report 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 2
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
MAIN FINANCIAL DATA
The items of assets and liabilities, and the cash flows are translated pursuant to the average exchange rate as of the date of this report.
The items in the statement of comprehensive income were translated pursuant to the average exchange rate constituting the arithmetic average of average exchange rates published by National Bank of Poland applicable as at the last day of the month of the reporting periods.
DESCRIPTION PLN EUR
2012 2011 2012 2011 Statement
Revenues from sales of products, goods and materials
668 824 537 019 160 251 129 712
Profit from operating activity 98 492 71 760 23 599 17 333
Gross profit 92 158 64 662 22 081 15 618
Net profit 95 720 51 811 22 935 12 514
Net profit per shareholders of parent entity in group 95 293 51 293 22 832 12 389
Net profit for non-controlling interest 427 518 102 125
Weighted average number of shares 29 507 028 29 507 028 29 507 028 29 507 028
Net profit per ordinary share [PLN/ share]: 3,23 1,74 0,77 0,42
Cash flow from operating activity 97 913 44 858 23 950 10 156
Cash flow from investing activity (12 106) (37 265) (2 961) (8 437)
Cash flow from financing activity (66 178) (667) (16 188) (151)
Total cash flows 19 629 6 926 4 801 1 568
Statement 31.12.2012 31.12.2011 31.12.2012 31.12.2011
Total assets 504 448 466 080 123 391 105 524
Fixed assets 249 359 203 407 60 995 46 053
Current assets 255 089 262 673 62 396 59 471
Equity with non-controlling interest 299 592 236 066 73 282 53 447
Non-controlling interest 1 160 1 141 284 258
Share capital 3 311 3 511 810 795
Long-term liabilities and provisions 45 364 54 044 11 096 12 236
Short-term liabilities and provisions 159 492 175 970 39 013 39 841
Weighted average number of shares 29 507 028 29 507 028 29 507 028 29 507 028
Net book value per ordinary share [PLN/ share]: 10,15 8,00 2,48 1,81
DESCRIPTION 2012 2011
EUR / PLN EUR / PLN
Statement of comprehensive income 4,1736 4,1401
Statement of cash flows 4,0882 4,4168
Statement of financial position 4,0882 4,4168
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 3
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
APATOR S.A.
Consolidated financial
statement for the period since 1st January 2012 till 31st December 2012
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 4
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Contents
1. GENERAL INFORMATION ............................................................................................................................................ 6
1.1. Information on capital group ............................................................................................................................................ 6
1.1.1. Information on the parent entity ....................................................................................................................................... 6
1.1.2. Composition of the capital group ..................................................................................................................................... 6
1.1.3. Composition of the Executive Board and the Supervisory Board .................................................................................. 10
2. INFORMATION ON THE BASE FOR THE PREPARATION OF FINANCIAL STATEMENT,REPORTING CURRENCY AND ROUNDING APPLIED ....................................................................................................................................... 10
2.1. The base for preparation of financial statement ............................................................................................................. 10 2.2. Reporting currency and the roundings applied ............................................................................................................... 10 2.3. Duration of activity of the group ..................................................................................................................................... 10 2.4. Approval of financial statement ...................................................................................................................................... 10 2.5. Adjustment to fundamental error.................................................................................................................................... 11
3. CONSOLIDATED FINANCIAL STATEMENT OF CAPITAL GROUP ........................................................................... 11
3.1 Consolidated statement of financial situation ................................................................................................................ 11
3.2 Consolidated statement of comprehensive income (calculating variant) ................................................................ 14 3.3. Consolidated statement of amendments to equity ............................................................................................... 15 3.4. Consolidated cash flow statement .................................................................................................................... 18
4. PRINCIPLES FOR INTERNATIONAL STANDARDS OF FINANCIAL ACCOUNTING ADOPTED .............................. 19
4.1. Standards and interperetations to be approved by european union ............................................................................... 19 4.2. First time adopted standards ......................................................................................................................................... 19 4.3. Earlier adoption of standards and interpretations ........................................................................................................... 19
5. ACCOUNTING PRINCIPLES ADOPTED ..................................................................................................................... 20
5.1. General principles ......................................................................................................................................................... 20 5.2. Consolidation ................................................................................................................................................................ 20 5.2.1. Principles of consolidation .............................................................................................................................................................. 20
5.2.2. Investments in joint controlled entities .......................................................................................................................................... 20
5.2.3. Goodwill of the company ................................................................................................................................................................. 21
5.3. Deatiled principles of evaluation for assets and liabilities adopted in the Group ............................................................. 21 5.3.1. Intangibles,costs of research and development .......................................................................................................................... 21 5.3.2. Tangible fixed assets ....................................................................................................................................................................... 21
5.3.3. Leasing .............................................................................................................................................................................................. 22
5.3.4. Investment properties ...................................................................................................................................................................... 22
5.3.5. Fixed assets and groups of net assets held for sale ................................................................................................................... 22
5.3.6. Stocks ................................................................................................................................................................................................ 23 5.3.7. Costs of external financing ............................................................................................................................................................. 23 5.3.8. Government subsidies ..................................................................................................................................................................... 23 5.3.9. Trade receivables ............................................................................................................................................................................ 23 5.3.10. Financial instruments....................................................................................................................................................................... 24 5.3.11. Bank credits ...................................................................................................................................................................................... 25 5.3.12. Trade liabilities ................................................................................................................................................................................. 25 5.3.13. Provisions ......................................................................................................................................................................................... 25 5.3.14. Revenues .......................................................................................................................................................................................... 26 5.3.15. Transactions in foreign currencies ................................................................................................................................................. 27
5.3.16. Taxes ................................................................................................................................................................................................. 27
5.3.17. Tax exemption resulting of activity in special economic Zone ................................................................................................... 28 5.3.18. Equities .............................................................................................................................................................................................. 28
5.3.19. Reporting on activity segments ...................................................................................................................................................... 28
6. BASIC ACCOUNTING JUDGEMENTS AND BASES OF UNCERTAINTY ESTIMATION .......................................... 28
7. INFORMATION ON SEASONAL NATURE OF BUSINESS ....................................................................................... 28
8. EXPLANATORY NOTES TO FINANCIAL STATEMENT ........................................................................................... 28
8.1. Operating segments ........................................................................................................................................................................ 28 8.2. Intangibles ......................................................................................................................................................................................... 31 8.3. Goodwill of subsidiaries .................................................................................................................................................................. 33 8.4. Tangible fixed assets ....................................................................................................................................................................... 33 8.5. Investment properties ...................................................................................................................................................................... 38 8.6. Investments in joint controlled entities .......................................................................................................................................... 38 8.7. Other financial assets ...................................................................................................................................................................... 39 8.8. Stocks ................................................................................................................................................................................................ 40 8.9. Trade and other receivables ........................................................................................................................................................... 40 8.10. Loans ................................................................................................................................................................................................. 41 8.11. Cash flow and equivalents .............................................................................................................................................................. 42 8.12. Prepayments .................................................................................................................................................................................... 43
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 5
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.13. Fixed assets held for sale ............................................................................................................................................................... 43 8.14. Share capital ..................................................................................................................................................................................... 44 8.15. Other capitals ................................................................................................................................................................................... 45 8.17. Credits and loans ............................................................................................................................................................................. 49 8.18. Provisions for liabilities .................................................................................................................................................................... 53 8.19. Liabilities ........................................................................................................................................................................................... 55 8.20. Income tax ........................................................................................................................................................................................ 55 8.21. Costs by nature ................................................................................................................................................................................ 60 8.22. Operating revenues and costs ....................................................................................................................................................... 61 8.23. Financial revenues and costs ......................................................................................................................................................... 62 8.24. Explanations for cash flow statement ............................................................................................................................................ 63 8.25. Merger of entities ............................................................................................................................................................................. 65 8.26. Long-term contracts ......................................................................................................................................................................... 65 8.27. Financial lease ................................................................................................................................................................................. 66 8.28. Futuer payments due to rent contracts, operating lease contracts not included in the statement of financial position ...... 67 8.29. Financial instruments....................................................................................................................................................................... 67 8.30. Derivative financial instruments, hedge accounting .................................................................................................................... 72 8.31. Objetives and principles of financial risk management ............................................................................................................... 73 8.32. Information on related entities ........................................................................................................................................................ 75 8.33. Contingent items and other items not included in the statement of financial position ............................................................ 77 8.34. Structure of employment ................................................................................................................................................................. 78 8.35. Remuneration of the entity authorized to audit the financial statement .................................................................................... 78 8.36. Subsidies ........................................................................................................................................................................................... 78 8.37. Changes in accounting principles, errors adjustments ............................................................................................................... 78 8.38. Events that occurred after the end of reporting period ................................................................................................................ 81
9. SIGNATURES ............................................................................................................................................................ 82
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 6
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
1. GENERAL INFORMATION
1.1. INFORMATION ON CAPITAL GROUP
Capital Group of APATOR („Group”) consists of APATOR S.A. - parent entity and its subsidiaries and co-subsidiaries.
1.1.1. INFORMATION ON THE PARENT ENTITY
APATOR Spółka Akcyjna seated in Toruń was established by the employees of liquidated public enterprise acting under the name Pomorskie Zakłady Aparatury Elektrycznej Apator in Toruń. The registration was made in the District Court in Toruń, 5th Commercial Department on 14
th January 1993
under the number RHB 1364. On 24th
October 2001 the entry into the Entrepreneurs Register of the District Court in Toruń, 7th Commercial Department of the National Court Register under the number 0000056456 was made. The Company conducts its activity in the territory of Poland under the provisions of Commercial Companies Code.
Subject of business activity of the parent entity
Pursuant to the Articles of Association of the Company the basic scope of business activity is the manufacturing and services in the field of distribution and control equipment for electrical energy. The shares of APATOR S.A. are listed in the basic market- pursuant to the classification of WSE “Electric Machinery Industry”.
1.1.2. COMPOSITION OF THE CAPITAL GROUP
In 2012 the Group included Apator SA and the following subsidiaries and co-subsidiaries:
APATOR MINING Sp. z o.o. (subsidiary of APATOR S.A.)
APATOR CONTROL Sp. z o.o. (subsidiary of APATOR S.A.)
APATOR METRIX S.A. (subsidiary of APATOR S.A.)
APATOR POWOGAZ S.A. (subsidiary of APATOR S.A.)
FAP PAFAL S.A. (subsidiary of APATOR S.A.)
APATOR RECTOR Sp. z o.o. (subsidiary of APATOR S.A.)
APATOR GmbH (subsidiary of APATOR S.A.)
APATOR TELEMETRIA Sp. z o.o. (subsidiary of APATOR POWOGAZ S.A.)
APATOR METROTEKS TOV (subsidiary of APATOR POWOGAZ S.A.)
ZAO APATOR ELEKTRO (co-subsidiary of APATOR S.A.)
APATOR ELECTRO LLC (co-subsidiary of APATOR S.A.)
ZAO TEPLOVODOMER (co-subsidiary of APATOR POWOGAZ S.A.)
APATOR METRA s.r.o. (subsidiary of APATOR POWOGAZ S.A.)
NEWIND Sp. z o.o. (subsidiary of APATOR RECTOR Sp. z o.o.)
GEORGE WILSON INDUSTRIES LIMITED (co-subsidiary of APATOR METRIX S.A.)
Changes in Group during 2012
On 5th September 2012 subsidiary- Apator Metrix S.A. concluded purchase contract of 4 million shares (i.e.50%) of George Wilson Industries Ltd with headquarters at Coventry in the United Kingdom.
Purchase price of 4 million shares was calculated based on discounted budgets for 2013-2016 for the amount 692.428 GBP increased by 1 GBP paid on the date of conclusion of the purchase contract.
Contingent payment increases in consolidated statement of financial position of Apator’s group the item: „Investments in co-subsidiaries consolidated by equity method” in correspondence with long-term liabilities and it was taken into consideration in estimation of the goodwill of GWI.
Apator Metrix S.A. has the right to purchase of outstanding 50% of shares in the period since 2017 till 2019. The purchase price of shares depends on EBITDA performed by GWI, while guaranteed price for the purchase of those shares is 3 million GBP.
At the same time current shareholders of GWI Ltd. have the right to sell to Apator Metrix Sp. z o.o. outstanding 50% of shares on the same conditions (provided that the assumption of achievement by GWI Ltd. gross profit at least 1.000.000 GBP), it means that Apator Metrix Sp. z o.o. irrevocably undertook to purchase the shares from current shareholders of GWI Ltd.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 7
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
On 26th November 2012, Apator- Electro LLC was registered in Moscow, where Apator S.A. has its 50% shares. Value of shares included in books of Apator S.A. is equal half of basic capital of new established co-subsidiary. Capital is not paid on the reporting day.
Established entity will take the role of commercial agent on Russian market as the target and replace current entity Apator Elektro S.A. The commencement of its activity as the limited company is required by legal aspects related to less financial charging on the territory of Russian Federation.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 8
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Entities consolidated and included in Capital Group
Company Headquarters Basic business activity Appropriate Court/ Register Body Share in capital
Consolidation method
Remarks
APATOR MINING Sp. z o.o.
Katowice
Manufacturing of distribution and control equipment for electrical energy, electrical equipment, crane equipment, pumps and compressors and related services
District Court in Katowice, Economy Department of National Court Register; KRS 0000047770
100,00% Full method Subsidiary
APATOR CONTROL Sp. z o.o.
Toruń Manufacturing of distribution and control equipment, electrical equipment and related services as well as R&D in technical sciences
District Court in Toruń, VII Economy Department of National Court Register; KRS 0000016020
100,00% Full method Subsidiary
APATOR METRIX S.A.
Tczew Manufacturing of metering, control, navigation equipment and other devices
District Court in Gdańsk , IX Economy Department of National Court Register; KRS 0000046259
100,00% Full method Subsidiary
FAP „PAFAL” S.A. Świdnica Manufacturing of electrical and electronic control and metering equipment, trade activity, services
District Court at Wrocław-Fabryczna in Wrocław, IX Economy Department of National Court Register; KRS 0000057162
100,00% Full method Subsidiary
APATOR RECTOR Sp. z o.o.
Zielona Góra IT, editing, printing and reproduction of saved information carriers
District Court in Zielona Góra, VIII Economy Department of National Court Register; KRS 0000297413
70,00% Full method Subsidiary
APATOR POWOGAZ S.A.
Poznań Manufacturing of metering, control, navigation equipment and other equipment of general use
District Court at Poznań – Nowe Miasto and Wilda in Poznań, VIII Economy Department of National Court Register; KRS 0000028129
100,00% Full method Subsidiary
APATOR GmbH Berlin Germany
Sales of prepayment electricity meters and systems
HRB 41496 Amtsgericht Mainz
100,00% Full method Subsidiary
ZAO APATOR ELEKTRO
Moscow Russia
Sales of electrical and electronic equipment 50,00% Equity method Co-subsidiary
APATOR ELECTRO LLC
Moscow Russia
Sales of electrical and electronic equipment 50,00% Equity method Co-subsidiary
APATOR TELEMETRIA Sp. z o.o.
Słupsk Manufacturing of data read out and data transmission equipment, manufacturing of system IT applications
District Court at Gdańsk – Północ in Gdańsk, VIII Economy Department of National Court Register; KRS 0000290726
61,60% Full method Indirect
subsidiary Indirect share
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 9
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Company Headquarters Basic business activity Appropriate Court/ Register Body Share in capital
Consolidation method
Remarks
APATOR METROTEKS TOV
Kiev Ukraine
Distribution of water metres and heat meters 61,00% Full method Indirect
subsidiary Indirect share
ZAO „Teplovodomer”
Mytishi Russia
Manufacturing and sales of water metres and heat metres and their calibration and service
50,00% Equity method Indirect co-subsidiary
Indirect share
APATOR METRA S.R.O.
Sumperk Czech Republic
Manufacturing of systems for heat cost allocators, thermometers and thermostats
100,00% Full method Indirect
subsidiary Indirect share
NEWIND Sp. z o.o.
Wrocław IT projects management services, security of IT systems and technical support
National Court Register KRS 000267353
60,00% 42,00%*
Full method Indirect
subsidiary Indirect share
GEORGE WILSON INDUSTRIES Ltd
Coventry United Kingdom
Manufacturing and sales of residential gas metres and industrial gas meters; smart metering for gas meters
50,00% Equity method Indirect co-subsidiary
Indirect share
*) Share of APATOR S.A. in Newind Sp. z o.o. was calculated as the product of share of APATOR S.A. in Apator Rector Sp. z o.o. and share of Apator Rector Sp. z o.o. in Newind Sp. z o.o.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 10
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The parent entity APATOR SA holds 81% of shares in the company APATOR-UKRAINA. The company established in 1998, just after two years discontinued its business activity. After the consultation made with the Ukrainian lawyers the company APATOR SA obtained the information that the official liquidation will bring very high costs. The parent entity APATOR SA stopped to finance APAOR-UKRAINE and its shares were covered by write downs. The consolidation of the financial data of this company is not possible. Any managing person or owner of the Capital Group of APATOR is not involved in managing or supervision over this company. There is no risk of claims due to existence of APATOR-UKRAINA.
1.1.3. COMPOSITION OF THE EXECUTIVE BOARD AND THE SUPERVISORY BOARD
Executive Board
Janusz Niedźwiecki – President of Executive Board Tomasz Habryka – Member of Executive Board Jerzy Kuś – Member of Executive Board Supervisory Board
Janusz Marzygliński – Chairman of Supervisory Board Mariusz Lewicki – Deputy Chairman of Supervisory Board Danuta Guzowska – Member of Supervisory Board Ryszard Wojnowski – Member of Supervisory Board Krzysztof Kwiatkowski – Member of Supervisory Board Eryk Karski – Member of Supervisory Board
2. INFORMATION ON THE BASE FOR THE PREPARATION OF FINANCIAL STATEMENT,REPORTING CURRENCY AND ROUNDING APPLIED
2.1. THE BASE FOR PREPARATION OF FINANCIAL STATEMENT
The consolidated financial statement of the Capital Group of APATOR S.A. was prepared pursuant to the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS) and the interpretations related to them announced in a form of the regulations of the European Commission. The financial statement of the Group APATOR S.A. covers the year 2012 and includes the comparative data for 2011 and consolidated statement of financial position for 2010 . Skonsolidowane sprawozdanie finansowe Grupy kapitałowej APATOR sporządzone zostało zgodnie z Międzynarodowymi Standardami Rachunkowości, Międzynarodowymi Standardami Sprawozdawczości Finansowej oraz związanymi z nimi interpretacjami ogłoszonymi w formie rozporządzeń Komisji Europejskiej. Skonsolidowane sprawozdanie finansowe Grupy obejmuje rok 2012 oraz zawiera dane porównawcze za rok 2011 oraz skonsolidowane sprawozdanie z sytuacji finansowej za rok 2010.
2.2. REPORTING CURRENCY AND THE ROUNDINGS APPLIED
The reporting currency for this financial statement is Polish zloty, and all amounts are quoted in thousands of Polish zlotys (unless it is stated otherwise).
2.3. DURATION OF ACTIVITY OF THE GROUP
The duration of the business activity of the parent entity APATOR SA and the entities covered by the consolidation is non-specified. The financial statement was prepared assuming the going concern principles for the foreseeable future, it means in the period not shorter than 12 months starting from the end of reporting period. The companies will continue its business activity in the same scope, without reporting the liquidation or bankruptcy. There are no circumstances indicating the threat for the continuance of the business activity.
2.4. APPROVAL OF FINANCIAL STATEMENT
This financial statement was signed by the Executive Board of parent entity on 22nd
April 20123.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 11
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
2.5. ADJUSTMENT TO FUNDAMENTAL ERROR
Apator’s group made the adjustment to fundamental error regarding recognized option of additional acquisition of shares in subsidiaries by the shareholders of non-controlling interest. The group valuated again the records of the below contracts regarding the option of selling of shares of non-controlling interest and considered that non-controlling interest should be recognized as liabilities pursuant to the method of expected purchase.
The option of the acquisition of outstanding 30% shares in subsidiary - Apator Rector Sp. z o.o. arised in 2007 and it was recognized as financial liability in correspondence to goodwill of the company and non-controlling interest (arisen on the day of take-over). In the following reporting periods the group made the distribution of the result of subsidiary in correspondence with non-controlling interest. Pursuant to IFRS 3 (version 2004) the Group should recognize the option in such manner like it has been done excluding non-controlling shares, therefore the group wrote off the value of non-controlling interest including it retained result.
The option of purchase of 40 % shares of Newind Sp. z o.o. arisen in 2011 (pursuant to IFRS 3 version of 2008) and it was recognized as financial liabilities in correspondence with goodwill of the company. Changes in liabilities in the following reporting periods were recognized with goodwill of the company and also the distribution of the result for non –controlling interest. The group has made selection of anticipated acquisition method, and therefore it should present the option in such a manner as it has been made excluding non-controlling interest. In result of it ,the group made some amendments to reverse of distribution of the result and the increase of the goodwill of the company in correspondence with retained result.
The group of Apator made the presentation adjustment in the statement of property situation at 31st
December 2011 involving balancing of assets and provisions due to deferred income tax.
The influence on transformation of comparative data was presented in the Note 8.37.
3. CONSOLIDATED FINANCIAL STATEMENT OF CAPITAL GROUP
3.1 CONSOLIDATED STATEMENT OF FINANCIAL SITUATION
DESCRIPTION NOTE
Day
31.12.2012 31.12.2011 restated
01.01.2011 restated
Fixed assets
249 359 203 407 172 465
Intangibles 2 4 400 4 031 4 465
Goodwill of subsidiaries 3 66 248 63 754 59 509
Tangible fixed assets 4 139 183 128 795 92 991
Investment properties 5 1 735 1 859 1 341
Investments in co-subsidiaries consolidated by equity method 6 6 571 729 1 052
Other long-term financial assets 7 525 - 10 693
- in related entities 7 8 - -
- in other entities 7 517 - 10 693
Long-term loans granted
- to related entities 10 8 175 - -
Long-term receivables
- from other entities 9 1 590 1 988 289
Long-term prepayments 12 61 31 58
Deferred income tax assets 20 20 871 2 220 2 067
Current assets
255 089 262 673 186 413
Inventories 8 94 053 91 587 63 619
Trade receivables 9 102 711 123 704 96 158
- from related entities 9 2 982 8 222 7 191
- from other entities 9 99 729 115 482 88 967
Legal entity income tax receivables 9 63 372 191
Receivables due to taxes, customs duties and social insurance 9 5 535 7 697 1 647
Other short-term receivables 9 6 026 3 186 1 820
- from related entities 9 - 229 -
- from other entities 9 6 026 2 957 1 820
Other short-term financial assets
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 12
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
- in other entities 7 1 003 354 2 007
Cash and its equivalents 11 43 719 24 090 17 164
Short-term prepayment 12 1 979 1 256 1 100
Fixed assets classified as held for sales 13 - 10 427 2 707
TOTAL ASSETS
504 448 466 080 358 878
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 13
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION NOTE Day
31.12.2012 31.12.2011
restated
01.01.2011 restated
Equity
299 592 236 066 201 505
Equity for parent entity shareholders
298 432 234 925 200 899
Share capital 14 3 311 3 511 3 511
Other capitals 15 186 971 165 106 142 738
Capital from valuation of hedging transactions and exchange rate differences from consolidation.
961 (4 991) (237)
Retained financial result
107 189 71 299 54 887
- retained result from previous years
23 699 20 006 26 204
- result of current period
95 293 51 293 36 060
- write offs on result of current year
(11 803) - (7 377)
Share of non-controlling interest 16 1 160 1 141 606
Liabilities
204 856 230 014 157 373
Long-term liabilities and provisions
45 364 54 044 53 733
Long-term credits and loans
- from other entities 17 12 887 21 669 25 077
Long-term liabilities
- towards other entities 19 25 425 20 917 15 505
Long-term provisions for liabilities of employee benefits 18 7 012 11 134 10 915
Other long-term provisions 18 40 324 2 236
Short-term liabilities and provisions
159 492 175 970 103 640
Short-term credits and loans
- from other entities 17 42 833 58 299 35 897
Trade liabilities 19 66 263 59 356 33 276
- towards related entities 19 1 - -
- towards other entities 19 66 262 59 356 33 276
Liabilities due to income tax of legal entities 19 7 606 2 700 1 672
Liabilities due to other taxes, customs duties and social insurance
19 9 246 8 862 8 974
Other short-term liabilities 19 18 902 26 180 13 912
- towards related entities 19 1 - -
- towards other entities 19 18 901 26 180 13 912
Short-term provisions for liabilities due to employee benefits 18 10 348 9 185 6 153
Other short-term provisions 18 4 294 4 388 3 756
Liabilities related to fixed assets classified as held for sale 13 - 7 000 -
TOTAL LIABILITIES
504 448 466 080 358 8
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 14
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
3.2 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CALCULATING VARIANT)
DESCRIPTION NOTE
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
restated
Revenues from sale
668 824 537 019
Revenues from sale of products and services 600 001 494 053
- to related entities 39 550 35 934
- to other entities 560 451 458 119
Revenues from sales of goods and materials 68 823 42 966
- to related entities 1 346 362
- to other entities 67 477 42 604
Cost of products sold (483 950) (371 688)
Cost of products and services sold (425 653) (337 410)
- to related entities (27 466) (23 412)
- to other entities (398 187) (313 998)
Cost of goods and materials sold (58 297) (34 278)
- to related entities (1 298) (316)
- to other entities (56 999) (33 962)
Gross profit from sale 184 874 165 331
Selling costs (31 247) (30 445)
Overheads (75 980) (66 008)
Profit from sale 77 647 68 878
Other operating revenues (costs),including: 22 18 639 3 841
Revenues 31 018 9 493
Costs (12 379) (5 652)
Share in profits of entities consolidated by equity 6 2 206 364
Restructuring costs - (1 323)
Profit from operation 98 492 71 760
Financial costs, including: 23 (6 334) (7 098)
Revenues 3 505 1 770
Costs (9 839) (8 868)
Profit before tax 92 158 64 662
Current income tax 20 (16 566) (13 233)
Deferred income tax 20 20 128 382
Net profit 95 720 51 811
Other comprehensive income
Other net comprehensive income 5 938 (4 737)
Exchange rate differences from translation of foreign entities (655) 1 293
Result on hedging accounting 8 139 (7 445)
Income tax concerning other comprehensive income (1 546) 1 415
Comprehensive income in total 101 658 47 074
Net profit, including: 95 720 51 811
shareholders of the company 95 293 51 293
shareholders of non-controlling interest 427 518
Comprehensive income in total, including: 101 658 47 074
shareholders of the company 101 245 46 539
shareholders of non-controlling interest 413 535
Net profit per ordinary share:
- basic 3,23 1,76
- diluted 3,23 1,76
Weighted average number of shares 29 507 028 29 07 028
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 15
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
3.3. CONSOLIDATED STATEMENT OF AMENDMENTS TO EQUITY
DESCRIPTION
CAPITAL OF SHAREHOLDERS OF PARENT ENTITY
SHARES OF NON CONTROLLING
INTEREST TOTAL EQUITY
Share capital Other capitals
Capital from evaluation of
hedging transactions and
exchange rate differences from
consolidation
Retained financial result
Total
Balance at 01.01.2010 3 511 127 850 (221) 46 696 177 836 2 032 179 868
Amendments to opening balance - (1 362) - (2 152) (3 514) (1 385) (4 899)
Amendments to accounting principles - (6 169) - (480) (6 649) - (6 649)
Balance after amendments 3 511 120 319 (221) 44 064 167 673 647 168 320
Amandments to equity in the period since 01.01.2010 till 31.12.2010
Net exchange rate differences from translation - - (16) - (16) 5 (11)
Net profit in the period since 01.01.2010 till 31.12.2010 - - - 36 060 36 060 220 36 280
Comprehensive income recognized in the period since 01.01.2010 till 31.12.2010
- - (16) 36 060 36 044 225 36 269
Dividends - - - (15 634) (15 634) - (15 634)
Settlement of interim dividend from previous year - - - 5 702 5 702 - 5 702
Advance payments paid for dividend - - - (7 377) (7 377) - (7 377)
Sale of own shares - 14 683 - - 14 683 - 14 683
Distribution of the result into supplementary capital - 7 736 - (7 736) - - -
Consolidation of subsidiary - - - - - 85 85
Purchase of additional shares of subsidiary - - - (192) (192) (351) (543)
Balance at 31.12.2010 3 511 142 738 (237) 54 887 200 899 606 201 505
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 16
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION
CAPITAL OF SHAREHOLDERS OF PARENT ENTITY
SHARES OF NON CONTROLLING
INTEREST TOTAL EQUITY
Share capital Other capitals
Capital from evaluation of
hedging transactions and
exchange rate differences from
consolidation
Retained financial result
Total
Balance at 01.01.2011 3 511 135 136 (238) 69 495 207 904 3 299 211 203
Amendments to opening balance - 13 771 1 (14 128) (356) (2 693) (3 049)
Amendments to accounting principles - (6 169) - (480) (6 649) - (6 649)
Balance after amendments 3 511 142 738 (237) 54 887 200 899 606 201 505
Amendments to equity in the period since 01.01.2011 till 31.12.2011
Hedging instruments for cash flow, including: - - (7 445) - (7 445) - (7 445)
- profits (losses) taken into consideration in evaluation of reporting value of the items hedged
- - (7 445) - (7 445) - (7 445)
Exchange rate differences from translation - - 1 276 - 1 276 17 1 293
Tax related to items presented in capital or transferred from capital - - 1 415 - 1 415 - 1 415
Net profit in the period since 01.01.2011 till 31.12.2011 - - - 51 293 51 293 518 51 811
Comprehensive income recognized in period since 01.01.2011 till 31.12.2011
- - (4 754) 51 293 46 539 535 47 074
Dividends - (13 771) - (6 292) (20 063) - (20 063)
Settlement of interim dividend from previous year - - - 7 377 7 377 - 7 377
Distribution of the result on supplementary capital - 36 459 - (36 459) - - -
Coverage of losses from supplementary capital - (320) - 320 - - -
Purchase of additional shares of subsidiary - - - 173 173 - 173
Balance at 31.12.2011 3 511 165 106 (4 991) 71 299 234 925 1 141 236 066
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 17
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION
CAPITAL OF SHAREHOLDERS OF PARENT ENTITY
SHARES OF NON CONTROLLING
INTEREST TOTAL EQUITY
Share capital Other capitals
Capital from evaluation of
hedging transactions and
exchange rate differences from
consolidation
Retained financial result
Total
Balance at 01.01.2012 3 511 165 106 (4 991) 66 968 230 594 5 873 236 467
Amendments to opening balance - - - 4 331 4 331 (4 732) (401)
Balance after amendments 3 511 165 106 (4 991) 71 299 234 925 1 141 236 066
Amendments to equity in the period since 01.01.2012 till 31.12.2012
Hedging instruments for cash flow, including: - - 8 139 - 8 139 - 8 139
- profits (losses) taken into consideration in evaluation of reporting value of items hedged
- - 8 139 - 8 139 - 8 139
Exchange rate differences from calculation - - (641) - (641) (14) (655)
Tax related to items presented in capital or transferred from capital - - (1 546) - (1 546) - (1 546)
Net profit for the period since 01.01.2012 till 31.12.2012 - - - 95 293 95 293 427 95 720
Comprehensive income recognized in the period since 01.01.2012 till 31.12.2012
- - 5 952 95 293 101 245 413 101 658
Dividends - - - (24 755) (24 755) (173) (24 928)
Advance payments paid for dividend - - - (11 803) (11 803) - (11 803)
Redemption of own shares (200) 1 824 - (1 624) - - -
Distribution of the result into supplementary capital - 25 726 - (25 726) - - -
Coverage of losses from supplementary capital - (5 685) - 5 685 - - -
Purchase of additional shares of subsidiary - - - (1 180) (1 180) (221) (1 401)
Balance at 31.12.2012 3 311 186 971 961 107 189 298 432 1 160 299 2
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 18
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
3.4. CONSOLIDATED CASH FLOW STATEMENT
DESCRIPTION NOTE
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Cash flow from operation
Profit before tax 92 158 64 662
Amendments: (1 507) 23 139
Amortisation of intangibles 2 1 379 1 442
Depreciation of tangible fixed assets 3 16 914 15 333
Write downs in loss of tangible fixed assets 2 238 (49)
(Profit) loss on sale of tangible fixed assets and intangibles (23 492) (1 232)
(Profits) losses from evaluation of investment properties at fair value
102 (64)
(Profits) losses due to amendment to fair value of derivatives (2 010) 3 277
Cost of interest 4 083 3 056
Share in (profits) losses of joint controlled entities (2 206) (364)
Interest revenues (97) (38)
Other amendments 24 1 582 1 778
Cash from operation before amendments to working capital 90 651 87 801
Amendment to stocks 24 (2 466) (23 409)
Amendment to receivables 24 20 434 (34 293)
Amendment to liabilities 24 4 957 27 969
Cash generated during operation 24 (3 337) 338
Amendment to prepayments 24 (753) (106)
Other amendments 24 (228) (607)
109 258 57 693
Income tax paid (11 345) (12 835)
Net cash from operation 97 913 44 858
Cash flow from investing activity
Expenses for the acquisition of intangibles (1 574) (480)
Expenses for the acquisition of tangible fixed assets (26 583) (39 551)
Effects from sale of tangibles fixed assets 28 160 1 307
Effects from sale of financial assets held for sale 750 43
Investment in subsidiaries (1 402) -
Loans granted (8 175) (35)
Received the repayments of loans granted - 35
Interest received 68 8
Dividends received - 96
Other proceeds (expenses) 24 (3 350) 1 312
Net cash used from investing activity (12 106) (37 265)
Cash flow from financing activity
Net proceeds due to the issue of shares - 580
Proceeds due to credits and loans taken
71 906 68 119
Repayment of credits and loans (95 408) (52 093)
Interest paid (3 779) (2 871)
Dividend paid (36 644) (12 684)
Repayment of liabilities due to financial lease (2 039) (1 217)
Other proceeds (expenses) 24 (214) (501)
Net cash from financing activity (66 178) (667)
Net increase (decrease) of cash and equivalents 19 629 6 926
Cash and equivalents at the beginning of the period 24 090 17 164
Cash and equivalents at the end of the period 43 719 24 090
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 19
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
4. PRINCIPLES FOR INTERNATIONAL STANDARDS OF FINANCIAL ACCOUNTING ADOPTED
4.1. STANDARDS AND INTERPERETATIONS TO BE APPROVED BY EUROPEAN UNION
At the day of publication of financial statement the following standards and interpretations wait to be approved by European Union:
IFRS 9 „Financial instruments” – is applied to annual periods beginning from 1
st January 2015 or later;
Amendments to IFRSF 7 „Financial instruments: disclosure of information” – is adopted for annual periods commencing from 1
st January 2015 or later
The Executive Board currently analyzes the consequences and the influence of adoption of the new standard on financial statement but it does not expect significant influence on financial statement of the Group.
4.2. FIRST TIME ADOPTED STANDARDS
The Group during preparation of the financial statement adopted for the first time amendments to IFRS 7 „Financial instruments: disclosure of information”.
The adoption of the above amendments did not cause any significant changes in accounting policy neither in presentation of data in the financial statements.
4.3. EARLIER ADOPTION OF STANDARDS AND INTERPRETATIONS
At the day of preparation of the report the following standards and interpretations and their amendments were approved:
Amendments to IAS 19 „Employee benefits”, that are applied to annual periods beginning on 1
st January 2013 or later;
Amendments to IAS 1 „Presentations of financial statements”, that are applied to annual periods beginning on 1
st July 2012 or later;
IFRS 10 „Consolidated financial statements” – are applied to annual periods beginning on 1
st January 2014 or later;
IFRS 11 „Joint agreements” – are applied to annual periods beginning on 1st January
2014 or later;
IFRS 12 „Disclosure of interest in other entities” – is applied to annual periods beginning on 1
st January 2014 or later;
Amendments to IAS 27 “Separate financial statement” – are applied to annual periods beginning on 1
st January 2014 or late;
Amendments to IAS 28 “Investments in associates and joint ventures” – are applied to annual periods beginning on 1
st January 2014 or later;
Amendments to IFRS 1 „First –time adoption of International Financial Reporting Standards” – are applied to annual periods beginning on
1st January 2013 or later;
Amendments to IAS 12 „Income taxes –deferred income tax” – are applied to annual periods beginning on 1
st January 2013 or later;
IFRS 13 „Fair value measurement” – are applied to annual periods beginning on 1st
January 2013 or later;
IFRIC 20 “Stripping costs in the production Phase of a Surface Mine” – is applied to annual periods beginning on 1
st January 2013 or later.
Amendments to IFRS 7 “Financial instruments: disclosures –compensation of financial assets and liabilities - are applied to annual periods beginning on 1
st January 2013 or
later;
Amendments to IAS 32 “ Financial instruments: presentation” - are applied to annual periods beginning on 1
st January 2014 or later;
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 20
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The Capital Group of APATOR did not make use of possibility of their earlier adoption. However, it is not expected that new standards and amendments to current ones could have significant influence on its financial statements.
5. ACCOUNTING PRINCIPLES ADOPTED
5.1. GENERAL PRINCIPLES
Financial statement is prepared in accordance with the conception of historical cost, except for measurement of some fixed assets and financial assets that according to IFRS were valuated according to fair value. The most significant accounting principles adopted by the entity were presented in points from 5.3.1 to 5.3.19. Policy of accounting presented below was adopted to all the periods presented below by the Group.
Some comparative data were reclassified in order to obtain the conformity with presentation of current period (see Note 37 – point 8.37).
