consolidated financial statement of zpue...

CONSOLIDATED FINANCIAL STATEMENT

OF ZPUE S.A. CAPITAL GROUP

FOR THE 3RD QUARTER OF 2012

WŁOSZCZOWA, NOVEMBER 2012

ZPUE S.A. Group's Consolidated Financial Statement for the 3rd Quarter of 2012

2

LIST OF CONTENTS

1. Condensed Consolidated Financial Statement for the 3rd Quarter of 2012

1.1 Consolidated Selected Financial Data

1.2 The exchange rates used to convert the “Selected financial data”.

1.3 Consolidated statement of the financial standing

1.4 Consolidated profit and loss account

1.5 Consolidated statement of total revenue

1.6 Consolidated statement of changes in equity capital

1.7 Consolidated cash flow statement

2. Condensed Financial Statement of ZPUE S.A.

2.1 Selected financial data


2.3 Separate statement of the financial standing

2.4 Separate profit and loss account

2.5 Separate statement of total revenue

2.6 Separate statement of changes in equity capital

2.7 Separate cash flow statement

3. Commentary and additional information to the Consolidated Financial Statement for the 3rd

Quarter of 2012

3.1 Basic information about the parent company, subsidiaries and area of business.

3.2 Scope of the Consolidated Financial Statement presented

3.3 Information about entities covered by consolidation

3.4 Methods of preparing Financial Statements

3.5 Description of adopted accounting principles, including valuation of assets and liabilities, revenues and

costs, determination of financial result and the method of preparation of financial statement and

comparable data

3.6 Adjustments for reserves, reserves from deferred income tax and impairment loss write-offs on the value

of assets

3.7 A concise description of the issuer’s achievements or setbacks during the period, to which the statement

refers to, with a list of the most significant events associated with them.

3.8 Factors and events during the period, particularly atypical ones, significantly affecting the financial

results achieved

3.9 Clarifications referring to seasons or cycles in the issuer’s business during the presented period.

3.10 Information concerning issues, purchases and payments of non-share and capital securities

3.11 Information concerning executed (or announced) dividend payout, jointly and calculated per share,

divided into ordinary and preference shares.

3.12 Events which took place following the date on which the Condensed Quarterly Financial Statement was

drawn up and not included in that statement, which could significantly affect the Issuer’s future financial

results

3.13 Changes in contingent liabilities or contingent assets, which occurred after the last financial year

3.14 List of the effects of changes to the structure of the business entity, including business entities

consolidation, take over or sale of the capital group’s entities, long-term investments, division, restructure

and ceasing business operations.

3.15 The position of the Management Board concerning the possibility of meeting the previously released,

current year’s profit forecasts early, in the light of results presented in the quarterly statement in relation

to forecast profits.

3.16 Shareholders who either directly or indirectly own in excess of 5% of the overall number of votes at the

GM of ZPUE S.A. as of the date of passing the quarterly report, together with the number of shares

owned by those entities, their percentage share in the capital, number of votes from these at the annual

general meeting and their percentage share in the total number of votes at the GM, as well as a list of the

changes to the ownership structure of significant issuer’s share packages during the period since the last

quarterly report was passed.

3.17 A statement of changes in the ownership of issuer’s shares or right to them (options) by issuer’s

management and persons in supervisory positions as per issuer’s information from the time of passing the

previous quarterly statement.

3.18 Information on legal proceedings before court, authority responsible for arbitration proceedings or a

public administration authority

3.19 Information on significant settlements arising out of court cases


3

3.20 Information on significant purchase and sale transactions with respect to property, plant and equipment

and on the significant obligation arising out of the purchase of property, plant and equipment

3.21 Information on the transactions entered into by the Issuer or its subsidiary with affiliated companies, if

these transactions individually or collectively are significant and were made on conditions other than

market conditions, with indication of their value, with the reservation that information on individual

transactions can be grouped by type except when information on individual transactions is required to

understand how they affect the issuer's assets, financial standing and the financial result.

3.22 Information concerning a loan or credit surety or guarantee issued by the Issuer or the Issuer’s subsidiary

– overall to a single entity or their subsidiary, if the total value of the existing sureties or guarantees

constitutes at least 10% of the Issuer’s equity capital.

3.23 Information on outstanding credits or loans or on the violation of material terms of the credit or loan

contract that were not remedied until the end of the reporting period.

3.24 Other information, which in the Issuer's opinion is important to assess its human resources, property,

finances, financial result and their changes as well as information, which is crucial in the assessment of

the Issuer's ability to fulfil its obligations.

3.25 Factors, which in the Issuer’s opinion will affect the results achieved by them in view of the next quarter

or longer

3.26 In the event that the condensed financial statement was examined by an entity authorised to examine

financial statements, the quarterly report contains the relevant opinion on the examination or a report on

the review of the condensed financial statement


4

1. Condensed Consolidated Financial Statement for the 3rd Quarter of 2012

1.1 Consolidated Selected Financial Data

CONSOLIDATED SELECTED FINANCIAL DATA

thousands PLN thousands EUR

period

from 1.01.2011

to 30.09.2011

period

from 1.01.2012

to 30.09.2012

period

from 1.01.2011

to 30.09.2011

period

from 1.01.2012

to 30.09.2012

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

251,785 303,833 62,303 72,431

II. Profit (loss) on operating activities 12,917 23,207 3,196 5,532

III. Gross profit (loss) 12,409 21,943 3,071 5,231

IV. Net profit (loss) 9,793 17,681 2,423 4,215

V. Net cash flows from operating activities 15,484 17,715 3,831 4,223

VI. Net cash flows from investment activities -32,783 -4,580 -8,112 -1,092

VII. Net cash flows from financial activities 25,561 288 6,325 69

VIII. Total net cash flows 8,262 684 2,044 163

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

X. Profit per ordinary share (PLN) 9.30 12.56 2.30 2.99

XI. . Diluted profit (loss) per ordinary share (PLN) 9.30 12.56 2.30 2.99

XII. Declared or paid dividend per share (PLN) 0.00 6.40 0 1.53

CONSOLIDATED SELECTED FINANCIAL DATA thousands PLN thousands EUR

31.12.2011 30.09.2012 31.12.2011 30.09.2012

I. Total assets 333,151 371,009 75,428 90,186

II. Liabilities and reserves for liabilities 168,191 162,099 38,080 39,404

III. Long term liabilities 21,050 11,621 4,766 2,825

IV. Short-term liabilities 131,071 117,875 29,676 28,654

V. Equity capital 164,960 208,910 37,348 50,783

VI. Share capital 8,990 12,362 2,035 3,005

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

VIII. Book value per share (PLN) 162.02 149.22 36.68 36.27

IX. Diluted book value per share (PLN) 117.83 149.22 36.68 36.27

Consolidated earnings per ordinary share for the three quarters of 2012 have been calculated by dividing the

consolidated net profit attributable to ordinary shares in the capital group, i.e. PLN 16,328,000 by the average

weighted number of ordinary shares: 1,300,000. Consolidated earnings per ordinary share for three quarters of

2012 amount to PLN 12.56.

Consolidated earnings per ordinary share for the three quarters of 2011 have been calculated by dividing the

consolidated net profit attributable to ordinary shares in the capital group, i.e. PLN 3,890,000 by the average

weighted number of ordinary shares: 418,127. Consolidated earnings per ordinary share for the three quarters of

2011 amount to PLN 9.30.

Consolidated book value per share for the three quarters of 2012 was calculated as the ratio of the consolidated

equity capital of PLN 208,910,000 and the total number of shares: 1,400,000.

Consolidated book value per share for the three quarters of 2012 amounted to PLN 149.22.

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

164,960,000 and the total number of shares: 1,018,127.

Consolidated book value per share as at 31 December 2011 amounted to PLN 162.02.

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

164,960,000 and the total number of shares after dilution i.e. 1,400,000.

Diluted consolidated book value per share as at 31 December 2011 amounted to PLN 117.83.


5

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

consolidated book value per share and the consolidated profit per ordinary share share during the first three

quarters of 2012.

1.2 The exchange rates used to convert the “Selected consolidated financial data”.

Selected consolidated financial data included in the financial statement for the 3rd quarter of 2012 were calculated

according to the following PLN/EUR exchange rates:

- individual balance sheet assets and liabilities calculated according to the average EUR rate applicable as at

30 September 2012, as set by the National Bank of Poland, i.e. PLN 4.1138 and as at 30 September 2011 –

PLN 4.4112 and as at 31 December 2011 – PLN 4.4168.

individual items on the profit and loss account and cash flow account converted to EUR according to the rate

which was the arithmetical average of the average rates set by the National Bank of Poland and applicable on

the last day of each turnover month:

- for the period January - September 2012 – PLN 4.1948

- for the period January - September 2011 – PLN 4.0413

EUR rate for calculating balance sheet items:

NBP average EUR rate as at 31 December.2012 – Table 189/A/NBP/2010 – PLN 4.1138.