5.2. CONSOLIDATION
5.2.1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statement includes the financial statement of the parent entity APATOR SA and the financial statements of the subsidiaries. As of the date of acquisition of the subsidiary (taking-up the control) the assets and liabilities of such entity are measured at fair value. The surplus of the purchase price over the fair value of identifiable acquired net assets is recognized in the assets of the statement of financial position as goodwill. In case when the purchase price is lower than the fair value of identifiable net assets, acquired net assets, the difference is immediately recognized in the profit and loss of the period, when the acquisition occurred. NCI are presented pursuant to the assigned goodwill of net assets. In case of acquiring the non-controlling interest i.e. purchase of the additional shares/stock holding already the control, the new fair value for the acquired assets and liabilities is not determined. This transaction is recognized as the shift of the value determined based on the fair value of net assets as of the acquisition date in the capitals between non-controlling interest and interest of the parent company. The subsidiaries disposed in the fiscal year are a subject of consolidation from the beginning of the fiscal year to the date of loss of control. The financial results of the entities acquired in the fiscal year are recognized in the financial statement from the date of take over of control. If necessary, in the financial statements of the subsidiaries or co-subsidiaries the adjustments are made in order to standardize the accounting principles adopted by the entity with the principles adopted by the parent entity. All transactions, balances, revenues and costs between the related entities covered by the consolidation are excluded from the consolidated financial statement.
5.2.2. INVESTMENTS IN JOINT CONTROLLED ENTITIES
The joint controlled entities are such entities over which the Group has joint control, where the division of control is specified in the contract and in cases where operational and financial strategic decisions require unanimity of the parties. The shares in joint controlled entities are measured by equity method, except for the situation where they are classified as held for sale. The investments in joint controlled entities are measured at the sale price including the changes of the Group in net assets, which occurred to the end of reporting period less the impairment of the relevant investments. The surplus of the purchase price over the fair value of the identifiable net assets of joint controlled entity as of the date of acquisition is recognized as goodwill and presented in the item “Investments in joint controlled entities consolidated by equity method".
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 21
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
In case when the purchase price is lower than the fair value of identifiable net assets, acquired net assets of co-subsidiary as of the date of acquisition, the difference is immediately recognized as the profit in the profit and loss of the period, when the acquisition occurred.
5.2.3. GOODWILL OF THE COMPANY
The goodwill is the component of the assets presenting the future economic benefits arisen from the acquired assets under the merger of entities, which cannot be identified or recognized separately. The goodwill is presented as the component of assets and at least once a year is subject of impairment test. The results of the impairments are charged against the profit and loss and are not a subject of reversal in the next periods.
5.3. DEATILED PRINCIPLES OF EVALUATION FOR ASSETS AND LIABILITIES ADOPTED IN THE GROUP
5.3.1. INTANGIBLES,COSTS OF RESEARCH AND DEVELOPMENT
The intangible assets include the assets meeting the following criteria:
they can be excluded or separated from the business entity, can be sold, transferred, licensed or leased to third parties, both separately and jointly with the related agreements, components and liabilities or
They follow the contracts of other legal titles regardless they are disposable or separatable from the business entity or other tiles or liabilities.
Intangible assets purchased under the separate transaction are recognized at purchase price in the statement of financial condition.
After the initial recognition the intangible assets are measured at the purchase price or manufacture cost diminished by the depreciation and impairment allowances.
The economic life of intangible assets depending on their nature is assessed and recognized as specified of unspecified.
Intangible assets with unspecified life and these, which have not been used yet, are verified annually regarding the possible impairment, with reference to the particular assets or at the level of cash generating unit.
For the other intangible assets the annual assessment if there are any assumptions on their impairment, is made.
The economic life for the relevant intangible assets are verified annually and adjusted from the beginning of the next fiscal year if necessary.
For the amortization purposes of the intangible assets with specified life the straight line depreciation method is applied. The lives of the particular items of intangible assets are as follows:
Patents and licenses from 2 to 5 years R&D from 3 to 5 years
R&D costs
The costs of research works are not a subject of activation and are presented in the profit and loss statement as the costs in the period when they were incurred.
The costs of research works are capitalized only when:
The strict project is implemented (e.g. software or new procedures);
It is probable that this item will bring the future economic benefits;
Project-related costs may be reliably estimated.
The costs of development works are depreciated using the straight line method for their anticipated economic life.
In case, where is not possible to separate the manufactured item of assets, the costs of research & development are recognized in the statement of comprehensive income in the period, when they were incurred.
5.3.2. TANGIBLE FIXED ASSETS
Property, plant and equipment are the tangible fixed assets held by the Group to use them in manufacturing, to provide goods and services, to be leased to third parties or in administration purposes,
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 22
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
which are expected to be used more than in one period. P,P&E are measured at the purchase prices or manufacturing costs, less the depreciation or amortization write-offs or also impairment allowances. Pursuant to the component based approach, the Group adopts the different depreciation rates for the significant items of tangible fixed asset.
Property, plant and equipment in the Group include tangible fixed assets with the anticipated economic life longer than one year. The amortization starts after the month when this asset was transferred to be used. At establishing the annual rates of amortization the period of economic life is considered. From time to time the managers of the production departments verify the correctness of application of amortization periods and rates. For amortization purposes the straight line depreciation method is applied. The economic lives for the particular items of non-current assets are as follows:
Buildings and constructions from 3 to 70 years
Machinery and equipment from 2 to 25 years
Means of transport from 4 to 10 years
Other tangible fixed assets from 3 to 10 years
If during the preparation of the financial statement there were any circumstances indicating that the carrying amount of property, plant and equipment may not be recoverable, then the review of such assets is made regarding the impairment. If there are any assumptions indicating that the impairment may occur and the carrying amount exceeds the anticipated recoverable value, then the value of these assets or cash generating units, to which these assets belong to, is reduced to the level of recoverable value. The recoverable value corresponds to the higher of these two values: fair value less the costs of sale or usable value. At determining the usable value, the expected future cash-flows are discounted to the current value using the discount rate reflecting the current market time value of money and risk related to the relevant asset. In case of the asset which does not generate the cash-flows in an independent manner the recoverable value is set for the cash generating unit to which this asset belongs.
Profit and losses resulting from the sale, liquidation or discontinuance of use of the P,P&E are determined as the difference between the revenues from sale and net value of these assets and are recognized in profit and loss statement for the period when the sale occurred.
P,P&E refer to tangible fixed assets in progress and are presented at purchase price or manufacture cost. The non-current assets under construction are not a subject of amortization until the construction or assembly is not completed and the asset is put into use.
The Group has the property, plant and equipment used in social activity. These assets along with the perpetual usufruct right were measured at fair value by the appraiser as at the date of IAS/IFRS adoption. Owing to a lack of selling plans for this property and the fact that this property is refunded from the Company’s Social Benefits Fund pursuant to the agreements with the Trade Unions, the Group presents these assets in the financial statement.
5.3.3. LEASING
The financial lease agreements are the agreements under which the total risk and potential benefits following the ownership as lessee are transferred to the Group.
Any other types of lease are treated as the operating lease.
The assets used under the financial lease agreements are treated the same as the Group’s assets and are measured when the leasing agreement starts pursuant to the lower of two values: fair value of the asset which is a subject of lease or current value of minimum leasing fees. The leasing fees are divided into the interest and principal amount so that the interest rate from the remained liability was fixed amount.
The leasing fees due to the operational lease are charged against the result of the period using the straight line method during the lease.
5.3.4. INVESTMENT PROPERTIES
The property, which is treated as the source of revenues from rents or/and is held in possession because of the expected increase of value, is recognized as the investment property. The investment property is measured as at the end of the period at fair value. Profits and losses resulted from the change of fair value of investment property are recognized in the result of the period when they occurred.
5.3.5. FIXED ASSETS AND GROUPS OF NET ASSETS HELD FOR SALE
Fixed assets classified for sale and also groups of net assets are evaluated according to the lower of two values: balance value or fair value reduced by sales costs.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 23
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Fixed assets and groups of net assets are classified for sale if their balance value will be recovered more from sales transaction than in result of their further usage. This condition is considered as fulfilled only when the element of assets (or group of net assets classified for sale) is available in its current status for immediate sale and the occurrence of sales transaction is very likely to be during the year since the
moment of the change of classification.
5.3.6. STOCKS
Materials and goods are measured at the purchase price (purchase price increased with the costs of shipment, tariffs, customs, and costs of loading and unloading). The materials and goods are measured at the weighted average.
The products are measured at manufacture cost on a current basis and the stocks of products are measured at manufacture costs not higher than their net sale price, achievable when the sale was made at the end of the period. The manufacturing cost includes the sum of direct costs (materials, salaries) and reasonable part of indirect costs related to the manufacture of product including the indirect production costs and the part of fixed indirect costs corresponding to the level of such costs in usual production capacity.
The stocks are verified in each reporting period. The 100% of revaluation allowance is made for stocks unusable for the economy. In order to make the amount of stocks real the analysis of the age structure of stocks is made, which decisive factor is the date of inflow and outflow from the warehouse.
5.3.7. COSTS OF EXTERNAL FINANCING
The Group applies the principle of capitalization of the costs of external financing (interest and other costs incurred by the Company due to cash granted), regarding the purchase or construction of tangible elements of property. The principles of capitalization are not adapted to investment properties and inventories manufactured in repeatable manner with short manufacturing cycle. The scope of granting of special means by the Group in order to finance the element of assets to be obtained, the amount of external financing in the period that is allowed to be activated is the difference between real costs of external financing in the period and the revenues of entities due to temporary investment of the means granted. If the Group grants the financial means and then it uses them aimed at to get the element of assets therefore the expenditures born in the period, the capitalization rate is adopted (weighted average of external financing costs that includes all the loans and borrowings remaining to be settled in the period).
5.3.8. GOVERNMENT SUBSIDIES
Subsidies from the government and non-cash subsidies indicated in fair value are taken only when there is sufficient certainty that the Group will meet the conditions concerning the subsidy and the subsidy will be really granted. In case when subsidy regards the given cost item then it is recognized as the decrease of the costs that the subsidy has to offset it. But in case when subsidy regards the element of assets at that time its fair value decreases the value of the element.
5.3.9. TRADE RECEIVABLES
Trade receivables are measured in books at fair value corrected by appropriate write downs of doubtful receivables.
Value of receivables is subject to updating, taking into account the probability of making appropriate write down charging the operating costs. Receivables and claims not recoverable that is receivables evidenced by decision made by enforcement authorities are not included in assets. Write downs are made for receivables that have the risk to be not recoverable. There are receivables overdue for more than 180 days and new due date for repayment has not been fixed yet. Receivable required over 180 days are corrected by cumulative amount discounted difference between the initial value and the value of due date calculated by effective interest rate.
Receivables related to implementation agreement
The uncompleted agreements on implementation service are recognized in the gross receivables for the works performed to the end of the period. This amount is established as the costs incurred to the end of the period including the risk less the sum of issued invoices and recognized losses. These costs include all costs directly referred to the specific agreements and the relevant part of fixed and variable general costs of the Company calculated at the usual use of the manufacturing capacity. Uncompleted agreements on implementation service are presented in the statement of financial position as the part of trade receivables and other receivables. If the payments received from the contractors exceed the recognized revenues, such surplus is recognized in the statement of financial position as the revenues of future periods (as a part of liabilities).
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 24
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
5.3.10. FINANCIAL INSTRUMENTS
Each agreement which results in the arise of new financial asset at one Party and financial liability or equity instrument at another Party is classified as the financial instrument by the Group providing that the contract concluded between the Parties results in the economic effects. The Group classifies the financial instruments with the following division:
Items of financial assets or liabilities measured at fair value through the profit or loss - assets and liabilities purchased or taken in order to sell or re-buy in near future or are the part of portfolio of the specified financial instruments which are managed jointly and for which the confirmation of the real formula of short-term profit generation, the Group includes in this category, derivatives that hedge against the exchange rate risk.
Investments held to maturity date- are non-derivative financial assets with fixed or determinable payments that the Group intends and is able to hold to maturity and that do not meet the definition of loans and receivables and are not designated on initial recognition as assets at fair value through profit or loss or as available for sale;
Loans and receivables - are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market,
Financial assets available for sale – are any non-derivative financial assets designated on initial recognition as available for sale or any other instruments that are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair value through profit or loss.
Other financial liabilities
Financial instruments include among other things trade receivables (see point 5.3.9), bank credits (see point 5.3.11) and trade liabilities (see point 5.3.12). Recognition and exclusion of the item of financial assets and financial liability
The financial assets item or financial liability is presented in the statement of financial condition when the Group becomes a Party of such instrument-related agreement. The item of the financial assets is excluded from the statement of financial condition when the rights to economic benefits and risk following the agreement were performed, expired or the Group waived them. The Group excludes from the statement of financial condition the financial liability when this liability has expired, it means when the obligation specified in the agreement was met, extinguished or expired. Measurement of financial instruments as at the inception date
As at the acquisition date the assets and financial liabilities are measured by the Group at the fiar value, so at the fair value of the paid consideration in case of the component of assets or received amount in case of liability. The costs of transactions are included by the Group to the initial value of all assets and liabilities measurement, except for the category of assets and liabilities measured at fair value through the profit and loss. Measurement of financial instruments as at the reporting date
The Group measures:
at amortized cost including the effective interest rate: the investments held to maturity date, loans and receivables and other financial liabilities. such measurement may be also at payable amount, if the effect of discount is not significant,
At fair value: financial assets and liabilities from the category of assets and liabilities measured at fair value through financial result and category financial assets available for sale.
If it is not possible to determine the fair value (such situation may occur when the equity instruments are not listed) such assets are measured at cost (purchase price). The effects of measurement at fair value for the financial assets available for sale are recognized in equity. The effects of the measurement of financial assets and liabilities classified to other categories are recognized through profit or loss.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 25
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Hedging accounting
Hedging of the cash flow
The Group uses the derivatives such as fx forward contracts in order to hedge the risk of the exchange rate difference.
In the connection with the fact that the future expected payments due to sale are not recognized in the financial statement of the Group, whereas the hedging instruments FOREX forward without the hedge accounting are measured at fair value through profit or loss there is a potential accounting mismatching. In order to eliminate the possible accounting mismatching the Group introduced the hedge accounting from 1 July 2011.
If the derivative is designated as the hedge for the variability of cash flows referred to the specified risk related to the recognized asset, the recognized liability or highly probable planned transaction which might affect the profit or loss of the current period, the part of profits or losses related to this hedge, which is an effective hedge, is recognized in other comprehensive income and is presented as the separate item due to hedge in equity. Profits or losses previously recognized in equity are forwarded to the profit or loss of the current period in the same period and the same item, where the hedged cash flows are recognized in the statement of profit and loss account. The ineffective part of the fair value change of the derivative is recognized immediately as the profit or loss of the current period.
If the hedging instrument discontinues meeting the hedge accounting criteria then it expires, is sold, released, executed or it will change its designation, the Group will discontinue applying the hedge accounting principles. If the item is hedged by the non-financial asset, profits or losses previously recognized in other comprehensive income correct the carrying amount of this asset as at the recognition. If the planned transaction is not accepted to be executed, the profits or losses recognized in the statement of financial position are recognized promptly as the profit or loss of the current period. In other cases the amounts previously recognized in other comprehensive income are recognized as the profit or loss of the current period in the same period or periods, when the hedged planned transaction affects the profit or loss of the current period.
When establishing the hedge the entities in the APATOR Group formally establish document the hedge relationship as well as the purpose of risk management and the strategy of establishing the hedge. The documentation contains identification of hedging instrument, hedged item or transaction, the nature of hedged risk as well as the manner how the entity will assess the effectiveness of hedging instrument in compensation of the threat of changes in the fair value of hedged item or cash flows related to the hedged risk. It is expected that the hedge will be highly effective in compensation of changes of the fair value or cash flows resulting from the hedged risk. The efficiency of the hedge is assessed on a current basis in order to check if it is highly effective in all reporting period, for which it was established.
5.3.11. BANK CREDITS
The bank credits carrying interest are recognized at purchase price corresponding to the fair value of received cash less the direct costs related to the credit. In the subsequent periods the credits are measured at amortized purchase price with the application of effective interest rate.
5.3.12. TRADE LIABILITIES
After the initial recognition all liabilities except for the liabilities measured at fair value through profit and loss are measured, pursuant to the principle, at adjusted purchase price applying the effective interest rate method. .
5.3.13. PROVISIONS
The provisions are established when the Group bears the obligation (legal or custom) resulting from the past events and when it is probable that fulfilment of this obligation will cause the necessity of outflow of assets when the reliable estimation of the liability's amount is possible to be made.
The costs related to the relevant provisions are presented in the profit and loss after reducing all returns. In case when the proceed of the money in time is significant the amount of provision is established by discounting the anticipated further cash-flows to the current value using the gross discount rate reflecting the current market assessment of the money and the possible risk related to this liability. If the method basing on discounting is applied, the increase of the provisions related to the lapse of time is recognized as the borrowing costs. The provisions are also established for the future liabilities caused by
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 26
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
restructuring, if basing on the separate regulations the Group is obliged to carry out or to enter into the binding agreement and the restructuring plans allow estimating the value of future liabilities in a reliable manner.
Pursuant to the pay-roll systems the employees are entitled to the retirement severance pays and in some companies of the Group they are also entitled to the jubilee awards. The jubilee awards are paid to employees after working out the specified number of years. The retirement severance pays are paid once at the moment of going into retirement. The amount of the severance pays and jubilee awards depend on the time of employment and the fixed base specified in the corporate collective labour agreements. The companies establish the provision for the future liabilities due to the retirement severance pays and jubilee awards in order to classify the costs to the periods to which they are related to. According to IAS 19 the jubilee awards are other long-term employee benefits and the retirement severance pays are the programs of post-employment employee benefits.
The provisions established for jubilee awards and retirement severance pays are determined basing on the projected unit credit method and actuarial techniques. The base for reliable estimation of the provisions is as follows:
Criteria for acquiring rights to defined benefits,
Actuarial assumptions.
The provisions for the jubilee awards and retirement severance pays are charged against other operating activity.
The Group establishes the provision for the costs of compensated absences which will have to be incurred as a result of right unused by the employees and which arisen as at the end of the period. Provision for cost of accumulated compensated absences is recognized as the liability (accrued and deferred costs) after deduction all paid amounts. Provision for costs of accumulated compensated absences is the short-term provision and is not subject of discount and is charged against the basic activity.
The Group establishes the provision for guarantee repairs because the Group APATOR enters into the sales agreement in which the guarantee is granted for the period of two and three years. And therefore the ratio of guarantee repairs cost to the total sale in the period is used to calculate the provision. The provision for guarantee repairs is charged against other operating activity.
5.3.14. REVENUES
Revenues from sales
The revenues from sale are recognized at fair value of received or payable payments and represent the receivables for products, goods and services provided under the usual business activity less the rebates, tax on goods and services and other taxes related to the sale (custom tax). The revenues are recognized in such amount in which it is possible that the Group will achieve the economic benefits related to the transaction and when the amounts of revenues may be reliable measured. Sale of goods and products
The sale of goods and products is recognized when the goods and products are delivered and the risk and benefits resulting from the ownership right and when the amount of revenues may be measured in a reliable manner. Rendering of services (other than due to uncompleted implementation contract)
The revenues due to services are recognized under the level of performance progress, if the result of related transaction may be measured in a reliable manner.The percentage progress of service performance is determined as the ratio of costs incurred as at the relevant date to the total estimated costs of transactions. If the result of the service related transaction cannot be estimated in a reliable manner then the revenues due to this agreement are recognized only to the amount of incurred costs which Group expects to recover. Other revenues
Interest
Revenues due to interest are recognized consecutively when they accrue, referring to the net carrying amount of the relevant asset in compliance with the effective interest rate method. Dividend
Dividends are recognized when the rights of shareholders to receive them are established. Revenues due to rent
The revenues due to rent of investment real properties are recognized applying the straight line method for the period of rent to the concluded agreements.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 27
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Revenues due to unfinished implementation agreement
The revenues due to the agreement on implementation service consist of the amount initially agreed in the agreement, adjusted by the later changes in the extent of performed works, claims or motivation payments to the extent, to which it is probable that these changes affect the amount of revenues and their effect may be reliable estimated. As soon as the estimation of the result from the implementation agreement is reliable the agreed revenues are recognized as the profit or loss of the current period pro rata basis to the works progress. The costs related to the agreement are recognized when incurred; unless they constitute the assets related to the future works under the agreement. The progress is assessed by the measurement of performed works. If the result on the agreement cannot be reliably estimated, revenues due to this agreement are recognized only to the incurred costs in connection with the agreement, which probably will be recovered. The expected loss on the agreements is promptly recognized as the result of the current period.
5.3.15. TRANSACTIONS IN FOREIGN CURRENCIES
In the financial statements of the Group APATOR and the entities belonging to the Group, the transactions in the foreign currencies are translated pursuant to the exchange rate applicable as the transaction date. As at the end of the period, the monetary assets and liabilities are translated pursuant to the exchange rate of the leasing bank applicable at the end of the reporting period (assets acc. to buy rate, liabilities- sell rate). Profits and losses resulting from translation of the currencies are charged directly against the profit or loss. The functional currency of the foreign subsidiary Apator GmbH is EUR and the functional currency of the subsidiary Apator Metra is Czech corona, however the functional currency of foreign entity Apator Metroteks is UAH. As at the end of the period the assets and liabilities of these entities are translated into the presentation currency of the Group at the exchange rate applicable as of the end of the period and their statements of comprehensive income are translated pursuant to the average weighted exchange rate for the relevant fiscal year. The exchange differences arisen as a result of such translation are recognized directly in the equity as the separate item. When the foreign entity is disposes, the cumulated deferred exchange differences recognized in the equity, referred to the relevant entity, are recognized in the profit or loss. .
5.3.16. TAXES
Income tax includes current part and deferred one. Current and deferred income taxes are recognized as the profit or the loss of current period with exception of the case when it regards the merger of entities and items included directly in equity or as other comprehensive income.
Current income tax is expected amount of liabilities or receivables due to income tax for the given year established with the application of tax rates legally binding or actually on reporting day and amendments to tax liability regarding previous years.
Deferred income tax is recognized relating to temporary differences between reporting value of assets and liabilities and their value established for tax purposes. Deferred income tax is not recognized in case of the following temporary differences: initial recognition of assets or liabilities from transaction that is not the merger of entities and it does not have the influence on profit or loss of the current period neither on income to be taxed, differences related to investments in subsidiaries and joint controlled entities in the scope, where it is not likely to be disposed in foreseeable future. Furthermore, the deferred income tax is not recognized from temporary differences arisen in relations to initial recognition of the goodwill of the company. The deferred income tax is recognized with application of tax rates that according to the probability will be applied when temporary differences are reversed and tax regulations legally or actually binding to the reporting day are taken. Deferred income tax assets and deferred income tax provisions are compensated if the group has the possibility to execute the legal right to make compensation of current tax liabilities and tax assets and provided that deferred income tax assets and deferred income tax provisions regard income tax imposed by the same tax authority upon the same tax payer of different tax payers who are going to settle their liabilities and receivables due to income tax in net amount or at the same time to settle the receivables and liabilities.
Deferred income tax assets related to unsettled tax loss, unused tax shelter and negative temporary differences are recognized to the value which is likely the income to be taxed is achieved that will allow to their write off. Deferred income tax assets are subject to the assessment again at every reporting day and they are reduced in the range in which it is not likely to perform related to them benefits in income tax. The entities in group of Apator apply tax rates pursuant to binding regulations of the country where the business activity is carried out (Czech Republic 19%, Ukraine 21%, Germany 15%).
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 28
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
5.3.17. TAX EXEMPTION RESULTING OF ACTIVITY IN SPECIAL ECONOMIC ZONE
APATOR S.A. being parent entity makes use of tax exemption due to the costs of a new investment based on permission granted on 28
th December 2010 to conduct business activity in the area of
Pomeranian Special Economic Zone. The permission relates to income in zone that is income received from business activity carried out in Pomeranian Special Economic Zone under permission granted (tax exemption of legal entities) pursuant to IAS 12 i.e. it recognizes it as deferred income tax assets to the value of public assistance possible to be granted. Maximum value of possible assistance to be grated is calculated as the product of the intensity of the assistance obligatory to the province and the value of expenditure within investment recognized as qualified expenses. Deferred income tax assets related to unused tax exemption are recognized to the value to which is likely that income to be taxed will allow to use them. Deferred income tax assets are subject to the assessment again at every reporting day and they are reduced in the range in which it is not likely to perform related to them benefits in income tax.
5.3.18. EQUITIES
The Capital Group APATOR includes to the equity as follows: share capital, supplementary capital from the sale of own shares over their nominal value, other supplementary capital, revaluation capital, reserve capitals, hedge transactions measurement capital and the exchange differences from the consolidation, undividable financial result from previous years and financial result. The items reducing the amount of the equity are as follows: own shares and write-offs of the financial result of the current year.
5.3.19. REPORTING ON ACTIVITY SEGMENTS
The operating segment is a part of the Group involved in business activity and thus it may achieve revenue or incur costs, including revenues and costs related to the transactions with other parts of the Group. The operating results of each segment are reviewed by the main body responsible for taking operational decisions in the Group on a current basis and this body decides on allocation of segment's resources and assesses its results of activity, whereas the separate financial information on each segment are available (see the Note 1- item 8.1).
6. BASIC ACCOUNTING JUDGEMENTS AND BASES OF UNCERTAINTY ESTIMATION
The preparation of the financial statement pursuant to IFRS requires the Executive Board to make the professional judgments and assumptions which affect the accepted principles and presented values of assets, liabilities, revenues and costs. The estimations and related assumptions are based on the historical experience and many other factors, which are deemed as being reasonable in these circumstances. The results of these estimations are the basis for the professional judgment regarding the book value of assets and liabilities. For the material issues, the Executive Board making the estimation bases on the opinions of independent experts. The actual value may vary from the estimated value. Estimations and related assumptions are a subject of current verification. The change of the accounting estimations is recognized in the period when it was made. The estimations and assumptions affecting significantly the amounts disclosed in the financial statement of the group of APATOR were recognized in the following notes:
Impairment: P,P &E impairment (Note 4- par. 8.4), intangible assets impairment (Note-2- par. 8.2), goodwill impairment (Note 3- par. 8.3), other financial assets ( Note 7- par. 8.7) inventories impairments (Note 8- par. 8.8), receivables impairment (Note 9- par. 8.9)
Provisions (Note 18- par. 8.18)
Deferred income tax (Note 20 –par. 8.20)
7. INFORMATION ON SEASONAL NATURE OF BUSINESS
Further to manufacturing by Group investment goods in particular quarters occurs seasonal nature of sales. The demand for the products is the highest in the third and fourth quarters of each year.
8. EXPLANATORY NOTES TO FINANCIAL STATEMENT
8.1. OPERATING SEGMENTS
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 29
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The business activity of the group of APATOR is focused on key segments of electrical machines branch: metering and switchgear. The Group intends to the complex services in the field of metering and reading of utility services and it provides with the equipment to the safe making and breaking of electrical circuits. Presenting the geographic information the Group separated three areas of activity:
Country- including the domestic sale;
Export- export sale, outside EU member states;
Union- sale to the EU member states. The main customers of the group are power holdings.
DESCRIPTION Metering
equipment Switchgear equipment
Other Unallocated
items TOTAL
Financial results of operating segments in the period since 01.01.2012 till 31.12.2012
Total revenues 424 822 151 119 92 883 - 668 824
Sale outside 388 932 146 113 92 883 - 627 928
Sale to related entities 35 890 5 006 - - 40 896
Total costs (312 237) (118 448) (84 512) - (515 197)
External costs (287 792) (114 129) (84 512) - (486 433)
Costs to related entities (24 445) (4 319) - - (28 764)
Result of segment 112 585 32 671 8 371 - 153 627
Unallocated costs - - - (57 341) (57 341)
Share in profits of entities consolidated by equity method
- - - 2 206 2 206
Profit (loss) from operation 112 585 32 671 8 371 (55 135) 98 492
Financial revenues - - - 3 505 3 505
- including interest - - - 1 165 1 165
Financial costs - - - (9 839) (9 839)
- including interest - - - (3 473) (3 473)
Profit (loss) before tax 112 585 32 671 8 371 (61 469) 92 158
Income tax - - - 3 562 3 562
Non-controlling interest - - - (427) (427)
Net profit (loss) 112 585 32 671 8 371 (58 334) 95 293
Other information on segments at 31.12.2012
Total assets, including: 279 789 63 208 20 822 140 629 504 448
Tangible fixed assets 82 610 13 113 1 226 - 96 949
Intangibles 2 807 931 120 - 3 858
Goodwill of subordinated entities 62 884 75 3 289 - 66 248
Stocks 75 079 18 902 72 - 94 053
Trade receivables 56 409 30 187 16 115 - 102 711
Unallocated assets - - - 140 629 140 629
Trade liabilities 35 969 13 841 16 453 - 66 263
Increase of tangible fixed assets and intangibles 21 055 3 686 - 8 948 33 689
Tangible fixed assets and intangibles 21 055 3 686 - - 24 741
Unallocated expenses - - - 8 948 8 948
Depreciation 13 713 4 135 350 95 18 293
Tangible fixed assets 12 899 3 590 328 - 16 817
Intangibles 814 545 22 - 1 381
Unallocated depreciation - - - 95 95
Write downs 6 331 1 443 13 - 7 787
Stocks 3 963 705 - - 4 668
Trade receivables 2 368 738 13 - 3 119
Financial result of operating segments in the period since 01.01.2011 till 31.12.2011
Total revenues 368 400 139 133 29 486 - 537 019
Sale outside 341 452 129 841 29 430 - 500 723
Sale to related entities 26 948 9 292 56 - 36 296
Total costs (271 029) (108 045) (23 059) - (402 133)
External costs (253 205) (102 186) (23 014) - (378 405)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 30
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Metering
equipment Switchgear equipment
Other Unallocated
items TOTAL
Costs of related entities (17 824) (5 859) (45) - (23 728)
Result of segment 97 371 31 088 6 427 - 134 886
Unallocated costs - - - (63 490) (63 490)
Share in profits of entities consolidated by equity method
- - - 364 364
Profit (loss) from operation 97 371 31 088 6 427 (63 126) 71 760
Financial revenues - - - 1 770 1 770
- including interest - - - 1 027 1 027
Financial costs - - - (8 868) (8 868)
- including interest - - - (2 780) (2 780)
Profit (loss) before tax 97 371 31 088 6 427 (70 224) 64 662
Income tax - - - (12 851) (12 851)
Shares in non-controlling interest - - - (518) (518)
Net profit (loss) 97 371 31 088 6 427 (83 593) 51 293
Other information on segments at 31.12.2011
Total assets, including: 273 067 79 584 18 439 94 990 466 080
Tangible fixed assets 75 784 11 675 1 065 - 88 524
Intangibles 2 248 1 209 64 - 3 521
Goodwill of subordinated entities 60 390 75 3 289 - 63 754
Stocks 63 208 20 426 7 953 - 91 587
Trade receivables 71 437 46 199 6 068 - 123 704
Unallocated assets - - - 94 990 94 990
Trade liabilities 25 092 17 182 17 082 - 59 356
Increase of tangible fixed assets and intangibles 11 131 2 896 67 37 612 51 706
Tangible fixed assets and intangibles 11 131 2 896 67 - 14 094
Unallocated expenses - - - 37 612 37 612
Depreciation 12 639 3 905 134 97 16 775
Tangible fixed assets 11 758 3 346 132 - 15 236
Intangibles 881 559 2 - 1 442
Unallocated depreciation - - - 97 97
Write downs 5 750 1 595 21 - 7 366
Stocks 3 656 729 - - 4 385
Trade receivables 2 094 866 21 - 2 981
Geographical information
DESCRIPTION Home Export EU TOTAL
Revenues from sale in geographical segments in the period since 01.01.2012 till 31.12.2012
Total revenues 428 011 105 309 135 504 668 824
Sale outside 428 011 64 413 135 504 627 928
Sale to related entities - 40 896 - 40 896
Revenues from sale in geographical segments in the period since 01.01.2011 till 31.12.2011
Total revenues 343 301 81 978 111 740 537 019
Sale outside 343 301 45 682 111 740 500 723
Sale to related entities - 36 296 - 36 296
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 31
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.2. INTANGIBLES
DESCRIPTION GOODWILL PATENTS AND
LICENSES, SOFTWARE
COST OF R&D OTHER
INTANGIBLES
ADVANCE PAYMENT FOR INTANGIBLES
TOTAL
Net value at 01.01.2011 61 1 211 2 720 473 - 4 465
Amendment due to take-over / exclusion of entity - - - 15 - 15
Increase due to acquisition - 716 - 11 - 727
Increase due to own manufacturing - - 468 - - 468
Increase due to advance payment for intangibles X X X X 39 39
Decrease due to liquidation - - (134) - - (134)
Decrease due to discontinued investment - - (121) - - (121)
Decrease due to re-classification-others - - - (8) - (8)
Depreciation - (514) (946) 18 - (1 442)
Redemption on the day of exclusion of entity - - - (1) - (1)
Decrease of redemption up to now due to liquidation - - 134 - - 134
Other amendments- gross - 1 (112) - - (111)
Net value at 31.12.2011 61 1 414 2 009 508 39 4 031
Net value at 01.01.2012 61 1 414 2 009 508 39 4 031
Increase due to acquisition - 927 33 163 10 1 133
Increase due to own manufacturing - - 592 - - 592
Increase due to re-classification-others - - 225 350 - 575
Increase due to advance payment for intangibles - - - - 177 177
Decrease due to liquidation - (21) (239) - - (260)
Decrease due to re-classification- others - (350) - (225) - (575)
Settlement of advance payment for intangibles - - - - (82) (82)
Depreciation - (419) (596) (364) - (1 379)
Decrease of redemption up to now due to liquidation - 21 239 - - 260
Decrease redemption up to now due to re-classification - others - 204 - (204) - -
Other amendments- gross - (72) (2) - - (74)
Other amendments- redemption - 2 - - - 2
Net value at 31.12.2012 61 1 706 2 261 228 144 4 400
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 32
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION GOODWILL PATENTS AND
LICENSES, SOFTWARE
COST OF R&D OTHER
INTANGIBLES
ADVANCE PAYMENT FOR INTANGIBLES
TOTAL
Status at 31.12.2011
Gross value 61 7 133 11 150 5 522 39 23 905
Total redemptions and write downs up to now - (5 719) (9 141) (5 014) - (19 874)
Net value 61 1 414 2 009 508 39 4 031
Status at 31.12.2012
Gross value 61 7 617 11 759 5 810 144 25 391
Total redemptions and write downs up to now - (5 911) (9 498) (5 582) - (20 991)
Net value 61 1 706 2 261 228 144 4 400
DESCRIPTION Day
31.12.2012 31.12.2011
Gross value of all completely amortized intangibles still being in use 7 468 7 472
Value of expenses for research and development recognized as the cost in the period
5 815 5 064
External financial cost amount activated in the period 36 35
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 33
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.3. GOODWILL OF SUBSIDIARIES
Data concerning the goodwill of the company are presented in the tables below.
SUBSIDIARY Day
31.12.2012 31.12.2011
Apator Control Sp.z o.o. 75 75
Apator Rector Sp.z o.o. 42 164 39 595
Newind Sp.z o.o. 3 289 3 289
Apator Powogaz S.A. 17 855 17 855
Apator Telemetria Sp.z o.o. 1 832 1 832
Apator Metra s.r.o. 665 698
Apator Metroteks 368 410
Net goodwill 66 248 63 754
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Gross goodwill at the beginning of the period 64 089 59 844
Amendment due to take-over / exclusion of entity - 2 028
Increase due to amendments resulting of later recognition 2 568 2 165
Net exchange rate differences translated from financial statement to currency of presentation
(74) 52
Gross goodwill at the end of the period 66 583 64 089
Write down due to depreciation at the beginning of the period (335) (335)
Write down due to depreciation at the end of the period (335) (335)
Net goodwill at the end of the period 66 248 63 754
8.4. TANGIBLE FIXED ASSETS
In 2011, the Company APATOR S.A. reclassified buildings located on the perpetual usufruct right of lands into the assets held for sale. On 5
th July 2012 Apator SA concluded the sales contract. Details
concerning the above sales contract have been presented in Note 13 –par.8.13. The most important expenditures on intangible fixed assets incurred in 2012 is the investment in Pomeranian Special Economic Zone in Ostaszewo. Apator SA performs the investment aimed the construction of Modern Manufacturing- Development Centre.
Data referred to the P, P&E have been presented in the tables below.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 34
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 35
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION LANDS,BUILDINGS
AND CONSTRUCTIONS
MACHINES AND
EQUIPMENT
MEANS OF TRANSPORT
OTHER TANGIBLE
FIXED ASSETS
TANGIBLE FIXED ASSETS
UNDER CONSTRUCTION
ADVANCE PAYMENTS
FOR TANGIBLE
FIXED ASSETS
TOTAL
Net value at 01.01.2011 46 229 18 084 4 195 18 920 5 019 544 92 991
Amendment due to take-over / exclusion of entity 5 568 2 165 1 009 - 246 - 8 988
Increase due to acquisition 3 308 4 172 1 300 5 389 398 - 14 567
Increase due to modernization 1 761 216 1 1 581 - - 3 559
Increase due to own manufacturing - 272 - 397 - - 669
Increase due to taking from financial lease - 711 476 - 573 - 1 760
Increase due to re-classification - others - 10 - (10) - - -
Increase due to advance payment for tangible fixed assets and tangible fixed assets under construction
- - - - 46 511 2 647 49 158
Decrease due to disposal (309) (1 964) (521) (154) - - (2 948)
Decrease due to liquidation (18) (653) - (556) - - (1 227)
Decrease due to discontinued investment - - - - (17) - (17)
Decrease due to re-classification- to assets held for sale (8 829) 3 - - - - (8 826)
Settlement of advance payment for tangible fixed assets and tangible fixed assets under construction
- - - - (17 444) (2 674) (20 118)
Other write downs due to depreciation of assets 180 (1) - (124) - - 55
Depreciation (1 775) (5 617) (1 839) (6 102) - - (15 333)
Redemption on the day of exclusion of entity - (16) (57) - - - (73)
Decrease of redemption due to disposal up to now 170 1 809 482 154 - - 2 615
Decrease of redemption due to liquidation up to now 14 646 - 556 - - 1 216
Decrease of redemption due to re-classification up to now – to assets held for sale
1 097 (3) - - - - 1 094
Decrease of redemption up to now due to re-classification - others
- (7) - 7 - - -
Net exchange rate differences translated from financial statement to currency of presentation.
458 166 13 - 20 - 657
Other amendments - 8 - - - - 8
Net value at 31.12.2011 47 854 20 001 5 059 20 058 35 306 517 128 795
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 36
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION LANDS,BUILDINGS
AND CONSTRUCTIONS
MACHINES AND
EQUIPMENT
MEANS OF TRANSPORT
OTHER TANGIBLE
FIXED ASSETS
TANGIBLE FIXED ASSETS
UNDER CONSTRUCTION
ADVANCE PAYMENTS
FOR TANGIBLE
FIXED ASSETS
TOTAL
Net value at 01.01.2012 47 854 20 001 5 059 20 058 35 306 517 128 795
Increase due to acquisition 34 214 17 004 2 049 6 598 - - 59 865
Increase due to modernization 819 388 - 899 - - 2 106
Increase due to own manufacturing - 758 - - - - 758
Increase due to taking from financial lease - 657 474 579 786 - 2 496
Increase due to re-classification – from assets held for sale 2 607 1 924 - 93 - - 4 624
Increase due to advance payment for tangible fixed assets and tangible fixed assets under construction
- - - - 29 242 2 749 31 991
Decrease due to disposal (7) (1 499) (1 005) (61) - - (2 572)
Decrease due to liquidation (566) (6 558) (239) (5 399) - - (12 762)
Decrease due to re-classification – to assets held for sale (1 636) - - - - - (1 636)
Decrease due to re-classification - others (3 030) - - (139) - - (3 169)
Settlement of advance payment for tangible fixed assets and tangible fixed assets under construction
- - - - (62 205) (3 062) (65 267)
Other write downs due to depreciation of assets (2 151) (227) - (2) - - (2 380)
Depreciation (2 359) (6 398) (1 995) (6 162) - - (16 914)
Decrease of redemption due to disposal up to now - 1 305 716 (24) - - 1 997
Decrease of redemption due to liquidation up to now 418 6 185 197 5 395 - - 12 195
Decrease of redemption due to re-classification up to now – to assets held for sale
433 (1 531) - (69) - - (1 167)
Decrease of redemption due to re-classification up to now - others
454 - - 139 - - 593
Net exchange rate differences of translation from financial statement to currency of presentation
- (1) - - - - (1)
Other amendments-gross (295) (110) (11) (319) - - (735)
Other amendments- redemption 11 32 4 319 - - 366
Net value at 31.12.2012 76 766 31 930 5 249 21 905 3 129 204 139 183
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 37
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION LANDS,BUILDINGS
AND CONSTRUCTIONS
MACHINES AND
EQUIPMENT
MEANS OF TRANSPORT
OTHER TANGIBLE
FIXED ASSETS
TANGIBLE FIXED ASSETS
UNDER CONSTRUCTION
ADVANCE PAYMENTS
FOR TANGIBLE
FIXED ASSETS
TOTAL
Status at 31.12.2011
Gross value 60 771 83 069 11 187 96 477 35 306 517 287 327
Total of redemptions and write downs up to now (12 917) (63 068) (6 128) (76 419) - - (158 532)
Net value 47 854 20 001 5 059 20 058 35 306 517 128 795
Status at 31.12.2012
Gross value 92 877 95 632 12 455 98 728 3 129 204 303 025
Total redemptions and write downs up to now (16 111) (63 702) (7 206) (76 823) - - (163 842)
Net value 76 766 31 930 5 249 21 905 3 129 204 139 183
Write downs of tangible fixed assets have been presented in the table.
DESCRIPTION LANDS, BUILDINGS
AND CONSTRUCTIONS
MACHINES AND EQUIPMENT
OTHER TANGIBLE FIXED ASSETS
TOTAL
Value of write off at 01.01.2011 262 342 - 604
Increase- establishment of write off on current result - 1 124 125
Decrease- write off on revenues of unused amounts (180) - - (180)
Value of write off at 31.12.2011 82 343 124 549
Value of write off at 01.01.2012 82 343 124 549
increase- establishment of write off on current result 2 151 227 3 2 381
Value of write off at 31.12.2012 2 233 570 127 2 930
Additional information on tangible fixed assets have been presented in the table below.
DESCRIPTION Day
31.12.2012 31.12.2011
Reporting value of temporary unused tangible fixed assets 2 019 -
Gross value of all completely depreciated tangible fixed assets still being in use 73 181 79 360
External financing cost amount activated in the period 677 354
Reporting value of tangible fixed assets being the hedging of liabilities 47 272 18 766
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 38
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Information on tangible fixed assets used in social activity has been presented in the table below.
DESCRIPTION LANDS,
BUILDINGS AND CONSTRUCTIONS
MACHINES AND EQUIPMENT
OTHER TANGIBLE
FIXED ASSETS
TANGIBLE FIXED ASSETS
UNDER CONSTRUCTION
TOTAL
Net value at 01.01.2011 4 228 4 305 - 4 537
Increase due to modernization - - 62 - 62
Decrease due to liquidation - (1) - - (1)
Depreciation (123) (1) (49) - (173)
Decrease of current redemption due to liquidation
- 1 - - 1
Net value at 31.12.2011 4 105 3 318 - 4 426
Net value at 01.01.2012 4 105 3 318 - 4 426
Increase due to advance payment for tangible fixed assets and tangible fixed assets under construction.
- - - 329 329
Decrease due to re-classification - others (3 032) - (139) - (3 171)
Amortization (123) (1) (52) - (176)
Decrease of current redemption due to re-classification- others
455 - 139 - 594
Net value at 31.12.2012 1 405 2 266 329 2 002
8.5. INVESTMENT PROPERTIES
The entities of the group of APATOR have qualified the land purchased with buildings that the entities rented to not related entities.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Value at the beginning of the period 1 859 1 341
Amendment due to take-over / exclusion of entity - 419
Net exchange rate differences translated from financial statement to currency of presentation
(22) 35
Increase of fair value - 318
Decrease of fair value (102) (254)
Value at the end of the period 1 735 1 859
Income and costs due to investment property are presented in the table below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Rent income recognized in current result 288 289
Direct operating costs concerning investment property that brought income in the period
162 150
Direct operating costs concerning investment property that did not bring any income in the period
9 6
At 31
st December 2012 the group made the assessment of investment properties by the reference to
transaction market prices concerning similar properties. Due to low value of overestimation the updating of the assessment is carried out once a year.
8.6. INVESTMENTS IN JOINT CONTROLLED ENTITIES
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 39
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Data concerning joint controlled entities are presented in the tables below.
DESCRIPTION
COMPANY
APATOR ELECTRO
APATOR- ELECTRO LLC
GWI Ltd. TEPLOVODOMER
Value at 01.01.2011 146 - - 906
Increase due to purchase of shares/shares of entity
- - - 227
Amendments to equity due to payment of dividend (106) - - -
Share in profits (losses) of joint controlled entities 57 - - 307
Net exchange rate differences translated from financial statement to currency of presentation
14 - - 172
Amendment due to not received margin on sale (227) - - (883)
Other amendments 116 - - -
Value at 31.12.2011 - - - 729
Value at 01.01.2012 - - - 729
Increase due to purchase of shares / shares of entity
- 1 3 546 229
Amendment due to re-classification (8) - - -
Share in profits (losses) of joint controlled entities - 8 (209) 2 407
Net exchange translated from financial statement to currency of presentation
28 - - (117)
Amendment due to not received margin on sale 631 (117) - 31
Write downs due to depreciation established in the period
(535) - - -
Other amendments (116) 108 - (45)
Value at 31.12.2012 - - 3 337 3 234
DESCRIPTION APATOR
ELECTRO
APATOR- ELECTRO
LLC GWI Ltd. TEPLOVODOMER TOTAL
Value at 31.12.2012
Fixed assets 302 - 6 122 225 6 649
Current assets 9 179 2 171 8 606 14 167 34 123
Long-term liabilities - - (14 412) - (14 412)
Short-term liabilities (8 374) (2 153) (4 620) (4 721) (19 868)
Net assets 1 107 18 (4 304) 9 671 6 492
Amendment to the margin retained in stocks - (234) - (3 204) (3 438)
Net assets to calculate the share 1 107 (216) (4 304) 6 467 3 054
Share of the group in net assets 554 (108) (2 152) 3 234 1 527
Total revenues 19 363 922 5 848 55 978 82 111
Net profit 120 16 (418) 4 814 4 532
Share of the group in net profit - 8 (209) 2 407 2 206
Value at 31.12.2011
Fixed assets 287 - - 332 619
Current assets 6 199 - - 12 322 18 521
Short-term liabilities (5 454) - - (7 929) (13 383)
Net assets 1 032 - - 4 725 5 757
Amendment to the margin retained in stocks (1 263) - - (3 267) (4 530)
Net assets to calculate the share (231) - - 1 458 1 227
Share of the group in net assets (116) - - 729 614
Total revenues 18 173 - - 43 476 61 649
Net profit 114 - - 614 728
Share of the group in net profit 57 - - 307 364
8.7. OTHER FINANCIAL ASSETS
Data concerning other financial assets have been presented in the table.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 40
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Day
31.12.2012 31.12.2011
Other long-term financial assets 525 -
Other shares (not in public trading) 8 -
Derivatives 517 -
Other short-term financial assets 1 003 354
Shares of entities admitted to public trading - 1
Derivatives 1 003 183
Bills of exchange - 170
Total other financial assets, including: 1 528 354
- in related entities 8 -
- in other entities 1 520 354
Data concerning write downs have been presented in the table below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Value of write downs at the beginning of the period 211 237
Increase- establishment of write down in current result - 1
Application of write down- write off - (27)
Value of write downs at the end of the period 211 211
8.8. STOCKS
Information on value of stocks at reporting day has been presented in the table.
DESCRIPTION Day
31.12.2012 31.12.2011
Materials 39 290 32 517
Production in progress 27 307 23 515
Finished products 23 172 18 452
Goods 1 749 11 711
Advance payments for deliveries 2 535 5 392
Total value of stocks 94 053 91 587
Stocks write downs have been presented in the table below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Total write down in stocks
Value of write downs at the beginning of the period 4 385 3 655
Amendment due to exclusion of the entity - 420
Increase- establishment of write down in current result 2 466 2 050
Decrease- write down in revenues of unused amounts (2 165) (1 778)
Net exchange rate differences from translation of financial statement to the currency of presentation
(18) 38
Value of write downs at the end of the period 4 668 4 385
Additional information concerning stocks has been presented in the table below.
DESCRIPTION Day
31.12.2012 31.12.2011
Value of stock recognized as the cost in the period 541 364 471 259
Value of stock being the hedging of liabilities 28 500 10 500
8.9. TRADE AND OTHER RECEIVABLES
Information on trade and other receivables has been presented in the table.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 41
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Day
31.12.2012 31.12.2011
Long-term receivables 1 590 1 988
Receivables due to tangible fixed assets sold and intangibles 296 553
Deposits and gages placed 401 435
Others 893 1 000
Short-term receivables, including: 114 335 134 959
Trade receivables 102 711 123 704
Current receivables 87 050 109 403
Overdue receivables up to 1month 12 239 10 195
Overdue receivables from 1 month to 3 months 2 714 3 441
Overdue receivables from 3 months to 6 months 848 965
Overdue receivables from 6 months to 1 year 422 780
Overdue receivables over 1 year 2 557 1 901
Write down in trade receivables (3 119) (2 981)
Receivables due to income tax of legal entities 63 372
Receivables due to other taxes, customs duties and social insurance 5 535 7 697
Receivables due to other taxes, customs duties and social insurance 5 668 7 923
Receivables due to other public law settlements 1 623 -
Write down in receivables due to taxes (1 756) (226)
Other short-term receivables 6 026 3 186
Receivables due to tangible fixed assets sold and intangibles 514 272
Receivables due to sale of investment 103 9
Deposits and gages placed 764 339
Disputable claims 133 202
Prepayments- advance payments for purchase of services 590 990
Other receivables 4 511 2 086
Write down in other short-term receivables (589) (712)
Total receivables, including: 115 925 136 947
- from related entities 2 982 8 451
- from other entities 112 943 128 496
Data regarding receivable write downs have been presented below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Total write down in receivables
Value of write downs at the beginning of the period 3 919 3 321
Amendment due to exclusion of entity - 1 017
Increase- establishment of write downs decreasing current result 3 681 2 066
Decrease- write down in revenues of unused amounts (1 811) (1 963)
Use of write down- write off (291) (598)
Net exchange rate translated from financial statement to currency of presentation
(34) 76
Value of write downs at the end of the period 5 464 3 919
Additional information concerning receivables have been presented in the table.
DESCRIPTION Day
31.12.2012 31.12.2011
Value of receivables being the hedging of liabilities 23 024 25 442
In addition, apart from receivables being the hedging of liabilities in the group, in parent entity Apator S.A. is also (hedging of credits) silent assignment of receivables in minimal value of 40% all hand over of parent entity.
8.10. LOANS
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 42
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Apator Metrix S.A. granted loans to joint controlled entity in total amount of 1.675.000 GBP but the loan in amount of 1.600.000 GBP was transferred to GWI on the day of conclusion of the contract of acquisition of shares but the following tranche in amount of 75.000 GBP was transferred after the contract had been concluded. The loans granted by the Company were included in the statement as financial assets in loan and receivables categories and they were evaluated by amortized cost method Depending on the development of the situation and the investment process conducted by George Wilson, the Executive Board of Apator Merix S.A does not exclude the possibility to grant the following emergency loans to joint controlled entity while business plans assumes that the following tranches will be transferred not earlier than in September 2013. In the long-term and approved development plan of George Wilson Industries it is assumed that the return of the loans granted will be carried out successively commencing since 2016 , depending on the rate of effectiveness of investment process carried out.
Data concerning the loan granted have been presented in the table below.
DESCRIPTION Day
31.12.2012 31.12.2011
Long-term loans granted, including: 8 175 -
Payable over 1year to 2 years 1 098 -
Payable over 2 years to 5 years 7 077 -
Total loans granted, including: 8 175 -
- to related entities 8 175 -
8.11. CASH FLOW AND EQUIVALENTS
Cash in bank are with interest pursuant to variable interest rates.
Short-term deposits are made for different periods from one day to three months depending on current need of the group for cash and they are with interest pursuant to established variable interest rates for them.
Specification of cash and its equivalents is presented in the table below.
DESCRIPTION Day
31.12.2012 31.12.2011
Cash in hand 98 73
Cash on bank accounts 23 912 8 053
Short-term deposits 19 709 15 962
Others- cash in transit - 2
Total cash and equivalents 43 719 24 090
Additional information on cash flow has been presented in the table below.
DESCRIPTION Day
31.12.2012 31.12.2011
Value of cash being the hedging of liabilities 14 032 1 273
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 43
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.12. PREPAYMENTS
Information on prepayments has been presented in the table.
DESCRIPTION Day
31.12.2012 31.12.2011
Long-term prepayments 61 31
Certification, calibration 60 26
Insurance 1 2
Other settlements of prepayments - 3
Short-term prepayments 1 979 1 256
Administrative fees 59 40
Certification, calibration 136 48
Insurance 792 573
Information technology services 263 195
Marketing services 416 112
Trainings 31 37
Other settlements of prepayments 282 251
8.13. FIXED ASSETS HELD FOR SALE
On 5th
July 2012 APATOR SA and Galeria Copernicus Toruń 2 Sp. z o.o., having its registered office in Warsaw, concluded the final contract of sale of the perpetual usufruct right of land and buildings and constructions which are the separate property subject, located in Toruń, ul. Żółkiewskiego 21/29.
The sales price for the real property was determined as 36,072 000 PLN and it includes 2,000 000 PLN, due to the performance by Apator SA the road investment in the area of the property. Galeria Copernicus Toruń 2 Sp. z o.o. made the advance payment in the amount of 7 000 PLN on 21 April 2011. The outstanding amount of 29,072 000 PLN was deposited in the escrow account on 22
nd April 2011 under the contract.
The schedule of payments from escrow account
11.036 000 PLN – payment after conclusion of the contract and acceptance protocol of the release of the property is submitted;
9.036 000 PLN – payment after the submission of extracts from land and mortgage register indicating the buyer as perpetual usufruct user of property;
2.000 000 PLN – payment in instalments (till 31st October 2012) according to the schedule of demolition of buildings and constructions in the territory
of the property;
5.000 000 PLN – payment after submission of final decision transferring to the buyer the permit for construction;
2.000 000 PLN – payment after acceptance protocol confirming the performance of road investment in the area of property that is till 28
th February 2013 is presented
On 5th
July 2012 the property was handed over to the Buyer.
At 31st December 2012 receivables resulting from sales transaction of the property were settled.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Value at the beginning of the period 10 427 2 707
Increase due to re-classification 1 019 7 731
Decrease due to disposal (8 751) -
Decrease due to liquidation - (5)
Decrease due to re-classification (2 839) -
Write down due to loss of value established in the period 144 (6)
Value at the end of the period - 10 427
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Value of the write offs at the beginning of the period 144 154
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 44
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Increase- establishment of the write off current result - 6
Decrease- write off revenues of the amounts unused (144) (16)
Total value of write offs at the end of the period - 144
Apator Powogaz S.A., due to lack of sale of the property located in Pniewy at Konińska 26, retrained the property from fixed assets held for sale to tangible fixed assets. Further to this amendment , depreciation was calculated for the period of 3 years where the fixed assets had been held for sale. Depreciation in amount of 340.600 PLN was recognized in current reporting period. In addition, the Executive Board of Apator Powogaz S.A. decided to make write down of the value of the assets to the value of the land taking into consideration the costs of demolition of buildings. The decision was enforced by lack of use of the property for business activity. The value of the write down in amount of 2.381.688,77 PLN charged other operating costs.
8.14. SHARE CAPITAL
Information on share capital has been presented in tables.
DESCRIPTION Day
31.12.2012 31.12.2011
Number of shares 33 107 028 35 107 028
Nominal value of shares 0,10 0,10
Share capital 3 311 3 511
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Share capital at the beginning of the period 3 511 3 511
Decrease of share capital in the period (200) -
Redemption of own shares (200) -
Share capital at the end of the period 3 311 3 511
On 13
th April 2012, APATOR S.A. acquired without remuneration from subsidiary - Apator Mining Sp. z o.o.,
2.000.000 bearer shares of APATOR S.A. of nominal value 0,10 PLN each, for their redemption and reduction of share capital.
According to the Resolution No 17/VI/2012 of General Shareholders Meeting of APATOR S.A. dated 18th
June 2012, it was decided to redeem 2.000.000 bearer shares of APATOR S.A. of nominal value 0,10 PLN each.
According to the Resolution No 18/VI/2012 of General Shareholders Meeting of APATOR S.A. dated 18th
June 2012 the share capital was reduced from the amount of 3.510.702,80 PLN to the amount of 3.310.702,80 PLN, that is by the amount of 200.000,00 PLN.
On 16th
July 2012 the Company received the decision of the District Court in Toruń, VII Economy Department of the National Court Register and based on it on 12
th July 2012, the registration of reduction of share capital of
APATOR S.A. from the amount of 3.510.702,80 PLN to the amount of 3.310.702,80 PLN that is by 200.000,00 PLN was made.
Structure of shareholders at 31st December 2012 was presented in the table.
Name and Surname Registered
shares Bearer shares
Total shares Number of
votes Share in capital Share in
votes
Apator Mining sp. z o. o. 0 3 600 000 3 600 000 3 600 000 10,87% 6,38%
Mariusz Lewicki 1 164 669 872 331 2 037 000 5 531 007 6,15% 9,80%
Tadeusz Sosgórnik 993 102 907 401 1 900 503 4 879 809 5,74% 8,65%
Danuta Guzowska 954 214 566 065 1 520 279 4 382 921 4,59% 7,77%
Zbigniew Jaworski 760 848 566 459 1 327 307 3 609 851 4,01% 6,40%
Janusz Marzygliński 818 092 229 565 1 047 657 3 501 933 3,16% 6,21%
AVIVA OFE 0 2 905 628 2 905 628 2 905 628 8,78% 5,15%
Others 3 083 567 15 685 087 18 768 654 28 019 355 56,69% 49,65%
TOTAL 7 774 492 25 332 536 33 107 028 56 430 504 100,00% 100,00%
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 45
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.15. OTHER CAPITALS
Information on other capitals was presented in the tables.
DESCRIPTION Day
31.12.2012 31.12.2011
Supplementary capital from sale of own shares over their nominal value 15 142 15 142
Outstanding supplementary capital 171 353 133 339
Own shares (3 524) (5 348)
Reserve capitals 4 000 21 973
Total other capitals 186 971 165 106
Pursuant to the Resolution No. 19/VI/2012 of General Shareholders Meeting of APATOR S.A. dated 18
th
June 2012 the programme of gratuitous acquisition of shares for their redemption was closed.
DESCRIPTION
SUPPLEMENTARY CAPITAL FROM SALE OF OWN SHARES OVER
THEIR NOMINAL VALUE
OUTSTANDING SUPPLEMENTARY
CAPITAL OWN SHARES
SUPPLEMENTARY CAPITALS
TOTAL
As at 01.01.2011 15 142 110 958 (5 348) 21 986 142 738
Increase in the period since 01.01.2011 till 31.12.2011
- 54 445 - 17 973 72 418
Distribution of the result - 36 459 - - 36 459
Closing the programme for the buyout of shares
- 17 986 - - 17 986
Opening the programme for the buyout of shares
- - - 17 973 17 973
Decrease in the period since 01.01.2011 till 31.12.2011
- (32 064) - (17 986) (50 050)
Coverage of loss from supplementary capital
- (320) - - (320)
Payment of dividend - (13 771) - - (13 771)
Closing the programme for the buyout of shares
- - - (17 986) (17 986)
Opening of the programme for the buyout of shares
- (17 973) - - (17 973)
As at 31.12.2011 15 142 133 339 (5 348) 21 973 165 106
As at 01.01.2012 15 142 133 339 (5 348) 21 973 165 106
Increase in the period since 01.01.2012 till 31.12.2012
- 43 699 - - 43 699
Distribution of the result - 25 726 - - 25 726
Closing the programme for the buyout of shares
- 17 973 - - 17 973
Decrease in the period since 01.01.2012 till 31.12.2012
- (5 685) 1 824 (17 973) (21 834)
Closing the programme for the buyout of shares
- - - (17 973) (17 973)
Coverage of loss from supplementary capital
- (5 685) - - (5 685)
Redemption of own shares - - 1 824 - 1 824
As at 31.12.2012 15 142 171 353 (3 524) 4 000 186 971
Information on reserve capitals was presented in the table.
DESCRIPTION Day
31.12.2012 31.12.2011
Capital for payment of dividend 4 000 4 000
Capital for buyout of shares - programme 2011/2012 - 17 973
Kapitały rezerwowe ogółem 4 000 21 973
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 46
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 47
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The profit distribution (loss coverage) in the companies belonging to the Capital Group of APATOR
Parent entity APATOR SA
Pursuant to the Resolution No. 16/VI/2012 of the General Meeting of Shareholders of APATOR S.A. of 18
th June 2012 the following net profit distribution for the year 2011 in the amount of 37,731.552,16
PLN was made in the following manner:
Dividend 24,830,271.00 PLN
Supplementary capital 12,901,281.16 PLN Further to the redemption of 2.000.000 bearer shares, for the payment of dividend were entitled 33.107.028 registered shares of A series and bearer shares of A, B, and C series. The right to the dividend to be paid was achieved by the shareholders holding the shares of APATOR S.A. on 6
th July
2012 the date of payment of dividend in amount of 0.75 PLN per share was fixed on the day 23rd
July 2012.
Subsidiary Apator Control Sp. z o.o.
Pursuant to the Resolution No.8 of the Ordinary General Partners Meeting of Apator Control Sp. z o.o. of 22
nd March 2012 the net profit for the year 2011 in the amount of 1,626,580.09 PLN was distributed
into:
Dividend in amount of 1.026.580,09 PLN
Supplementary capital in amount of 1.022.611,16 PLN The date of payment was fixed on
5th
April 2012 – the amount of 513.290,00 PLN
20th
April 2012 – the amount of 513.290,00 PLN Subsidiary FAP Pafal SA
Pursuant to the Resolution No. 9/2012 of the Ordinary General Shareholders Meeting of FAP Pafal SA of 5
th April 2012 the net profit for the year 2011 in the amount 2.126.926,16 PLN was distributed into:
Dividend in amount of 1.104.315,00 PLN
Supplementary capital in amount of 1.022.611,16 PLN The date of payment was fixed on 31
st May 2012
Subsidiary Apator Mining Sp. z o.o.
Pursuant to the Resolution No. 8/04/2012 of the Ordinary General Partners Meeting of Apator Mining Sp. Z o.o. of 4
th April 2012 the profit in the amount 9,733,827.86 PLN was distributed into:
Dividend in the amount of 6,838,000,00 PLN
Supplementary capital in the amount of 2,895,827.86 PLN In October 2011 the advance payment in the amount of 2,893,000.00 PLN was paid for the expected dividend. The remained part of the dividend in the total amount 3,945,000,00 PLN was fixed on 6
th April
2012. The subsidiary Apator Metrix SA
Pursuant to the Resolution No. 3/03/2012 of the Ordinary General Shareholders Meeting of Apator Metrix SA on29th March 2012, the profit in the amount of 6,913,344,09 PLN was distributed into:
Dividend in the amount 4,00,144.06 PLN
Supplementary capital in the amount 2,913,190.03 PLN The date of payment of dividend is:
On 11th
April 2012 - the amount of 2.000,000,00 PLN
On 18th
June 2012 - the amount of 2.000,144,06 PLN Subsidiary Apator Rector Sp. z o.o.
Pursuant to the Resolution No. 10/IV/2012 of the Ordinary General Partners Meeting of Apator Rector Sp. z o.o. of 3
rd April 2012 the profit in the amount of 9,322,643.38 PLN was distributed into:
Dividend in the amount of 8,600,000.00 PLN
Supplementary capital in the amount of 722,643,38 PLN The date of payment of dividend was fixed on 6
th April 2012.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 48
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The subsidiary APATOR POWOGAZ SA
Pursuant to the Resolution No. 5/IV/2012 of the Ordinary General Shareholders Meeting of Apator Powogaz SA on 5
th May 2012, the profit in the amount of 12,297.105,92 PLN was distributed into:
Dividend in the amount of 10,000,000.00 PLN
Supplementary capital in the amount of 2,297,105.92 PLN The date of payment of dividend was fixed on 16
th April 2012
The advance in the amount of PLN 8,776,757.00 PLN, so PLN 0.25 per share was paid for the expected dividend from the profit of 2010. 35,107,028 registered shares of A series and bearer’s shares of A, B, and C series were entitled to the advance for the expected dividend. The advance for the expected dividend for the fiscal year 2010 payment was made pursuant to Art. 349 of the Code of Commercial Companies and § 12 par. 8 of the Articles of Association under the Resolution of the Supervisory Board No. 29/2010 of 28 October 2010. The right to pay the advance for the expected dividend for the fiscal year 2010 was achieved by the shareholders holding the shares of APATOR S.A. on 6 December 2010. The advance for the expected dividend payment was made on 13 December 2010.
35,107,028 registered shares of A series and bearer’s shares of A, B and C series is entitled to receive the remained part of dividend.The right to remained part of dividend in the total amount PLN 12,287,459.80 will be achieved by the shareholders holding the shares of APATOR S.A. on 8 July 2011. The payment of the remained part of dividend in the amount of PLN 0.35 per share was made on 22 July 2011.
Subsidiary Apator Control Sp. z o.o.
Pursuant to the Resolution No. 8/2011 of the Ordinary General Meeting of Apator Control Sp. z o.o. of 17 May 2011 the net profit for the year 2010 in the amount of PLN 1,220,322.92 was distributed and designated to pay the dividend. Subsidiary FAP Pafal SA
Pursuant to the Resolution No. 11/2011 of the Ordinary General Meeting of FAP Pafal SA of 26 May 2011 the net profit for the year 2010 in the amount PLN 300,228.85 was distributed and designated to pay the dividend. Subsidiary Apator Mining Sp. z o.o.
Pursuant to the Resolution No. 8/2011 of the Ordinary General Meeting of Apator Mining Sp. Z o.o. of 26 May 2011 the profit in the amount PLN 24,394,902.93 PLN was divided and designated for:
Dividend in the amount of PLN 18,410,000.00
Supplementary capital in the amount of PLN 5,984,902.93 In November 2010 the advance payment in the amount of PLN 5,260,000.00 was paid for the expected dividend. The remained part of the dividend in the total amount PLN 13,150,000.00 was paid in two instalments:
On 31 March 2011 the amount of PLN 5,260,000.00
On 30 May 2011 the amount PLN 7,890,000.00 The subsidiary Apator Metrix SA
Pursuant to the Resolution No. 3/04/2011 of the Ordinary General Meeting of Apator Metrix SA on 4 April 2011, the profit in the amount of PLN 4,440,810.29 was distributed and designated for:
Dividend in the amount PLN 3,005,888.60
Supplementary capital in the amount PLN 1,434,921.69 The dividend payment date is:
On 16 May 2011 the amount of PLN 1,500,000.00
On 15 June 2011 the amount of PLN 1,505,888.60 Subsidiary Apator Rector Sp. z o.o.
Pursuant to the Resolution No. 10/2011 of the Ordinary General Meeting of Apator Rector Sp. z o.o. of 27 April 2011 the profit in the amount of PLN 8,962,052.56 was divided and designated for:
Dividend in the amount 7,862,000.00 PLN
Supplementary capital in the amount of 1,100,052.56 PLN The date of payment of dividend was fixed on 16
th April 2012.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 49
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The subsidiary - APATOR GmbH
Pursuant to the Resolution No. 4/2012 of the Ordinary General Partners Meeting of Apator GmbH on 21
st March 2011, the profit in the amount of 1,912,13 EUR was distributed into supplementary capital.
Other subsidiaries designed supplementary capital in the amount of 2.365.400 PLN from the profit for 2011.
8.16. NON CONTROLLING INTEREST
Information on non-controlling interest has been presented in the table below.
SUBSIDIARY Day
31.12.2012 31.12.2011 31.12.2010
Apator Telemetria Sp.z o.o. 1 021 1 008 532
Apator Metroteks 139 133 74
Total non-controlling interest 1 160 1 141 606
8.17. CREDITS AND LOANS
Information on credits and loans has been presented in the tables.
DESCRIPTION Day
31.12.2012 31.12.2011
Long-term credits and loans 12 887 21 669
Payable over 1year to 2years 1 222 16 334
Payable over 2 years to 5 years 11 665 4 001
Over 5 years - 1 334
Short term credits and loans 42 833 58 299
Total credits and loans,including 55 720 79 968
- from other entities 55 720 79 968
There were no events in the reporting period that caused that the entities did not fulfil their obligations in group of APATOR resulting from credit contracts concluded . Parent entity APATOR S.A.
At 31
st December 2012 APATOR S.A. had the debit due to credits taken in amount of 35.358 000 PLN
under credit contracts which terms and conditions were presented below: Credit (1)
Name of bank Bank Handlowy w Warszawie S.A.
Date of agreement and possible annex to the agreement
27 May 2004, the last annex to the agreement of
19 September 2012
Credit amount 30,000 000 PLN - credit on current account
Term of the credit payment 9 September 2014
Type of collateral Assignment of receivables in the amount of 6,000 000 PLN Mortgage on property to the amount of 37.000 000 PLN
Interest rate WIBOR 1M + margin year to year
Credit (2)
Name of bank RAIFFEISEN BANK POLSKA S.A.
Date of agreement and possible annex to the agreement
16 June 2005, the last annex to the agreement of
18 December 2012
Credit amount 17,500 000 PLN: - 7,500 000 – on current account - 5,000 000 – revolving credit (1)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 50
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
- 5,000 000 – revolving credit (2) and the limit of 12,000 000 PLN to be used - 12,000 PLN – limit for credit letter “without payments in advance" - 12,000 000 PLN – limit for bank guarantees
Term of the credit payment 10 April 2014- credits on current account 9 April 2014 – revolving credits
10 April 2014 – letter of credits and guarantees
Type of collateral Power of attorney to the current account Silent assignment of dues in the amount of at least 40% of total trade turnover
Interest rate WIBOR 1M + margin year to year
Subsidiary Apator Metrix S.A.
At 31 December 2012 the Company has the debit due to credits in amount of 13.905 000 PLN which conditions are presented below.
Credit (3)
Name of bank Bank Millenium S.A.
Date of agreement and possible annex to the agreement
28 February 2007, the last annex to the agreement 25 February 2013
Credit amount 7.500 000 PLN
Term of the credit payment 27 February 2015
Type of collateral Bail mortgage to the amount of 7.000 000 PLN for the developed land property
Interest rate WIBOR 1M + margin
Credit (4)
Name of bank Bank Millenium S.A.
Date of agreement and possible annex to the agreement
3 September 2012
Credit amount 8.000 000 PLN
Term of the credit payment 2 September 2017
Type of collateral Bail mortgage
Interest rate WIBOR 1M + margin
Subsidiary Apator Mining Sp. z o.o.
At 31 December 2012 Apator Mining Sp. z o.o. has no debit due to credits. It has in possession free credit limit in amount of 5.000 000 PLN.
Credit (5)
Name of bank ING Bank Śląski S.A.
Date of agreement and possible annex to the agreement
May 2012
Credit amount 5.000 000 PLN
Term of the credit payment May 2013
Type of collateral Ordinary mortgage
Interest rate WIBOR 1M + margin
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 51
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Subsidiary group of Apator Powogaz
At 31 December 2012 group of Apator Powogaz has the debit due to credits and loans in amount of 6.457 000 PLN under credit contracts which terms and conditions are presented below. Apator Powogaz S.A.
Credit (6)
Name of bank BZ WBK SA
Date of agreement and possible annex to the agreement
5 April 2012
Credit amount 15.000 000 PLN
Term of the credit payment 31 May 2013
Type of collateral Transfer of receivables in minimum amount of 7.000 000 PLN Transfer of receivables from insurance contract Power of attorney to bank account Registered pledge on stock in amount of 22.500 000 PLN
Interest rate WIBOR 1M + margin
Credit (7)
Name of bank Raiffeisen Bank Polska SA
Date of agreement and possible annex to the agreement
14 December 2010
Credit amount 2.000 000 EUR
Term of the credit payment 29 December 2017
Type of collateral Ordinary mortgage in amount of 2 m EUR Bail mortgage in amount of 1 m EUR; Assignment of receivables from the property insurance contract Power of attorney to bank account
Interest rate EURIBOR 1M+ margin
Apator Metra s.r.o.
Credit (8)
Name of bank Raiffeisenbank a.s.
Date of agreement and possible annex to the agreement
20 December 2008, the last annex dated14 December 2012
Credit amount 20.000 000 CZK
Term of the credit payment 31 December 2013
Type of collateral Pledge on property Blank promissory notes
Interest rate PRIBOR 1D + margin
Apator Telemetria Sp. z o.o.
Credit (9)
Name of bank Bank Zachodni WBK SA
Date of agreement and possible annex to the agreement
29 September 2009 , annex dated 19 June 2012
Credit amount 800 000 PLN
Term of the credit payment 30 June 2013
Type of collateral Blank promissory notes
Interest rate WIBOR 1M + margin
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 52
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Subsidiary group of Apator Rector
At 31 December 2012 subsidiary group of Apator Rector has no debit due to credits. It has in possession free credit limit in amount of 6.500 000 PLN.
Apator Rector Sp. z o.o.
Credit (10)
Name of bank Bank Millennium SA
Date of agreement and possible annex to the agreement
6 March 2009 , annex dated 31 July 2012
Credit amount 3.500 000 PLN
Term of the credit payment 2 August 2013
Type of collateral Assignment of receivables
Interest rate WIBOR 1M + margin
Newind Sp. z o.o.
Credit (11)
Name of bank Kredyt Bank SA
Date of agreement and possible annex to the agreement
9 May 2012
Credit amount 3.000 000 PLN
Term of the credit payment 19 May 2015
Type of collateral Own blank promissory note Transfer of receivables
Interest rate WIBOR O/N + margin
Liabilities and costs due to credits and loans.