NBP average EUR rate as at 31 December 2011 – Table 252/A/NBP/2010 – PLN 4.4168

NBP average EUR rate as at 30 September 2011 – Table 190/A/NBP/2011 – PLN 4.4112

Arithmetical average of average NBP EUR rates for the period

between 1.01 and 30.09 2012

Table number Date Rate

21/A/NBP/2012 31.01.2012 4.2270

42/A/NBP/2012 29.02.2012 4.1365

64/A/NBP/2012 30.03.2012 4.1616

84/A/NBP/2012 30.04.2012 4.1721

105/A/NBP/2012 31.05.2012 4.3889

125/A/NBP/2012 30.06.2012 4.2613

147/A/NBP/2012 31.07.2012 4.1086

169/A/NBP/2012 31.08.2012 4.1838

189/A/NBP/2012 30.09.2012 4.1138

Average rate for 9 months of 2012 4.1948

The highest EUR rate during 2012 4.3889

The lowest EUR rate during 2012 4.1086


between 1.01 and 31.03.2011


20/A/NBP/2011 31.01.2011 3.9345

40/A/NBP/2011 28.02.2011 3.9763

63/A/NBP/2011 31.03.2011 4.0119

83/A/NBP/2011 29.04.2011 3.9376

104/A/NBP/2011 31.05.2011 3.9569

125/A/NBP/2011 30.06.2011 3.9866

146/A/NBP/2011 29.07.2011 4.0125

168/A/NBP/2011 31.08.2011 4.1445

190/A/NBP/2011 30.09.2011 4.4112





6

1.3 Consolidated statement of financial standing of ZPUE S.A. Capital Group [thousands PLN]

2011

as at the end

of

30.09.2011

2011

as at the end

of

2012

as at the

end of

30.06.2012

2012

as at the

end of

30.09.2012

Assets

A. Fixed assets 159,660 160,832 197,752 198,028

I. Intangible assets 17,261 17,293 16,454 16,017

1. R&D 12,843 12,998 12,472 12,142

2. Goodwill 0 0 0 0

3. Other intangible assets 4,418 4,295 3,982 3,875

II. Property, plant and equipment 118,160 119,587 155,563 156,745

1. Fixed assets 111,133 115,131 148,488 149,173

a) land (including perpetual usufruct right to the

land) 7,554 7,554 17,503 17,503

b) buildings, commercial premises and civil

engineering facilities 66,248 66,011 77,173 78,232

c) equipment and machinery 27,401 31,177 43,341 43,238

d) means of transport 8,810 8,248 7,912 7,361

e) other fixed assets 1,120 2,141 2,559 2,839

2. Fixed assets under construction 7,027 4,456 7,075 7,572

III. Long-term receivables 102 97 55 54

1. From associates 0 0 0 0

2. From other entities 102 97 55 54

IV. Long-term investments 23,422 23,097 24,134 23,650

1. Real estate 6,103 6,076 6,023 5,997

2. Intangible assets 0 0 0 0

3. Long-term financial assets 8,396 8,438 9,051 8,957

a) in associates 8,348 8,390 8,943 8,849

- shares 8,348 8,390 8,943 8,849

- other securities 0 0 0 0

- granted loans 0 0 0 0

- other long-term financial assets 0 0 0 0

b) in other entities 48 48 108 108

- shares 48 48 108 108




4. Other long-term investments 8,923 8,583 9,060 8,696

V. Long-term deferred charges and accruals 715 758 1,546 1,562

1. Assets from deferred income tax 715 758 1,546 1,562

2. Other deferred charges and accruals 0 0 0 0

B. Current assets 149,477 172,319 177,678 172,981

I. Inventory 42,152 39,910 54,740 52,737

1. Materials 11,231 10,496 13,761 13,511

2. Semi-finished products and products in progress 29,032 27,065 36,016 35,671

3. Finished products 1,677 2,131 4,512 3,145

4. Goods 212 218 451 410

II. Short-term receivables 96,137 116,556 104,107 104,262

1. Receivables from associates 0 2,035 3,332 1,562

a) for deliveries and services, maturing within: 0

2,035

3,332 1,562


7

- up to 12 months 0 2,035 3,332 1,562

- in excess of 12 months 0 0 0 0

b) others 0 0 0 0

2. Receivables from other entities 96,137 114,521 100,775 102,700

a) for deliveries and services, maturing within: 87,540 108,644 94,697 98,332

- up to 12 months 87,540 108,644 94,445 98,031


b) from tax, subsidy, customs, social security 111 244 398 397

- including from income tax on legal entities 0 0 178 1

c) others 8,486 5,633 5,680 3,971

d) claimed at court 0 0 0 0

III. Short-term investments 8,463 11,217 15,332 12,805

1. Short-term financial assets 8,463 11,217 15,332 12,805

a) in associates 0 0 0 0

- shares 0 0 0 0



- other short-term financial assets 0 0 0 0


- shares 0 0 0 0




c) cash and other cash assets 8,463 11,217 15,332 12,805

- cash in hand and at bank 2,378 4,987 9,193 6,591

- other cash 6,085 6,230 6,139 6,214

- other pecuniary assets 0 0 0 0

2. Other short-term investments 0 0 0 0

IV. Short-term deferred charges and accruals 2,725 4,636 3,499 3,177

Total assets 309,137 333,151 375,430 371,009

Liabilities

A. Equity capital (fund) 154,845 164,960 183,358 208,910

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

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

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

IV. Supplementary capital (fund) 102,254 101,722 166,263 183,383

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

V. Revaluation reserve capital (fund) 21,535 21,894 21,894 21,894

VI. Other reserve capital (fund) 936 936 936 936

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

VIII. Net profit (loss) 9,792 19,558 9,239 17,665

IX.