DESCRIPTION
LIABILITY AS AT
COST OF INTEREST
LIABILITY AS AT
COST OF INTEREST
since
01.01.2012 since
01.01.2011
31.12.2012 till 31.12.2012 31.12.2011 till 31.12.2011
Credits 55 720 4 030 79 968 3 322
Total 55 720 4 030 79 968 3 322
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 53
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.18. PROVISIONS FOR LIABILITIES
PROVISIONS FOR LIABILITIES EMPLOYEE BENEFITS OTHER PROVISIONS
TOTAL DESCRIPTION
SEVERANCE PAYMENTS,
JUBILEE AWARDS
RESTRUCTURING PROVISION
BONUSES LEAVES GWARANCJE
PROVISIONS FOR DICONTIMUED
IMPLEMENTATION CONTRACTS
(penalties, compensations)
OTHERS
PROVISION FOR NOT RECEIVED MARGIN ON
SALE TO JOINT CONTROLLED ENTITY
Value of provisions at 01.01.2011 (+) 12 230 - 3 556 1 282 5 762 - 230 - 23 060
Amendment to take-over (+) / exclusion (-) of entity - - 309 290 1 034 - - - 1 633
Increase- establishment of provision decreasing current result (+)
218 1 323 2 538 845 604 451 112 116 6 207
Decrease – write off in revenues of unused amounts (-) - - (1 332) - (3 436) - (230) - (4 998)
Usage of provision – settlement of costs (-) - - (800) (175) - - - - (975)
Net exchange rate differences translated from financial statement to to currency of presentation
- - 24 11 69 - - - 104
Value of provisions 31.12.2011, including: 12 448 1 323 4 295 2 253 4 033 451 112 116 25 031
- long-term provisions 11 134 - - - 324 - - - 11 458
- short-term provisions 1 314 1 323 4 295 2 253 3 709 451 112 116 13 573
Value of provisions at 01.01.2012 12 448 1 323 4 295 2 253 4 033 451 112 116 25 031
Increase- establishment of provision decreasing current result
- - 4 695 771 3 533 - 83 108 9 190
Decrease – write off in revenues of unused amounts (3 532) - - - - (245) - (116) (3 893)
Provisions used- settlement of costs (189) - (4 227) (457) (3 690) - (39) - (8 602)
Net currency exchange rate from translation of financial statement to the currency of presentation
- - (12) (8) (12) - - - (32)
Value of provisions at 31.12.2012,including: 8 727 1 323 4 751 2 559 3 864 206 156 108 21 694
- long-term provisions 7 012 - - - 40 - - - 7 052
- short-term provisions 1 715 1 323 4 751 2 559 3 824 206 156 108 14 642
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 54
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Employee benefits – actuarial assumptions
Main actuarial assumptions accepted at reporting day (quoted as weighted average values): - Discount rate at 31st December 2012 4,75% - Future increase of remuneration 2,70% (for Apator S.A. 0,00 %) - Number of employees 1 815
Assumptions concerning the future mortality and disability are based on statistics published and tables of mortality. Different parameters of mobility have been applied: - for persons at age up to 40 years old 5% - for persons from 41 to 45 years old 4% - for persons from 46 to 50 years old 3% - for persons 51 years old and over 1% Severance payments and jubilee awards
The obligation of restructuring arisen in FAP "PAFAL” S.A. because the production discontinuance process of one of the basic activities i.e. production of the electronic meters for measurement of electric energy consumption started. Pursuant to the strategy applied by the parent entity of the Capital Group Apator aiming at transfer of the activity of the Company Apator S.A. to the Pomeranian Special Economic Zone in Ostaszewo, Łysomice community and constructing there the modern production and development center of Apator S.A., where one manufacturing plant for electronic meters will be created, the manufacturing of electrical energy meters is step by step transferred from the company PAFAL S.A. to APATOR S.A. Pursuant to Regulations regarding the remuneration, the group creates reserves for employee benefits that are calculated by independent actuary – Michał Stańczuk Actuarial Office.
Further to the conclusion of the Agreement concerning the introduction of new Collective Labour Agreement of the Company since 1
st January 2013 in subsidiary - Apator Powogaz S.A. the obligation
resulting from jubilee awards is calculated based on practice and base amount of the remuneration.
Restructuring provisions
In FAP „PAFAL” S.A. there was the obligation to conduct the restructuring due to commencement of completion process of one of the essential areas of activity i.e. manufacturing of electronic electricity meters for the measurement of electrical energy consumption.
Pursuant to strategy assumed by parent entity in Capital Group of Apator aiming at transfer of the activity of Apator S.A. to Pomeranian Special Economic Zone in Ostaszewo, Łysomice municipality and construction of modern manufacturing and development center of Apator S.A., where gradual transfer of manufacturing of electronic electricity meters from PAFAL SA to Apator SA is held, it will be established one area for manufacturing of electronic electricity meters.
In 2011 formal plan was established for restructuring which was approved by Supervisory Board of FAP PAFAL S.A. and in December 2011, it was made public to the representatives of the Trade Unions operating in FAP PAFAL S.A.
As a result of restructuring the employment in the subsidiary, it is expected to be reduced by 128 persons. The total costs of employment restructuring, composed of severance pays for the dismissed employees, compensations for the shortened period of notice and payment of unused leaves equivalents are estimated as PLN 1,323,106.00.
Plan of activity of PAFAL S.A. assumed that to the end of 2012 the entity will terminate the manufacturing of electronic electricity meters for the measurement of electrical energy consumption. In 2012 the manufacturing of electronic electricity metres was continued and there were no circumstances that indicated to reduce the employment and therefore to release of provision. It is assumed that the process of expiring of the manufacturing of electronic electricity meters will proceed during 2013.
Bonuses
The Group establishes the provisions for the bonuses granted to the employees of the Group under the provisions of the remuneration by-laws.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 55
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Guarantees
The provision for the guarantee repairs is mainly related to the sale of the equipment being manufactured by the Group in the reporting periods ending on 31 December 2009, 31 December 2010 and 31 December 2011. This provision is estimated under the historical data referred to the share of defective products in comparison to the revenues from sale of these products.
Provisions due to agreements on unfinished implementation services
The provision due to agreements on unfinished implementation services is established when the one of the conditions of the agreement is not met and this causes the liability arise.
8.19. LIABILITIES
DESCRIPTION Day
31.12.2012 31.12.2011
Long-term liabilities 25 425 20 917
Investment liabilities 841 913
Liabilities due to purchase of shares 3 546 -
Liabilities due to put options concerning non-controlling interest of subsidiary 19 155 16 742
Liabilities due to financial lease contracts 1 883 1 995
Liabilities due to derivatives - 1 267
Short-term liabilities, including: 102 017 97 098
Trade liabilities 66 263 59 356
Current liabilities 55 283 54 122
Overdue liabilities 10 980 5 234
Liabilities due to income tax from legal entities 7 606 2 700
Liabilities due to other taxes, customs duties and social insurance 9 246 8 862
Other short-term liabilities 18 902 26 180
Liabilities due to remunerations 2 629 2 812
Liabilities due to dividend 98 83
Liabilities due to derivatives 82 7 627
Liabilities due to financial lease contracts 1 606 1 468
Investment liabilities 7 127 7 574
Prepayments - advance payments received for deliveries 1 726 653
Accrued revenues 2 121 5 049
Other liabilities 3 513 914
Total liabilities, including: 127 442 118 015
- towards related entities 2 -
- towards other entities 127 440 118 015
8.20. INCOME TAX
Data regarding income tax have been presented in the tables.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Comprehensive income statement
Current income tax 16 566 13 233
Current burden due to income tax 16 583 13 216
Amendments to current tax from previous years (17) 17
Deferred income tax (20 128) (382)
Related to establishment and write off temporary differences (122) (382)
Tax shelter due to activity in Special Economic Zone (20 006) -
Tax burden presented in comprehensive income statement (3 562) 12 851
Statement on amendments to equity
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 56
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Deferred income tax 1 546 (1 415)
Net deferred income tax on hedging of cash flow settled in the financial year 1 546 (1 415)
Tax benefit (burden) presented in equity 1 546 (1 415)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 57
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Status at the
beginning of the period
Amendment due to take-over/exclusion
of entity
Net currency rate differences from
translation of financial statement
to currency of presentation
Recognition (charging) of the
result due to change of temporary
differences and tax loss
Increase (decrease) of equity due to
change of temporary differences
Status at the end of the period
Deferred income tax in the period since 01.01.2011 till 31.12.2011
Assets due to deferred income tax 9 048 370 31 271 1 429 11 149
Provisions for employee benefits 2 567 25 2 325 - 2 919
Provisions for bonuses 676 14 1 30 - 721
Sale included in the next reporting period 5 - - 19 - 24
Provisions for warranty repairs 1 095 196 13 (453) - 851
Future costs (liabilities) 297 - - (101) - 196
Remunerations, insurance premium not paid 244 - - 103 - 347
Write downs in tangible fixed assets and intangibles 141 - - (9) - 132
Write downs in stocks 694 60 8 80 - 842
Write downs in receivables 408 - - (22) - 386
Evaluation at fair value- derivatives 63 - - 270 1 429 1 762
Evaluation at fair value-other financial assets 4 - - (3) - 1
Tax loss 1 392 13 1 (923) - 483
Book amortization other than tax one 5 - - 55 - 60
Transactions within the groups 708 - - 39 - 747
Differences due to lease contracts - - - 155 - 155
Temporary differences due to long-term contracts (implementation services contracts)
531 - - 405 - 936
Other costs not taxed in the period 218 62 6 301 - 587
Provisions due to deferred income tax 6 981 1 894 151 (111) 14 8 929
Evaluation at fair value - properties 17 - - 12 - 29
Evaluation at fair value – derivatives 445 - - (352) 14 107
Evaluation at fair value – other financial assets 1 - - - - 1
Book amortization other than tax one 6 119 1 862 151 (496) - 7 636
Excess of nominal value over book value of the aport 238 - - - - 238
Differences due to lease contracts 92 32 - 232 - 356
Compensations received - - - 380 - 380
Temporary differences due to long-term contracts (implementation service contracts)
27 - - 31 - 58
42 - - 82 - 124
Tax decreasing result of the period/capitals X X X 382 1 415 X
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 58
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Status at the
beginning of the period
Amendment due to take-over/exclusion
of entity
Net currency rate differences from
translation of financial statement
to currency of presentation
Recognition (charging) of the
result due to change of temporary
differences and tax loss
Increase (decrease) of equity due to
change of temporary differences
Status at the end of the period
Total assets due to deferred income tax 2 067 X X X X 2 220
Total provision due to deferred income tax - X X X X -
Deferred income tax in the period since 01.01.2012 till 31.12.2012
Assets due to deferred income tax 11 149 - (16) 19 376 (1 359) 29 150
Provision for employee benefits 2 919 - (2) (654) - 2 263
Provision for bonuses 721 - (1) 116 - 836
Sale recognized in the next reporting period 24 - - (24) - -
Provision for warranty repairs 851 - (2) (76) - 773
Future costs (liabilities) 196 - - 451 - 647
Remuneration, social insurance premium not paid 347 - - 24 - 371
Write downs in tangible fixed assets and intangibles 132 - - 425 - 557
Write downs in stocks 842 - (7) 97 - 932
Write downs in receivables 386 - - 31 - 417
Evaluation at fair value- derivatives 1 762 - - (313) (1 359) 90
Evaluation at fair value-other financial assets 1 - - - - 1
Tax loss 483 - - (456) - 27
Tax relief due to activity in Special Economic Zone - - - 20 006 - 20 006
Book amortization other than tax one 60 - - 59 - 119
Transactions within the groups 747 - - (148) - 599
Differences due to lease contracts 155 - - (5) - 150
Temporary differences due to long-term contracts (implementation service contracts)
936 - - (551) - 385
Other cost not taxed in the period 587 - (4) 394 - 977
Provision due to deferred income tax 8 929 - (85) (752) 187 8 279
Evaluation at fair value-properties 29 - - (19) - 10
Evaluation at fair value- derivatives 107 - - 69 187 363
Evaluation at fair value- other financial assets 1 - - (1) - -
Book amortization other than tax one 7 636 - (85) (1 387) - 6 164
Excess in nominal value over book value of the apport 238 - - - - 238
Differences due to lease contracts 356 - - 94 - 450
Compensations received 380 - - (155) - 225
Temporary differences due to long-term contracts (implementation service contracts)
58 - - 438 - 496
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 59
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Status at the
beginning of the period
Amendment due to take-over/exclusion
of entity
Net currency rate differences from
translation of financial statement
to currency of presentation
Recognition (charging) of the
result due to change of temporary
differences and tax loss
Increase (decrease) of equity due to
change of temporary differences
Status at the end of the period
Other revenues not taxed in the period 124 - - 209 - 333
Tax decreasing result of the period/capitals X X X 20 128 (1 546) X
Total assets due to deferred income tax 2 220 X X X 20 871
Total provision due to deferred income tax - X X X -
The reconciliation with effective tax rate is presented below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Gross profit, including: 92 158 64 662
- taxable at tax rate obligatory in Poland 89 589 62 039
- taxable at tax rate obligatory in Germany 547 8
- taxable at tax rate obligatory in Czech Republic 1 952 2 471
- taxable at tax rate obligatory in Ukraine 70 144
Income tax calculated according to obligatory tax rates 17 490 12 290
Amendments: (21 052) 561
Possible tax on tax free revenues (permanent differences) (2 306) (829)
- including revenues covered by zone tax relief (Special Economic Zone) (1 354) -
Tax on costs not being the revenue expenditures (permanent differences) 2 572 2 651
Tax on transactions within the groups (permanent differences) (443) (3)
Tax on items not included in financial result of the period (321) (315)
Asset for tax due to activity in Special Economic Zone (20 006) -
Amendment to tax loss from previous years (442) (924)
Other tax deductions (106) (19)
Income tax presented in comprehensive income statement (3 562) 12 851
Effective tax rate -3,87% 19,87%
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 60
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Tax losses to be used
In 2009, subsidiary -FAP Pafal S.A. made tax loss on financial activity due to currency transactions concluded (options) in amount of 9.149.506,22 PLN. The date of settlement of the above mentioned loss expires on 31.12.2014. At 31.12.2012 the amount of 139.011,26 PLN remained to be settled. In the Company the asset was established for the entire value of tax loss made, since accepted plan of activity for 2011-2014 assumes that tax income will be reached enabling its entire settlement.
Subsidiary - Apator Metra s.r.o. terminated in 2012 established one year earlier the asset due to deferred income tax.
Activity in the Special Economic Zone
On 28th
May 2010 the Company received the License No. 69/PSSE for conducting the business activity within the Pomeranian Special Economic Zone.
This license specifies the following terms and conditions for the business activity in the zone:
Incurring the investment expenses amounting to at least PLN 50 M within territory of PSSE to 31 December 2014,
Employment of at least 100 employees to 31 December 2014 and maintenance of such employment level to 31 December 2015 for the business activity upon the license is obtained;
Completion of the investment to 31 December 2014;
Running business activity for the period not shorter than 5 years from the moment, when the entire investment is completed.
Activity in Special Economic Zone
On 28th
December 2010 parent entity APATOR S.A. was granted the Permission No. 69/PSSE to conduct business activity in the area of Pomeranian Special Economic Zone.
The permission specifies the following conditions concerning business activity to be conducted in the area of the zone.
Investment expenditures to be incurred in the area of Pomeranian Special Economic Zone till 31
st December 2014 of the value at least of 50 m PLN,
Employment by the Company for conducting of business activity in the area of the zone after the permission granted at least 100 employees till 31st December 2014 and maintain that level of employment till 31
st December 2015 ;
Completion of investment till 31st December 2014;
Conducting of business activity for the period not shorter than 5 years since the moment when entire investment is completed.
The Company commenced its business activity in Pomeranian Special Economic Zone on 1st June
2012.
Due to the costs of a new investment , the income earned from business activity conducted in the area of Pomeranian Special Economic Zone is subject to tax exemption related to the permission granted. The value of tax exemption granted to the Company is calculated as the product of the intensity of the assistance (for Kujawy and Pomorze province 50%) and the value of costs of the investment . Maximum value of qualified investment costs specified in permission is 75 m PLN.
At the day of commencement of activity in Pomeranian Special Economic Zone, the deferred income tax asset were recognized in amount of 20.357 000 PLN due to possible to be used tax exemption
At 31st December 2012 the value was adjusted by qualified expenses incurred and the amount of the
assistance applied in 2012. At 31st December 2012 the value of money of public assistance available is
20.918,400 PLN. The value of deferred income tax assets at 31st December 2012 is 20.005,800 PLN
and it was calculated based on approved activity plan of the Company for 2013 – 2015. The tax exemption was granted till 2020 r. further to it at 31
st December 2012 asset was recognized due to part
possible tax exemption to be used in the future..
8.21. COSTS BY NATURE
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 61
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Operating cost (596 974) (475 012)
Manufacturing costs of products for own needs of entity 2 089 938
Amortization and depreciation (18 293) (16 775)
Materials and energy consumption (278 862) (219 049)
Outsourcing (91 936) (69 219)
Employee benefits (133 396) (118 670)
Other costs (18 279) (17 959)
Cost of goods and materials sold (58 297) (34 278)
8.22. OPERATING REVENUES AND COSTS
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Operating revenues 31 018 9 493
Result on sale of tangible fixed assets 23 527 1 271
Evaluation of investment property - 318
Release of write downs in tangible fixed assets - 55
Release of write downs in fixed assets held for sale 144 (6)
Release of write downs in receivables - 21
Use or release of provisions for employee benefits 3 722 -
Release of provision for warranty repairs 157 2 832
Release of provision for expected losses - 80
Release of provisions for liabilities - 251
Reimbursement of costs (fairs and conferences) 229 -
Compensation received due to tangible fixed assets pursuant to IAS16 114 226
Compensations received and liquidated damages 244 2 683
Donations received 32 6
Reimbursement of court costs, legal representation 192 287
Other costs 2 657 1 469
Operating costs (12 379) (5 652)
Cost of liquidated tangible fixed assets (567) (11)
Cost of liquidated assets held for sale - (5)
Cost related to liquidated fixed assets and intangibles (51) (9)
Evaluation of investment property (102) (254)
Establishment of write downs in tangible fixed assets (2 381) -
Establishment of write downs in inventories (301) (272)
Establishment of write downs in receivables (1 836) -
Establishment of provisions for employee benefits - (218)
Establishment of provision for liabilities (415) (276)
Scrapping of stock (1 729) (1 614)
Inventory shortage (325) (606)
Fortuitous damages and other damages of assets (132) (148)
Discontinued investments - (138)
Donations granted (561) (167)
Penalties, fines, compensations paid (527) (435)
Court , court bailiff, legal representation costs (180) (175)
Not obligatory fees (16) (17)
Other costs (3 256) (1 307)
Net operating revenues (costs) 18 639 3 841
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 62
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.23. FINANCIAL REVENUES AND COSTS
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Financial revenues 3 505 1 770
Interest on loan 68 1
Interest on cash on bank accounts 633 246
Interest received on bills of exchange 39 132
Interest on receivables 424 645
Other interest 1 3
Release of the value of shares write downs - 16
Balance measurement of foreign items - 36
Revenues due to currency transaction (including derivatives) 2 176 -
Release of receivables write downs - 279
Decrease of discount rate of receivables - 6
Discount of liabilities 156 323
Other receivables 8 83
Financial costs (9 839) (8 868)
Interest on credits and loans (3 054) (2 571)
Interest paid to state budget (123) (10)
Interest on liabilities (86) (46)
Other interest (210) (153)
Sales of shares pursuant to purchase price - (16)
Redemption cost of own shares (536) -
Reversing entry of balance evaluation of foreign items (bonds) - (36)
Negative exchange rate differences (5 131) (3 859)
Costs due to currency transactions (including derivatives) - (804)
Establishment of write downs in receivables (34) (402)
Discount of receivables (75) (76)
Expenses for the purchase of shares in subsidiary after the control taken - (2)
Commissions on credits and loans (263) (312)
Bank guarantees and commissions (apart to commissions on credits) (176) (469)
Other costs (151) (112)
Net financial revenues (costs) (6 334) (7 098)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 63
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.24. EXPLANATIONS FOR CASH FLOW STATEMENT
The following table presents the explanations of inconsistency between the amendments from the statement of financial position and amendments of these items presented in the statement of cash flows.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Change in inventories
Change in inventories (2 466) (27 968)
Inventories on the day of takeover of Apator Metra s.r.o. - 4 537
Inventories on the day of takeover Newind Sp. z o.o. - 22
Change in cash flow account (2 466) (23 409)
Change in receivables
Change in long-term receivables 398 (1 699)
Change in trade receivables 20 993 (27 546)
Change in receivables due to taxes, customs duties and social insurance 2 471 (6 231)
Change in other receivables (2 840) (1 366)
Receivables on the day of takeover of Apator Metra s.r.o. - 2 184
Receivables on the day of takeover of Newind Sp. z o.o. - 916
Amendment to receivables due to income tax (308) 181
Amendment to investment receivables (280) (961)
Other changes - 229
Change in cash flow account 20 434 (34 293)
Change in liabilities
Change in long-term liabilities 4 508 5 412
Change in trade liabilities 6 907 26 080
Change in liabilities due to taxes, customs duties and social insurance 5 290 916
Change in other liabilities (7 278) 12 268
Change of liabilities on the day of take-over of Apator Metra s.r.o. - (2 977)
Liabilities on the day of take-over of Newind Sp. z o.o. - (1 526)
Amendment to liabilities due to the purchase of shares (3 546) -
Amendment to liabilities due to put option (2 569) 2 435
Amendment to liabilities due to dividend (14) (2)
Amendment to liabilities due to financial lease (213) (718)
Amendment to liabilities due to derivatives 8 812 (8 565)
Amendment to liabilities due to purchase of the software - 15
Amendment to liabilities due to income tax (4 669) (676)
Amendment to investment liabilities (254) (4 746)
Amendment to liabilities due to planning fees (2 016) -
Other changes (1) 53
Change in cash flow account 4 957 27 969
Change in provisions
Change in long-term provisions due to employee benefits (4 122) 219
Change in other long-term provisions (284) (1 912)
Change in short-term provisions due to employee benefits 1 163 3 032
Change in other short-term provisions (94) 632
Provisions on the day of takeover of Metra s.r.o. - (1 473)
Provisions on the day of takeover of Newind Sp. z o.o. - (160)
Change in cash flow account (3 337) 338
Change in prepayments
Change in long-term accruals and prepayments (30) 27
Change in short-term accruals and prepayments (723) (156)
Accruals and prepayments on the day of takeover of Apator Metra s.r.o. - 9
Accruals and prepayments on the day of takeover of Newind Sp. z o.o. - 14
Change in cash flow account (753) (106)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 64
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The table below presents explanations for the amounts recognized as other adjustments.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Other amendments (1) of cash flow from operation
Liquidation of tangible fixed assets and intangibles 490 10
Discontinued investments - 138
Settlement of subsidies (25) (9)
(Profit) loss due to settlement of derivatives (162) (1 037)
The value of shares write downs - 1
Commissions and fees for credits and loans (8) 38
Not received margin of stocks in joint controlled entities
(546) 1 110
Exchange rate differences from consolidation (158) 513
Others 1 991 1 014
Total 1 582 1 778
Other amendments (2) of cash flow from operation
Receivables repaid by bills of exchange 170 (12)
Transfer of finished products to fixed assets (408) (479)
Recognized in provisions not received margin on sale to joint controlled entities
8 (116)
Others 2 -
Total (228) (607)
The table below presents explanations for the amounts recognized as other (proceeds) expenses.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Other proceeds (expenses) from investment activity
Advance payments for fixed assets under construction (2 577) (2 371)
Advance payments for intangibles (175) (39)
Proceeds and expenses related to hedging transactions and options (588) 995
Commissions paid and other costs related to the sale and liquidation of tangible fixed assets
(6) (8)
Extra payments to subsidiaries, cash taken - (5 203)
Others (4) 7 938
Total (3 350) 1 312
Other proceeds (expenses) from financial activity
Lease interest (148) (147)
Commissions and fees for credits and loans (66) (59)
Others - (295)
Total (214) (501)
The cash flows from the investment activity, the item “expenses for purchase of P, P&E” include the expenses related to the investment in Pomeranian Special Economic Zone- Construction of Modern Manufacturing and Development Centre of Apator S.A. The item „proceeds from sales of tangible fixed assets” includes the following elements:
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Proceeds from sale of tangible fixed assets
Revenues from sale of fixed assets 37 123 347
Change in net receivables due to sale of fixed assets 280 961
Change in discount rate for receivables 2 (1)
Costs incurred at sale of fixed assets (4 261) -
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 65
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Change in liabilities due to costs incurred 2 016 -
Settlement of down payment for the sale of land (7 000) -
Razem 28 160 1 307
8.25. MERGER OF ENTITIES
On 5th
September 2012 subsidiary Apator Metrix S.A. concluded purchase contract of 4 million shares (i.e.50%) of George Wilson Industries Ltd with headquarters at Coventry in the United Kingdom.
The purchase price of 4 million shares was calculated based on discounted budgets for 2013-2016 for the amount of 692.428 GBP increased by 1 GBP paid on the day of conclusion of the contract.
Contingent payment increases in consolidated statement of financial position of group of Apator the item: “Investments in joint controlled entities and consolidated by equity method” in relation to long term liabilities and it was taken into account during the estimation of the goodwill of GWI.
Apator Metrix S.A. has the right to acquire other 50% shares in the period since 2017 till 2019. The purchase price of other shares depends on performance by GWI the level of EBITDA while guaranteed purchase price of those shares is 3 m GBP.
At the same time the current shareholders of GWI Ltd. have the right to sell in favour of Apator Metrix Sp. z o.o. other 50% shares on the same conditions (after the assumption of reaching by GWI Ltd. gross profit at least at the level of 1.000.000 GBP is met), that means that Apator Metrix Sp. z o.o. irrevocably undertook to acquire the shares from current shareholders of GWI Ltd.
Fair value assets and liabilities have been presented in the table below.
DESCRIPTION GWI Ltd.
Fixed assets 6 499
Tangible fixed assets 6 499
Current assets 9 135
Inventories 4 630
Receivables 2 843
Prepayments 1 390
Cash and equivalents 272
Total assets 15 634
Long term liabilities and provisions 15 299
Liabilities 15 299
Short-term liabilities and provisions 4 905
Liabilities 3 351
Provisions 1 554
Total liabilities and provisions 20 204
Net assets (4 570)
Total net assets acquired (2 285)
Goodwill at the moment of acquisition 5 831
Purchase price 3 546
8.26. LONG-TERM CONTRACTS
Information on long-term contracts are presented in the tables below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
TOTAL
Amount of the revenues from the contract initially established in the contract 76 052 28 152
Amendments 693 (293)
Total amount of the revenues from the contract , including 76 745 27 859
Costs of the contract incurred to the end of the reporting period (14 431) (7 013)
Remaining costs for the performance of the contract (32 683) (12 288)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 66
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Total estimated costs of the contract (47 114) (19 301)
Estimated profits 29 631 8 558
DESCRIPTION TOTAL
Costs incurred to the end of reporting period related to the performance of the contract (14 431)
Provisions for the losses recognized to the end of the reporting period (36)
Costs incurred and amended by recognized provisions for losses (14 467)
Invoiced amounts to the end of reporting period 20 341
Result of the contract recognized to the end of the reporting period pursuant to invoiced values
5 874
Non invoiced revenues on the reporting day pursuant to the advancement degree 2 612
Prepayments of revenues (2 028)
Profits (losses) recognized to the end of reporting period 6 458
Receivables on the reporting day 2 780
8.27. FINANCIAL LEASE
The entities of capital group make use of financial lease, renting personal vehicles and computer equipment.
Future lease fees have been presented in the table.
DESCRIPTION
As at 31.12.2012 As at 31.12.2011
Payments Current value of payments
Payments Current value of payments
Payable till 1 year 1 581 1 447 1 600 1 468
Payable from 1 year to 5 years 2 120 2 042 2 125 1 995
Future minimum payments due to financial lease contracts
3 701 3 489 3 725 3 463
Future financial charges (-) (212) X (262) X
Current value of minimum lease payments 3 489 3 489 3 463 3 463
Data regarding liabilities due to financial lease have been presented in the table.
DESCRIPTION Day
31.12.2012 31.12.2011
Long-term liabilities due to financial lease 1 883 1 995
Short-term liabilities due to financial lease 1 606 1 468
Total liabilities due to financial lease 3 489 3 463
Objects of financial lease have been presented in the table.
DESCRIPTION Day
31.12.2012 31.12.2011
Machines and equipment 1 459 934
Transport means 3 123 2 229
Other tangible fixed assets 548 -
Tangible fixed assets under construction - 473
Value at the end of the period 5 130 3 636
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 67
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.28. FUTUER PAYMENTS DUE TO RENT CONTRACTS, OPERATING LEASE CONTRACTS NOT INCLUDED IN THE STATEMENT OF FINANCIAL POSITION
Entities of capital group of APATOR make use of operating lease, renting personal vehicles and computer equipment. Furthermore, the Group included the right of usufruct of land in financial lease that it received based on administrative decision.
The value of the future minimum fees is presented in the table.
DESCRIPTION below 1 year from 1 year to 5 years
over 5 years TOTAL
As at 31.12.2012 1 193 2 038 25 117 28 348
As at 31.12.2011 1 165 1 771 22 315 25 251
The set of fees included in financial result is presented in the table below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Total payments 1 515 1 006
8.29. FINANCIAL INSTRUMENTS
The categories and classes of financial instruments in values on reporting day have been presented below.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 68
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Financial assets available for sale
Financial assets at fair value through profit or
loss Loans and receivables
Financial liabilities evaluated according to amortized cost.
Hedging instruments TOTAL
Held for trading
As at 31.12.2012 8 1 157 017 (156 239) 1 438 2 225
Shares of entities admitted to public trading - 1 - - - 1
Other shares 8 - - - - 8
Derivatives (assets) - - - - 1 520 1 520
Loans granted - - 8 175 - - 8 175
Trade receivables - - 102 711 - - 102 711
Investment receivables - - 913 - - 913
Cash and deposits - - 43 719 - - 43 719
Trade liabilities - - - (66 263) - (66 263)
Investment liabilities - - - (7 968) - (7 968)
Credits and loans taken - - - (55 720) - (55 720)
Derivatives (liabilities) - - - - (82) (82)
Liabilities due to lease contracts - - - (3 489) - (3 489)
Liabilities due to put options concerning non - controlling interests of subsidiary
- - - (19 155) - (19 155)
Liabilities due to dividend - - - (98) - (98)
Other financial liabilities - - - (3 546) - (3 546)
Others - - 1 499 - - 1 499
As at 31.12.2011 1 - 148 982 (173 281) (8 711) (33 009)
Shares of entities admitted to public trading 1 - - - - 1
Derivatives (assets) - - - - 183 183
Bills of exchange - - 170 - - 170
Trade receivables - - 123 704 - - 123 704
Investment receivables - - 1 018 - - 1 018
Cash and deposits - - 24 090 - - 24 090
Trade liabilities - - - (59 356) - (59 356)
Investment liabilities - - - (8 487) - (8 487)
Credits and loans taken - - - (79 968) - (79 968)
Derivatives (liabilities) - - - - (8 894) (8 894)
Liabilities due to lease contracts - - - (3 463) - (3 463)
Liabilities due to put options concerning non-controlling interest of subsidiary
- - - (16 742) - (16 742)
Liabilities due to dividend - - - (83) - (83)
Other financial liabilities - - - (5 182) - (5 182)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 69
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Comparison of balance value and fair value for particular categories of financial instruments are presented in the table.
DESCRIPTION As at 31.12.2012 As at 31.12.2011
Balance value Fair value Balance value Fair value
Financial assets available for sale 8 8 1 1
Financial assets evaluated in fair value financial result: 1 1 - -
- held for trading (pursuant to IAS 39) 1 1 - -
Loans and receivables 157 017 157 017 148 982 148 982
Financial liabilities evaluated in amortized cost (156 239) (156 239) (173 281) (173 281)
Derivatives 1 438 1 438 (8 711) (8 711)
Total 2 225 2 225 (33 009) (33 009)
Derivatives classified by the Group to financial assets and liabilities held for trading are evaluated in fair value.
The fair value of loans and receivables and liabilities evaluated in amortized cost have been accepted in book value since there is lack of possibility to establish in reliable manner the fair value and the Group does not want to dispose receivables and liabilities.
Receivables, costs, profits and losses recognized in financial result with division into categories of financial instruments are presented below.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 70
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION Financial assets
available for sale
Financial assets at fair value through profit or loss Loans and
receivables
Financial liabilities evaluated
according to amortized cost
Financial liabilities at fair value through profit or loss
Hedging instruments
TOTAL
Allocated to that category
Held for trading Held for trading
Status as at 31.12.2012 - (417) - (5 237) (1 846) - 2 112 (5 388)
Revenues (costs) due to interest - (301) - 636 (2 520) - - (2 185)
Profits (losses) due to exchange rate differences - (116) - (5 689) 674 - - (5 131)
Revenues due to performance of derivatives - - - - - - 1 310 1 310
Costs due to performance of derivatives - - - - - - (1 208) (1 208)
Revenues due to evaluation of derivatives - - - - - - 361 361
Costs due to evaluation of derivatives - - - - - - 1 649 1 649
Establishment of write downs - - - (1 801) - - - (1 801)
Write off the write downs - - - 1 554 - - - 1 554
Profits (losses) due to performance of immediate transaction of the exchange of currencies
- - - 63 - - - 63
Status as at 31.12.2011 15 - 1 815 2 664 (6 993) 17 (4 012) (6 494)
Revenues (costs) due to interest - - - 1 026 (2 769) - - (1 743)
Profits (losses) due to exchange rate differences - - - 365 (4 224) - - (3 859)
Revenues due to performance of derivatives - - 2 157 - - - 531 2 688
Costs due to performance of derivatives - - (3) - - - (1 589) (1 592)
Revenues due to evaluation of derivatives - - (509) - - - (1 346) (1 855)
Costs due to evaluation of derivatives - - 170 - - 17 (1 608) (1 421)
Establishment of write downs (1) - - (2 065) - - - (2 066)
Write off the write downs 16 - - 1 963 - - - 1 979
Profits (losses) due to performance of immediate transaction of the exchange of currencies
- - - 1 376 - - - 1 376
Others - - - (1) - - - (1)
The table below presents the analysis of financial instruments measured in fair value in groups according to three levels structure where:
Level 1 – fair value is based on price on the stock exchange (not adjusted)
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 71
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Level 2 – fair value is established on base of values observed on the market but not being market direct quotation
Level 3 – fair value is established on the base of different techniques of evaluation not basing on any market data observed.
DESCRIPTION As at 31.12.2012 As at 31.12.2011
Level 1 Level 2 Level 3 3 Level 1 Level 2 Level 3
Shares of entities admitted to trading 1 - - 1 - -
Derivatives (assets) - 1 520 - - 183 -
Derivatives (liabilities) - (82) - - (8 894) -
Total 1 1 438 - 1 (8 711) -
Transfers between level 1 and level 2 did not occur.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 72
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.30. DERIVATIVE FINANCIAL INSTRUMENTS, HEDGE ACCOUNTING
In the group of Apator, transactions regarding derivative currency instruments are concluded according to hedging policy against currency rate risk. The group hedges export proceeds that exceed expenses in import.
As at 31st December 2012 the group applies hedge accounting of the cash flow. Since 1st July 2 011, the group designated derivative instruments of FX forward type to hedge accounting against the threat of variability of cash flow due to future planned cash flow from sales denominated in foreign currency.
The table below shows detail information concerning hedging connection in hedging accounting of the cash flows.
Type of hedging Hedging of variability of the cash flow due to future cash flow in EUR.
Item being hedged Item being hedged is the part of future the most likely cash flows due sales denominated in EUR .
Hedging instruments Hedging instrument are FX forward transactions, where the group undertakes to sell EUR for PLN.
Risk being hedged The group hedges the variability of cash flows due to currency risk.
Recognition in financial statement
Part of the change of evaluation to fair value of hedging instruments suitable to effective hedging and recognized in capital from evaluation of hedging transactions (specification of changes in capital). Not effective part of the change of evaluation to fair value of hedging instruments is recognized in financial revenues or financial costs (note 23 – point 8.23).
The period when the cash flow is expected
It is expected that the item being hedged will generate the cash flow in the period till 31
st December 2013.
Nominal value 11 900 000 EUR
The table below presents fair value of derivative instruments
DESCRIPTION Day
31.12.2012 31.12.2011
Long-term assets 517 -
Hedging instruments 517 -
Short-term assets 1 003 183
Hedging instruments 1 003 183
Total assets 1 520 183
Long-term liabilities - 1 267
Hedging instruments - 1 267
Short-term liabilities 82 7 627
Hedging instruments 82 7 627
Total liabilities 82 8 894
The table below shows the amounts due to hedging accounting of cash flows that the group recognized in result and in capital in 2012:
DESCRIPTION Day
31.12.2012 31.12.2011
Evaluation of instruments, including: 1 438 (8 711)
Capital from evaluation of hedging transactions (changes in evaluation to fair value of hedging derivatives in order to hedge the risk)
694 (7 445)
Financial result of the period (change in evaluation of hedging derivatives in order to hedge the risk)
744 (1 266)
The table below shows changes in capital from evaluation of hedging transactions due to hedging accounting of cash flows in 2012:
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 73
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Status at the beginning of the period (7 445) -
Write off the evaluation from the previous period 7 445 -
Evaluation at the end of the period 694 (7 445)
Status at the end of the period 694 (7 445)
8.31. OBJETIVES AND PRINCIPLES OF FINANCIAL RISK MANAGEMENT
Except for the derivatives, the main instruments used by the group include the bank credits and overdrafts. The group has also the financial assets such as trade receivables and cash which arise directly during the business activity and other receivables and granted loan. The companies belonging to the capital group APATOR enter into the derivatives transactions which include the forward contracts and currency options. The purpose of these transactions is to manage the financial risk arisen during the business activity. The forward contracts are concluded basing on the forecasts of currency exchange rates, pursuant to the corporation guideline. The principle applied by the group of APATOR is not to trade with financial instruments. The risk, to which the group of APATOR is exposed, includes the market risk (currency risk and lesser interest rate risk) as well as credit risk and liquidity risk. Currency risk
The Group is exposed to currency risk due to transactions. Such risk arises as a result of sell or buy transactions in the other currency than its functional currency (PLN). The level of exposure of the group of APATOR is presented in the table below. .
.