Write-offs on net profit during the financial year

(negative value) 0 0 0 0

X. Uncontrolled shares 10 10 73 79

B. Liabilities and reserves for liabilities 154,292 168,191 192,072 162,099

I. Reserves for liabilities 9,660 9,556 13,096 13,329

1. Reserves for deferred income tax 8,523 8,607 11,377 11,543

2. Social security reserves (and similar reserves) 1,079 697 1,581 1,539

- long-term 1,079 646 1,388 1,346

- short-term 0 51 193 193

3. Other reserves 58 252 138 247


8

- long-term 0 0 0 0

- short-term 58 252 138 247

II. Long term liabilities 21,732 21,050 16,229 11,621

1. To associates 0 0 0 0

2. To other entities 21,732 21,050 16,229 11,621

a) credits and loans 19,531 19,268 15,277 10,828

b) issuance of debt securities 0 0 0 0

c) other financial liabilities 2,201 1,782 952 793

d) others 0 0 0 0

III. Short-term liabilities 116,136 131,071 145,174 117,875


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

- up to 12 months 0 0 40 0


b) others 0 0 0 0




c) other financial liabilities 3,473 3,073 2,099 1,595

d) for deliveries and services, maturing within: 60,582 84,598 77,545 60,271

- up to 12 months 60,582 84,598 77,545 60,271


e) received advance payments for deliveries 1,834 4,231 1,724 5,076

f) liabilities on bills of exchange 0 0 0 0

g) from tax, customs, social security and other

benefits 4,812 7,537 5,197 7,692

- from income tax on legal entities 0 11 0 344

h) from remuneration 4,112 4,248 4,414 4,614

i) others 67 285 9,611 334

IV. Accruals and deferred income 6,764 6,514 17,573 19,274

1. Negative goodwill 0 0 0 0

2. Other deferred charges and accruals 6,764 6,514 17,573 19,274

- long-term 351 322 15,293 16,994

- short-term 6,413 6,192 2,280 2,280

Total liabilities 309,137 333,151 375,430 371,009

1.4 Consolidated profit and loss account of ZPUE S.A Capital Group [thousands PLN]

from

1.07.2011

to 30.09.2011

from

1.01.2011 to

30.09.2011

from

1.07.2012 to

30.09.2012

from

1.01.2012 to

30.09.2012

Net revenue from sales of products, goods

and materials, including: 94,795 251,785 111,837 303,833

- from associates 0 0 1,213 3,085

Net revenue from sale of products 75,028 198,521 97,299 269,683

Net revenue from sales of products, goods and

materials 19,767 53,264 14,538 34,150

Cost of products, goods and materials sold,

including: 76,630 204,889 86,374 237,952

- to associates 0 0 837 2,474

Cost of producing goods sold 58,798 156,965 73,766 207,607

Value of goods and materials sold 17,832 47,924 12,608 30,345

Gross profit / (loss) on sales 18,165 46,896 25,463 65,881


9

Cost of sales 3,731 9,941 4,827 13,273

General administrative expenses 7,999 24,765 10,536 31,380

Profit (loss) on sales 6,435 12,190 10,100 21,228

Other operating revenue, including: 1,537 4,131 2,682 5,335

Profit on sales of non-financial fixed assets 222 222 0 12

Subsidies 254 863 803 2,299

Other operating revenue 1,061 3,046 1,879 3,024

Other operating costs, including: 1,277 3,404 2,079 3,356

Loss on sales of non-financial fixed assets -39 0 4 46

Revaluation of non-financial fixed assets 638 1,261 164 304

Other operating costs 678 2,143 1,911 3,006

Profit (loss) on operating activities 6,695 12,917 10,703 23,207

Financial revenue, including 2,815 4,250 1,507 3,522

Share dividends, including: 0 2 0 2

- from associates 0 0 0 0

Interest, including: 1,518 2,264 400 1,346


Profit on sale of investments 0 0 0 0

Revaluation of investments 0 0 0 0

Others 1,297 1,984 1,107 2,174

Financial costs, including: 2,598 4,758 1,689 4,786

Interest, including: 865 2,034 1,195 2,926


Loss on sale of investments 0 0 0 0

Revaluation of investments 0 0 0 0

Others 1,733 2,724 494 1,860

Gross profit (loss) 6,912 12,409 10,521 21,943

Income tax 1,491 2,616 2,089 4,262

Other obligatory decrease of gross profit

(increased loss) 0 0 0 0

Net profit (loss) 5,420 9,793 8,432 17,681

Financial result allocated to minority

shareholders 0 0 6 16

Financial result allocated to the group 5,420 9,792 8,426 17,665

1.5 Consolidated statement of total revenue of ZPUE S.A. Capital Group [thousands PLN]

from

1.07.2011

to

30.09.2011

from

1.01.2011 to

30.09.2011

from

1.07.2012 to

30.09.2012

from

1.01.2012 to

30.09.2012

Net profit (loss) 5,420 9,792 8,426 17,665

Other total revenue: 0 0 0 0

Financial assets available for sale 0 0 0 0

Collateral on cash flow 0 0 0 0

Change in the surplus from reappraisal 0 0 0 0

Other income 0 0 0 0

Income tax on other elements of total income 0 0 0 0

Total other revenue after tax 0 0 0 0

Total income 5,420 9,792 8,426 17,665

1.6 Consolidated statement of changes in equity of ZPUE S.A Capital Group [thousands PLN]


10

from

1.07.2011

to 30.09.2011

from

1.01.2011 to

30.09.2011

from 1.01.2011

to 31.12.2011

from 1.07.2012

to 30.09.2012

from 1.01.2012 to

30.09.2012

I. Opening balance of equity (OB) 149,477 144,977 144,977 183,358 164,960

- valuation adjustments 0 0 0 0 0

I. a Opening balance of equity capital (fund)

(OB), adjusted 149,477 144,977 144,977 183,358 164,960

1. Opening balance of stated capital (fund) 8,990 8,990 8,990 12,362 8,990

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

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

- share issue (stock issue) 0 0 0 0 3,372

- increases in capital from net profit 0 0 0 0 0

b) decrease (due to) 0 0 0 0 0

- redemption of shares 0 0 0 0 0

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

2. Opening balance of called up stated

capital 0 0 0 0 0

2.1 Change in called up stated capital 0 0 0 0 0

a) increase (due to) 0 0 0 0 0


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

3. Opening balance of own shares 0 0 0 0 0

a) increase 0 0 0 0 0

b) decrease 0 0 0 0 0

3.1 Closing balance of own shares 0 0 0 0 0

4. Opening balance of supplementary

capital (fund) 102,254 87,174 87,174 166,263 101,722

4.1 Changes in supplementary capital (fund) 0 15,080 14,548 17,120 81,661

a) increase (due to) 0 15,081 15,081 0 81,661

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

- from profit distribution (statutory) 0 0 0 0 0

- from profit distribution (above the

statutory value) 0 15,081 15,081 0 10,632

- from the merger of companies 0 0 0 17,120 17,120


- loss coverage 0 1 1 0 0

- consolidation adjustments 0 0 532 0 0

4.2 Closing balance of supplementary capital

(fund) 102,254 102,254 101,722 183,383 183,383

5.

Supplementary capital (capital

adjustment) from the application of the

merger method other than defined in

IFRS 3 as at Opening Balance -2,464 -2,464 -2,464 -41,681 -2,464

5.1 Changes in supplementary capital (capital adjustments) with the use of the combination

method other than defined in IFRS 3 0 0 0 0 -39,217


b) decrease 0 0 0 0 39,217

5.2

Supplementary capital (capital adjustment)

from the application of the merger method

other than defined in IFRS 3 as at Closing

Balance -2,464 -2,464 -2,464 -41,681 -41,681

6. Opening balance of revaluation reserve

capital (fund) 21,587 21,587 21,587 21,894 21,894

6.1 Changes in revaluation reserve capital (fund) -52 -52 307 0 0



- deferred tax assets 52 0 0 0 0

6.2 Closing balance of revaluation reserve

capital (fund) 21,535 21,535 21,894 21,894 21,894

7. Opening balance of other reserve capitals 936 936 936 936 936


11

(funds)

7.1 Changes in other reserve capitals (funds) 0 0 0 0 0



7.2 Closing balance of other reserve capitals

(funds) 936 936 936 936 936

8. Opening balance of Minority capital 10 9 9 73 10

Changes in capital 0 1 1 6 69

increase 0 1 1 6 69

decrease 0 0 0 0 0

8.1 Minority capital at the end of the year 10 10 10 79 79

9. Opening balance of previous years' profit

(loss) 18,164 28,746 28,746 23,511 33,872

9.1 Opening balance of previous years' profit 18,164 28,746 28,746 23,511 33,872

- adjustments of fundamental errors 0 0 0 0 0

9.2 Opening balance of previous years' profit

after adjustments 18,164 28,746 28,746 23,511 33,872


- distribution of previous years'� profit 0 74 0 0 0

- revaluation of fixed assets 0 1 0 0 0

- result adjustment by the inventory margin 0 0 0 0 33

b) decrease (due to) appropriation of profit 0 15,081 14,549 0 19,631

- revaluation of fixed assets 0 0 0 0 0

9.3 Closing balance of previous years' profit 18,164 13,792 14,314 23,511 14,272

9.4 Opening balance of previous years' loss 0 0 0 0 0

- adjustments of fundamental errors 0 0 0 0 0

9.5 Opening balance of previous years' loss after adjustments 0 0 0 0 0


- re-booking of previous years' loss to be

covered 0 0 0 0 0


9.6 Closing balance of previous years' loss 0 0 0 0 0

9.7 Closing balance of previous years' profit

(loss) 18,164 13,792 14,314 23,511 14,272

10. Net result 5,420 9,792 19,558 8,426 17,665

a) net profit 5,420 9,792 19,558 8,426 17,665

b) net loss 0 0 0 0 0

c) write-offs on profit 0 0 0 0 0

II. Closing balance of equity (CB), including: 154,845 154,845 164,960 208,910 208,910

Equity capital attributable to the Capital

Group 154,835 154,835 164,950 208,831 208,831

Equity capital attributable to uncontrolled

shares 10 10 10 79 79

1.7 Consolidated cash flow statement of ZPUE S.A. Capital Group [thousands PLN]

from 1.07.2011

to 30.09.2011

from 1.01.2011 to

30.09.2011

from 1.07.2012 to

30.09.2012

from 1.01.2012 to

30.09.2012

A. Cash flows from operating activities - indirect method

I. Gross profit (loss) 6,912 12,409 10,515 21,927

II. Total adjustments -3,729 3,075 10,413 -4,212

1. Profit (loss) of minority shareholders 0 0 6 16

2. Shares in net profit (loss) of subsidiaries and affiliates

consolidated by equity method 0 0 0 0

3. Depreciation 2,930 8,858 4,354 12,580

4. Exchange gains (losses) 59 46 -85 -65

5. Interest and profit sharing (dividend) 357 1,939 974 2,626

6. Profit (loss) on investment activities -261 -222 3 34


12

7. Change in reserves -3 -216 67 -422

8. Change in inventory -6,093 -13,789 2,002 -5,893

9. Change in receivables 2,418 14,549 -155 7,267

10. Change in short-term liabilities excluding credits and loans -480 -4,901 5,047 -16,457

11. Change in prepayments and accruals -468 -383 -431 -530

12. Income tax paid -2,187 -2,858 -1,369 -3,368

13. Other adjustments -1 52 0 0

III. Net cash flows from operating activities 3,183 15,484 20,928 17,715

B. Cash flows from investment activities

I. Inflows 365 573 17 264

1. Disposal of intangible assets and property, plant and

equipment 365 571 15 244

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

3. Inflows from financial assets 0 2 2 20



- dividend received 0 2 2 2

4. Other inflows from investment activities 0 0 0 0

II. Outflows 15,688 33,356 4,597 17,583

1. Acquisition of intangible assets and property, plant and

equipment 7,357 25,025 4,591 17,100

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

3. Spending on financial assets 8,331 8,331 6 455

a) in associates 8,331 8,331 6 455

- acquisition of financial assets 8,331 8,331 6 455


4. Other outflows from investment activities 0 0 0 28

III. Net cash flows from investment activities -15,323 -32,783 -4,580 -17,319

C. Cash flows from financial activities

I. Inflows 23,568 50,140 2,455 32,416

1. Net inflows from issuance of shares and other capital

instruments 0 0 0 0

2. Credits and loans 23,568 50,140 0 19,237

3. Issuance of debt securities 0 0 0 0

4. Other inflows from financial activities 0 0 2,455 13,179

II. Outflows 9,493 24,579 21,414 32,128

1. Purchase of own shares 0 0 0 0

2. Dividends and other payments to shareholders 0 0 9,001 9,001

3. Profit distribution liabilities other than profit distribution

payments to shareholders 0 0 0 0

4. Repayment of credits and loans 8,208 19,684 10,701 16,483

5. Redemption of debt securities 0 0 0 0

6. From other financial liabilities 0 0 0 0

7. Payment of liabilities arising from financial leases 927 2,953 737 3,939

8. Interest 358 1,942 975 2,705

9. Other outflows from financial activities 0 0 0 0

III. Net cash flows from financial activities 14,075 25,561 -18,959 288

D. Total net cash flows 1,935 8,262 -2,611 684

E. Balance sheet change in cash, including: 1,988 8,216 -2,527 746

- change in cash due to exchange rate differences -54 46 -84 -62

F. Cash opening balance 6,489 161 14,382 11,087

G. Closing balance of cash, including: 8,423 8,423 11,771 11,771

2. Condensed Financial Statement of ZPUE S.A.


13

2.1 Selected financial data

SELECTED FINANCIAL DATA

thousands PLN thousands EUR

period

from 1.01.2011

to 30.09.2011

period

from 1.01.2012

to 30.09.2012

period

from 1.01.2011

to 30.09.2011

period

from 1.01.2012

to 30.09.2012

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

235,011 250,743 58,152 59,775

II. Profit (loss) on operating activities 11,694 14,961 2,894 3,567

III. Gross profit (loss) 11,477 14,146 2,840 3,372

IV. Net profit (loss) 9,032 11,345 2,235 2,705

V. Net cash flows from operating activities 14,911 18,554 3,690 4,423

VI. Net cash flows from investment activities -32,286 -16,062 -7,989 -3,829

VII. Net cash flows from financial activities 25,138 -1,890 6,220 -451

VIII. Total net cash flows 7,763 602 1,921 144

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

Profit per ordinary share (PLN) 8.58 8.07 2.12 1.92

XI. . Diluted profit (loss) per ordinary share (PLN) 8.58 8.07 2.12 1.92

XII. Declared or paid dividend per share (PLN) 0.00 6.40 0.00 1.53

SELECTED FINANCIAL DATA thousands PLN thousands EUR

31.12.2011 30.09.2012 31.12.2011 30.09.2012

I. Total assets 321,573 385,648 72,807 93,745

II. Liabilities and reserves for liabilities 156,077 146,383 35,337 35,583

III. Long term liabilities 20,772 11,222 4,703 2,728

IV. Short-term liabilities 121,121 106,386 27,423 25,861

V. Equity capital 165,496 239,265 37,470 58,162

VI. Share capital 8,990 12,362 2,035 3,005

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

VIII. Book value per share (PLN) 162.55 170.90 36.80 41.54

IX. Diluted book value per share (PLN) 118.21 170.90 26.76 41.54

Separate earnings per ordinary share for the three 3 quarters of 2012 were calculated by dividing the net profit

attributable to ordinary shares, i.e. PLN 10,486,000 by the number of ordinary shares 1,300,000. Separate earnings

per ordinary share for the 3 quarters of 2012 amount to PLN 8.07.

Separate earnings per ordinary share for the 3 quarters of 2011 were calculated by dividing the net profit

attributable to ordinary shares, i.e. PLN 3,588,000 by the number of ordinary shares 418,127. Separate earnings

per ordinary share for the 3 quarters of 2011 amount to PLN 8.58.

Separate book value per share for the three quarters of 2012 were calculated as the ratio of the equity capital of

PLN 239,265,000 and the total number of shares: 1,400,000.

Separate book value per share for the three quarters of 2012 amounted to PLN 170.90

Separate book value per share for 2011 was calculated as the ratio of the separate equity capital of PLN

165,496,000 and the total number of shares: 1,018,127.

Separate book value per share for 2011 amounted to PLN 162.55.

Diluted book value per share in 2011 was calculated as the ratio of the equity capital of PLN 165,496,000 and the

total number of shares after dilution i.e. 1,400,000.

Diluted consolidated book value per share in 2011 amounted to PLN 118.21.


14

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

consolidated net earnings per ordinary share during the first three quarters of 2012.


Selected financial data included in the financial statement for the 3rd quarter of 2012 was calculated according to

the following PLN/EUR exchange rates:

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

according to the average EUR rate applicable as at 30 September 2012, as set by the National Bank of Poland,

i.e. PLN 4.1138, as at 30 September 2011 – PLN 4.4112 and as at 31 December 2011 – PLN 4.4168.

individual items on the profit and loss account and cash flow account converted to EUR according to the rate

which was the arithmetical average of the average rates set by the National Bank of Poland and applicable on

the last day of each turnover month:

- - for the period January - September 2012 – PLN 4.1948

- - for the period January - September 2011 – PLN 4.0413

EUR rate for calculating Balance Sheet items:

NBP average EUR rate as at 31 December.2012 – Table 189/A/NBP/2010 – PLN 4.1138.