DESCRIPTION As at 31.12.2012 As at 31.12.2011
In currency in PLN In currency in PLN
Items in eur ( EUR) 2 581 8 703 8 403 35 650
Trade receivables 6 233 24 601 9 779 41 809
Advances granted for the purchase of materials and services
16 68 20 92
Cash 2 110 8 355 687 2 997
Trade liabilities (4 017) (16 879) (1 984) (8 814)
Advances received for deliveries (43) (184) (99) (434)
Other liabilities (272) (1 149) - -
Others (1 446) (6 109) - -
Items in American dollars (USD) 293 567 1 312 4 427
Trade receivables 295 890 169 565
Advances granted for the purchase of materials and services
709 2 307 1 566 5 351
Cash 1 626 4 865 67 223
Trade liabilities (1 926) (6 164) (434) (1 541)
Advances received for deliveries (411) (1 331) (56) (171)
Items in pound sterling (GBP) (361) (605) 60 309
Trade receivables 19 94 66 345
Loans granted 1 675 8 175 - -
Cash 8 40 1 2
Trade liabilities (13) (69) (7) (38)
Other liabilities (2 050) (8 845) - -
At 31st December 2012 grup of Apator has forward type currency transactions.
Pursuant to the guideline “regulations in the field of forwards agreements" (ed. IV) accepted on 8 April 2010 to hedge the export inflows exceeding the import expenses the forward contracts and cost options are applied. To conclude the forward contracts the consent of the Executive Board in a form of the
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 74
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
resolution, which determines the maximum nominal of hedges, defined basing on the foreign trade balance plan and level of current hedges, is required The conclusion of comprehensive hedging structure is made upon the positive opinion of the Supervisory Board, which takes the decision after presenting by Executing Board the intent to use of such hedge and its potential influence on profits.
The table below presents the sensitivity of gross financial result and equity on the reasonable possible fluctuations of currencies exchange rates. The group expects that all currencies may fluctuate by 10% (at the no variability of other parameters).
DESCRIPTION
since 01.01.2012 till 31.12.2012 since 01.01.2011 till 31.12.2011
Effect on financial gross result
Effect on equity Effect on financial
gross result Effect on equity
EUR / PLN
+10% 870 4 935 3 565 9 713
- 10% (870) (4 935) (3 565) (9 713)
USD / PLN
+10% 57 - 443 -
- 10% (57) - (443) -
GBP / PLN
+10% (61) - 31 -
- 10% 61 - (31) -
Interest rate risk
The group of APATOR is exposed to risk of interest rates, because it borrows the cash bearing variable interest rates. The group does not apply any hedges in a form of swaps and forwards of interest rates due to small variability of WIBOR rates, on which the credit interest rates are based.
Financial instruments due to interest rate are shown below.
DESCRIPTION Day
31.12.2012 31.12.2011
Financial instruments of fixed interest rate 66 446 70 154
Financial assets 135 256 142 941
Financial liabilities (68 810) (72 787)
Financial instruments of variable interest rate (54 990) (59 044)
Financial assets 26 921 10 013
Financial liabilities (81 911) (69 057)
Total 11 456 11 110
The table below presents the sensitivity of gross financial result and equity on the reasonable possible fluctuations of WIBOR rates. For the analysis purposes it is assumed that all amount of unpaid liabilities at the end of reporting period remained unpaid for all year.
DESCRIPTION
Since 01.01.2012 till 31.12.2012 Since 01.01.2011 till 31.12.2011
Effect on gross financial result
Effect on equity Effect on gross financial result
Effect on equity
WIBOR
+ 100 base points (549) - (513) -
- 100 base points 549 - 513 -
LIBOR
+ 100 base points 48 - - -
- 100 base points (48) - - -
EURIBOR
+ 100 base points (50) - (71) -
- 100 base points 50 - 71 -
Credit risk
The credit risk means that the contractor will not fulfil its liabilities following the financial instrument or agreement that will cause that the other party will suffer the financial loss. The group of APATOR is exposed to the credit risk resulting from operating activity, mainly from trade receivables.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 75
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
The companies of group of APATOR enter into transactions only with reputable companies with good credit capacity. All clients, who want to apply the postponed terms of payments, are a subject of initial verification. The financial inspection of sale orders operates in the company. The group's aim is the cooperation with all clients is based on the trade agreements. Moreover, owing to current monitoring of receivables, the exposure of the group to the risk of uncollectible receivables is small. The trade receivables include the due amounts from huge number of clients, distributed between various branches and geographical sectors. The credit risk related to cash and derivatives is limited because the contractors of the group are the banks with high rating awarded by international rating agencies. Liquidity risk
The group of APATOR monitors the risk of no funds, establishing the monthly expenditures plans and weekly financial conditions. The aim of the group is to keep the balance between the continuity and flexibility of financing. In order to finance the current business activity the group uses mainly the overdraft. In order to fund the acquisition of shares of Fabryka Wodomierzy Powogaz S.A., APATOR S.A. took the long-term credit for the amount 45 million zlotys. At 31
st December 2012 the debt due to
this credit was completely repaid. The table below shows information on liability maturity dates.
DESCRIPTION Value on
reporting day
Cash flow under the contract
below 6 months
From 6 to 12
months
From 1 year to 2 years
From 2 to 5 years
Over 5 years
TOTAL
As at 31.12.2012 134 497 67 699 8 099 38 023 20 968 - 134 789
Credits and loans 55 720 1 069 6 529 36 508 11 694 - 55 800
Liabilities due to leasing 3 489 925 832 1 515 429 - 3 701
Payments due to derivatives 82 - 82 - - - 82
Trade liabilities 66 263 65 607 656 - - - 66 263
Other financial liabilities 3 644 98 - - 3 546 - 3 644
As at 31.12.2011 151 764 83 932 40 693 21 536 4 531 1 334 152 026
Credits and loans 79 968 21 254 37 045 16 334 4 001 1 334 79 968
Liabilities due to leasing 3 463 706 895 1 594 530 - 3 725
Payments due to derivatives 8 894 2 551 2 746 3 597 - - 8 894
Trade liabilities 59 356 59 338 7 11 - - 59 356
Other financial liabilities 83 83 - - - - 83
Capital management
The main purpose of capital management of the group of APATOR is to keep the good credit rating and secure capital ratios which would support the operating activity of the Company and would increase the value for shareholders. The group of APATOR manages the capital structure and as a result of changes in economic conditions enters the changes to this structure. In order to adjust the capital structure, the Group may pay dividend for shareholders, return the capital to shareholders or issue new shares. The group of APATOR monitors the capitals using leverage ratio which is calculated as net debts to sum of capitals increased by net debts. The net debts include the credits bearing interests and loans, trade liabilities and other liabilities excluding the derivatives less cash and cash equivalents. Equity includes the equity presented in the statement of financial condition.
8.32. INFORMATION ON RELATED ENTITIES
Information on benefits for managing staff shows the table below.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Short-term employee benefits 11 952 9 814
Employee benefits after the period of employment 13 9
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 76
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Other long- term employee benefits 107 42
Total 12 072 9 865
Data concerning transactions with related entities and information on unsettled balances shows the table below.
DESCRIPTION Apator Electro
S.A.
Apator- Electro
LLC
Teplovodomer S.A.
George Wilson
Industries Ltd.
OTHER RELATED ENTITIES
TOTAL
Transactions in the period since 01.01.2012 till 31.12.2012
Sales of products and services 3 846 (26) 35 703 27 - 39 550
Sales of goods and materials 1 346 - - - 8 1 354
Sales of tangible fixed assets and intangibles
- - - - 27 27
Trade receivables 222 - 2 744 16 - 2 982
Receivables due to loan granted - - - 8 175 - 8 175
Dividend paid - - - - 2 580 2 580
Purchase of products, services, goods and materials
- - - 1 379 380
Purchase of tangible fixed assets and intangibles
- - - - 11 11
Trade liabilities - - - 1 6 7
Other liabilities - 1 - - - 1
Transactions in the period since 01.01.2011 till 31.12.2011
Sales of products and services 9 301 - 26 633 - - 35 934
Sales of goods and materials 362 - - - - 362
Trade receivables 3 895 - 4 327 - - 8 222
Purchase of products, services, goods and materials
- - - - 94 94
Purchase of tangible fixed assets and intangibles
- - - - 20 20
Trade liabilities - - - - 4 4
Investment liabilities - - - - 2 2
The Group identified the related entities. The related entities are as follows:
a. Subsidiaries
Apator Control Sp. z o.o. (Toruń)
Apator Mining Sp. z o.o. (Toruń)
FAP PAFAL SA (Świdnica)
Apator Metrix S.A. (Tczew)
Apator GmbH (Berlin, Germany)
Apator Rector (Zielona Góra)
Apator Powogaz S.A., (Poznań) b. Indirect subsidiaries
Apator Telemetria Sp. z o.o., (Słupsk) – subsidiary of Apator Powogaz S.A.
Apator – Metroteks (Kiev, Ukraine) – subsidiary of Apator Powogaz S.A.
Apator Metra (Supmerk, Czech Republic) – subsidiary of Apator Powogaz S.A.
Newind Sp. z o.o. (Wrocław) - subsidiary of Apator Rector Sp. z o.o. c. Joint controlled entities
Apator Elektro (Moscow, Russia) - entity joint controlled by Apator SA
Apator Electro LLC (Moscow,Russia) - entity joint controlled by Apator SA d. Indirect joint controlled entities
Teplovodomer (Mytishi, Russia) – entity joint controlled by Apator Powogaz S.A.
George Wilson Industries Limited (Coventry, United Kingdom) – entity joint controlled by APATOR METRIX S.A.
e. Members of the Supervisory Board f. Key managing staff g. Relatives of the member of Supervisory Board and Key managing staff in joint households h. Entities controlled by the persons defined in e. and f.
The Executive Board of APATOR S.A. stated that the composition of the managing staff of the Company include the following persons:
Janusz Niedźwiecki- President of the Executive Board, CEO
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 77
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
Tomasz Habryka- Member of the Executive Board, Strategic Development and Marketing Director
Jerzy Kuś, Member of Executive Board, Metering equipment and Systems Director
The executive Board approved the makeup of other members of the managing staff:
Janina Karaszewska- Zandrowicz, Proxy, Financial Director
Mirosław Klepacki - Proxy, Switchgear Equipment Director
Krzysztof Malec- Manufacturing Director Transactions with other related entities specified in par. e-h, except for payment of remunerations due to held positions and work benefits, presented in the table above (other related entities).
8.33. CONTINGENT ITEMS AND OTHER ITEMS NOT INCLUDED IN THE STATEMENT OF FINANCIAL POSITION
Guarantees
As at 31 December 2012 the group had the active guarantees issued by: 1. Bank Handlowy w Warszawie S.A.
a. Due to performance bond in the amount of 30 000 PLN maximum till 19 September 2015; 2. TU Euler Hermes S.A.:
a. Due to performance bond in the amount of 3.992 000 PLN maximum till 31 December 2017; b. Due to removal of defects in amount of 300 000 PLN maximum till 31 December 2014. c. Due to warranty in amount of 436 000 maximum till 30 June 2017; d. Due to bid bond in amount of 110 000 PLN maximum till 18 February 2013;
3. InterRisk Towarzystwo Ubezpieczeń S.A.: a. Due to removal of defects in the amount of 623 000 PLN max. till 17 March 2018; b. Due to bid bond in the amount of 20 000 PLN maximum till 26 January 2013; c. Due to performance bond and removal of defects in the amount of 149 000 PLN maximum till
28 June 2016; d. Due to performance bond in amount of 426 000 PLN maximum till 24 December 2015
4. BZ WBK S.A.: a. Due to performance bond in the amount of 3.747. 000 PLN maximum till 28 February
December 2014; 5. Bank Millenium S.A.:
a. Due to performance bond in the amount of 330 000 PLN maximum till 31 August 2014; b. Due to bid bond in amount of 631 000 PLN maximum till 30 January 2013.
6. Hestia S.A.: a. Due to performance bond in the amount of 785 000 PLN maximum till 15 January 2013; b. Due to removal of defects in amount of 134 000 PLN maximum till 4 October 2013.
7. UNIQA TUS.A.: a. Due to performance bond in the amount of 2 000 PLN maximum till 9 March 2013; b. Due to removal of defects in amount of 1.138 000 PLN maximum till 22 February 2016; c. Due to bid bond in amount of 120 000 PLN maximum till 5 April 2013;
8. TUZ: a. Due to performance bond in the amount of 328 000 PLN maximum till 31 January 2014; b. Due to removal of defects in amount of 95 000 PLN maximum till 15 November 2016. c. Due to bid bond in amount of 5 000 PLN maximum till 7 February 2013;
9. PZU S.A.:
a. Due to removal of defects in the amount of 38 000 PLN till 30 July 2013;
In addition, as at 31 December 2012 parent entity had the active warranty due to removal of defects for the total amount of 826 500 PLN issued by Marbud S.A. with the maturity date on 29 March 2015.
Other off balance items
On 5
th September 2012 investment agreement with partners of GWI LTD., NIG (GUERNSEY) LIMITED
was concluded and under the agreement after subsequent three financial years, commencing from 2016 (within 25 working days of the Ordinary Partners Meeting held confirming the financial statement of the Company for the year) Apator Metrix Sp. z o.o. has the right to acquire outstanding 50% shares of GWI Ltd. (call option), that means that current shareholders of GWI Ltd. undertook irrevocably to dispose the shares in favour of Apator Metrix Sp. z o.o. At the same time the current shareholders of GWI Ltd. have the right to sell in favour of Apator Metrix Sp. z o.o. outstanding 50% shares on the same conditions
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 78
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
(provided that GWI Ltd. will achieve gross profit at the level at least 1.000.000 GBP), that means Apator Metrix Sp. z o.o. irrevocably undertook to acquire shares from current shareholders of the GWI Ltd. The price is dependent on results of the Company in 2016 – 2018.
8.34. STRUCTURE OF EMPLOYMENT
The employment in the group of APATOR shows the table.
DESCRIPTION
Period
01.01.2012 01.01.2011
31.12.2012 31.12.2011
Average employment in persons in the period 2 005 1 923
Blue collar workers 1 218 1 200
White collar workers 787 723
Employment in persons at the end of the period 1 992 1 919
Blue collar workers 1 185 1 170
White collar workers 807 749
8.35. REMUNERATION OF THE ENTITY AUTHORIZED TO AUDIT THE FINANCIAL STATEMENT
On 6th June 2012 the contract was concluded with KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp. k. of auditing covering interim and annual financial statements and the review of interim and audit of annual consolidated statement of APATOR S.A. for 2012-2013. Auditing that concerned the year 2011 also was conducted by KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp. k.
Remuneration of statutory auditor shows the table below.
DESCRIPTION VALUE
2012 2011
Audit/ review of interim statements 44 37
Audit / review of annual statements 66 55
Total 110 92
Apart above mentioned remuneration APATOR S.A. makes also the reimbursement of proved by documents the costs of staying of auditing team out of the headquarters of auditors (travelling, accommodation) and the costs of courier’s mail.
8.36. SUBSIDIES
Parent entity APATOR S.A.
APATOR S.A. participates in the project „Investigation of the effectiveness of data transmission of PLC technology in LV and MV power grids” as the co-contractor of the project, based on the contract concluded on 2
nd August 2012 between National Centre for Research and Development and Wrocław
University of Technology. Under the contract concluded APATOR S.A., as the co-contractor received on19th December 2012 100 000 PLN on 19
th December 2012 for the financing to make prototypes of
communication equipment of PLC technology. The time of performance is 36 months.
8.37. CHANGES IN ACCOUNTING PRINCIPLES, ERRORS ADJUSTMENTS
The group of Apator changed the principles of presentation of some items in financial statement of financial position and comprehensive income. The changes introduced allow to present better actual financial situation of the Company. The above changes have no influence on the value of net result and equities of the Company for the period ending on 31
st December 2011.
Simultaneously the adjustment of essential error was introduced (changes 4-5) described in point 2.5.
The changes introduced shows the table below.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 79
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
ITEMS IN THE STATEMENT AMENDMENT (1) AMENDMENT (2) AMENDMENT (3) AMENDMENT (4) AMENDMENT (5) TOTAL
Title of amendment:
Netting of assets and provisions due to deferred income
tax.
Netting of revenues and financial costs
Netting of other revenues and
operating costs.
Amendment due to put option of
Apator Rector S.A.
Amendment due to put option of
Newind Sp.z o.o.
Statement on financial position
Fixed assets (8 929) - - - (401) (9 330)
Goodwill of subordinated entities - - - - (401) (401)
Deferred income tax assets (8 929) - - - - (8 929)
TOTAL ASSETS (8 929) - - - (401) (9 330)
Equity - - - - (401) (401)
Equity for shareholders of the parent entity - - - 3 412 919 4 331
Retained financial result - - - 3 412 919 4 331
- retained result from previous years - - - 334 - 334
- result of current period - - - 3 078 919 3 997
Non-controlling interest - - - (3 412) (1 320) (4 732)
Liabilities (8 929) - - - - (8 929)
Long-term liabilities and provisions (8 929) - - - - (8 929)
Provision due to deferred income tax (8 929) - - - - (8 929)
TOTAL LIABILITIES (8 929) - - - (401) (9 330)
Comprehensive income statement
Other operating revenues (costs), including: - - - - - -
Revenues - - (1 149) - - (1 149)
Costs - - 1 149 - - 1 149
Profit (loss) from operation - - - - - -
Financial revenues (costs) ,including: - - - - 295 295
Other financial revenues (costs) - - - - 295 295
Revenues - (17 242) - - 295 (16 947)
Costs - 17 242 - - - 17 242
Profit (loss) before tax - - - - 295 295
Net profit (loss) - - - - 295 295
Comprehensive income in total - - - - 295 295
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 80
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
ITEMS IN THE STATEMENT AMENDMENT (1) AMENDMENT (2) AMENDMENT (3) AMENDMENT (4) AMENDMENT (5) TOTAL
Title of amendment:
Netting of assets and provisions due to deferred income
tax.
Netting of revenues and financial costs
Netting of other revenues and
operating costs.
Amendment due to put option of
Apator Rector S.A.
Amendment due to put option of
Newind Sp.z o.o.
Net profit (loss), including: - - - - 295 295
Shareholders of the entity - - - 3 078 919 3 997
Shares of non-controlling interest - - - (3 078) (624) (3 702)
Comprehensive income in total, including: - - - - 295 295
Shareholders of the entity - - - 3 078 919 3 997
Shares of non-controlling interest - - - (3 078) (624) (3 702)
Cash flow statement
Cash flow from operation
Profit before tax (operation continued) - - - - 295 295
Net cash from operation - - - - 295 295
Cash flow from financial activity
Other proceeds (expenses) - - - - (295) (295)
Net cash from financial activity - - - - (295) (295)
Cash and its equivalents at the end of the period - - - - - -
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 81
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
8.38. EVENTS THAT OCCURRED AFTER THE END OF REPORTING PERIOD
The Executive Board of APATOR S.A. declared the dividend from the profit for financial year 2012 in gross amount of 1,20 PLN per share. For the dividend from the profit for 2012 interim dividend was paid in December 2012 gross amount of 0,40 PLN per share. Other declared amount of the dividend in gross amount of 0,80 PLN per share will be paid after its approval by General Shareholders Meeting of APATOR S.A.
On 15th
January 2013 joint controlled entity - Apator Electro S.A. was liquidated.
On 13th March 2013 the Province Administration Court refused the claim of Apator S.A. concerning the decision of Director of Tax Chamber in Bydgoszcz imposing the liability on the Company due to income tax of legal persons for 2009 in amount of 1.256.454 PLN (hedging nature of transactions on derivative financial instruments the Company concluded in 2008 was questioned , while the performance brought the loss in 2009). On 12th April 2013 the Plenipotentiary of the President of Apator S.A. received the justification in writing of the verdict. APATOR S.A. is going to file the cassation to the Supreme Administration Court. During 2012, the Company took into consideration the liabilities due to payment of the obligation however in relations to negative decision of Province Administration Court the liability due on reporting day it was entirely covered by the write down.
In January 2013 FAP Pafal S.A. took part in successfully completed for the Company bid proceeding for the delivery of inductive electricity metres to PGE Dystrybucja S.A.
On 21 January 2013 FAP Pafal S.A. and Apator S.A. concluded the sales contract of 181 210 registered shares of FAP PAFAL S.A. for their redemption. In result of it share capital of the Company will be reduced from the amount of 2.657.718,10 PLN to 2.003.550,00 PLN (555 000 registered shares of A series of nominal value 3,61 PLN). Appropriate resolution were adopted by Extraordinary General Shareholders meeting in January 2013.
On 7 February 2013 FAP Pafal S.A. and LINTER S.A. Wolbrom concluded the contract , concerning the satisfaction of claims resulting of not fulfilment of the contract of the supply of electricity meters in due time. Under the contract the penalty was established for the amount of 240 000 PLN. At the end of reporting period provision was created for that purpose.
On 11th January 2013 the conversion of 20.362 preferred registered shares in voting in relations 1:4 to ordinary shares (without preferetion). In result of the conversion total number of votes was reduced from 56.430.504 to 56.369.418 in Apator SA.
Consolidated financial statement for 2012
Okres objęty sprawozdaniem finansowym: 01.01.2012 – 31.12.2012 Waluta sprawozdawcza: złoty polski (PLN) Strona 82
Poziom zaokrągleń: wszystkie kwoty wyrażone są w tysiącach złotych polskich (o ile nie wskazano inaczej)
9. SIGNATURES
Signatures of the Members of the Executive Board
2013-04-22
Janusz Niedźwiecki President of the Executive Board, Managing Director
2013-04-22
Tomasz Habryka Member of the Executive Board, Strategic Development and Marketing Director
2013-04-22
Jerzy Kuś Member of the Executive Board, Metering Equipment and Systems Director
Signature of person, who is responsible for keeping accounting books
2013-04-22
Janina Karaszewska - Zandrowicz Finance Director
MANAGEMENT REPORT OF GRUPA APATOR IN 2012
1
TABLE OF CONTENTS:
1. DESCRIPTION OF THE ISSUER’S CAPITAL GROUP ORGANIZATION .................................................................................. 3 1.1 COMPOSITION OF GRUPA APATOR .......................................................................................................... 3 1.2 THE SUBJECT OF THE ACTIVITY OF GRUPA APATOR’S COMPANIES ............................................................ 3 1.3 SPECIFICATION OF ENTITIES TO BE A SUBJECT OF CONSOLIDATION ........................................................... 4 1.4 MISSION ................................................................................................................................................ 5
2. THE MANAGEMENT BOARD OF APATOR SA’S STATEMENT CONCERNING THE PREPARATION OF A FINANCIAL STATEMENT AND THE MANAGEMENT REPORT. ................................................................................................................................ 5 3. THE STATUTORY AUDITOR’S INDICATIONS AND THE STATEMENT OF THE MANAGEMENT BOARD OF APATOR SA CONCERNING THE STATUTORY AUDITOR. ........................................................................................................................................ 5 4. STATEMENT REGARDING THE APPLICATION OF CORPORATE GOVERNANCE PRINCIPLES ......................................... 6
4.1 THE SET OF CORPORATE GOVERNANCE PRINCIPLES, BY WHICH THE ISSUER ABIDES, AND THE PLACE WHERE
THEY ARE AVAILABLE TO THE PUBLIC .................................................................................................................. 6 4.2 APPLICATION OF THE CORPORATE GOVERNANCE PRINCIPLES ................................................................... 6
5. DESCRIPTION OF THE BASIC FEATURES OF THE INTERNAL CONTROL AND RISK MANAGEMENT, IN RELATION TO THE PROCESS OF PREPARING FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS, APPLIED BY GRUPA APATOR .................................................................................................................................................................................... 7 6. SPECIFICATIONS OF THE SHAREHOLDERS HOLDING, DIRECTLY OR INDIRECTLY, SIGNIFICANT BLOCKS OF SHARES, GIVING THE NUMBER OF SHARES HELD BY THESE SHAREHOLDERS, THEIR PROPORTIONAL INTEREST IN THE SHARE CAPITAL, NUMBER OF VOTES AND THEIR PROPORTIONAL INTEREST IN THE TOTAL NUMBER OF VOTES AT THE GENERAL MEETING. .............................................................................................................................................................................. 8
6.1 SHAREHOLDERS HOLDING OVER 5% OF THE VOTES AT THE GMS ............................................................. 8 6.2 INTEREST OF THE RELEVANT GROUPS OF SHAREHOLDERS IN THE TOTAL NUMBER OF SHARES .................... 8
7. STOCK PRICE............................................................................................................................................................................ 9 8. DIVIDEND ................................................................................................................................................................................. 10
8.1 DIVIDEND FROM THE PROFIT FOR 2011 ................................................................................................. 10 8.2 DECLARATION OF THE DIVIDEND FROM THE PROFIT FOR 2012 ................................................................ 11 8.3 DIVIDEND POLICY ................................................................................................................................. 11
9. SPECIFICATION OF THE HOLDERS OF ANY SECURITIES GIVING SPECIAL CONTROL RIGHTS, INCLUDING THEIR DESCRIPTION. ...................................................................................................................................................................................... 12 10. LIMITATIONS TO THE EXECUTION OF VOTING RIGHTS ..................................................................................................... 13 11. INDICATION OF ANY LIMITATIONS REGARDING THE TRANSFER OF THE OWNERSHIP RIGHTS OF APATOR SA SHARES ................................................................................................................................................................................................ 13 12. DESCRIPTION OF THE RULES FOR APPOINTING AND RECALLING THE MEMBERS OF THE MANAGING BODIES AND THEIR RIGHTS, IN PARTICULAR THE RIGHT TO MAKE A DECISION REGARDING THE ISSUANCE OR BUY-OUT OF SHARES 13
12.1 SUPERVISORY BOARD ...................................................................................................................... 13 12.2 MANAGEMENT BOARD ...................................................................................................................... 14
13. DESCRIPTION OF THE CHANGES TO THE ARTICLES OF ASSOCIATION OF APATOR SA .............................................. 15 14. THE MANAGEMENT STRUCTURE AS OF DECEMBER 31ST, 2012: .................................................................................... 15 15. GENERAL MEETING ............................................................................................................................................................... 15
15.1 GENERAL MEETING OPERATION PRINCIPLES ...................................................................................... 15 15.2 GENERAL MEETINGS IN 2012 ........................................................................................................... 16
16. THE COMPOSITION OF THE MANAGING AND SUPERVISING BODIES OF APATOR SA, ALONG WITH ITS CHANGES DURING THE LAST FISCAL YEAR AND A DESCRIPTION OF ITS ACTIVITY .................................................................................... 17
16.1 SUPERVISORY BOARD ...................................................................................................................... 17 16.2 THE AUDITING COMMITTEE OF THE SUPERVISORY BOARD OF APATOR SA .......................................... 18 16.3 MANAGEMENT BOARD ...................................................................................................................... 18
17. SUPERVISING AND MANAGING BODIES OF THE APATOR GROUP................................................................................... 20 18. AGREEMENTS CONCLUDED BETWEEN THE COMPANIES OF GRUPA APATOR AND PERSONS MANAGING THESE COMPANIES ......................................................................................................................................................................................... 20 19. INFORMATION ON AGREEMENTS WHICH MAY RESULT FROM CHANGE OF THE PROPORTION OF THE SHARES HELD BY THE PRESENT SHAREHOLDERS ....................................................................................................................................... 20 20. CORPORATE SOCIAL RESPONSIBILITY ............................................................................................................................... 21 21. EMPLOYMENT IN GRUPA APATOR ....................................................................................................................................... 21 22. INFORMATION ON MARKETS ................................................................................................................................................ 21
22.1 BASIC TRENDS IN THE ECONOMY AND THE TEMPO OF ECONOMIC GROWTH ........................................... 21 22.2 ATTRACTIVENESS OF THE BRANCHES, WHERE APATOR SA OPERATES ................................................ 22 22.3 REVENUES FROM SALE AND SALES STRUCTURE ................................................................................. 22 22.4 TERRITORIAL STRUCTURE OF REVENUES ........................................................................................... 24 22.5 SOURCES OF SUPPLY ....................................................................................................................... 26
23. DESCRIPTION OF THE BASIC ECONOMIC AND FINANCIAL FIGURES DISCLOSED IN THE ANNUAL FINANCIAL STATEMENT ......................................................................................................................................................................................... 27
23.1 ASSESSMENT OF THE FACTORS AND UNUSUAL EVENTS AFFECTING THE OPERATIONAL PROFIT IN THE
FISCAL YEAR WITH THE DETERMINATION OF THE LEVEL OF INFLUENCE OF THESE FACTORS OR UNUSUAL EVENTS ON
THE ACHIEVED RESULT .................................................................................................................................... 27
MANAGEMENT REPORT OF GRUPA APATOR IN 2012
2
23.2 COMPREHENSIVE INCOME STATEMENT - EXECUTION OF THE INCOME RESULTING FROM BUSINESS ACTIVITY
28 23.3 STATEMENT OF FINANCIAL CONDITION ............................................................................................... 31 23.4 INFORMATION ON DRAWN AND TERMINATED BORROWING AGREEMENTS............................................... 32 23.5 INFORMATION ON GRANTED LOANS IN THE CURRENT FISCAL YEAR ....................................................... 32 23.6 INFORMATION ON GRANTED AND RECEIVED WARRANTIES AND GUARANTEES IN THE RELEVANT FISCAL
YEAR 33 23.7 CONTINGENT LIABILITIES .................................................................................................................. 33 23.8 LEASE AND RENT ............................................................................................................................. 33 23.9 STATEMENT OF CASH FLOWS ............................................................................................................ 33 23.10 FORWARD CONTRACTS ..................................................................................................................... 34
24. ASSESSMENT OF THE POSSIBILITY OF THE EXECUTING THE INVESTMENT PLANS, INCLUDING EQUITY INVESTMENTS IN COMPARISON TO THE AMOUNT OF POSSESSED ASSETS, TAKING INTO CONSIDERATION THE POSSIBLE CHANGES TO THE FINANCIAL STRUCTURE OF THIS ACTIVITY ..................................................................................................... 34 25. ASSESSMENT OF FINANCIAL RESOURCES MANAGEMENT, IN PARTICULAR CONSIDERING THE ABILITY TO MEET LIABILITIES TAKEN AND A DETERMINATION OF THE POSSIBLE THREATS AND ACTIONS, WHICH WERE TAKEN OR ARE TO BE TAKEN BY THE ISSUER IN ORDER TO COUNTERACT SAID THREATS .................................................................................... 35 26. OTHER INFORMATION BY WHICH TO ASSESS STAFF, ASSETS, FINANCIAL STANDING, FINANCIAL RESULT AND ITS CHANGES, AND THE INFORMATION WHICH IS IMPERATIVE TO THE ASSESSMENT OF GRUPA APATOR'S ABILITY TO PERFORM ITS LIABILITIES .................................................................................................................................................................. 36 27. CHANGES IN THE BASIC MANAGEMENT PRINCIPLES OF THE ISSUER’S ENTITY AND ITS CAPITAL GROUP ............. 36 28. INFORMATION ON ISSUANCE OF SECURITIES .................................................................................................................... 37 29. INFORMATION ON EMPLOYEE STOCKOWNERSHIP PLAN CONTROL SYSTEM ............................................................... 37 30. BRIEF DESCRIPTION OF SIGNIFICANT ACHIEVEMENTS AND FAILURES OF THE ISSUER INCLUDING THE SPECIFICATION OF THE MOST IMPORTANT EVENTS IN 2012 ........................................................................................................ 37 31. CHARACTERISTIC OF EXTERNAL AND INTERNAL FACTORS IMPORTANT FOR THE DEVELOPMENT OF APATOR SA AND GRUPA APATOR, INCLUDING THE SIGNIFICANT RISK AND THREAT FACTORS AND DESCRIPTION OF THE BUSINESS ACTIVITY DEVELOPMENT PROSPECTUS .......................................................................................................................................... 38
31.1 ZONE PERMIT AND LOCATION OF THE BUSINESS ACTIVITY IN PSEZ ..................................................... 38 31.2 EXTERNAL AND INTERNAL FACTORS IMPORTANT FOR GRUPA APATOR’S DEVELOPMENT ....................... 39 31.3 RISKS AND THREATS ........................................................................................................................ 39 31.4 DEVELOPMENT PROSPECTUS ............................................................................................................ 40
32. SIGNIFICANT EVENTS AFTER DECEMBER 31, 2012 IN THE BUSINESS ACTIVITY OF GRUPA APATOR ........................ 41 33. INFORMATION ON PROCEEDINGS BEFORE COURT, COMPETENT AUTHORITY FOR ARBITRAGE PROCEEDINGS OF PUBLIC ADMINISTRATION AUTHORITY PERTAINING TO THE LIABILITIES OF RECEIVABLES OF APATOR SA OR ITS SUBSIDIARIES ...................................................................................................................................................................................... 41 34. INFORMATION ON CONCLUDED AGREEMENTS SIGNIFICANT TO THE ISSUER’S BUSINESS ACTIVITY, INCLUDING THE AGREEMENTS CONCLUDED BETWEEN THE SHAREHOLDERS KNOWN TO THE ISSUER, INSURANCE AGREEMENTS AND COOPERATION AGREEMENTS .................................................................................................................................................. 42 35. INFORMATION PERTAINING TO APATOR SA, OR ITS SUBSIDIARY, CONCLUDING ONE OR MORE TRANSACTIONS WITH AFFILIATES, IF THEY ARE IMPORTANT INDIVIDUALLY OR AT ALL AND WERE CONCLUDED UNDER CONDITIONS DIFFERING FROM THOSE OF THE MARKET ...................................................................................................................................... 44 36. EXPLANATION OF THE DIFFERENCES BETWEEN THE FINANCIAL RESULTS PRESENTED IN THE ANNUAL REPORT AND THE PUBLISHED FORECASTS OF THE RESULTS FOR THE RELEVANT YEAR ..................................................................... 46 37. FORECAST OF FINANCIAL RESULTS FOR 2013 .................................................................................................................. 47
MANAGEMENT REPORT OF GRUPA APATOR IN 2012
3
1. Description of the Issuer’s capital group organization
1.1 Composition of Grupa Apator
The parent entity of the capital group Apator is Apator SA, which has a leading role through organization and coordination of the collaboration of all domestic and foreign entities.
As of April 24, 1997, Apator SA has had their stock listed at the Warsaw Stock Exchange. This trading is performed via continuous trading. The Company is classified under the electromachinery industry sector. The company’s stock participates in the RESPECT Index and, until December 28, 2012, participated in the sWIG80 index. However, since December 28, 2012 they have been classified under the mWIG40 index. Since March 29, 2013 the Apator SA stock has once again been incorporated into the WIGdiv dividend index at WSE.
The share of Apator SA in the share capital of the subsidiaries and jointly-controlled entities as of December 31, 20102 is presented below.
No capital relations exist between the subsidiaries, nor do they exist between the subsidiaries and the jointly-controlled companies. As at December 31, 2012: 1) Apator Powogaz SA holds:
100% of the capital of Apator Metra s.r.o. (Czech Republic),
61.60% of the capital of Apator Telemetria Sp. z o.o. (Słupsk),
61% of the capital of TOV Apator Metroteks (Ukraine),
50% of the capital of ZAO Teplovodomer (Russia), 2) Apator Rector Sp. z o.o. owns 60% of the capital of the Newind Grupa Apator Sp. z o.o. (Wrocław), 3) Apator Metrix SA owns 50% of the shares in George Wilson Industries (GWi) Ltd. (Great Britain).
1.2 The subject of the activity of Grupa Apator’s companies
*)
MANAGEMENT REPORT OF GRUPA APATOR IN 2012
4
The subject of the activity of Grupa Apator’s companies is presented below:
Metering segment Switchgear segment Other sales
FAP Pafal SA Apator Mining Sp. z o. o.
Newind Sp. z o. o.
Apator Metrix SA and GWi Ltd. Apator Control Sp. z o. o.
Apator Powogaz and entities: Apator Metra, Metroteks, Teplovodomer, Apator Telemetria
Apator Elektro
Apator Rector Sp. z o. o.
Apator SA
Apator GmbH
As part of its measurement segment, Grupa Apator offers “smart meters”:
1) Electrical energy meters, 2) Gas meters, 3) Water meters, 4) Heat meters, 5) Installation and service of AMI/AMM (Automated Meter Management) systems, 6) Installation and service of pre-paid systems.
Grupa Apator’s offer includes both hardware and software incorporated into the smart metering and smart girds systems. It is comprehensive and covers the entire value chain, from metering equipment production to the analytics, visualization and sharing of the meter data. As part of its switchgear segment, Grupa Apator provides equipment for the safe connection and disconnection of electric circuits. Contrary to “measuring companies” the companies working as part of this segment conduct their activity in independent market segments.
1.3 Specification of entities to be a subject of consolidation
Parent entity: Apator SA,
Subsidiaries (direct and indirect) included in the scope of consolidation in full:
Company Headquarters Share in capital Related to Apator SA
Apator Mining Sp. z o. o. Katowice 100,00% Subsidiary of Apator SA
Apator Control Sp. z o. o. Toruń 100,00% Subsidiary of Apator SA
Apator Metrix SA Tczew 100,00% Subsidiary of Apator SA
FAP Pafal SA Świdnica 100,00% Subsidiary of Apator SA
Apator Rector Sp. z o. o. Zielona Góra 70,00% Subsidiary of Apator SA
Apator Powogaz SA Poznań 100,00% Subsidiary of Apator SA
Apator GmbH Berlin (Germany) 100,00% Subsidiary of Apator SA
Newind Sp. z o. o. Wrocław 60,00%
42,00%
Subsidiary indirectly by Apator Rector Sp. z o. o. Indirect share by Apator Rector Sp. z o. o.