NBP average EUR rate as at 31 December 2011 – Table 252/A/NBP/2010 – PLN 4.4168

NBP average EUR rate as at 30 September 2011 – Table 190/A/NBP/2011 – PLN 4.4112


between 1.01 and 30.09 2012


21/A/NBP/2012 31.01.2012 4.2270

42/A/NBP/2012 29.02.2012 4.1365

64/A/NBP/2012 30.03.2012 4.1616

84/A/NBP/2012 30.04.2012 4.1721

105/A/NBP/2012 31.05.2012 4.3889

125/A/NBP/2012 30.06.2012 4.2613

147/A/NBP/2012 31.07.2012 4.1086

169/A/NBP/2012 31.08.2012 4.1838

189/A/NBP/2012 30.09.2012 4.1138





between 1.01 and 31.03.2011


20/A/NBP/2011 31.01.2011 3.9345

40/A/NBP/2011 28.02.2011 3.9763

63/A/NBP/2011 31.03.2011 4.0119

83/A/NBP/2011 29.04.2011 3.9376

104/A/NBP/2011 31.05.2011 3.9569

125/A/NBP/2011 30.06.2011 3.9866

146/A/NBP/2011 29.07.2011 4.0125

168/A/NBP/2011 31.08.2011 4.1445

190/A/NBP/2011 30.09.2011 4.4112




2.3 Separate statement of the financial standing of ZPUE S.A. [thousands PLN]


15

2011

as at the end

of

30.09.2011

2011

as at the

end of

2012

as at the

end of

30.06.2012

2012

as at the

end of

30.09.2012

Assets

A. Fixed assets 157,514 158,802 239,589 240,010

I. Intangible assets 17,257 17,291 16,171 15,743

1. R&D 12,843 12,998 12,356 12,033

2. Goodwill 0 0 0 0

3. Other intangible assets 4,414 4,293 3,815 3,710

II. Property, plant and equipment 103,940 105,475 113,087 114,225

1. Fixed assets 96,945 101,052 106,129 106,805

a) land (including perpetual usufruct right to the

land) 5,399 5,399 6,947 6,947

b) buildings, commercial premises and civil

engineering facilities 57,978 57,764 58,318 59,143

c) equipment and machinery 24,323 28,123 31,401 31,413

d) means of transport 8,225 7,714 7,259 6,792

e) other fixed assets 1,019 2,052 2,204 2,510

2. Fixed assets under construction 6,994 4,423 6,958 7,420

III. Long-term receivables 102 97 55 54

1. From associates 0 0 0 0

2. From other entities 102 97 55 54

IV. Long-term investments 35,541 35,215 109,636 109,331

1. Real estate 6,103 6,076 6,023 5,997

2. Intangible assets 0 0 0 0

3. Long-term financial assets 20,515 20,556 95,753 95,759

a) in associates 20,467 20,508 95,705 95,711

- shares 20,467 20,508 95,705 95,711





- shares 48 48 48 48




4. Other long-term investments 8,923 8,583 7,860 7,575

V. Long-term deferred charges and accruals 674 724 640 657

1. Assets from deferred income tax 674 724 640 657

2. Other deferred charges and accruals 0 0 0 0

B. Current assets 141,415 162,771 149,259 145,638

I. Inventory 38,451 35,264 42,118 42,856

1. Materials 9,206 7,625 7,414 8,679

2. Semi-finished products and products in progress 28,926 26,742 33,651 33,787

3. Finished products 107 679 837 178

4. Goods 212 218 216 212

II. Short-term receivables 92,360 111,770 89,390 88,019

1. Receivables from associates 2,938 4,248 7,972 5,237


- up to 12 months 2,938 4,248 7,972 5,237


16


b) others 0 0 0 0

2. Receivables from other entities 89,422 107,522 81,418 82,782


- up to 12 months 80,939 101,914 75,817 78,998


b) from tax, subsidy, customs, social security 0 0 185 7

- including from income tax on legal entities 0 0 178 0

c) others 8,483 5,608 5,416 3,777

d) claimed at court 0 0 0 0

III. Short-term investments 7,947 11,160 14,498 11,824

1. Short-term financial assets 7,947 11,160 14,498 11,824


- shares 0 0 0 0





- shares 0 0 0 0




c) cash and other cash assets 7,947 11,159 14,498 11,824

- cash in hand and at bank 1,862 4,929 8,408 5,734

- other cash 6,085 6,231 6,090 6,090

- other pecuniary assets 0 0 0 0

2. Other short-term investments 0 0 0 0

IV. Short-term deferred charges and accruals 2,657 4,577 3,253 2,939

Total assets 298,929 321,573 388,848 385,648

Liabilities

A. Equity capital (fund) 156,143 165,496 233,202 239,265

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

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

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

IV. Supplementary capital (fund) 101,378 101,377 164,311 164,311

V. Revaluation reserve capital (fund) 21,535 21,894 36,038 36,038

VI. Other reserve capital (fund) 936 936 936 936

VII. Profit (loss) from previous years 14,272 14,273 14,273 14,273

VIII. Net profit (loss) 9,032 18,026 5,282 11,345

IX.

Write-offs on net profit during the financial year

(negative value) 0 0 0 0

B. Liabilities and reserves for liabilities 142,786 156,077 155,646 146,383

I. Reserves for liabilities 8,263 8,126 11,340 11,482

1. Reserves for deferred income tax 7,195 7,219 10,623 10,779

2. Social security reserves (and similar reserves) 1,009 655 655 655

- long-term 1,009 604 604 604

- short-term 0 51 51 51

3. Other reserves 58 252 62 48

- long-term 0 0 0 0

- short-term 58 252 62 48

II. Long term liabilities 21,431 20,772 15,788 11,222


17





c) other financial liabilities 1,900 1,504 511 394

d) others 0 0 0 0

III. Short-term liabilities 106,821 121,121 113,042 106,386

1. To associates 485 914 9,599 10,215

a) for deliveries and services, maturing within: 485 914 9,599 10,215

- up to 12 months 485 914 9,599 10,215


b) others 0 0 0 0




c) other financial liabilities 3,101 2,718 1,549 1,185

d) for deliveries and services, maturing within: 58,510 80,119 47,522 50,260

- up to 12 months 58,510 80,119 47,522 50,260


e) received advance payments for deliveries 1,834 4,231 1,724 5,076

f) liabilities on bills of exchange 0 0 0 0

g) from tax, customs, social security and other

benefits 4,075 6,841 3,194 5,658

- from income tax on legal entities 219 12 0 337

h) from remuneration 3,814 3,972 3,641 3,787

i) others 50 268 9,157 156

IV. Accruals and deferred income 6,271 6,058 15,476 17,293

1. Negative goodwill 0 0 0 0

2. Other deferred charges and accruals 6,271 6,058 15,476 17,293

- long-term 6,271 6,058 13,656 15,473

- short-term 0 0 1,820 1,820

Total liabilities 298,929 321,573 388,848 385,648

2.4 Separate profit and loss account of ZPUE S.A. [thousands PLN] PLN]

from

1.07.2011

to 30.09.2011

from

1.01.2011 to

30.09.2011

from

1.07.2012 to

30.09.2012

from

1.01.2012 to

30.09.2012

A. Net revenue from sales of products, goods

and materials, including: 88,052 235,011 93,600 250,743

- from associates 01,431 3,876 2,639 6,528

I. Net revenue from sale of products 71,073 187,737 77,695 208,289

II. Net revenue from sales of products, goods and

materials 16,979 47,274 15,905 42,454

B. Cost of products, goods and materials sold,

including: 71,589 192,603 74,192 200,940

- to associates 1,204 3,012 2,692 5,411

I. Cost of producing goods sold 56,112 149,218 59,725 161,446

II. Value of goods and materials sold 15,477 43,385 14,467 39,494

C. Gross profit / (loss) on sales 16,463 42,408 19,408 49,803

D. Cost of sales 3,518 9,343 4,671 13,214

E. General administrative expenses 6,988 21,970 7,619 23,162

F. Profit (loss) on sales 5,957 11,095 7,118 13,427

G. Other operating revenue, including: 1,525 3,976 2,610 5,619


18

I. Profit on sales of non-financial fixed assets 261 222 0 0

II. Subsidies 219 757 688 1,953

III. Other operating revenue 1,045 2,997 1,922 3,666

H. Other operating costs, including: 1,310 3,377 2,173 8,085

I. Loss on sales of non-financial fixed assets 0 0 0 17

II. Revaluation of non-financial fixed assets 638 1,261 153 291

III. Other operating costs 672 2,116 2,020 3,777

I. Profit (loss) on operating activities 6,172 11,694 7,555 14,961

J. Financial revenue, including 3,060 4,517 1,767 3,917

I. Share dividends, including: 0 2 0 2


II. Interest, including: 1,763 2,531 669 1,772


III. Profit on sale of investments 0 0 0 0

IV. Revaluation of investments 0 0 0 0

V. Others 1,297 1,984 1,098 2,143

K. Financial costs, including: 2,723 4,734 1,812 4,732

I. Interest, including: 752 1,792 1,058 2,618


II. Loss on sale of investments 0 0 0 0

III. Revaluation of investments 0 0 0 0

IV. Others 1,971 2,942 754 2,114

N. Gross profit (loss) 6,509 11,477 7,510 14,146

O. Income tax 1,454 2,445 1,447 2,801

P. Other obligatory decrease of gross profit

(increased loss) 0 0 0 0

R. Net profit (loss) 5,055 9,032 6,063 11,345

2.5 Separate statement of comprehensive income of ZPUE S.A. [thousands PLN]

from

1.07.2011

to 30.09.2011

from 1.01.2011

to 30.09.2011

from 1.07.2012

to 30.09.2012

from 1.01.2012

to 30.09.2012

Net profit (loss) 5,055 9,032 6,063 11,345

Other total revenue: 0 0 0 0

Financial assets available for sale 0 0 0 0

Collateral on cash flow 0 0 0 0

Change in the surplus from reappraisal 0 0 0 0

Other income 0 0 0 0

Income tax on other elements of total income 0 0 0 0

Total other revenue after tax 0 0 0 0

Total income 5,055 9,032 6,063 11,345

2.6 Separate statement of changes in equity of ZPUE SA [thousands PLN]

from 1.07.2011

to 30.09.2011

from

1.01.2011 to

30.09.2011

from

1.01.2011 to

31.12.2011

from

1.07.2012 to

30.09.2012

from 1.01.2012

to 30.09.2012

I. Opening balance of equity (OB) 151,140 147,164 147,164 233,202 165,496

- valuation adjustments 0 0 0 0 0

I.a. Opening balance of equity capital (fund)

(OB), adjusted 151,140 147,164 147,164 233,202 165,496

1. Opening balance of stated capital (fund) 8,990 8,990 8,990 12,362 8,990

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

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

- share issue (stock issue) 0 0 0 0 3,372


19

- increases in capital from net profit 0 0 0 0 0


- redemption of shares 0 0 0 0 0

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

2. Opening balance of called up stated

capital 0 0 0 0 0

2.1. Change in called up stated capital 0 0 0 0 0



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

3. Opening balance of own shares 0 0 0 0 0


b) decrease 0 0 0 0 0

3.1. Closing balance of own shares 0 0 0 0 0

4. Opening balance of supplementary

capital (fund) 101,378 87,174 87,174 164,311 101,378

4.1. Changes in supplementary capital (fund) 0 14,204 14,204 0 62,933

a) increase (due to) 0 14,204 14,204 0 62,933

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

- from profit distribution (statutory) 0 0 0 0 0

- from profit distribution (above the

statutory value) 0 14,204 14,204 0 9,024


- loss coverage 0 0 0 0 0

4.2. Closing balance of supplementary capital

(fund) 101,378 101,378 101,378 164,311 164,311

5. Opening balance of revaluation reserve

capital (fund) 21,587 21,587 21,587 36,038 21,894

5.1. Changes in revaluation reserve capital

(fund) -52 -52 307 0 14,144

a) increase due to the valuation of shares 0 0 359 0 17,462

b) decrease due to the reserve for deferred

tax 52 52 52 0 3,318

5.2. Closing balance of revaluation reserve

capital (fund) 21,535 21,535 21,894 36,038 36,038

6. Opening balance of other reserve capitals

(funds) 936 936 936 936 936

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



6.2. Closing balance of other reserve capitals

(funds) 936 936 936 936 936

7. Opening balance of previous years' profit

(loss) 18,249 28,477 28,477 19,555 32,298

7.1. Opening balance of previous years' profit 18,249 28,477 28,477 19,555 32,298

Adjustments of fundamental errors 0 0 0 0 0

7.2. Opening balance of previous years' profit

after adjustments 18,249 28,477 28,477 19,555 32,298


Distribution of previous years� profit 0 0 0 0 0

b) decrease (due to) appropriation of profit 0 14,205 14,204 0 18,025

7.3. Closing balance of previous years' profit 18,249 14,272 14,273 19,555 14,273

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

Adjustments of fundamental errors 0 0 0 0 0

7.5. Opening balance of previous years' loss

after adjustments 0 0 0 0 0

a) increase (due to) - Reserves for employee

benefits 0 0 0 0 0

Re-booking of previous years' loss to be

covered 0 0 0 0 0

b) decrease (due to) loss carry forward 0 0 0 0 0


20

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

7.7. Closing balance of previous years' profit

(loss) 18,249 14,272 14,273 19,555 14,273

8. Net result 5,055 9,032 18,026 6,063 11,345

a) net profit 5,055 9,032 18,026 6,063 11,345

b) net loss 0 0 0 0 0

c) write-offs on profit 0 0 0 0 0

II. Closing balance of equity (CB) 156,143 156,143 165,496 239,265 239,265

III. Equity (fund) including proposed profit

distribution (loss coverage) 156,143 156,143 165,496 239,265 239,265

2.7 Separate cash flow statement of ZPUE SA [thousands PLN]

from 1.07.2011

to 30.09.2011

from 1.01.2011 to

30.09.2011

from 1.07.2012 to

30.09.2012

from 1.01.2012 to

30.09.2012

A. Cash flows from operating activities - indirect

method

I. Gross profit (loss) 6,509 11,477 7,510 14,146

II. Total adjustments -3,213 3,434 12,578 4,408

1. Depreciation 2,683 8,129 3,525 10,118

2. Exchange gains (losses) 59 46 -84 -62

3. Interest and profit sharing (dividend) 283 1,698 832 2,229

4. Profit (loss) on investment activities -261 -222 0 17

5. Change in reserves -1 -214 -14 -204

6. Change in inventory -6,028 -13,475 -738 -7,592

7. Change in receivables 3,898 15,635 1,372 23,790

8. Change in short-term liabilities excluding credits

and loans -1,374 -5,178 8,801 -21,517

9. Change in prepayments and accruals -418 -261 -323 -203

10. Income tax paid -2,053 -2,724 -793 -2,168

11. Other adjustments -1 0 0 0

III. Net cash flows from operating activities 3,296 14,911 20,088 18,554

B. Cash flows from investment activities

I. Inflows 365 573 0 204

1. Disposal of intangible assets and property, plant and equipment 365 571 0 202

2. Disposal of investments in real property and in

intangible assets 0 0 0 0

3. From financial assets, including: 0 2 0 2


- sale of financial assets 0 0 0 0

- dividend and profit sharing 0 0 0 0

- repayment of long-term loans 0 0 0 0

- interest 0 0 0 0

- other inflows from financial assets 0 0 0 0


- sale of financial assets 0 0 0 0

- dividend and profit sharing 0 2 0 2

- repayment of long-term loans 0 0 0 0

- interest 0 0 0 0

- other inflows from financial assets 0 0 0 0

4. Other inflows from investment activities 0 0 0 0

II. Outflows 15,657 32,859 3,930 16,266

1. Acquisition of intangible assets and property, plant

and equipment 7,326 24,528 3,924 15,811

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


21

assets

3. For financial assets, including: 8,331 8,331 6 455

a) in associates 8,331 8,331 6 455

- acquisition of financial assets 8,331 8,331 6 455

- granted long-term loans 0 0 0 0


- acquisition of financial assets 0 0 0 0

- granted long-term loans 0 0 0 0

4. Other outflows from investment activities 0 0 0 0

III. Net cash flows from investment activities -15,292 -32,286 -3,930 -16,062

C. Cash flows from financial activities

I. Inflows 22,746 48,933 2,454 24,143

1. Net inflows from issuance of shares and other

capital instruments and from capital contributions 0 0 0 0

2. Credits and loans 22,746 48,933 0 10,992

3. Issuance of debt securities 0 0 0 0

4. Other inflows from financial activities 0 0 2,454 13,150

II. Outflows 9,306 23,795 21,371 26,033

1. Purchase of own shares 0 0 0 0

2. Dividends and other payments to shareholders 0 0 9,001 9,001

3. Profit distribution liabilities other than profit

distribution payments to shareholders 0 0 0 0

4. Repayment of credits and loans 8,209 19,684 11,056 11,442

5. Redemption of debt securities 0 0 0 0

6. From other financial liabilities 0 0 0 0

7. Payment of liabilities arising from financial leases 814 2,410 481 3,299

8. Interest 283 1,701 833 2,291

9. Other outflows from financial activities 0 0 0 0

III. Net cash flows from financial activities 13,440 25,138 -18,917 -1,890

D. Total net cash flows 1,444 7,763 - 2759 602

E. Balance sheet change in cash, including: 1,498 7,717 -2,674 664

- change in cash due to exchange rate differences -54 46 -85 -62

F. Cash opening balance 6,463 145 14,448 11,087

G. Cash closing balance 7,908 7,908 11,689 11,689

3. COMMENTARY AND ADDITIONAL INFORMATION TO THE CONSOLIDATED FINANCIAL

STATEMENT FOR THE 3RD QUARTER OF 2012

3.1. Basic information about the parent company, subsidiaries and area of business.

3.1.1. Parent Company – ZPUE S.A. in Włoszczowa

ZPUE S.A. based in Włoszczowa (until 18 December 2006 the Company operated under the name Zakład

Produkcji Urządzeń Elektrycznych B.Wypychewicz Spółka Akcyjna) was established on 22 October 1996. The

Company began operating on 7 January 1997.

ZPUE S.A. is a commercial company entered in the Register of Entrepreneurs of the National Court Register

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

number 0000052770.

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

switchgear and controlgear (PKD 27.12.Z).

According to the classification adopted by the regulated market, the Company is categorised as a company from

the electrical machinery industry.

3.1.2. Subsidiary – ZPUE Gliwice Sp. z o.o. in Gliwice


22

ZPUE Gliwice Sp. z o.o. based in Gliwice was established on the basis of the articles of association confirmed by

a notarial act. The Company began operating on 1 May 1995 on the day it was first entered into the Commercial

Register of the District Court in Gliwice under the following number: RHB – 11901.

On 21 November 2002 it was entered into the National Court Register by the District Court in Gliwice, 10th

Commercial Division of the National Court Register, under the following KRS number: 0000133811.

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


The share capital of ZPUE Gliwice sp. z o.o. amounts to PLN 1,500,000.00 and is divided into 15,000 shares of

the value of PLN 100.00 per share. ZPUE S.A holds 14,986 shares of ZPUE Gliwice sp. z o.o. representing 99.9%

of the share capital of the said company and entitling to 99.9% of votes at the Shareholders' Meeting of ZPUE

Gliwice sp. z o.o.

3.1.3. Subsidiary – ZPUE Katowice S.A. in Katowice

Elektromontaż - 1 Katowice S.A. in Katowice (previously Elektromontaż-1 Katowice) manufactures state-of-the-

art and recognised power engineering equipment, including medium and low voltage switchgear, switchgear and

control cabinet enclosures, transformer enclosures, low and medium voltage bus bars, automatic transfer switching

equipment as well as capacitor banks for compensation of reactive power.

Elektromontaż-1 Katowice S.A. has been operating on the market as a manufacturer of electrical equipment since

1948. In 1992, it was transformed into a sole-shareholder company of the State Treasury and in 1995 incorporated

into the Mass Privatisation Programme. In 1998, the controlling stake of the Company was taken over by

Klöckner-Moeler based in Germany. In 2004, the said stake was purchased by Transforma Project Management

GmbH based in Germany and in 2007 the main shareholder was Bogusław Wypychewicz. On 25 July 2012, the

company's name was changed to ZPUE Katowice Spółka Akcyjna.

ZPUE Katowice Spółka Akcyjna with its registered office in Katowice was established based on the articles of

association confirmed by a notarial act. The Company began operating in 1992 on the day it was first entered on

the Commercial Register of the District Court in Katowice under the following number: RHB – 8398.

It was entered into the National Court Register on 25 January 2002 under KRS number: 0000083973. The entity

keeping the register is the District Court Katowice-Wschód in Katowice, 8th Commercial Division of the National

Court Register.



The share capital of ZPUE Katowice SA amounts to PLN 6,628,902.72 and is divided into 1,883,211 shares of

the value of PLN 3.52 per share. ZPUE S.A. holds 1,870,439 shares of Elektromontaż-1 Katowice S.A.,

representing 99.32% of its share capital and entitling to 99.32% of the votes at the General Shareholders' Meeting

of ZPUE Katowice S.A.