Apator Metra s. r. o. Sumperk (Czech Republic) 100,00%
100,00%
Subsidiary indirectly by Apator Powogaz SA Indirect share by Apator Powogaz SA
TOV Apator Metroteks Kiev (Ukraine) 61,00%
61,00%
Subsidiary indirectly by Apator Powogaz SA Indirect share by Apator Powogaz SA
Apator Telemetria Sp. z o. o. Słupsk 61,60%
61,60%
Subsidiary indirectly by Apator Powogaz SA Indirect share by Apator Powogaz SA
Joint-controlled entities measured by equity method:
MANAGEMENT REPORT OF GRUPA APATOR IN 2012
5
Company Headquarters Share in capital Related to Apator SA
Apator Elektro Moscow (Russia) 50,00% Joint controlled by Apator SA
ZAO Teplovodomer Mytishchi (Russia) 50,00%
50,00%
Joint controlled by Apator Powogaz SA Indirect share by Apator Powogaz SA
GWi Ltd. Coventry (Great Britain)
50%
50%
Joint controlled by Apator Metrix SA Indirect share by Apator Metrix SA
1.4 Mission
Grupa Apator (Group) aims at becoming the leader of East-Central Europe in the field of the development and sale of:
measuring equipment and systems,
switchgear equipment.
2. The Management Board of Apator SA’s statement concerning the preparation of a financial statement and the Management Report.
The Management Board of Apator SA, being composed of:
Janusz Niedźwiecki - President of the Management Board
Tomasz Habryka - member of the Management Board
Jerzy Kuś - member of the Management Board, states that pursuant to its best knowledge of the Management Board, the Grupa Apator’s 2012 financial statement and comparable data were prepared pursuant to the International Accounting Standards (IAS), the International Financial Reporting Standards (IFRS) and the related interpretations published in the form of the regulations of the European Commissions. Grupa Apator applies the provisions of the Accounting Act and the executive regulations under this Act in the field not regulated by the IAS/IFRS. The consolidated financial statement reflects the property and financial condition of Grupa Apator and its financial result in a fair, accurate and clear manner. The detailed principles of preparing this statement are included in the explanatory notes. The Management Report of Grupa Apator contains an accurate description of the development, achievements and standing of the group, including a description of the basic risks and threats.
3. The statutory auditor’s indications and the statement of the Management Board of Apator SA concerning the statutory auditor.
The audit of the consolidated annual financial statement was carried out by the entity authorized to audit the financial statements- KPMG Audyt Spółka z ograniczoną odpowiedzialnością Sp. k., with its registered office in Warsaw. On June 6, 2012, Apator SA concluded agreements with the entity authorized to audit financial statements:
An agreement regarding the audit of the separate financial statement and the review of the interim financial statement for the first half of 2012 - under this agreement the remuneration for the authorized entity is PLN 44 k plus VAT (1st six months of 2011: PLN 37 k plus VAT).
An agreement regarding the audit of the separate financial statement and the audit of the consolidated financial statement for 2012 - under this agreement the remuneration for the authorized entity is PLN 66 k plus VAT (for 2011: PLN 55 k plus VAT).
Moreover, Apator SA bears the cost of travelling, meals and accommodation of the employees performing the audit. Pursuant to the agreement, the amount owed for the audit and review of the interim consolidated statements cannot exceed PLN 9.5 k plus VAT (amounted to PLN 2 k) and for the audit of the separate and consolidated financial statement - PLN 15 k plus VAT.
MANAGEMENT REPORT OF GRUPA APATOR IN 2012
6
Apator SA has been using the services of KPMG Audyt spółka z ograniczoną odpowiedzialnością sp. k., starting with the audit of interim financial statements for 2011. The Management Board of Apator SA declares that the entity authorized to audit the financial statement, KPMG Audyt spółka z ograniczoną odpowiedzialnością Sp. k., which performed the audit of the annual financial statement, was selected in compliance with applicable law. The Supervisory Board of Apator SA elected the entity to audit and review the financial statements on March 23, 2012 pursuant to § 20 of the Articles of Association of Apator SA i.e. in a manner that assures its independence to perform its tasks. The election of the entity authorized to audit financial statements was performed pursuant to the applicable regulations and professional standards. In order to provide the due independence of the opinion, the Supervisory Board changes the entity authorized to audit financial statements at least once every seven years (§ 20 item 2 of the Articles of Association of Apator SA). KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. -entered into the register of the entities authorized to audit financial statements with KIBR number 3546, as well as members of its Management Board and statutory auditors carrying out the financial audit for Apator SA and its subsidiaries, meet the requirements of fairness and independency specified in Art. 56 of the Act of May 7, 2009 on the Statutory Auditors, Their Self-Governing Organisation and Entities Authorized to Audit Financial Statements and on Public Oversight.
4. Statement regarding the application of corporate governance principles
4.1 The set of corporate governance principles, by which the issuer abides, and the place where they are available to the public
The corporate governance principles are available on the WSE’s website: http://www.corp-gov.gpw.pl and on the website of Apator SA: http://www.apator.com .
4.2 Application of the corporate governance principles
In 2012, Apator SA observed the principles declared by the Management Board of Apator SA on December 22, 2011 (incorporated in “Code of Best Practice for WSE Listed Companies ", attached as the Appendix to the Resolution of the Stock Exchange Board No. 20/1287/2011 of October 2011); except for:
Rule I.1 in the field of broadcasting the General Meeting session using the Internet;
Rule IV.10 in the field of shareholders' participation in the General Meeting via electronic communication means.
Changes in principle application after 31.12.2012: On December 18, 2012 the Management Board of Apator SA declared that from January 1, 2013, it will observe the rules outlined in the document entitled “Code of Best Practice for WSE Listed Companies" (the Appendix to the Resolution of the WSE Board No. 19/1307/2012 of October 21, 2012) except for:
Rule I.12 in the field of enabling its shareholders to exercise their voting rights during a General Meeting either in person or through a plenipotentiary outside the venue of the General Meeting using by means of electronic communication;
Rule IV.10 in the field of the shareholders' participation in the General Meeting using electronic communication means through:
1) the real-time broadcast of General Meetings, 2) real-time bilateral communication where shareholders may take the floor during a General Meeting from a location other than that of the General Meeting.
The Management Board of Apator SA took the aforementioned decision because the shareholders were not interested in the aforementioned solutions and the company needed to incur additional costs to meet it. In order to allow shareholders to become acquainted with the events of the session, the company records the session in video format and publishes it on its website: www.apator.com.
MANAGEMENT REPORT OF GRUPA APATOR IN 2012
7
5. Description of the basic features of the internal control and risk management, in relation to the process of preparing financial statements and consolidated financial statements, applied by Grupa Apator
The financial statements are prepared by the Accounting Division of Apator SA, operating under the Director of the Financial Division. The consolidated and separate financial statements are prepared pursuant to the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS). IAS and IFRS include the interpretation recommended by the Commission for International Financial Reporting Interpretations. Moreover, the prepared financial statements are based on the Ordinance of the Ministry of Finance of February 19, 2009 (as amended) on the current and periodic information provided by the issuers of securities and the conditions of considering the information required by the legal provisions of the non-member country as equally important. The reporting and accounting in the companies: Apator SA, FAP Pafal SA, Apator Metrix SA, Apator Powogaz SA and Apator Control sp. z o. o. is performed using the Integrated Management System Baan IV. Each company has an accounting policy that is based on the commonly accepted principles of Grupa Apator. They determine the main principles for recording events. But the basic elements of the statement preparation process are the common accounting principles that are accepted by all entities of Grupa Apator, based mainly on the solutions applied by the parent entity Apator SA. As a consequence of these records, the accounting books of the relevant companies, which further serve as a base for the separate financial statements of all entities of the group, are created. The separate financial statements serve as a base for the preparation of the consolidated financial statements of Grupa Apator. The following risks are defined in the process of preparation of the financial statements:
Incorrect input data,
Improper presentation of data,
Effects of error estimations made by independent consultants (actuaries, appraisers),
At the financial data consolidation stage - improper integration of data from the companies, which did not implement the integrated management system Baan IV, with the data of the companies, which have said system.
All the aforementioned risks are minimized by the internal and external control systems and by the common accounting principles. The party responsible for minimizing risk and identifying new risks is the Management Board of Apator SA, in cooperation with the Financial Director, who assesses the efficiency of the internal control system in the process of preparing financial statements on an on-going basis. The installation of an effective internal control system for financial reporting ensures the correctness of the financial information contained in the financial statements and their proper presentation. This correctness is ensured by verifying compliance with the regulations and guidelines of the financial law and the internal regulations, as well as through audit based on EN ISO 9001:2008. The internal control is performed directly by each employee (using the self-assessment system), his supervisor and cooperating persons as well as by the managers of the organizational unit working in the field of the quality and correctness of the activities performed by the relevant employees. The aim is to assure the compliance of these activities with the procedures and mechanisms of internal control. At each stage of the financial statement preparation, one of the basic control mechanisms (external) is periodic verification of the financial statements carried out by the independent statutory auditor and, in particular, a review of the interim financial statements and an audit of the annual financial statements. The entity which will be the statutory auditor of the Apator SA company and Grupa Apator is elected in such a manner as to assure independency in the performance of its tasks. Statutory auditor selection is performed by the Supervisory Boards of the relevant companies, among the known auditing companies warranting high standards and independency. All companies of the Grupa Apator are audited by the same entity authorized to audit the financial statements. The Auditing Committee of the Supervisory Board of Apator SA participates in the process of monitoring the efficiency of the internal control system. Its essential task is to advise the Supervisory Board on the following issues:
Separate and consolidated financial reporting,
Internal control,
Risk management and cooperation with the statutory auditors. The financial data, which serve as the base for financial statements and periodic reports, are used also in the monthly financial and operating reporting. Upon closing the monthly settlement period, the senior management (management board, directors), under the supervision of the Supervisory Board, performs a monthly analysis of the financial results of the Apator SA company, the relevant companies of Grupa Apator and the consolidated results of Grupa Apator. The analysis of the results attained is made by comparing these results with the accepted business assumptions contained in the annual budget and development strategy. The identified deviations are analysed on an on-going basis to view their influence on the current results of Grupa Apator, after which possible corrective measures are taken. Moreover, Grupa Apator
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performs an annual review of the business plans, pertaining to both all entities of the capital group and the entire Grupa Apator. All of senior and middle management is engaged in the budgeting process, which includes all operating areas. The prepared budget is accepted by the management board of the company and approved by the supervisory board. Based on the assessment of the applied procedures, the Management Board of Apator SA states that as of December 31, 2012, there were not any circumstances which could have negatively affected the efficiency of the internal control regarding the preparation of the financial statements.
6. Specifications of the shareholders holding, directly or indirectly, significant blocks of shares, giving the number of shares held by these shareholders, their proportional interest in the share capital, number of votes and their proportional interest in the total number of votes at the general meeting.
6.1 Shareholders holding over 5% of the votes at the General Shareholders Meeting
As at 31 December 2012
Name and Surname Registered
shares Bearer shares
Total shares Number of
votes Share in
capital Share in
votes
Mariusz Lewicki 1 164 669 872 331 2 037 000 5 531 007 6,15% 9,80%
Tadeusz Sosgórnik 993 102 907 401 1 900 503 4 879 809 5,74% 8,65%
Danuta Guzowska 954 214 566 065 1 520 279 4 382 921 4,59% 7,77%
Zbigniew Jaworski 760 848 566 459 1 327 307 3 609 851 4,01% 6,40%
Apator Mining sp. z o. o. 0 3 600 000 3 600 000 3 600 000 10,87% 6,38%
Janusz Marzygliński 818 092 229 565 1 047 657 3 501 933 3,16% 6,21%
AVIVA OFE 0 2 905 628 2 905 628 2 905 628 8,78% 5,15%
Others 3 083 567 15 685 087 18 768 654 28 019 355 56,70% 49,64%
Total 7 774 492 25 332 536 33 107 028 56 430 504 100,00% 100,00%
For natural persons the above table presents the number of shares held by significant shareholders with spouses.
6.2 Interest of the relevant groups of shareholders in the total number of shares
The diagram below presents the interest of the relevant groups of shareholders in the share capital (as of the date for the dividend right: December 6, 2012).
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The institutional investors’ interest increased in 2012, achieving a level of 41%. The funds purchase ordinary bearer shares, and, due to this fact, their interest in the share capital is higher than in votes. The diagram below presents the interest of the institutional investors in the share capital of the Company for the last 9 years.
7. Stock price
Despite the recession of the financial markets for the majority of the year, the main indices have finished the year 2012 with the most proportional increases since 2009. The annual change (increase) in WIG index amounted to 26.2%, WIG20: 20.4%; sWIG80: 22.9% and mWIG40: 17,4%. From June 2012 the stock market indices tended to increase and were resistant to all negative information pertaining to the condition and prospectus of the economy. The stock exchange rate of Apator SA’s stock in 2012 had a similar tendency. For the entire year it was growing - starting the first six months at the level of PLN 18.05 (it was the lowest stock exchange rate in 2012) and finishing at the level of PLN 25. In the second half of the year the prices of Apator SA stock increased from PLN 25 to maximum price of PLN 32.69 on December 11, 2012. It is the maximum stock exchange rate ever achieved by the Company in its entire listing history since 1997. Apator SA closed the year 2012 slightly below the maximum, at PLN 32.63 and the average for the entire year was PLN 25.32. In the period from January to December 2012, the stocks of the Company gained 80.8% toward an increase at the level of 22.9% of the sWIG80 index.
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In 2011-2012 the stock price of Apator SA was correlated with the sWIG80 index in which the Company's shares participated. Since December 28, 2012, the Company’s stock participated in mWIG40. Share price of Apator SA in 2011-2012 versus sWIG80 index
The table below presents selected stock exchange data for Apator SA for 2011-2012.
Unit
2011 2012
Description Date Value Date Value
Closing share price on the first day of quotation PLN 2011-01-03 19,49 2012-01-02 18,05 Evaluation of the goodwill of the Company at the begining of the period 000’PLN 2011-01-03 684 236 2012-01-02 633 682
Closing share price on the last day of quotation PLN 2011-12-31 17,80 2012-12-28 32,63 Evaluation of the goodwill of the Company at the end of the period 000’PLN 2011-06-30 624 905 2012-12-28 1 080 282
The lowest share price PLN 2011-01-10 14,70 2012-01-02 18,05
The highest share price PLN 2011-02-16 21,47 2012-12-11 32,69
Average share price PLN year 18,59 year 25,32
8. Dividend
8.1 Dividend from the profit for 2011
On June 18, 2012 the Ordinary General Meeting of Shareholders adopted the resolution on the dividend from the profit for 2011 in the total amount of PLN 24 830 271.00, so PLN 0.75 gross per share. The dividend was paid in full on July 23, 2012. The right to dividend will be gained by the shareholders holding Apator SA shares as of July 6, 2012. 33 107 028 registered shares, including 7 774 492 of the A series and 25 332 536 bearer shares of the A, B and C series were entitled to receive the dividend.
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8.2 Declaration of the dividend from the profit for 2012
On October 23, 2012 the Management Board of Apator SA made a decision pertaining to the payment of the advance payment for the expected dividend from the profit of 2012 in the total amount of PLN 13 242 811.20, so PLN 0.40 gross per share. 33 107 028 registered shares of the A series and bearer shares of the A, B and C series were entitled to the advance payment for the expected dividend in 2012. The right to receive the advance payment for the expected dividend was granted to the shareholders holding Apator SA shares on December 6, 2012 and the payment was made on December 13, 2012.
The Management Board of Apator SA declares that it will recommend to the General Meeting of Shareholders the payment of the second part of the dividend for the fiscal year 2012 in the amount of PLN 0.80 per share that jointly constitutes PLN 26.5 M.
The total declared level of divided is PLN 1.20 gross per share, so PLN 39.7 M.
8.3 Dividend policy
On March 16, 2007 the Management Board of the Company determined the dividend policy for Apator SA, where the annual payment of dividend in the amount of 75% of the net profit of Apator SA generated for the relevant fiscal year was declared. The dividend will be payable in two parts: in the form of advance payment in the relevant fiscal year and the remaining part of the final amount of the dividend to be paid upon approval by the General Meeting of Shareholders.
At the same time the Management Board of Apator SA stipulated that in event of the performance of significant investment plans, the company is entitled to decide on a different profit division for the relevant year.
In 2012 the net income of Apator SA amounted to PLN 70 344, but the total declared level of dividend is PLN 39 728 k. It constitutes 56.48% of net income. As of June 1, 2012 (the commencement date of business activity in PSEZ) the asset for deferred corporate income tax was recognized in the amount of PLN 20.357 k due to usable tax credit. As of December 31, 2012 this asset amounted to PLN 20 006 k and increased the net income of Apator SA by this amount. However, this asset is only a potential amount in the accounting books, which do not affect the actual financial liquidity of the Company. The level of total declared dividend for 2012, excluding this asset, is 78.92%.
*Declared dividend
(78,9%)
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97,7% 93,3
% 98,7
% 55,9
% 40,6
% 96,7
% 78,2
% 49,5
% 35,5
% 82,3
% 51,1
% 65,8
%
56,5%
(78,9%)
Share of dividend in the profit
9. Specification of the holders of any securities giving special control rights, including their description.
No holder of the securities issued by Apator SA has special control rights over the Company. Each bearer share carries one voting right; however the registered shares are preference shares in such a manner that one share carries four voting rights at the General Meeting of Shareholders. The principles of disposal of the registered shares or their conversion are specified in the Articles of the Association of Apator SA.
As of December 31, 2012, the Company’s share capital consisted of 33 107 028 shares of the nominal value equal to PLN 0.10 each. In 2012 this capital fell by 2 M own bearer shares acquired to be redeemed without any remuneration (description in item 10).
The table below presents Apator SA’s shareholding at the end of 2012.
As at 31 December 2012
Shares and votes Number of shares
Structure of shares
% Number of votes
Structure of votes
%
Registered shares 7 774 492 23,48% 31 097 968 55,11%
Bearer shares 25 332 536 76,52% 25 332 536 44,89%
Total shares 33 107 028 100,00% 56 430 504 100,00%
As of the date of this financial statement, i.e. April 22, 2013, upon conversion of 20 362 registered shares on January 11, 2013, the preference shares constitute 23.42% of the share capital and 55.02% votes at the General Meeting of Shareholders of Apator SA.
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10. Limitations to the execution of voting rights
There are no limitations regarding the execution of voting rights, such as:
Limitation to the execution of voting rights by the shareholders of a specified part or number of votes,
Time limitations pertaining to the execution of voting rights,
Provisions under which, with the cooperation of the company, the securities-related equity rights are separated from the holding of securities.
On January 23, 2012 the Extraordinary General Meeting of the company adopted the free share redemption and cancellation program and the reduction of the share capital. The aim of the Program was the free acquisition, outside of the regulated market, of 2 M own bearer shares (5.70% of the capital) with the nominal value of PLN 200 k from Apator Mining Sp. z o.o. On April 13, 2012, Apator SA acquired 2 million of own bearer shares, free of charge, marked with the code PLAPATR00018 from the subsidiary Apator Mining Sp. z o.o. And thus the Program was completed. The voting right from the shares acquired under this Program will not be executed and these shares will not participate in the profit division for 2011. The decision pertaining to the possible redemption and cancellation of these shares will be made at the Ordinary General Meeting on June 18, 2012. On July 16, 2012 Apator SA received the decision of the District Court in Toruń, under which on July 12, 2012 the decrease of the share capital from PLN 3 510 702.80 to PLN 3 310 702.80, as a result of the redemption and cancellation of these shares, was registered.
11. Indication of any limitations regarding the transfer of the ownership rights of Apator SA shares
The registered preference shares are subject to limitation to their disposal. These shares may be disposed of by the shareholders and their heirs or legal successors only in favour of the shareholders holding the registered shares. The disposal of the registered shares in favour of persons other than the shareholders holding the registered shares requires the consent of the Management Board. If the Management Board does not express consent for the transfer of shares, it should, within 60 days, determine another purchaser; determine the price pursuant to the bearer share price of the date of application. If, within 60 days of the date of written application for the consent for the shares’ disposal, the Management Board does not express their opinion, the disposal will not be limited.
The bearer shares are not subject to any limitations regarding the transfer of their ownership.
12. Description of the rules for appointing and recalling the members of the managing bodies and their rights, in particular the right to make a decision regarding the issuance or buy-out of shares
Pursuant to the Articles of the Association of Apator SA, the sole competence of the General Meeting of Apator SA is to decide on the:
Issuance of shares, convertible bonds or senior bonds,
Acquisition of shares to be cancelled,
Increase or decrease of the share capital.
12.1 Supervisory Board
The Supervisory Board of Apator SA acts under the provisions of the Code of Commercial Companies, the Articles of Association and the Supervisory Board Regulations. The Articles of Association and the Supervisory Board Regulations are available on Apator SA’s website: www.apator.com, in the folder “Investor’s Relations”.
The Supervisory Board supervises all fields of the business activity of the Company . It does not have the right to instruct the Management on the management of the Company’s matters. The Supervisory Board
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performs its duties collegially, but it may appoint their members to perform the relevant supervision tasks individually.
The members of the Supervisory Board of Apator SA are appointed and recalled by the General Meeting, which establishes the number of members of the Supervisory Board and their remuneration. The members of the Supervisory Board should have proper knowledge and experience. The Supervisory Board may be composed of 5 to 7 members, elected by the General Meeting for the joint term in office of 5 years. Reduction of the number of Supervisory Board members during the term of office to not less than 5 members does not cause the necessity to complete the composition of the Supervisory Board.
The Supervisory Board elects a Chairman and Deputy Chairman at the first meeting.
The members of the Supervisory Board are obliged to non-compete. The members of the Supervisory Board cannot be: Members of the Management Board, Proxy, Liquidator, and Managers of the unit or plant, Chief Accountants employed by the company, Legal Advisers or Lawyers of a person who is subordinate to the member of the Management Board. Moreover, the members of the Management Board and/or subsidiary Liquidators cannot be members of the Supervisory Board.
In order to have a valid resolution of the Supervisory Board, all members must be invited, and the following must be in attendance:
at least 3 members of a five person composition,
at least 4 members of a composition of more than five persons.
The resolutions of the Board are adopted by the absolute majority of the present votes. In case of equality in the votes, the vote of the Chairman of the Supervisory Board is decisive.
The General Meeting adopts the Supervisory Board Regulations.
The Supervisory Board is not authorized to make a decision on the issuance or buyout of shares.
12.2 Management Board
The Management Board of the Company acts under the provisions of the Code of Commercial Companies and the Management Board Regulations. The Articles of Association and the Regulations of the Management Board of Apator SA are available on Apator SA’s website: www.apator.com in the folder entitled “Investor’s Relations”.
The members of the Management Board of Apator SA are appointed and recalled pursuant to the provisions of the Code of Commercial Companies and the provisions of the Articles of Association. The Management Board of Apator SA is composed of one to three members appointed by the Supervisory Board for three years of the joint term of office. The Supervisory Board adopts resolutions on:
Determining the number of members of the Management Board of the Company,
Appointing and recalling the Management Board of the Company,
Appointment of the President of the Management Board,
Suspending the performance of tasks by all or relevant members of the Management Board, for important reasons,
Delegation of members of the Supervisory Board to temporary execution of the activities of the members of the Management Board,
Determining the remuneration for the Management Board, including the nature of its motivation.
The members of the Management Board may be recalled by the Supervisory Board or General Meeting any time. It has no prejudice to their claims under the employment contract.
The Management Board manages the entire business activity of the Company, represents the Company to third parties, manages its assets and all issues not reserved for other bodies, is responsible for the proper keeping of accounting books and strictly observes the provisions of the Articles of Association, Management Board Regulations as well as the resolutions of the Company’s bodies. Whence performing its activities, the Management Board takes the Company’s interests into consideration The tasks of the Management Board are controlled by the President. The resolutions of the Board are adopted by the absolute majority of votes. In the event of a tie, the President’s vote is decisive.
Each member of the Management Board is independently, or by proxy, entitled to submit statements pertaining to the property rights and duties of the Company as well as to sign documents. Each member of the Management Board is entitled and obliged to handle the issues of the Company, not exceeding the usual activity of the Company.
The members of the Management Board and Proxies are obliged to non-compete.
The Supervisory Board adopts the Management Board Regulations.
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The Management Board is not authorized to make decisions pertaining to the issuance or buyout of shares.
13. Description of the changes to the Articles of Association of Apator SA
The change to the Articles of Association of Apator SA, under par. 14 item 14 of the Articles of Association, is in the competences of the General Meeting and may be adopted by the majority of 3 votes. In case of intention to change the Articles of Association, the notice on convening the General Meeting of Shareholders will include the current provisions and the content of the proposed changes. The General Meeting of Shareholders may authorize the Supervisory Board, under the resolution on change in the Articles of Association, to establish a consolidated text of the changed Articles of Association or to introduce any other editorial changes.
Changes to the Articles of Association become effective upon their entry into the National Court Register. The obligation to report the changes to the Articles of Association is the responsibility of the Management Board. Under par. 430 of the Code of Commercial Companies, the Management Board is obliged to report the change to the Articles of Association within 3 months of the date of adopting the relevant resolution by the General Meeting, but Art. 22 of the Act on the National Court Register obliges to submit the application for entry to the Register no later than within 7 days of the event that justifies such an entry.
14. The management structure as of December 31st, 2012:
15. General Meeting
15.1 General Meeting operation principles
The manner of operation of the general meeting, its basic rights and description of the shareholders’ rights, and the way of their execution, in particular the rules following the regulation of the general meeting, unless this information follows directly from the law, are specified below. The General Meeting of Shareholders of the Company operates under the provisions of the Code of Commercial Companies and the General Meeting Regulations. The General Meetings can be ordinary and extraordinary. The Ordinary General Meeting is convened once per year, at the latest at the end of June. The General Meetings are convened by announcement in the manner specified by the Code of Commercial Companies for public companies, at least 26 days in advance of the General Meeting. The right to participate in the General Meeting is only for persons who are shareholders of the company 16 days before the date of the General Meeting (as of the registration date of participation in the meeting):
The persons authorized by registered shares and share certificates, and the pledgees and users, who are entitled to vote by shares, have the right to participate in the General Meeting if they are listed in the share register on the registration date of the General Meeting.
The list of persons authorized by bearer shares to participate in the General Meeting is determined by the Company based on the list drawn up by the National Depository of Securities SA under the conditions specified by the Commercial Companies Code.
GENERAL SHAREHOLDERS MEETING
Supervisory Board Janusz Marzygliński, Mariusz Lewicki, Ryszard Wojnowski, Danuta Guzowska,
Krzysztof Kwiatkowski, Eryk Karski
Executive Board Janusz Niedźwiecki,
Tomasz Habryka, Jerzy Kuś
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The shareholders representing at least half of the share capital or at least half of the total votes are entitled to convene the Extraordinary General Meeting by appointing the chairman of this meeting. The shareholder or shareholders representing at least 1/20 of the share capital are authorized to:
Request to convene the Extraordinary General Meeting and incorporate the specified issues into the agenda of this meeting. The request to convene the Extraordinary General Meeting should be submitted to the Management Board in writing or by e-mail;
Request to incorporate the specified issues into the agenda of the next General Meeting. This request should be reported to the Management Board not later than 21 days in advance of the date of the General Meeting. The Management Board is obliged to announce agenda changes, introduced at the shareholders’ request, immediately, but not later than within 18 days in advance of the date of the General Meeting. The announcement is made in a manner appropriate for convening the General Meeting;
Before the date of the General Meeting, to submit to the Company in writing or by e-mail, the drafts of the resolutions referring to the issues incorporated into the agenda or issues to be incorporated to the agenda. The Company immediately presents the resolution drafts on its website. Each shareholder is entitled to submit the resolution draft concerning the issues from the agenda during the General Meeting.
The following persons should participate in the General Meeting:
Members of the Supervisory Board and the Management Board, in a composition that enables the substantial answering of the questions asked during the meeting,
Statutory auditor, if the financial matters of the Company are subject matter of this meeting. Unless the provisions of the Code of Commercial Companies state otherwise, the general meeting is valid regardless of the number of presented shareholders. The General Meeting may adopt the resolutions only for the issues included in the agenda, except for the resolutions on order issues, which may refer only to the issues related with the meeting. The resolution on discontinuing to resolve an issue from the agenda may be passed only when there are important reasons. In such case the request must be explained in detail. The General Meeting may not adopt the resolution on excluding from the agenda or discontinuing the consideration of the issues which are incorporated into the agenda upon the request of the shareholders. The resolutions are passed by the absolute majority of votes, unless the provisions of the Articles of Association or the Commercial Companies Code state otherwise. The voting is open, except for the situation specified in Art. 420 of the Code of Commercial Companies i.e. secret voting is ordered:
For elections and in case of motions on recalling the members of the Company's bodies,
Motions on holding them liable,
On personal matters,
At the request of but one shareholder or proxy present at the General Meeting. The resolutions of the General Meeting are binding for all shareholders.
15.2 General Meetings in 2012
On January 23, 2012 the Extraordinary General Meeting of Shareholders was held, which:
closed the share redemption, cancellation and reduction of share capital program of June 20, 2011; (no shares were acquired),
Liquidated the Shares Cancellation Fund,
Expressed consent for free redemption and cancellation of 2 M shares without remuneration,
Established the Free share redemption, cancellation and share capital decrease program - this program refers to the free redemption of 2 M own shares from the subsidiary Apator Mining Sp. z o.o.
On June 18, 2012 the Ordinary General Meeting of Shareholders of Apator SA was held, which:
Approved the Management Report of the Company and Capital Group for the year 2011;
Approved the financial statement of Apator SA and Capital Group for the year 2011;
Discharged the members of the Company’s Management Board of their duties in 2011;
Approved the Supervisory Board Report for 2011;
Discharged the members of the Company’s Supervisory Board of their duties in 2011;
Adopted the resolution pertaining to the profit division for 2011 and dividend payment;
Adopted the resolution pertaining to the redemption and cancellation without remuneration of 2 M own bearer shares of Apator SA acquired free-of-charge from the subsidiary Apator Mining Sp. z o.o.
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Adopted the resolution pertaining to the decrease of the share capital of Apator SA as a result of the redemption and cancellation of 2 M own shares;
Adopted the resolution pertaining to closing the Share redemption, cancellation and share capital decrease program of January 23, 2012;
Adopted the resolution pertaining to the change of § 7 of the Articles of Association of Apator SA;
Adopted the resolution pertaining to passing the consolidated text of the Articles of Association;
Did not adopt resolution on consent for acquisition of 3.6 M shares to be cancelled without consideration from the subsidiary Apator Mining Sp. z .o.o. 3,6 M own bearer shares free of charge in order to redeem them without remuneration.
The resolution on free share redemption and cancellation program and reduction of the share capital was not adopted.
16. The composition of the managing and supervising bodies of Apator SA, along with its changes during the last fiscal year and a description of its activity
16.1 Supervisory Board
At the end of 2012 the composition of the Supervisory Board of Apator SA was as follows:
Janusz Marzygliński - Chairman of the Supervisory Board
Mariusz Lewicki - Deputy Chairman of the Supervisory Board,
Ryszard Wojnowski - Member of the Supervisory Board
Danuta Guzowska - Member of the Supervisory Board
Krzysztof Kwiatkowski - Member of the Supervisory Board
Eryk Karski - Member of the Supervisory Board.
The term of office of the present Board ends on the day of the Ordinary General Meeting of Shareholders to be held in 2015.
The shareholding structure of the members of the Supervisory Board was as follows:
Description
As at 31 December 2012
shares votes % shares % votes
Janusz Marzygliński 1 047 657 3 501 933 3,16% 6,21%
Mariusz Lewicki 2 037 000 5 531 007 6,15% 9,80%
Ryszard Wojnowski 869 334 869 334 2,63% 1,54%
Danuta Guzowska 1 520 279 4 382 921 4,59% 7,77%
Krzysztof Kwiatkowski 0 0 0,00% 0,00%
Eryk Karski 0 0 0,00% 0,00%
Total 5 474 270 14 285 195 16,53% 25,32%
The table above presents the number of shares held by significant shareholders with spouses.
The members of the Supervisory Board of Apator SA hold the positions in the supervising bodies of the subsidiaries:
Mariusz Lewicki - Chairman of the Supervisory Board of Apator Mining Sp. z o.o., Chairman of the Supervisory Board of Apator Metrix SA;
Janusz Marzygliński - Chairman of the Supervisory Board of Apator Rector Sp. z o.o., Chairman of the Supervisory Board of Apator Powogaz SA Chairman of the Supervisory Board of Newind Sp. z o. o,
Ryszard Wojnowski - Chairman of the Supervisory Board of Apator Control Sp. z o.o.,
The remuneration of the members of the Supervisory Board was not a significant portion of the costs of the Company and did not affect its financial result in a significant manner. The remuneration obtained in 2012 is as follows:
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Name and Surname
Remunaration Apator SA
Remuneration subsidiaries
Total remuneration
000’PLN 000’PLN 000’PLN
Janusz Marzygliński 72 119 191
Mariusz Lewicki 66 96 162
Ryszard Wojnowski 66 48 114
Danuta Guzowska 66 0 66
Krzysztof Kwiatkowski 66 0 66
Eryk Karski 66 0 66
Total 402 263 665
Pursuant to the provisions of the Articles of Association, the Board meets once per quarter or more often, if needed, upon the invitation of the Chairman. In 2012, 10 meetings of the Supervisory Board of Apator SA were held. The members of the Management Board of Apator SA participated in these meetings. The Management Board provided the Supervisory Board with sufficient information on all important matters referring to the business activity of Apator SA and Grupa Apator. At the meetings of the Supervisory Board the resolutions in matters, which were specified by the agenda sent to the members of the Supervisory Board in the notice, were passed. The business activity of the Supervisory Board focused on the matters significant for the business activity of the Apator SA company and the Grupa Apator. The Auditing Committee operates within the Supervisory Board, but the Nomination Commission and Remuneration Commission were not appointed.
16.2 The Auditing Committee of the Supervisory Board of Apator SA
On September 23, 2009 the Supervisory Board of Apator SA appointed the Auditing Committee, which is composed of at least three members including the Chairman who is appointed among its members. The goal of the Auditing Committee is collaboration with the statutory auditors and consultancy for the Supervisory Board on the following issues:
Separate and consolidated financial reporting,
Internal control and risk management. The main tasks of the Auditing Committee include:
Monitoring the financial reporting process (audit of the accepted accounting standards, information circulation, prepared documents and planned changes);
Monitoring the efficiency of the internal control systems, internal audit and risk management systems;
Monitoring the performance of audit activities;
Monitoring the independency of the statutory auditor to audit the financial statements.
The detailed principles of the Auditing Committee’s operation are specified by the Regulations of the Auditing Committee of the Supervisory Board of Apator SA, which is available on its website: www.apator.com in the folder “Investor’s relations”. The composition of the 2012 Auditing Committee includes:
Mariusz Lewicki - Chairman of the Committee,
Ryszard Wojnowski - Member of the Committee,
Krzysztof Kwiatkowski - Member of the Committee. Krzysztof Kwiatkowski meets the criterion of independency from Apator SA. Pursuant to the Regulations, the meetings of the Committee are held at least twice a year, before the Company publishes the financial statement (interim and annual). In 2012, seven meetings of the Committee were held.
16.3 Management Board
In 2012 the composition of the Management Board of Apator SA was as follows:
Janusz Niedźwiecki - President of the Management Board
Tomasz Habryka - Member of the Management Board
Jerzy Kuś - Member of the Management Board. The present term of office of the Management Board ends on June 24, 2013 when the Ordinary General Meeting of Shareholders will be held.
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On June 18, 2012 the President of the Management Board of Apator SA, Janusz Niedźwiecki, submitted a written statement pertaining to him not standing as a candidate for the Management Board of Apator SA for the next term of office. The Supervisory Board proposed Janusz Niedźwiecki stand as a candidate for the Supervisory Board after the completion of the term of office of the President of the Management Board, and declared its support. On October 23, 2012 the Supervisory Board of Apator SA elected Mr Andrzej Szostak as a candidate for the President of the Management Board of Apator SA for the next term of office within 2013-2015.
The members of the Management Board are members of the supervising bodies of the subsidiaries (as of December 31, 2012):
Janusz Niedźwiecki - Member of the Supervisory Board of FAP Pafal SA, Member of the Supervisory Board of Apator Rector Sp. z o.o., Member of the Supervisory Board of Apator Powogaz SA,
Tomasz Habryka - President of the Management Board of FAP Pafal SA, President of the Management Board of Apator GmbH Member of the Supervisory Board of Apator Control Sp. z o.o., Member of the Supervisory Board of Newind Sp. z o. o,
Jerzy Kuś - Member of the Supervisory Board of Apator Metrix SA.
The remuneration of the Members of the Management Board is determined on the basis of the clear procedures and principles considering its motivation nature and to provide the effective and fluent management of the Company. The remuneration corresponded to the responsibility criteria pertaining to the position held, staying reasonably proportionate to the level of remuneration in similar companies in a comparable market. The remuneration obtained by the Members of the Management Board in 2012 is as follows:
Name and Surname
Apator SA Remuneration
from other entities in group of Apator
Total
remuneration base
remuneration bonuses / awards
000’PLN 000’PLN 000’PLN 000’PLN
Janusz Niedźwiecki 596 476 108 1 180
Jerzy Kuś 319 244 36 599
Tomasz Habryka 227 182 294 703
Total 1 142 902 438 2 482
The shareholding structure of the members of the Management Board of Apator SA is as follows:
Name and Surname As at 31 December 2012
shares votes % shares % votes
Janusz Niedźwiecki 436 518 1 734 639 1,32% 3,07%
Tomasz Habryka 0 0 0% 0%
Jerzy Kuś 200 200 0,00060% 0,00035%
Total 436 718 1 734 839 1,32060% 3,07035%
While making decisions on company issues, the members of the Management Board act within the limits of justified economic risk, i.e. after considering all information, analyses and opinions, which should be considered by this issue because of the company's interests. While determining the interests of the Company, they considered, as justified by a long-term prospectus, the business of the shareholders, debtors, employees and other entities and persons collaborating with the Company’s business activity , as well as the interest of the local society. The Management Board operated with due diligence in order to make any transactions with the persons, whose interests affected the interest of the Company under the market conditions.