ZPUE Katowice S.A. manufactures state-of-the-art and recognised power engineering equipment:

medium voltage switchgear,

low voltage switchgear,

switchgear and control cabinet enclosures,

transformer enclosures,

low and medium voltage bus bars,

automatic transfer switching equipment as well as capacitor banks for compensation of reactive power.

ZPUE Katowice S.A. provides services in the field of:

construction of electrical systems,

sheet metal processing;

powder coating;

switchgear maintenance.

ZPUE Katowice S.A. also pursues the sales in:

'Tyco Elektronics' cable accessories and cable terminals designed for power-engineering industry:

Holophane lighting systems designed mainly for the industry, but also for use in commercial, sports,

recreation and public buildings.

ZPUE Katowice SA uses modern machinery and technologies as well as employs a team of experienced

professionals.

Customers of ZPUE Katowice SA are mainly industrial plants, power companies and environmental protection

plants in Poland, Eastern and Western Europe, Asia and Africa.

The acquisition of ZPUE Katowice S.A. allows:


23

- to expand the portfolio of the offered products; to increase the range of the offered products and expand

to the new segments of the power engineering market,

- to increase the export share in the Company's trading balance by widening the offer with new products,

which hitherto were absent in the operated trade network to boost the exports;

- to facilitate recruitment of the engineering and technical staff by attracting the graduates of technical

universities from the Upper Silesia Region;

- the synergy effect in terms of purchases, innovations and implementations; mitigation of the detrimental

impact of the seasonality at the Company, procurement of contracts several months in advance.

On 3 September 2012, the District Court Katowice-Wschód in Katowice, 8th Commercial Division of the National

Court Register, registered the merger of ZPUE Katowice S.A. and Elektromontaż MB Sp. z o.o. with its registered

office in Włoszczowa, thus deleting Elektromontaż MB Sp. z o.o. from the Register of Entrepreneurs.

3.1.4. Subsidiary – ZPUE Tools Sp. z o.o. in Włoszczowa

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

moulds and press moulds. Furthermore, ZPUE Tools Sp. z o.o. offers machining services. It prepares moulds for

our Group for the manufacture of thermosetting plastic components such as casings for cable connectors as well as

the moulds for manufacture of spun concrete poles, a wide range of tools (moulds, die blocks, trimming dies),

various components and minor elements used in the manufacture of the power engineering equipment.

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

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

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

other semi-products (PKD 4676Z).

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

value of PLN 5,000.00 PLN per share. ZPUE S.A holds 12 shares of ZPUE Tools Sp. z o.o. representing 100% of

the share capital of the said company and authorizing to 100% of votes at the Shareholders' Meeting of ZPUE

Tools Sp. z o.o.

3.1.5. Subsidiary – ZPUE Poles Sp. z o.o. in Włoszczowa

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

which the support structures for the medium and low voltage overhead power lines are installed. The poles are

manufactured on the optimized and automated production line. The current production capacity of ZPUE Poles Sp.

z o.o. is 16,000 spun concrete poles per year. The incorporation of ZPUE Poles Sp. z o.o. into ZPUE S.A. Capital

Group facilitates complex performance of the contracts for the development of the overhead power lines and street

lighting.

It was entered into the National Court Register on 04 May 2011 under KRS number: 0000385172. The entity

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


concrete construction products (PKD 2361Z).

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

value of PLN 50.00 per share. ZPUE S.A holds 300 shares of ZPUE Poles Sp. z o.o. representing 100% of the

share capital of the said company and authorizing to 100% of votes at the Shareholders' Meeting of ZPUE Poles

Sp. z o.o.

3.1.6. Other unconsolidated subsidiaries

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

Group's activities:

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

Transformer Substations) at the Urban Settlement of Tolmachevo (Leningrad Oblast, Russian Federation)

manufactures stations in concrete casings as well as complete transformer stations in concrete casings. The

company's legal form corresponds to a Polish limited liability company and its share capital amounts to RUB

10,000.00. ZPUE S.A. holds the interest of RUB 5,100.00, representing 51% of the share capital of the said

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

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

Oblast, Russian Federation) leases real properties and maintains operation of ZBKTP. The company's legal


24

form corresponds to a Polish limited liability company and its share capital amounts to RUB 85,000,000.00.

ZPUE S.A. holds the interest of RUB 43,350,000.00, representing 51% of the share capital of the said

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

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

Ukraine. The company's legal form corresponds to a Polish limited liability company and its share capital

amounts to EUR 8,000. ZPUE S.A. holds the interest of EUR 6,400, representing 80% of the share capital of

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

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

Czech Republic. The company's legal form corresponds to a Polish limited liability company and its share

capital amounts to CZK 210,000.00. ZPUE S.A. holds the interest of CZK 154,000.00, representing 73.33%

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

Meeting of the company.

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

as manufactures concrete enclosures in Bulgaria. The company's legal form corresponds to a Polish limited

liability company and its share capital amounts to BGN 300. ZPUE S.A. holds 300 shares of the total value

of BGN 300, representing 100% of the share capital of the said company and authorizing ZPUE S.A. to

100% of votes at the Shareholders' Meeting of the company.

ZPUE Usługi Sp.z o.o. w organizacji with its registered office in Włoszczowa provides services, especially

accountancy services. The share capital of the Company amounts to PLN 6000, and consists of 120 shares

with a nominal value of PLN 50. ZPUE S.A. holds all shares of ZPUE Usługi sp. z o.o. w organizacji.

Data for the third quarter of 2011 comprise the financial information of the parent company and ZPUE Gliwice Sp.

z o.o. In turn, the financial statements for the third quarter of 2012 present the consolidated financial statements of

the parent company and its subsidiaries, namely ZPUE Gliwice Sp. z o.o., Elektromontaż-1 Katowice S.A., ZPUE

Tools Sp. z o.o. and ZPUE Poles Sp. z o.o.

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

the difficulties related to procurement of reliable financial data.

3.1.7. Shares in other entities

As at 31 March 2012, ZPUE S.A. owns 28 shares in Przedsiębiorstwo Aparatów i Konstrukcji Energetycznych

ZMER Sp. z o.o. in Kalisz, entitling it to 28 votes at the Shareholders' Meeting, which constitutes 3.92% of the

total number of votes. This entity is not, however, part of ZPUE S.A. Capital Group and is not subject to

consolidation.

3.2 Scope of the consolidated financial statement presented

The consolidated quarterly financial statement of ZPUE S.A. Capital Group for the 3rd quarter of 2012 (the period

from 1.07.2012 to 30.09.2012) includes the financial statements of the parent company and the financial statement

of the subsidiaries. Comparative data for the 3rd quarter of 2011 cover data for the period from 1.01.2011 to

30.09.2011 for the parent company and the subsidiaries.

3.3 Information about entities covered by consolidation

The consolidated quarterly financial statement for the 3rd quarter of 2012 was prepared based on financial data of

ZPUE S.A. based in Włoszczowa and data of ZPUE Gliwice Sp. z o.o., Elektromontaż-1 Katowice S.A., ZPUE

Poles Sp. z o.o. and ZPUE Tools Sp. z o.o. belonging to ZPUE SA Capital Group.

ZPUE S.A. Group's Consolidated Financial Statements do not include the data of the companies:

1. "Zavod Blochnykh Komplektnykh Transformatornykh Podstantzy" OOO (The Plant of Complete Unit

Transformer Substations) at the Urban Settlement of Tolmachevo (Leningrad Oblast, Russian Federation)

2. "Promyshlennye investicii" OOO (Industrial Projects) at the Urban Settlement of Tolmachevo (Leningrad

Oblast, Russian Federation)

3. OOO ZPUE Ukraina (ZPUE Ukraine) based in Synelnykove (Ukraine),

4. ZPUE Trade s.r.o. (ZPUE Trade) based in Napajedla (Czech Republic),

5. ZPUE Balkani, EOOD (ZPUE Balkans) based in Sofia (Republic of Bulgaria).

6. ZPUE Usługi Sp.z o.o. w organizacji with its registered office in Włoszczowa.


25

ZPUE SA has not consolidated the financial data of the acquired companies due to their minor significance for the

Group's consolidated statements and due to the fact that the costs of procuring reliable financial information would

exceed the economic benefits from procurement and presentation thereof. Nevertheless, ZPUE S.A. recognizes the

purchase of shares in the aforementioned companies as the long-term investment designed at expansion of the

existing product offer and hopes that it will shed a light on the Russian, Ukrainian, Czech and Bulgarian markets,

and thus facilitate establishing business contacts win the future.

3.4 Methods of preparing financial statements

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

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

the business activity.