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17. Supervising and managing bodies of the Apator Group
The composition of the supervisory boards and management boards of the subsidiaries and jointly-controlled entities of Apator SA is presented below:
Company Composition of the Supervisory Board as at 31.12.2012
Composition of the Executive Board as at 31.12.2012
Apator Metrix SA Mariusz Lewicki Jerzy Kuś Krzysztof Malec
Arkadiusz Chmielewski Ryszard Lippke Marek Rissmann
FAP Pafal SA
Kazimierz Piotrkowski Janusz Niedźwiecki Janina Karaszewska-Zandrowicz Tadeusz Sosgórnik
Tomasz Habryka Marek Gruszyński
Apator Rector Sp. z o. o. Janusz Marzygliński Marek Kurzawa Janusz Niedźwiecki
Krzysztof Wojtczak Marek Michalski Sławomir Kowalik
Apator Powogaz SA
Janusz Marzygliński Janina Karaszewska-Zandrowicz Tadeusz Sosgórnik Janusz Niedźwiecki Jolanta Dombrowska
Krzysztof Prucnal Marcin Szczurowicz
Apator Mining Sp. z o. o. Mariusz Lewicki Kazimierz Piotrowski Zbigniew Baranowski
Tadeusz Sosgórnik
Apator Control Sp. z o. o. Ryszard Wojnowski Tomasz Habryka Monika Guzowska
Ryszard Trąbała
Apator Elektro Aleksander Iwanow Mirosław Klepacki
K. G. Burcew A. W. Konfetkin O. W. Petrowa
Apator GmbH - Tomasz Habryka
Mirosław Klepacki
GWi Ltd
- Duncan McDougal Alan M. Rodger Marek Rissmann Arkadiusz Chmielewski
On September 2012, the Management Board of GWI, under the joint-control of Apator Metrix SA, included: Marek Rissmann and Arkadiusz Chmielewski. On December 4, 2012, Marek Gruszyński was appointed as the member of the Management Board of FAP Pafal SA.
18. Agreements concluded between the companies of Grupa Apator and persons managing these companies
There are no unusual agreements between the relevant company of Grupa Apator and managing persons, in the field of compensation, in the event of:
Resignation or dismissal from the position held, without an important reason,
When the recalling or dismissal is caused by a business combination via acquisition.
The managing persons of Grupa Apator’s companies are the employees of these companies under the contract for employment. In case of resignation or dismissal from the position held, the parties settle their obligations under the applicable regulations, in particular the labour law.
19. Information on agreements which may result from change of the proportion of the shares held by the present shareholders
Apator SA does not have any information on any agreements, including these to be concluded after the end of the period, resulting in changes to the proportion of shares held by the present shareholders and bond holders (Apator SA has never issued bonds).
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20. Corporate Social Responsibility
Apator SA publishes on its website (www.apator.com) a separate report on CSR. Since February 1, 2013, Apator SA has been participating in the next 6th edition of the Respect Index for the fifth time. In 2010 (in the 2nd edition) the Company did not report its participation in this project.
21. Employment in Grupa Apator
The table below presents the employment in Grupa Apator excluding the consolidated entities by equity method, i.e. ZAO Teplovodomer, Apator Elektro and GWi Ltd.
Company As at
31.12.2012 As at
31.12.2011 r.
increase/decreased Dynamics
persons
Apator SA 474 446 28 106,28%
FAP Pafal SA 313 332 -19 94,28%
Apator Metrix SA 290 292 -2 99,32%
Apator Mining sp. z o. o. 117 115 2 101,74%
Apator Control sp. z o. o. 61 57 4 107,02%
Grupa Apator Rector 199 146 53 136,30%
including: Apator Rector Sp. z o. o. 154 118 36 130,51%
Grupa Apator Powogaz 536 529 7 101,32%
including: Apator Powogaz SA 344 356 -12 96,63%
Apator GmbH 2 5 -3 40,00%
Total 1 992 1 922 70 103,64%
The employment in Grupa Apator as at December 31, 2012 increased by 70 persons in comparison to December 31, 2011. The main changes in the employment referred to:
The company Apator Rector Sp. z o.o., Increase caused by the necessary increase of competences and production capacity in the implementation areas (programmer) and business support (system analytics and implementation specialists),
Apator SA- an increase of employment was caused mainly by the increase of direct production workers due to partially taking-over the assembly of electronic electric energy meters from the subsidiary Pafal SA and due to the increase of sales.
FAP Pafal SA- a decrease of employment as a result of adjustment of the employees to the reduced production capacity.
22. Information on markets
22.1 Basic trends in the economy and the tempo of economic growth
In 2012 the economic situation of Poland was less favourable than in the previous year. In 2012 the economic activity fell. In 2012 the GDP growth amounted to 2.0% in comparison with 4.3% in the previous year. The more and even larger fall pertains to the gross value added generated in the industry. In 2012 its growth was 1.2%, and in the previous year 10.0%. The sold production of industry increased by 1.0% in 2012, in comparison with 7.7% in the previous year ago. At the same time, in the period January-December 2012, the amount of export, as counted by current prices, was higher by 3.8% than in 2011. Import value was lower by 0.6% YOY. The biggest shares in the Polish export belonged to Germany (25.1%), Great
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22
Britain (6.7%) and Czech Republic (6.3%), and the import presented as follows: Germany (21.1%), Russia (14.3%) and China (9.0%). The employment in the industry decreased by 1.0%, in comparison to the 2.1% increase in the previous year. The total economy noted a slight increase of employment (by 0.1%). The labour performance increased by 2.0% in comparison to 5.5% in the previous year. Among the main industrial groups, the increase of the sold production was noted by the entities producing the consumer non-durables (by 5.6%), and by those producing intermediate goods (by 0.7% YOY). The decrease of production had to do with the entities producing energy-related goods (by 1.0%), capital goods (by 0.6%) and consumer durables (by 0.5% YOY). The prices of sold production of industry increased by 3.3% in 2012 in comparison with 7.6% in the previous year.
22.2 Investment attractiveness of the branches, where Apator SA operates
Switchgear equipment sector The number of building permits issued in 2012 amounted to 165 092 and was lower by more than 10% in comparison to 2011. These data show the possible sales slump in construction in 2013. In 2012, the number of apartments put into use was higher than in 2011 by 16%; however the forecast for 2013 is lower than said performance in 2012 by 23%. In 2012 the industrial production dynamics ratio was higher by 1.3%. The construction and assembly production dynamics in the same period declined by 1%. The situation in mine sector deteriorated in 2012- mining decreased by more than 6.6% that was reflected by the worse situation of mines. The positive trend occurred in the automation sector- an increase 5.6% YOY was noted, in the sector drivers and controllers the increase amounted to 9.1%. The sales was better by 5.1% than in 2011 in the cables production and sales sector. In 2012 electric wholesales noted an 8% increase in sale, in comparison to 2011. Measurement equipment sector In 2012 the sold production of water meters increased by 54% (by GUS) achieving the level 5.5 M pieces. The main growth was driven by export. In the gas meters sector 15% decrease of sale was noted. The increase of sale was noted in the segment of electric energy meters (37% in comparison to 2011). Generally export contributed to this increase, because domestic sales slowdown at the end of the year due to lack of a technical standard for smart metering. After the first big pilotage implementation of smart metering in 2012 (Energa, Tauron), the year 2013 may appear to be a period of waiting for technical specification. The increasing interest of both energy plants and the Polish Energy Regulatory Office (URE) in intelligent meters is noted. The development of this market is stopped by a lack of technical standard for smart metering in Poland. Within 2015-2016 the commencement of many European SM projects is expected. Apator SA participates in consultations regarding many projects tied to the idea of smart grids and smart metering in Poland and abroad. The exemplary organization aimed at speeding up the works on implementation of a Smart Grids network in Poland is: the Smart Power Grid Polska Consortium and the Intelligent Energetic Networks Section at the National Chamber of Electronics and Telecommunication and collaboration with organizations associating the Polish distributors - the Polish Power Transmission and Distribution Association [PTPiREE]. At the beginning of 2013 the organizations KIGEiT and PTPiREE established a working group dealing with technical specification for the Smart Metering in Poland in collaboration with the regulatory body (URE).
22.3 Revenues from sale and sales structure
The consolidated revenues from sale of Grupa Apator in 2012 amounted to PLN 668 824 k that means the increase by PLN 131 805 k, so by 24.54% in comparison to 2011, including:
Sale of the products amounted to PLN 600 001 k (increase by PLN 105 948 k YOY),
Sale of goods and materials: PLN 68 823 k (increase by 25.857 k YOY). The increase of the revenues from sale is a result of the increase of sale of measuring products and IT solution and services increase offered by Newind Sp. z o.o., which are classified to other sale.
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Products92%
Goods and materials
8%
Structure of revenues from sales in total in 2011
The dominant in the sales structure of the Apator Group is the measuring equipment, which in 2012 constituted 63% of the total sale. In 2012 these sales amounted to:
Measuring instruments: PLN 424 822k (increase by 5 422 k YOY),
Switchgear instruments: PLN 151 119 k (increase by 11 986 k YOY),
Other sale: PLN 92 883 k (increase by 63.397 k YOY).
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The share of the other sale in the general revenues increased from 5 to 14%. The agreement signed by Newind Sp. z o.o. and Social Insurance Company on delivery and licence for the software for the needs of modernization of Technical and System Infrastructure of Electronic Data Exchange amounting to PLN 32.9 net had the basic influence on the results of the other sale in 2012 in comparison to 2012.
22.4 Territorial structure of revenues
In 2012 the territorial structure of revenues was similar to 2011, where the export constituted 36% of revenues and the domestic sales 64%. In 2012 the amount of revenues from domestic and export sale was as follows:
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On foreign markets, the revenues amounted to PLN 240 813 k (increase by PLN 47 095 k YOY),
On domestic markets, the revenues amounted to PLN 428 011 k (increase by PLN 84 710 k YOY). They exporters of Grupa Apator are as follows:
Apator SA- switchgear equipment and electronic electric energy meters,
Apator Metrix SA- gas meters,
Apator Powogaz SA- water meters and heat meters,
FAP Pafal SA- inductive electric energy meters.
The table below presents the sale structure of products by the assortment groups (domestic and export) and value:
Description Performance 2011
(000’PLN)
Performance 2012
(000’PLN) Change yoy
(000’PLN)
Dynamics
(%)
Metering segment 368 400 424 822 56 422 115,32%
home 203 189 219 180 15 991 107,87%
export 165 211 205 642 40 431 124,47% Share of export of metering equipment in revevenues in total 30,76% 30,75%
Switchgear segment 139 133 151 119 11 986 108,61%
home 110 892 116 249 5 357 104,83%
export 28 241 34 870 6 629 123,47% Share of export of switchgear equipment in revenues in total 5,26% 5,21%
Other sales 29 486 92 883 63 397 315,01%
home 29 220 92 582 63 362 316,84%
export 266 301 35 113,16%
Share of export of the other sales in revenues in total 0,05% 0,05%
Total revenues 537 019 668 824 131 805 124,54%
home 343 301 428 011 84 710 124,68%
export 193 718 240 813 47 095 124,31%
Share of export in revenues in total 36,07% 36,01%
The table below presents the geographical structure of export:
Description
31.12.2011 31.12.2012
value structure value structure Change
yoy Dynamics
(tys. zł) (%) (tys. zł) (%) (tys. zł) (%)
European Union 111 740 57,68% 135 504 56,27% 23 764 121,27%
Other countries 81 978 42,32% 105 309 43,73% 23 331 128,46%
Total export 193 718 100,00% 240 813 100,00% 47 095 124,31%
On the other hand, the diagram below presents the export sale of Grupa Apator by countries with the sales over PLN 1 M in 2012.
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26
In 2012 Grupa Apator noted the huge increase of the export sale to:
Denmark (target the Netherlands)- increase by PLN 17 814 k, generated due to the sale of the gas meters of Apator Metrix SA with the new structure of meter allowing to read more measurement parameters,
Russia- increase by PLN 11 381 k generated by the higher export of water meters, heat meters, gas meters and switchgear equipment.
Turkey- increase by PLN 8 860 k, generated by the higher sale of electronic cost allocators and gas meters and also the export of switchgear equipment,
Germany- increase by PLN 6 128 k, generated via higher export of gas meters and inductive and electronic electric energy meters.
22.5 Sources of supply
In 2012 Grupa Apator continued the activities aimed at keeping the proper supply economy and optimization of the costs of purchase of the materials, production services and goods. In connection with this:
The company and its subsidiaries commonly purchased metallurgical goods, plastic and electronic components,
The trade conditions with the suppliers of the high volume of turnover were renegotiated,
The constant supervision over the performance of the signed agreements was performed,
The cyclic assessment of reliability of the strategic suppliers was performed.
The offers were submitted and the suppliers were selected. Grupa Apator supplies with materials, services, and goods mostly on the Polish market i.e. from the entities registered in Poland. However, many suppliers, domestic manufacturers import raw materials and due to this fact the part of purchases from the Polish entities is also the indirect import. Therefore, the exchange rates have influence on the purchased goods both imported and bought in the domestic market. Any of suppliers outside Grupa Apator supplying Grupa Apator in 2012 did not exceed 10% of revenues from sale the company Apator S.A. for 2012. The mutual relations within the Apator Group were discussed in the item 35. The essential raw materials used in the production process of the companies of Grupa Apator are the metallurgical goods (non-ferrous materials, steel, joining elements etc.) and the plastic products, plastic and chemical raw materials.
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Referring to the prices of materials in the world economy, it should be indicated that in 2012:
there was a further decrease of prices and an improvement of the electronic components availability,
the prices of plastic and derivatives were stabilized,
Copper prices were kept at a very high level and the changes during the year were dynamic. Referring to 2013, we can expect:
the maintenance of electronic components prices, with a tendency to extend the delivery terms,
the maintenance of high plastic prices of,
copper prices to remain high, but with a tendency to fall.
23. Description of the basic economic and financial figures disclosed in the annual financial statement
23.1 Assessment of the factors and unusual events affecting the operational profit in the fiscal year with the determination of the level of influence of these factors or unusual events on the achieved result
The following unusual factors and events affected the activity of the Apator Group in 2012: Construction of a new plant of Apator SA in PSEZ and recognition of assets due to accountable capital allowance The completion of the construction of the plant was made pursuant to the planned date, i.e. March 2012. The transfer of total business activity in the second quarter of 2012 was performed fluently. While transferring the production processes, the company incurred higher costs such as e.g. costs of moving, costs of assets amortization in two locations, financing of temporarily increased inventories. The purchase of the plot of land, changing the status of farm land and the construction of the plant collectively cost PLN 38 M, which also affected the financial costs due to the temporary higher levels of crediting. However, the company operating in the zone incurred additional capital expenses for production process improvement. Collectively from the moment of the building permit (permit No. 69/PSSE for conducting the business activity within PSEZ in Ostaszewo of December 28, 2010) to December 31, 2012 the investment expenses amounted to PLN 46 855 k (after discounting PLN 44 544 k). As of June 1, 2012 the assets for the deferred corporate income tax were recognized in the amount of PLN 20 357 k due to usable tax credit. As of December 31, 2012, the assets amounted to PLN 20 006. Revenue from the sale of the real property in Toruń On July 5, 2012 the company Apator SA sold real property located in Toruń, ul. Żółkiewskiego in favour of Galeria Copernicus Toruń 2 Sp. z o.o., with its registered office in Warsaw. The revenue from the sale of this real property amounted to PLN 34.1 plus additional PLN 2 M for the performance of a road investment and support of the Toruń City enterprises by Apator SA. The advance payment in the amount of PLN 7 000 k was paid on April 21, 2012. The remaining PLN 29 072 k was deposited into a reserved account on April 22, 2011. Schedule of payments from the reserved account is as follows:
The amount PLN 11 036 k - payment after concluding the agreement and provision of the protocol of transfer and receipt;
The amount PLN 9 036 k - payment after providing the copies of the land and mortgage register showing the buyer as the perpetual user of the property;
The amount PLN 2 000 k - payment in parts (to October 31, 2012) pursuant to the schedule for the demolition of the buildings on the property;
The amount PLN 5 000 - payments after providing the final decision regarding the transfer of the temporary building permit to the buyer;
The amount of PLN 2 000 - payments after presentation of the protocol of transfer and receipt confirming the performance of the road investment in the area of the property.
All amounts specified in this schedule are credited the company’s account. The result from the sale of the real property after tax amounted to PLN 17.2 M.
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23.2 Comprehensive income statement - performance of the income resulting from business activity
Description 2011 2012
Change year/year
Dynamics
(000'PLN) (000'PLN) (000'PLN) (%)
Revenues from sale in total 537 019 668 824 131 805 124,54%
Cost of products,goods and materials sold 371 688 483 950 112 262 130,20%
Gross profit from sale 165 331 184 874 19 543 111,82%
Selling costs 30 445 31 247 802 102,63%
Overheads 66 008 75 980 9 972 115,11%
Profit on sale 68 878 77 647 8 769 112,73%
Other operating revenues 9 493 31 018 21 525 326,75%
Other operating costs 5 652 12 379 6 727 219,02%
Profit on operation 71 760 98 492 26 732 137,25%
EBITDA margin * 88 535 116 785 28 250 131,91%
Financial revenues 1 770 3 505 1 735 198,02%
Financial costs 8 868 9 839 971 110,95%
Gross profit 64 662 92 158 27 496 142,52%
Income tax 12 851 -3 562 -16 413 -27,72%
Net profit 51 811 95 720 43 909 184,75%
*In 2012 EBIDA margin included the proceeds due to the sale of property and the influence is 21.253.000 PLN The consolidated gross profit on sales increased from the amount of PLN 165 331 k in 2011 to PLN 184 874 k in 2012 (by PLN 19 453 k). It is the increase by 11.82% at the increase of the revenues from sale by 24.54%. The margin on gross sales decreased from 30.79% (2011) to 27.64% in 2012. The share of the total costs of sold products, goods and materials in the revenues from sales increased from 69.21% in 2011 to 72.36% in 2012 that was reflected by the lower level of margin on sales. In 2012 it was caused by:
The change of the sales structure of gas meters- the significant increase of the sales of gas meters containing the electronic components (for Flonidan DC A/S, Denmark)- this type of gas meters is characterized by the higher level of material costs and thus the lower margin on sales;
The lower margin on sales generated by Apator SA (it was described in the separate Management Report of Apator SA in 2012 - item 26.2);
Very low increase of revenues from sales (by circa PLN 55.4 M YOY) generated by Newind company at low margin on sales (at the level circa 1.5%).
The increase of the revenues from sales of products and services (by PLN 105 948 k) allowed to generate the higher gross profit on sales of products and services by PLN 17 705 (in 2012: PLN 174 348 k, in 2011: PLN 156.643 k). This profit was generated as a result of revenues from sales in all branch and geographic segments. The revenues from sales of goods and materials in 2012 increased by PLN 25 857 k. It allowed to get higher gross profit from sales of goods and materials from the amount of PLN 8 688 k in 2011 (at revenues PLN 42 966 k) to the amount of PLN 10 526 k in 2012 (at revenues at the level of PLN 68 823 k). The share of the cost of sold goods and materials in the revenues from sales increased from 79.78% in 2011 to 84.71% in 2012.
The distribution costs in 2012 increased by PLN 802 k in comparison to 2011, and the administrative expenses increased by PLN 9 972 k. The share of the distribution costs in the revenues from sales decreased from 5.67% in 2011 to 4.67% in 2012 similarly to the administrative expenses from 12.29% in 2011 to 11.36% in 2012. The decreases of the proportion share follow the significant increase of revenues and the strict supervision over costs.
The primary costs of Grupa Apator in 2012 amounted to PLN 540 766 k and were higher by PLN 99 094 k (by 22.44%) from the costs incurred in 2011.
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The biggest increase of the primary costs was in the field of: 1. Materials and energy consumption by PLN 59 813 k (by 27.31%) that is a result of the increase of sales
of Grupa Apator’s products in 2012 in comparison to 2011 by PLN 105 948 k (i.e. 21.44%). 2. Third party services by PLN 22 717 k (by 32.82%) that is a result of mandating by Apator SA the part of
its production process in the extent of SMD board and Through-Hole Technology of electronic energy meters to the third companies.
3. Employee benefits by PLN 14 726 k (by 12.41%) what is a result of:
Increase of the employed persons (increase by 73 persons YOY) in Grupa Apator;
Increase of employees’ salaries.
The table below presents the cost structure by nature in 2011-2012.
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30
In 2012 the result of the other operating activity closed with the profit amounted to PLN 18.639 k (in 2011: PLN 3,841 k). In 2012 the total operating revenues amounted to PLN 31.018 k and increased by PLN 21 525 k in comparison to 2011. The highest amount in revenues (PLN 23 527 k) and the highest increase of these revenues YOY (PLN 22 256 k) is the profit on sales of P,P&E that is the direct consequence of the sale of the real property on July 5, 2012, located in Toruń, ul. Żółkiewskiego in favour of Galeria Copernicus Toruń 2 Sp. z o.o. The profit before tax on this transaction amounted to PLN 21 253 k. The next item is the release of the provisions for employee benefits (PLN 3 722 k) that had influence on release of the provisions for employee benefits in Apator Powogaz SA due to implementation of new Corporate Collective Labour Agreement. On the list of other operating expenses, the highest value is attributable to the write-down of entitlements in the amount of PLN 2 38 k that was affected by the revaluation of the real property in Pniewy (unused in the business activity) belonging to Apator Powogaz SA. The total operating costs in 2012 amounted to PLN 12 379 k and increased by PLN 6 727 k in comparison to 2011. The detailed specification of the operating revenues and costs was presented in the item 8.22 of the Annual Consolidated Financial Statement for 2012 of Grupa Apator (Annual Report RS-2012). The EBIDTA margin for 2012 amounted to PLN 116 785 and was higher by PLN 28 250 k in comparison to 2011. The essential influence on the amount of this margin came from the profit from the real property sale (PLN 21 253 k) and the high level of amortization (PLN 18 293 k). The gross profit before tax of Grupa Apator in 2012 amounted to PLN 92 158 k and was higher by PLN 27 496 k in comparison to 2011. The financial revenues and costs had a significant influence on this profit. The financial revenues increased the operating profit by PLN 3 505 k and the finance costs decreased it by PLN 9 839 k. The result on the financial activity was closed with the loss in the amount of PLN 6 334 k. On the list of finance revenues the higher amount and the higher influence of their growth was attributable to revenues due to currency transactions amounting to PLN 2 176 k. The increase of the finance costs (PLN 9 839 k) was mostly affected by:
exchange losses: PLN 5 131 k (increase by 1 272 k YOY),
Interest from credit and loans: PLN 3 054 k (increase by 483 k YOY),
Sales of shares and stock at cost in the amount of PLN 1 961 k (increase by PLN 1 945 k YOY), connected with the cancellation of 2 M bearer shares of Apator SA, acquired by Apator SA free of charge from the subsidiary Apator Mining Sp. z o.o.
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31
The detailed specification of the finance income and cost was presented in the item 8.23 of the Annual Consolidated Financial Statement for 2012 of Grupa Apator (Annual Report RS-2012). The net profit level in 2012 amounted to PLN 95 720 and increased by PLN 43 909 k so by 84.75% in comparison to 2011. It was mainly caused by
Results generated in the aforementioned activity of Grupa Apator, in particular the increase of sales,
Deferred corporate income tax asset the due to possible tax credit under the business activity run in the economic zone by Apator SA,
Sales of the real property of Apator SA located in Toruń, ul. Żółkiewskiego 21/29,
Limitation of the selling costs and overheads.
Financial result 2011
(000’PLN) 2012
(000’PLN) Change yoy
(000’PLN Dynamics
(%)
Gross profit on sale 165 331 184 874 19 543 111,82%
Profit on sale 68 878 77 647 8 769 112,73%
Profit on operation 71 760 98 492 26 732 137,25%
EBITDA 88 535 116 785 28 250 131,91%
Gross profit 64 662 92 158 27 496 142,52%
Net profit 51 811 95 720 43 909 184,75%
The table below presents the basic ratios for 2011-2012.
Balance
31.12.2011 31.12.2012
value structure value structure Change
yoy Dynamics
(000'PLN) (%) (000'PLN) (%) (000'PLN) (%)
Total assets 466 080 100,00% 504 448 100,00% 38 368 108,23%
Total assets, including: 213 834 45,88% 249 359 49,43% 35 525 116,61%
fixed assets held for sale*) 10 427 2,24% 0 0,00% -10 427 0,00%
Current assets (excluding fixed assets held for sale) 252 246 54,12% 255 089 50,57% 2 843 101,13%
Total liabilities 466 080 100,00% 504 448 100,00% 38 368 108,23%
Equity 236 066 50,65% 299 592 59,39% 63 526 126,91%
Liabilities 230 014 49,35% 204 856 40,61% -25 158 89,06%
23.3 Statement of financial condition
The balance sum as at December 31, 2012 amounted to PLN 504 448 k, which signifies an increase by PLN 38 368 k in comparison to December 31, 2011. The increase of the balance sum of Apator SA at the end of 2012 in comparison to 2011 was caused by:
deferred income tax assets (increase by PLN 18 651 k YOY)- mainly as an asset due to the possible tax credit under the business activity run in the economic zone;
Granted long-term borrowings in the amount of PLN 8 175 due to a loan granted to the joint-controlled company GWi Ltd. by Apator Metrix SA;
Equity (increase by PLN 63 526 k YOY)- mainly the other capitals due to divided net profit for 2011 and undivided net profit for 2012 including the write-off of this profit in a form of advance payment for the expected dividend for 2012 (parent entity Apator SA).
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On the other hand, at the end of 2012 there was a decrease in the following items of the statement of financial position:
Long-term liabilities (decrease by PLN 8 680 k)- mainly as a result of the repayment in September 2012 of the long-term credit in the amount of PLN 15 M taken in November 2011; this credit was designated to fund the current business activity of Apator SA;
short-term liabilities (decrease by PLN 16 478 k)- mainly as a result of the last instalment of the long-term credit repaid in June 2012 in the amount of 11 M (the amount of the total credit was PLN 45 M and was designated to finance the acquisition of Powogaz SA in 2008).
23.4 Information on drawn and terminated borrowing agreements
The status of credits in the companies of Grupa Apator at the end of 2011 and 2012 is as follows:
Credits
31.12.2011 31.12.2012
value structure value structure Change
yoy Dynamics
(000'PLN) (%) (000'PLN ) (%) (000'PLN) (%)
Long-term credits, including: 21 669 27,10% 12 887 23,13% -8 782 59,47%
payable over 1 year to 2 years 16 334 20,43% 1 222 2,19% -15 112 7,48%
payable over 2 years to 5 years 4 001 5,00% 11 665 20,94% 7 664 291,55%
payable over 5 years 1 334 1,67% 0 0,00% -1 334 0,00%
Short-term credits 58 299 72,90% 42 833 76,87% -15 466 73,47%
Total credits 79 968 100,00% 55 720 100,00% -24 248 69,68%
The aforementioned borrowing is drawn in the Polish currency. In 2012, no banks terminated their credit agreements. As of the date of this financial statement Grupa Apator has no debt in the form of borrowings from not related entities.
The detailed conditions for the credit agreements of Apator SA are presented in item 8.17 of the Annual Consolidated Financial Statement for 2012 of Grupa Apator (Annual Report R-2012).
23.5 Information on granted loans in the current fiscal year
In 2012 Apator Metrix SA granted its subsidiary GWi Ltd., jointly three borrowings in the total amount of GBP 1 675 k (i.e. PLN 8 175 k).
Entity,the loan was granted to Title
Amount of loan acc. to the contract
Date of the loan
granted
As at 31.12.2012
Currency Maturity
date Interest rate
GWI Ltd - joint control entity
loan granted for current activity
1 450 000,00 05.09.2012 1 450 000,00 GBP 2016 3 percentage points above base rate of
Barclays Bank PLC
GWI Ltd - joint control entity
loan granted for current entity
150 000,00 05.09.2012 150 000,00 GBP 2016 3 percentage points above base rate of
Barclays Bank PLC
GWI Ltd - joint control entity
loan granted for current entity
75 000,00 03.10.2012 75 000,00 GBP 2016 3 percentage points above base rate of
Barclays Bank PLC
TOTAL
1 675 000,00
1 675 000,00 GBP
The information on loans granted by companies of Grupa Apator is presented in item 8.10 of the Annual Consolidated Financial Statement for 2012 of Apator SA (Annual Report R-2012).
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23.6 Information on granted and received warranties and guarantees in the relevant fiscal year
The information on granted and received warranties and guarantees in the fiscal year was placed in item 8.33 of the Annual Consolidated Financial Statement for 2012 of Grupa Apator (Annual Report RS-2012). Moreover, in 2012 Apator SA did not grant and receive any warranties, but it held:
Active guarantees issued by (granted by) Bank Handlowy w Warszawie SA and TU Euler Hermes SA against various beneficiaries (as specified in the Management Report of Apator SA in 2012); - item 26.6) ;
Active joint and several sureties of the following subsidiaries: Apator Mining Sp. z o.o., FAP Pafal SA and Apator Metrix Sp. z o.o.:
For the amount of PLN 14 M including due interest, commissions, fees and other costs in order to secure the payment of future receivables attributable to the bank, in case Apator SA does not fulfil its obligation toward Bank Handlowy w Warszawie SA due to the guarantee issued by Bank Handlowy w Warszawie SA in favour of the Galeria Copernicus Toruń 2 Sp. z o.o. - this surety expired on July 11, 2012 when Apator SA and Galeria Copernicus Toruń 2 Sp. z o.o. concluded the final real property sale agreement;
For the amount of PLN 12 M in order to secure the payment of future receivables attributable to Bank Handlowy w Warszawie SA, in case Apator SA does not fulfil its obligations toward this bank due to the working capital facility to the amount of PLN 12 M. - this surety expired on September 19, 2012, when the Annex to the credit agreement was signed changing the type of collateral for the bank;
For the amount of PLN 15 M due to a short-term loan granted by Bank Handlowy w Warszawie SA in favour of Apator SA- this surety expired on September 21, 2012, because Apator SA repaid this loan.
In 2012 Apator Rector Sp. z o.o. granted the surety for its subsidiary Newind Sp. z o.o. for the amount of PLN 10 299 k as a surety for liabilities. The guarantee agreement expired on 31.12.2012. Moreover, Apator Powogaz SA guaranteed two notes securing the insurance guarantee for the performance bond by its subsidiary Apator Telemetria Sp. z o.o. for the total amount of PLN 65 k for Management Board of Gospodarka Komunalna w Jerzycach Sp. z o.o. The guarantee expires as follows:
The first note for the amount of PLN 50 k expires on 02.12.2013,
The second note for the amount of PLN 15 k expires on 17.12.2015.
23.7 Contingent liabilities
The information on contingent liabilities was placed in item 8.33 of the Annual Consolidated Financial Statement of Grupa Apator for 2012 (Annual Report RS-2012).
23.8 Lease and rent
The information on leasing and rent was placed in items 8.27 and 8.28 and 8.23 of the Annual Consolidated Financial Statement of Grupa Apator for 2012 (Annual Report RS-2012).
23.9 Statement of cash flows
At the end of 2012 Grupa Apator generated positive cash-flows from its operating activity in the amount PLN + 97 913 k and from its operating activity and negative in the amount of PLN - 12 106 k from its investment activity and financial activity in the amount of PLN – 66 178 k. Negative cash-flows from investment activity are a result of offsetting the proceeds from sales of P, P&E in the amount of PLN 28 160 k (mainly proceeds from sales of the real property in Toruń, ul. Żółkiewskiego in favour of Galeria Copernicus Toruń 2 Sp. z o.o.), expensed related to acquisition of intangible assets and P, P&E (in total PLN 28 157 k- mainly investment expenses in new plant in PSEZ) and granted borrowings (in total PLN 8 175 k) for GWi Ltd.
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The negative cash-flows from financial activity are mainly the result of:
Negative balance due to taken and repair short-term and long-term borrowings (PLN – 23 502 k),
Payment of the dividend for shareholders for 2011 (PLN 36.644 k). On the other hand, the profit from the business activity of Grupa Apator and changes in the trade receivables. The cash-flows presented above at the end of 2012 present the cash in the amount of PLN +43.719 k.
23.10 Forward contracts
The forward contracts in Grupa Apator are a regular element of its business activity; they are concluded pursuant to the hedge policy and are covered by the currency exposure. In 2012 export constituted 36.01% (PLN 240 813 k) of total revenues.
As of December 31, 2012 Grupa Apator As at December 31, 2013 Apator SA has concluded hedge contracts in 2011 and 2012 in the total amount of EUR 11 900 k with the average weighted Euro exchange rate PLN 4.35 and the following time of performance:
in 2013: EUR 8.900 k at the average weighted exchange rate of PLN 4.28,
in 2014: EUR 3.000 k at the average weighted exchange rate of PLN 4.55. The effect of the forward contracts on Grupa Apator’s profit before tax is presented in the table below:
Effect of forward contracts on the result of group of Apator (000’PLN) 2011 2012
Effect on financial revenues 2 209 1 770
Result of forward contracts 4 065 1 409
Evaluation of forward contracts -1 856 361
Effect on financial costs 3 013 -406
Result of forward contracts 1 592 1 243
Evaluation of forward contracts 1 421 -1 649
Effect on result before tax -804 2 176
24. Assessment of the possibility of the executing the investment plans, including equity investments in comparison to the amount of possessed assets, taking into consideration the possible changes to the financial structure of this activity
The 2013 Grupa Apator investment plan concerns mainly the expenditure for property investments connected with automation of production processes, new technologies and expenditure for development work. They are estimated at the total level of PLN 25.8 M (performance in 2012: PLN 32.7 M). The expected expenditure in 2013 includes:
Modernization and recovery purchases and in all companies of Grupa Apator (new technologies, modernization of the machine park),
Investments connected with the automation of processes and increase of the production capacity in the new plant of Apator SA in PSEZ,
Purchase of equipment related to the implementation of new products and modernization of the existing ones regarding the market requirements.
These investments are necessary for:
Provision of the further increase of the revenues and that requires the implementation of new and modernization of the offered products,
Restructuring and combination of the production processes (e.g. central plastic processing) in Grupa Apator,
Increase of the production capacity in order to satisfy the increasing market needs,
Reduction of the productions costs, improvement of the technical culture and work organization. The basic source of financing of the aforementioned investments will be the own funds and the bank credit. In the second quarter of 2013 it is planned to increase the share capital of the subsidiary of Apator Powogaz SA, which amounts to PLN 753.5 k. This increase will be performed via issuance of 64 930 shares with the nominal value equal to the issue value in the amount of PLN 50 each. These shares will be taken over by the
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parent entity Apator SA and paid for by its own funds. Moreover, Apator SA does not plan any expenditure on financial assets in 2013.
25. Assessment of financial resources management, in particular considering the ability to meet liabilities taken and a determination of the possible threats and actions, which were taken or are to be taken by the issuer in order to counteract said threats
The management of financial resources in Grupa Apator is made basing on the following criteria:
Verification of the financial condition of the current and potential clients (using the information published in Monitor Polski B and reports of credit information agencies,
Collecting prepayments or immediate settlements with the new clients, collateral of the trade credit,
Current monitoring of the settlements with recipients and suppliers,
Overdue receivables collecting,
Determination of possible favourable terms for repayment of liabilities,
Financing of the current business activity using the overdraft, which level automatically is reduced by any proceed of cash,
Obtaining the credits and other bank facilities under the most favourable conditions,
Replacement of the deposits in the tenders into the bank or insurance guarantees. The basic assumption for the management of the Grupa Apator’s financial resources is maintain the strong and safe position regarding the financial liquidity of the particular companies, which is the ground of trust from other commercial partners, creditors and the market and it allows to perform the expected plans and further development of each of companies as well as entire Grupa Apator. The companies monitor the figures affecting the amount of the financial resources on a current basis, aiming at maximum acceleration of the cash flows, both by the analysis of the inventories turnover cycle and the fastest receivables collection. In order to prevent from the possible incorrectness in the management of the financial resources, the companies of Grupa Apator adopted the code of conduct in the following fields: sale, collateral of trade credit, monitoring of receivables, current information about the financial standing for the Management Board and Directors. Analysis of the basic financial ratios confirms the stable financial condition. It is certified by the profitability ratios, which have the positive values as a result of generated profits on all business activity levels. Grupa Apator finances its business activity both by equity and third party capital. The proportion of the financing structure is presented below.
Financing Structure 2011 2012 Change
Equity 50,65% 59,39% + 8,74 pp
Financial capital 49,35% 40,61% - 8,74 pp
Total 100,00% 100,00%
In 2012 in the structure of Grupa Apator’s capitals, equity was dominant. Their share increased by 8.74 p.p. in comparison to 2011 that is a result of decrease of the companies of Grupa Apator the liabilities due to third capital (credits) in 2012. The decrease of credit engagement referred mainly to:
Apator SA as a result of the repayment in September 2012 of the long-term credit in the amount of PLN 15 M taken in November 2011; this credit was designated to fund the current business activity of Apator SA;
Apator Mining Sp. z o.o. as a result of repayment of the short-term overdraft in the amount of PLN 4 923 k;
Pafal SA as a result of repayment of the short-term overdraft in the amount of PLN 7 186 k; Moreover, as a result of concluding the final contract with Galeria Copernicus Toruń 2 Sp. z o.o., the liability in the amount of PLN 7 M due to advance payment paid under the preliminary agreement on sales of the real estate in Toruń, ul. Żółkiewskiego 21/29 expired in the Apator SA company. In 2011 the financing structure was contrary. The share of the third party capital in Grupa Apator increased in comparison to 2010 that mainly was a result of the temporary credit engagement performed by the Apator SA company due to the construction of new plant in PSEZ.
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The reduction of the third party capital engagement in the financing structure of Grupa Apator causes that the Group has lower levels of the current liquidity ratio (1.60 for 2012; 1.49 for 2011) and also the quick liquidity (1.01 in 2012 and 0.97 in 2011). The structure of assets in 2012 shows a slight higher level of current assets (50.57%) over non-current assets (49.43%). The significant material components of the current assets are as follows: total short-term receivables (44.82% of total current assets), inventories (36.87%) and cash and cash equivalents (17.14%). Information on cash flows presented in the statement of cash flows specifies the origin sources and amount of the cash generated by the company as well as the method of spending. The net financial results generated by Grupa Apator cause the continuous increase of the equity. The diagram below presents the dynamic of equity and net result of Grupa Apator for the last six years.
26. Other information by which to assess staff, assets, financial standing, financial result and its changes, and the information which is imperative to the assessment of Grupa Apator's ability to perform its liabilities
Referring to the resignation of the present President of the Management Board of Apator SA- Janusz Niedźwiecki- from running as a candidate for the role of President of the Management Board for the next term of office, on October 23, 2012, under the decisions of the Supervisory Board of Apator SA Mr Andrzej Szostak has been elected as the President of the Management Board of Apator SA for 2013-2015.
27. Changes in the basic management principles of the issuer’s entity and its capital group
Indication of the results of changes to the entity’s structure in 2012, including, as a result of the business combination, acquisition or sale of the entities of capital group, long-term investments, division, restructuring or discontinuance of the activity:
1. In Q1 2012 the shares of Apator Powogaz SA in Apator Telemetria Sp. z o.o. increased, because in March 2012 Mr Arkadiusz Oporski, a partner of Apator Telemetria Sp. z o.o., singed the agreement
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to dispose 108 shares of Apator Telemetria for the amount of PLN 1 000 000.08. It increased the interest of Apator Powogaz SA in Apator Telemetria Sp. z o.o. from 50.8% into 61.6%.
2. On September 5, 2012 the subsidiary Apator Metrix SA concluded the agreement to purchase 4 M shares (i.e. 50%) in George Wilson Industries Ltd. (GWi) with the registered office in Coventry, Great Britain. This company became a company that is under joint-control with Apator Metrix SA.
3. On October 17, 2012 the General Meeting of ZAO Apator Elektro (joint-stock company) took a decision to reorganize the company by its liquidation and the establishment of the new company OOO Apator Elektro. On November 26, 2012 the new company OOO Apator Elektro (limited liability company) was established, where Apator holds 50% of shares. OOO Apator Elektro took over the role of commercial mediator on the Russian market, in place of ZAO Apator Elektro. The start-up of the activity in the form of the limited liability company is based on legal conditions and is connected with the tax burden level in Russia. On January 15, 2013 the jointly-controlled company ZAO Apator Elektro was liquidated.
Except for the aforementioned events, in 2012 Apator SA did not combine with any other entity, did not acquire or dispose of any entity in the group, there were no divisions, restructuring, or discontinuance of the business activity and long-term investments.
28. Information on issuance of securities
In the period covered by this report (reporting period 2012) any of the companies belonging to the Apator Group did not issue any securities. On April 18, 2013 the General Meeting of Apator Powogaz SA took decision to increase the share capital from the amount of PLN 753.5 k to PLN 4 000 k via issue of 64 930 shares. These shares will be taken over by the parent entity Apator SA and paid for by its own funds.
29. Information on employee stockownership plan control system
The Issuer does not perform any employee stockownership plans.
30. Brief description of significant achievements and failures of the issuer including the specification of the most important events in 2012
Significant achievements and failures in 2012:
Achievements:
1) Starting the business activity of Apator SA within the Pomeranian Special Economic Zone (including the recognition of the deferred corporate income tax due to possible tax credit).
2) Sale of the real property of Apator SA in Toruń, ul. Żółkiewskiego in favour of the Galeria Copernicus Toruń 2 Sp. z o.o.
3) Increase of the domestic and export sales by value in comparison to 2011.
Failures:
1) Decrease of the gross return on sale and return on sale in Grupa Apator, among others as a result of high turnover of the subsidiary Newind Sp. z o.o. and minimum margin on sales. `
Other important events for Grupa Apator in 2012:
1. On January 23, 2012, at the EGM the free share redemption and cancellation without consideration programme was established.
2. On January 23, 2012 the Supervisory Board selected the company KPMG Audyt spółka z ograniczoną odpowiedzialnością sp. k. to review and audit the separate and consolidated financial statements for 2012-2013.
3. On April 13, 2012, Apator SA acquired 2 million of own bearer shares with the nominal value PLN
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0.10 each, free of charge, from the subsidiary Apator Mining Sp. z o.o. The transaction was made outside the regulated market.
4. On June 18, 2012 the Supervisory Board of Apator SA announced that the President of the Management Board of Apator SA- Janusz Niedźwiecki submitted a written statement on his non-standing as a candidate for the Management Board of Apator SA for the next term of office. The present term of office of the Management Board ends on June 24, 2013 when the Ordinary General Meeting of Shareholders will be held. The Supervisory Board proposed Janusz Niedźwiecki stand as a candidate for the Supervisory Board after the completion of the term of office of the President of the Management Board, and declared its support.
5. On June 18, 2012 the Ordinary General Meeting of Shareholders of Apator SA adopted the amount of dividend for 2011, designating the amount of PLN 24 830 271.00 from the profit 2011, that constituted PLN 0.75 gross per share. The payment was made on July 23, 2012 to the shareholders holding shares on July 6, 2012.
6. On June 18, 2012 The Ordinary General Meeting of Shareholders decided to redeem and cancel 2 000 000 own bearer shares of Apator SA and to reduce the share capital.
7. On June 29, 2012 The Management Board of Apator announced that Apator SA repaid the last instalment of the credit drawn on April 17, 2008 to purchase the shares of Apator Powogaz SA. The last instalment amounted to PLN 11M, and the amount of the total credit: PLN 45 M.
8. On July 5, 2012, Apator SA concluded the final agreement on the sale of the perpetual usufruct right to the land and buildings constituting the separate subject of property, located in Toruń, ul. Żółkiewskiego 21/29. The sale price of this Real property amounted to PLN 36 072 k, including PLN 2 M due to the performance of a road investment by the Seller. The agreement was concluded with the Galeria Copernicus Toruń 2 Sp. z o.o.
9. On July 16, 2012 Apator SA received the decision of the District Court in Toruń, under which on July 12, 2012 the decrease of the share capital from PLN 3 510 702.80 to PLN 3 310 702.80, as a result of the redemption and cancellation of these shares, was registered. The capital was decreased by cancellation of 2M bearer shares of Apator SA, acquired free of charge from Apator Mining Sp. z o.o.
10. As of August 9, 2012 under the decision of the District Court in Wrocław, the Newind Grupa Apator Sp. z o.o. company acts as Newind Sp. z o.o.
11. On October 23, 2012 the Management Board of Apator SA announced its decision regarding the payment of the advance payment for the expected dividend from the profit of 2012 in the total amount of PLN 13 242 811.20, so PLN 0.40 gross per share.
12. On October 23, 2012 the Supervisory Board of Apator SA elected Mr Andrzej Szostak as a candidate for the President of the Management Board of Apator SA for the next term of office within 2013-2015.
31. Characteristic of external and internal factors important for the development of Apator SA and Grupa Apator, including the significant risk and threat factors and description of the business activity development prospectus
Before making any investment decisions, the possible investors should consider the risk factors specified below and other information included in this report. Each of the described factors may affect the business activity, financial standing and development prospectus of the Company and thus may affect the stock price. The development and risk factors described below are the sole risks to which the Grupa Apator is exposed. The Issuer presented only the factors which are deemed to be important. There may be other risk factors, which, in the Issuer’s opinion, are not important now or which have not been identified yet and which might cause the aforementioned effects. In presenting the order of the risk factors, the Issuer does not consider their probability or their importance. The development, risk and threat factors listed below refer to both the company Apator SA and entire Group.
31.1 Zone permit and location of the business activity in PSEZ
On December 28, 2010, Apator SA received Permit No. 69/PSSE to conduct the business activity within PSEZ in Ostaszewo, kujawsko-pomorskie Voivodship, issued by the Pomeranian Special Economic Zone (PSEZ). This permit was granted to perform the production, trading and service activity in the field of goods and services produced within the Zone and services rendered within the Zone specified in the Permit using
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the catalogue of the Polish Classification of Goods and Services of the Main Statistical Office. Pursuant to the conditions specified in the Permit, Apator SA is obliged to:
Incur the investment expenses amounting to at least PLN 50 M within the PSEZ territory to December 31, 2014,
Employ at least 100 employees in the period up to December 31, 2014, and keep this level of employment to December 31, 2015;
Complete the new investment to December 31, 2014;
Run the business activity for a period not shorter than 5 years from the moment, when the entire investment is completed.
Observe PSEZ Regulations and other legal regulations for the Zone operation. Apator SA chose to use the tax credit due to the costs of the new investment. The amount of credit (available support) attributable to the company is a product of the “support intensity” (for kujawsko-pomorskie Voivodship it is 50%) and the amount of investment (minimum PLN 50 M- maximum PLN 74 M). CIT exemption is attributable from the month when the investment expense was incurred until the pool of support is exhausted. Hence the available support for Apator SA to be used up to 2020 is PLN 25-37.5 M. It is an exemption for corporate income tax, from the income generated in the zone sales. Apator SA started its business activity in the PSEZ on June 1, 2012. The amount of tax exemption used in 2012 is PLN 1 354 k.
31.2 External and internal factors important for Grupa Apator’s development
External development factors
Program for the replacement of the regular electric energy meters in Poland with "smart meters”,
Intensive replacement of the usual meters with smart meters in Western Europe:
Holland- gas and electric energy,
Great Britain, Ireland- gas and electric energy,
Germany- electric energy,
Italy - gas.
Increase in the investment in Polish energy companies working in low voltage networks.
Increase in IT expenditures (in particular passportization).
Internal development factors
Consistently performed business strategy based on two market segments.
Transfer of the business activity of Apator SA to a modern plant in the Pomeranian Special Economic Zone.
Implementation of the strategy of electric energy meter production in one place in Grupa Apator, i.e. Apator SA.
Intensive development works, in particular in the field of measuring systems.
Joint marketing, logistic, purchase activities in Grupa Apator,
Certification of goods pursuant to the MID Directive of the European Union.
Conducting further activities aimed at increasing export sales.
Implementation of the CRM system in Grupa Apator (management of client's relationships).
Automation of gas meters and electric energy meter production.
31.3 Risks and threats
In the field of significant risk and threat factors, Apator SA pays attention to: External risks and threats
Economic situation in the European Union.
Currency risk related to the exchange rate of EUR (export) and USD (import).
Consolidation of Polish Power generation.
The possibility of new players on the market connected with the implementation of “smart metering”.
There is no standard for “smart metering” in Poland.
No precise decision pertaining to the legalization of smart meters should be made - URE may extend this period for regular meters in order to reduce costs.
Internal risks and threats
A necessity of restructuring the employment in FAP Pafal SA upon moving the production of electronic electric energy meters to Apator SA. The business of FAP Pafal SA will be focused on the production of induction meters and metering services.
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The end of the three year term of office of the Management Board expiring in June 2013, upon the GMS (change of the person holding the position of the President of the Management Board).
Moreover, attention should be paid to the purposes and principles of financial risk management of Apator SA specified in item 8.26 of the Separate Financial Statement of Apator SA for 2012 (Annual Report R-2012).
31.4 Development prospectus
Grupa Apator aims at achieving and keeping the leading position in the East-Central Europe in the field of the development and sale of switch gear and measurement systems and instruments. Grupa Apator wants to be a beneficiary of the technological turning point, which is expected due to the plans for the implementation of Smart Power Grids in Poland. Smart metering will be the part of this initiative. As Frost & Sullivan reports the market of smart meters in Europe will increase six fold to 2017 in comparison to 2012 with the average return rate of approximately 29%. 150 M intelligent meters are to be installed in Europe to 2020. Apator SA carefully follows the implementation of “Smart Grids" and the standards and technical standards of this field. This warrants an opportunity to offer new products in the switchgear sector (which also may gain benefits due to development of the smart power grids). The most important strategic initiatives which were undertaken by Grupa Apator in 2011-2013 are as follows: Geographical expansion Grupa Apator focuses on the following key geographical markets: countries of East-Central Europe and Russia and CIS, Germany and Austria, Benelux, Great Britain, Switzerland and Turkey. One of the most important sectors of the capital group expansion is Central and Eastern Europe. The strategic goals of the company also include the Apator brand achieving a strong position on these markets. Technological development The Grupa Apator relies on the development of the technology, products and services related to the economic management of energy, measurements, optimization of network operation and modern switchgear equipment. The Group is also interested in offering comprehensive services for industry and institutional recipients aiming at the optimization of energy and other utilities consumption (consultancy, software, hardware). Grupa Apator will provide supporting products for renewable energy resources and will develop an offer for assets inventory services (passportization) for distribution companies. System development Grupa Apator aims to maintain its leading position in the measuring market. The Group wants to participate in the first big implementation of the remote reading and measurement management abroad. The development of multi-energetic systems will be accelerated by agreements, alliances, purchases of ready technologies and licenses and companies. Clients’ data base expansion The Grupa Apator intends to offer both present and new products and services to the new groups of clients. Apart from the industry and institutional recipients, the company also addresses its offer to installers, integrators, housing cooperatives and intends to strengthen its share in the sale of water and heat distribution plants. Grupa Apator will also put into production new types of advanced electronic meters with increased precision and with improved remote communication options. Apator collaborates at designing standards for smart metering in Poland. Other factors One of the main strategic purposes is the continuous improvement of the quality and reliability of the goods that will allow to increase the share in the demanding foreign markets (West Europe). Grupa Apator is increasingly participating in alliances, consortia and strategic initiatives aimed at the popularization of the smart metering idea and the establishment of Polish and European measurement standards.
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32. Significant events after December 31, 2012 in the business activity of Grupa Apator
1. On January 11, 2013 the conversion of 20 362 registered shares preferred by votes in a 1:4 ratio into the bearer shares (no preference). As a result of this conversion the total number of votes was reduced from 56 430 504 to 56 369 418.
2. On January 15, 2013 the joint-controlled entity ZAO Apator Elektro was liquidated, where Apator SA held 50% of shares. The new company OOO Apator Elektro, with Apator SA having a 50% share, took over the role of commercial mediator on the Russian market, replacing ZAO Apator Elektro.
3. FAP Pafal SA purchased 181 210 own shares from Apator SA with consideration in the amount of PLN 27.00 per share i.e. for the total amount of PLN 4 892 670.00. FAP Pafal SA repurchased the aforementioned shares to redeem, cancel and reduce the share capital.
4. On January 24, 2013 the Warsaw Stock Exchange published a new composition of companies establishing the Respect Index. This index included 20 companies, among which Apator SA appeared for the fifth time.
5. On February 21, 2013 the Management Board of Apator SA declared the level of dividend in 2012 to amount to PLN 1.20 gross per share. For the dividend from the profit in 2012 the advance payment in the amount of PLN 0.40 gross per one share was paid in December 2012. The remaining declared amount of dividend, in the amount of PLN 0.80 PLN per one share, will be paid after it is approved by the General Meeting of Apator SA.
6. On March 13, 2013 the Provincial Administrative Court dismissed the complaint of Apator SA concerning the decision of the Principal of the Treasury Chamber in Bydgoszcz imposing corporate income tax liability for 13 in the amount of PLN 1 256 k on the Company (the securing nature of agreements for the derivatives, which were concluded in 2088 and from which it generated loss in 2009, was questioned in the justification of this decision). On April 12, 2013 the company Apator SA was served with a written justification of the judgment submitted a cassation appeal to the Supreme Administrative Court.
7. On March 20, 2013 Apator SA announced that within the period from January 13, 2012 to March 20, 2013 the companies of Grupa Apator (including Apator SA) entered into 42 agreements with PGE Dystrybucja SA, which jointly meet the criterion of the significant agreement. The total amount of agreements was PLN 22.9 M net and refers to the delivery of electric energy meters and network passportization.
8. On March 25, 2013 the subsidiary Apator Control Sp. z o.o. received the notice on being the winner of the limited tender organized by ArcelorMittal Poland, with the registered office in Dąbrowa Górnicza. The subject matter of this tender is the performance of the “Long Rail” Project, under which Apator Control Sp. z o.o. shall provide control equipment and industry automation equipment. The agreement amount is PLN 24.8 M net.
9. Since March 29, 2013 the Apator SA stock has been incorporated to the WIGdiv dividend index at WSE again.
10. On April 18, 2013 the General Meeting of Apator Powogaz SA took decision to increase the share capital from the amount of PLN 753.5 k to PLN 4 M via issue of 64 930 shares. These shares will be taken over by the parent entity Apator SA and paid for by its own funds.
33. Information on proceedings before court, competent authority for arbitrage proceedings of public administration authority pertaining to the liabilities of receivables of Apator SA or its subsidiaries
The proceedings held before the court (including two or more) referred to the liabilities and receivables of Apator SA or its subsidiaries, authority competent for arbitrage proceeding or public administration authority concerning the issuer or its subsidiaries do not constitute 10% of the issuer's equity.
Moreover:
1. The Public Prosecutor’s Office in Warsaw conducted preparatory proceedings on the suspicion of concealment of real data within 2008-2009 in the current and periodic reports referring to
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transactions of purchasing forward contracts and call and put options within 2008-2009. The proceeding was carried out as a result of a notice submitted by the shareholder.
Due to the fact that the company did not have any information about the proceedings, on August 21, 2012 the application for information was submitted to the Prosecutor’s Office. On September 3, 2012 Apator received a response to this letter announcing the discontinuance of the proceeding on January 20, 2011 under Art. 17 § 1 item 2 of the Code of Criminal Procedure, due to the lack of features of a prohibited act.
2. On October 11, 2011 the company received information from the Polish Financial Supervision Authority pertaining to the initiation of the administrative procedure on imposing an administrative penalty regarding the suspicion that the company Apator SA breached Art. 56 of the Act on public offering conditions governing the introduction of financial instruments to organized trading and public companies. On April 17, 2012 the Polish Financial Supervision Authority imposed a monetary penalty on Apator SA in the amount of PLN 150 k, because the Company did not publish and inform the PFSA and the company running the regulated market within the statutory term i.e. immediately, but no later than within 24 hours of becoming aware of confidential information on entering into exchange transactions by the company and its subsidiaries within 2008-2009, which carries the risk of material loss or increases risk significantly to the extent that they exceed the planned proceeds in foreign currency as at the transaction dates and might affect the separate or consolidated financial profit or loss of the issuer.
Apator SA did not agree with the decision of the PFSA, on May 4, 2012 submitted an appeal and now awaits another decision of the PFSA.
3. As a result of the tax control carried out in 2012 by the Treasury Control Office in Bydgoszcz it was stated that the agreements on the derivatives concluded by the Company did not hedge its revenues. And due to this fact it was stated that the Company inflated the revenues and tax expenses and therefore the tax obligation was calculated as PLN 1 256 k plus interest for delay. The Company appealed the aforementioned decision and dismissed all accusations, but it received a final decision from the Treasury Chamber in Bydgoszcz sustaining the tax obligation. Due to the fact that the company did not accept the received decision, it appealed it to the Administrative Court. On March 13, 2013 the Provincial Administrative Court dismissed the complaint of Apator SA concerning the decision of the Principal of the Treasury Chamber in Bydgoszcz imposing the corporate income tax liability for 2009 in the amount of PLN 1 256 k on the Company. On April 12, 2013 the company Apator SA was served with a written justification of the judgment submitted a cassation appeal to the Supreme Administrative Court.
4. The District Court in Ostrawa, branch Olomouc (Czech) conducts the application of Mr Jugoslav Manchaca (ex-partner of Metra Šumperk), proceeding against Apator Metra s.r.o. (Czech) regarding the payment of CZK 19,625 k (i.e. PLN 3.342 k at the exchange rate of NBP from 18 January 2012 amounting to PLN 0.1703 per CZK 1- as at the date of deferment) as the additional payment to the previously acquired share. Pursuant to the plaintiff the amount paid was too low. On January 18, 2012 the court proceeding was held, where the case was deferred for the unspecified period of time in order to develop the opinion by the expert.
34. Information on concluded agreements significant to the issuer’s business activity, including the agreements concluded between the shareholders known to the issuer, insurance agreements and cooperation agreements
The Apator SA Company has no information on any agreements concluded between the shareholders. Trade agreements: In 2012 the companies of Grupa Apator concluded the following significant trade agreements (amounting to over 10% equity of Apator SA):
1) On April 10, 2012 the Apator SA company and Cechtar Sp. z o.o. entered into a significant agreement. The subject matter of this agreement was the delivery of electronic, credit electric energy meters with the total amount of PLN 18 247 k net performed by Apator SA. Deliveries were performed from April 2012 to the end of 2012.
2) On May 21, 2012 Apator SA and Energa-Operator SA concluded a significant agreement pertaining to the delivery of credit electric energy meters with the total amount of PLN 24 873 k net. Deliveries are performed within 24 months to the relevant Branch Offices of Energa-Operator SA.
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3) On June 15, 2012 the Consortium, which leader is Comarch SA, and where the partner is Apator Rector Sp. z o.o. concluded the significant agreement with Tauron Dystrybucja SA on delivery and implementation of IT system for Management of Network Assets of Tauron Dystrybucja SA and providing the system service. The agreement amount is PLN 78.9 M net. The estimated amount of revenues for Apator Rector Sp. z o.o. due to this agreement is PLN 39.3 M net.
4) Since June 23, 2011 to June 22, 2012 the companies of Grupa Apator (including Apator SA) entered into 8 agreements with Energa-Operator SA, which jointly met the criterion of the significant agreement. The total amount of agreements was PLN 45.8 M net and refers to the delivery of electric energy meters.
5) On July 5, 2012, Apator SA concluded the final agreement of sale of the perpetual usufruct right to the land and buildings located in Toruń, ul. Żółkiewskiego 21/29. The sale price of this property was PLN 36 072 k, including PLN 2 M due to the performance of a road investment within the property territory. The agreement was concluded with the Galeria Copernicus Toruń 2 Sp. z o.o.
6) On July 20, 2012 Newind Sp. z o.o. entered into the significant agreement with Zakład Ubezpieczeń Społecznych with the registered office in Warsaw with the total amount of PLN 32.9 M. The subject matter of this agreement was the delivery of equipment and granting the licence for software for the needs of the Technical and System Infrastructure of the Electronic Data Exchange system, which is an element of the Comprehensive Information Technology System of ZUS. The agreement will be performed within 8 weeks from the date of the agreement.
7) On September 19, 2012 Apator SA and Bank Handlowy w Warszawie SA signed the annex to the Overdraft Agreement of May 27, 2004. This annex concerned the credit increase to the amount of PLN 30 M.
8) On September 19, 2012 Apator SA and Bank Handlowy w Warszawie SA signed the annex to the framework agreement on revolving credit for granting the bank guarantees of October 13, 2011. This Annex increased the amount of bank guarantees granted by the Bank at the request of Apator SA to the amount of PLN 20 M in the period from September 21, 2012 to September 10, 2013.
9) In the period from January 13, 2012 to March 20, 2013 the companies of Grupa Apator (including Apator SA) entered into 42 agreements with PGE Dystrybucja SA, which jointly meet the criterion of the significant agreement. The total amount of agreements is PLN 22.9 M net and refers to the delivery of electric energy meters and network passportization.
Cooperation or collaboration agreements:
1) In the field of the production of postpayment electronic meters, the Apator SA company cooperates with the subsidiary FAP Pafal SA. The base of this cooperation is the agreement concluded between Apator SA and FAP Pafal SA on March 1, 2005 (with annexes). This agreement specifies the general cooperation conditions for the delivery of electronic boards and sub-assemblies by Apator SA to FAP Pafal SA. The amount of deliveries performed is in accordance with the current orders and the prices are concluded under the market conditions. The agreement is concluded for a non-specified period of time. The detailed terms and conditions of this agreement do not differ from the terms and conditions usually applied in such agreements.
2) On January 4, 2010 Apator SA concluded a cooperation agreement with the subsidiary FAP Pafal SA. The subject of cooperation is to:
conduct the sale of the products of the subsidiary FAP Pafal SA,
provide construction services for FAP Pafal SA by Apator SA.
The cooperation agreement was concluded for a non-specified period of time and its conditions do not differ from the conditions of similar transactions in the market.
The mutual turnover between Apator SA and FAP Pafal SA following the above agreements in 2012 amounted to PLN 49 772 k in total (in 2011: PLN 52 865 k).
3) In the field of development of production and sales of gas meters meeting the criterion of smart
metering the company Apator Metrix SA collaborates with Flonidan DC A/S with the registered office in Horsens (Denmark). The cooperation agreement was concluded on September 30, 2010 for the period of 5 years. It does not specify the amount of the subject of matter, however the agreement is performed by submitting the current orders specifying the quantities and prices of the ordered products. In 2012 the mutual turnover between Apator Metrix SA and Flonidan DC A/S amounted to PLN 72 M, while the purchase amount from Flonidan DC A/S amounted to PLN 42.5 M and the Flonidan CS A/C purchase of electronic components amounted to PLN 29.5 M.
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Insurance agreements: On June 29, 2012 Apator SA and the pool of insurers PZU SA/STU Ergo Hestia SA entered into the insurance agreement, under the comprehensive program of property and third party liability insurance for the companies of Grupa Apator, for a period of two years with two separate annual settlement periods: from July 1, 2012 to June 30, 2013 and from July 1, 2013 to June 30, 2014. Agreements include the insurance of:
third party liability due to the business activity and putting product into trade - with the basis guarantee sum PLN 30 M,
loss of profit under the property insurance against all risks,
machines against damages,
electric machines against electric damages,
electronic equipment against all risks,
property in transit. Moreover, Apator SA concluded agreements for all companies of Grupa Apator in the field of:
motor insurance – an agreement concluded with TUiR Warta SA for the period from July 1, 2012 to June , ;
travel insurance – an agreement concluded with PZU SA for the period from July 1, 2011 to June 30, 2013;
Continuation of the second settlement period 2012/2013. Moreover, Apator SA continues to insure the liability of members of the managing bodies of Grupa Apator in Charstis Europe SA, Branch Office in Poland (principle insurance policy) and in ACE European Group Ltd. Sp. z o.o., Branch Office in Poland (second layer policy).
35. Information pertaining to Apator SA, or its subsidiary, concluding one or more transactions with affiliates, if they are important individually or at all and were concluded under conditions differing from those of the market
In 2012, neither Apator SA nor its subsidiary concluded any transactions with related entities which would be important individually or jointly and were concluded under conditions differing from those of the market. The transactions of Apator SA and its subsidiaries with the related entities in the period from January to December 2012 included the transactions, which are usually concluded under the market conditions and their nature follows the current business activity conducted by Apator SA and its subsidiaries. These transactions refer to cooperation in the field:
Credit electronic meters, electronic boards- cooperation of Apator SA and FAP Pafal SA,
Low voltage switchgear equipment- cooperation of Apator SA and Apator Elektro SA,
Heat meters – cooperation of Apator SA and Apator Powogaz SA,
Water meters- cooperation of Apator Powogaz SA and ZAO Teplovodomer SA and Apator Powogaz SA and Apator Telemetria Sp. z o.o. and Apator Telemetria Sp. z o.o.,
Gas meters – cooperation of Apator Metrix SA and Apator GmbH,
Electric energy meters- cooperation of Apator SA, Pafal SA with Apator GmbH. Specification of the significant agreements concluded by the companies of Grupa Apator, which were in force in 2012 and were concluded under the market conditions:
1) In the field of postpayment electronic meter production, the Apator SA company cooperates with the subsidiary FAP Pafal SA, having its registered office in Świdnica. The base of this cooperation is the agreement concluded between Apator SA and FAP Pafal SA on March 1, 2005 (with annexes).
2) On January 4, 2010 Apator SA concluded a cooperation agreement with the subsidiary FAP Pafal SA. The subject of cooperation is to:
conduct the sale of the products of the subsidiary FAP Pafal SA,
provide construction services for FAP Pafal SA by Apator SA.
3) On December 14, 2011 the subsidiary Apator Powogaz SA with the registered office in Poznań and the joint-controlled company ZAO Teplovdomer (Russia) entered into a significant agreement pertaining to the sale of water meters and gas meters by Apator Powogaz SA. The total amount of the contract is EUR 8.5 M net i.e. PLN 38.8 M). The contract was performed in 2012. On January 11, 2013 the next agreement pertaining to the sale of water meters and heat meters by Apator Powogaz
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SA was concluded. The total amount of the contract is EUR 10.5 M net i.e. PLN 43 M. The contract will be performed in 2013.
4) On December 23, 2010 Apator Metrix SA and Apator GmbH concluded an agreement with Thuga AG, with the registered office in Munich, pertaining to the delivery of diaphragm gas meters. The contract amount is EUR 1 126 k net (i.e. PLN 4 474 k). The agreement is concluded for the period from January 1, 2011 to December 31, 2013.
5) On January 10, 2012 Apator SA concluded the framework agreement with the joint-controlled company Apator Elektro, with the registered office in Moscow (Russia). This framework agreement refers to the sale of low-voltage control instruments and related parts by Apator SA. The amount of this framework agreement is EUR 3.5 M net, i.e. PLN 15.7 M.
6) On August 31, 2011 Apator SA and Apator Rector Sp. z o.o. and the company EnergiaPro SA with the registered office in Wrocław concluded an agreement. It refers to the supply of AMI systems and direct and indirect electronic meters with remote transmission capabilities for the needs of Energia Pro SA. The total agreement amount is PLN 7.8 M net. The performance of this agreement is to be completed in 2013.
Mutual turnover between entities of the group of Apator of the value over 1 m PLN for 2012 (000’PLN)
Apator SA -> FAP Pafal SA 14 826
FAP Pafal SA -> Apator SA 34 946
Total mutual turnover between Apator SA and FAP Pafal SA 49 772
Apator Powogaz SA -> ZAO Teplovodomier 37 257
ZAO Teplovodomier -> Apator Powogaz SA 0
Total mutual turnover between Apator Powogaz SA and ZAO Teplovodomier 37 257
FAP Pafal SA -> Apator GmbH 9 592
Apator GmbH -> FAP Pafal SA 214
Total mutual turnover between FAP Pafal SA and Apator GmbH 9 806
Apator Metrix SA -> Apator GmbH 9 075
Apator GmbH -> Apator Metrix SA 414
Total mutual turnover between Apator Metrix SA and Apator GmbH 9 489
Apator Telemetria sp. z o. o. -> Apator Powogaz SA 7 501
Apator Powogaz SA -> Apator Telemetria sp. z o. o. 270
Total mutual turnover between Apator Telemetria sp. z o. o. and Apator Powogaz SA 7 771
Apator SA -> Apator Powogaz SA 6 636
Apator Powogaz SA -> Apator SA 92
Total mutual turnover between Apator SA and Apator Powogaz SA 6 728
Apator SA -> Apator GmbH 6 205
Apator GmbH -> Apator SA 1 212
Total mutual turnover between Apator SA and Apator GmbH 7 417
Apator SA -> Apator Elektro 5 192
Apator Elektro -> Apator SA 45
Total mutual turnover between Apator SA and Apator Elektro 5 237
Apator Powogaz SA -> TOV Apator Metroteks 2 736
TOV Apator Metroteks -> Apator Powogaz SA 0
Total mutual turnover between Apator Powogaz SA and TOV Apator Metroteks 2 736
Apator Powogaz SA -> Apator Metra s.r.o. 568
Apator Metra s.r.o. -> Apator Powogaz SA 1 516
Total mutual turnover between Apator Metrix SA and Apator Powogaz SA 2 084
As the financial activity between the companies of Grupa Apator the dividends are paid. Jointly the subsidiaries paid the following dividends for Apator SA:
Dividend received by Apator SA from related entities
2011 (000’PLN)
2012 (000’PLN)
Change yoy (000’PLN)
Dynamics (%)
Apator Control Sp. z o. o. 0 1 027 1 027 0,00%
Apator Metrix SA 3 006 4 000 994 133,07%
Apator Mining Sp. z o. o. 16 043 6 049 -9 994 37,70%
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Dividend received by Apator SA from related entities
2011 (000’PLN)
2012 (000’PLN)
Change yoy (000’PLN)
Dynamics (%)
Apator Rector Sp. z o. o. 5 503 6 020 517 109,39%
FAP Pafal SA 0 1 104 1 104 0,00%
Apator Powogaz SA 6 000 10 000 4 000 166,67%
ZAO Apator Elektro 100 0 -100 0,00%
Total dividend 30 652 28 200 -2 452 92,00%
36. Explanation of the differences between the financial results presented in the annual report and the published forecasts of the results for the relevant year
On February 23, 2012 the Management Board of Apator SA published the consolidated forecast of the financial results with the following amounts:
Consolidated total revenues from sale in the amount of PLN 580 M,
Consolidated net profit in the range: PLN 70 -75 M. The forecast of the consolidated financial results in 2012 included the total results on the activity of Grupa Apator assigned to shareholders of the parent entity and the shareholders of NCI. On August 22, 2012 the Management Board of Apator SA published the first adjustment of the financial results forecast, which included the following amounts:
Consolidated total revenues from sale in the amount of PLN 580 M,
Consolidated net profit in the range: PLN 90 -95 M. The recognition of deferred tax asset in the amount of PLN 20 M due to possible tax credit had influence on the increased forecasted consolidated net profit. On November 14, 2012 the Management Board SA published the second adjustment of the consolidated financial results’ forecast. The adjusted forecast included the following amounts:
Consolidated total revenues from sale in the amount of PLN 670 M,
Consolidated net profit in the amount of PLN 98 M. The forecast of financial results was adjusted due to:
High level of sales performed by all companies of Grupa Apator,
Intensive activity of Newind Sp. z o.o. on IT market- 2012 revenues of this company will exceed the expected amounts twice.
The Management Board of Apator SA emphasized that:
Newind Sp. z o.o. has been running its activity on IT market for nearly two years (start-up),
At present the business of this company is shows a low profitability due to the performance of the contracts with the huge share of hardware.
Other assumptions of the adjusted forecast included:
Running the business of Apator SA in the Pomeranian Special Economic Zone (starting to settle the tax credit as of June 1, 2012),
Recognition of deferred tax asset due to possible tax credit, which expected amount at the end of 2012 will be PLN 22 M,
Other operating revenues due to sales of the real property in Toruń: PLN 16 M.
Significant share of export sales in the total revenues from sales,
Accepted EUR exchange rate at the level PLN 4.18,
Level of forward contracts and hedge accounting for the currency risk of Grupa Apator,
The composition of Grupa Kapitałowa including the companies: Apator SA, FAP Pafal SA, Apator Mining sp. z o. o., Apator Control sp. z o. o., Apator Elektro SA, Apator GmbH, Grupa Apator Powogaz (Apator Powogaz SA, Apator Telemetria sp. z o. o., Apator Metroteks TOV, Apator Metra s.r.o., ZAO Teplovodomer), Apator Rector sp. z o.o. including Newind sp. z o. o. and Apator Metrix SA including GWi Ltd. (GWi since September 2012).
The Management Board of Apator SA assessed that incorporation of GWi Ltd. in Grupa Kapitałowa Apator will not have a significant influence on the forecast of the consolidated financial results of 2012. The published and adjusted forecast of the consolidated financial results in 2012 includes the total net profit on the activity of Grupa Apator assigned to shareholders of the parent entity and the shareholders of NCI.
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The performance of the forecast of the consolidated financial results in 2012 is as follows:
Description Initial forecast for
2012
First adjustment to the forecast
for 2012
Second adjustement of the
forecast for 2012
Performance of 2012
% performance in relation to
second adjustment to
the forecast
Consolidated revenues from sales of products,goods and materials
580 000 580 000 670 000 668 824 99,82%
Consolidated net profit * 70 000 – 75 000 90 000 – 95 000 98 000 95 720 97,67%
*Consolidated net profit covers all the profit of the capital group of Apator (including non control interest)
37. Forecast of financial results for 2013
The forecast of the consolidated financial results in 2013 is as follows:
Consolidated total revenues from sales within PLN 700 M- 730 M,
Total consolidated net profit within PLN 68 M-71 M,
Consolidate net profit attributable to shareholders of the parent entity within PLN 63 M- 66M, This forecast considers:
High level of sales performed by all companies of Grupa Apator,
Intensive activity of Newind Sp. z o.o. on IT market,
Running the business of Apator SA in the Pomeranian Special Economic Zone,
Significant share of export sales in the total revenues from sales,
Accepted EUR exchange rate at the level PLN 4.10,
Level of forward contracts and its influence on the financial result of Grupa Apator,
The composition of Grupa Kapitałowa including the companies: Apator SA, FAP Pafal SA, Apator Mining sp. z o. o., Apator Control sp. z o. o., Apator Elektro SA, Apator GmbH, Grupa Apator Powogaz (Apator Powogaz SA, Apator Telemetria sp. z o. o., Apator Metroteks TOV, Apator Metra s.r.o., ZAO Teplovodomer), Apator Rector sp. z o.o. including Newind sp. z o. o. and Apator Metrix SA including GWi Ltd.
Toruń, April 22, 2013
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Janusz Niedźwiecki
President of the Management Board of Apator SA
Tomasz Habryka
Member of the Management Jerzy Kuś Board of Apator SA
Member of the Management Board of Apator SA