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

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

Company and subsidiaries for the period between

1) in the case of the statements of financial positions - as at: 30.09.2012, 30.06.2012, 31.12.2011 and

30.09.2011;

2) in the case of the profit and loss account and the cash flow statement, as for the following periods: from 1

January 2012 to 30 September 2012, from 1 July 2012 to 30 September 2012, from 1 January 2011 to 30

September 2011, from 1 July 2011 to 30 September 2011;

3) in the case of the presentation of changes in equity capital, as for the following periods: from 1 January

2012 to 30 September 2012, from 1 July 2012 to 30 September 2012, from 1 January 2011 to 31

December 2011, from 1 July 2011 to 30 September 2011;

Comparable data cover the consolidated financial statements of the Parent Company ZPUE S.A., and of the

following subsidiaries: ZPUE Gliwice Sp. z o.o., ZPUE Katowice S.A., ZPUE Tools Sp. z o.o. and ZPUE Poles

Sp. z o.o., while in the case of ZPUE Gliwice Sp. z o.o. the comparable data cover the period from 1 January 2011

to 30 September 2012, whereas in the case of ZPUE Katowice S.A., ZPUE Tools Sp. z o.o. and ZPUE Poles Sp. z

o.o. the comparable data cover the period from 1 January 2012 to 30 September 2012.

3.5 Description of adopted accounting principles, including valuation of assets and liabilities, revenues

and costs, determination of financial result and the method of preparation of financial statement and

comparable data

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

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

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

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

3.5.1. The current rules for measuring assets and liabilities

Principles of recognising property, plant and equipment

The property, plant and equipment are such assets which:

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

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

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

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

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

reliably.

The fixed assets include;

land (including perpetual usufruct right to the land),

buildings,

civil engineering facilities,

machinery, equipment,

means of transport,


26

other items

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

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

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

materials. Upon release for use their value is written down in costs of materials and recorded off the

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

of use. The criterion to include materials in records was their use for more than one year.

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

fixed assets records allow to enter differentiators distinguishing assets financed from other sources (e.g.

from the state budget, EU subsidies.) Fixed assets are recorded in analytical positions in accordance with

Classification of Fixed Assets.

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

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

trademarks, decor or utility designs,

successful development costs, spending on R&D,

goodwill,

know-how

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

lease agreement or other agreement of similar nature.

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

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

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

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

intended use. In the case of in-house production it is the cost of production, which shall be the value of

property used and external services, the costs of salaries including related costs and other costs attributable to

the value of manufactured fixed assets or intangible assets. The cost of production does not include general

administrative costs, sales costs, other operating and financial costs and costs of excessive deficiencies,

excessive labour and other resources during the construction, installation or improvement of fixed assets and

the adaptation for use;

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

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

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

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

condition and degree of wear.

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

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

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

assets.

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

A separate inventory number for each item,

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

year of construction (purchase),

name of the fixed asset,

classification symbol of the asset,

initial value,

changes in value during use,

annual rate of depreciation,

annual and monthly amount of depreciation,

depreciation to date,

net value,

the date of withdrawal from use and evidence number,

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

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

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

inventory number,


27

name,

date of purchase or manufacture,

date of booking and proof of purchase number,

date of putting to use,

initial value,

annual rate of depreciation,

the annual, monthly, and total depreciation value,

net value,

the date of full depreciation,

date and number of withdrawal from records

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

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

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

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

benefits that outweigh the benefits possible to be achieved within the originally estimated benefits from the asset

already owned. All other subsequent expenditures are recognized as an expense in the period in which they are

incurred. Expenditures for repairs and maintenance of property, plant and equipment incurred to restore or

maintain future economic benefits, which the entity can expect based on the originally estimated benefits, are

recognized as expenses when incurred.

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

independent period of their economic use.

Redemption

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

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

benefits from the asset.

Depreciation is recognized as an expense during the period.

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

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

future periods are adjusted.

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

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

impairment of individual assets.

The depreciation schedule includes:

inventory number,

generic classification symbol,

item name,

date put into use,

initial value,

depreciation method,

annual depreciation rate,

annual and monthly amount of depreciation write-offs,

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

the Accounting Act are classified as fixed assets - depreciation period shall be based on useful life.

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

causing permanent loss of economic usefulness of an asset, appropriate unplanned depreciation write-offs

are charged to other operating costs.

Valuation of fixed assets and intangible assets

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

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

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

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

valued by the purchase prices or cost of production.

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

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

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


28

Group 2 — Civil engineering facilities valued by the fair value are redeemed for 720 months at a rate of 1.66% per

annum. Other fixed assets — 120-300 months.

Valuation of other assets and liabilities

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

impairment loss write-offs.

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

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

Real estate are recorded and measured in accordance with the rules relating to fixed assets and intangible assets and rights, i.e.

according to the purchase price or production cost, or revalued amount, less depreciation and permanent


Intangible assets classified as investments are recorded and measured in accordance with the rules relating to fixed assets and intangible assets and rights, i.e.

according to the purchase price or production cost, or revalued amount, less depreciation and permanent


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

permanent impairment loss write-offs.

Inventories of materials, goods, finished products, intermediates and products in progress are measured at

purchase price or production cost or recoverable net value, depending on which is the lower amount.

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

quantity and value of inventory.

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

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



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



Materials received by the warehouse are recorded by:

actual purchase prices.

Materials released from the warehouse are measured using:

First in, first out (FIFO) method.

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

Goods released from the warehouse are measured using:

First in, first out (FIFO).

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

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

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

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

actual production cost is measured by:

First in, first out (FIFO).

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

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

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

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

of production that remain relatively constant regardless of the volume of production, such as depreciation and

cost of maintenance of factory buildings and equipment, and manufacturing (factory) cost of management and

administration. Variable indirect production costs are those indirect costs of production that vary directly or

nearly directly with the volume of production, such as indirect materials and labour costs.

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

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


29

Receivables are measured at the amount due, taking in account the prudence principle, after impairment of their

value. The receivables are revalued taking into consideration the probability of their payment. With respect to:

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

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

bankruptcy proceedings, upon receipt of the relevant information,

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

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

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

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

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

court's decision.

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

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

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

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

reliably estimated write-down upon referral of the debt for the enforcement proceedings pursuant to a legally

binding court's decision.

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

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

cost.

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

Provisions for losses and liabilities are measured at a reasonable, reliably estimated value.

The reserves are created when:

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

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

a reliable estimate of that obligation can be made.

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

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

accounts of other operating income and financial revenue.

Valuation of financial instruments:

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

with their current purchase/sale price.

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

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

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

securities, further discounted with the current interest rate.

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

made by these funds.

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

financial statements issued by these funds.

Shares (stocks) are measured at their purchase price.

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

Valuation of assets and liabilities denominated in foreign currencies

On the balance date:

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

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

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

During the financial year:


30

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

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

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

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

tables - the exchange rates from the second exchange rate table published on a particular date.

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

rate announced by the National Bank of Poland on the last working day preceding the date of incurred cost,

unless the customs declaration or other document that binds the entity sets a different rate;

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

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

bank)

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

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

currency rates:

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

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

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

Principles of valuation of contingent liabilities

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

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

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

reliability or is not likely that fulfilling this liability would lead to an outflow of resources embodying economic

benefits. In connection with this, such liability is not presented in the balance sheet, but it is described in additional

information and notes to financial statements.

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

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

Principles of measuring derivative instruments hedging assets

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

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

exchange rate, etc.)

initial purchase expenses do not occur or are very low,

instrument will be settled in the future.

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

rate, interest rates, stock indices.

An entity may use derivative hedging instruments in order to:

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

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

booked on the accounts,

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

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

transactions, which are booked on the accounts.

Contracts associated with financial instruments reduce the risks associated with the entity's assets or liabilities, i.e.

hedge these assets or liabilities, if at least:

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

identified,

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

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

interest rates or currency exchange rate,

likelihood of the expected cash flows is significant.

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

financial hedging instruments and changes in their value.

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

the accounts.

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

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

measured.


31

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

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

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

instruments (Official Journal No 149, item 1674).

Reserves and assets from income tax

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

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

base in the future.

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

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

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

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

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

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

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

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

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

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

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

financial year.

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

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

amount of tax liability.

Accruals and deferred costs

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

resulting from:

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

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

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

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

other items justified by the economic risk and commercial practices.

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

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

Accruals and deferred income

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

future periods. Revenue accruals include, among others:

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

financial year,

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

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

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

operating income in proportion to the depreciation of fixed assets funded from grants received. Booking

fixed assets in fixed assets register in the "Fixed assets" module allows the introduction of marking

allowing the distinction of fixed assets financed by subsidy and to determine the value of depreciation of

the corresponding part funded from the grant.

Accrued costs/expenses

3.5.2. Deferred expenditure

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

following:

cost of rents and leases paid in advance,

energy costs paid in advance,

cost of property insurance,

fees for perpetual usufruct of land,

property tax,

assets from deferred taxes,


32

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

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

financial periods to which they relate.

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

analytical accounts grouping the basic operating costs, financial costs and other operating expenses not deductible

for the purposes of the Income Tax Act, and on the other hand the accounts grouping together financial revenue

and other operating revenue which are not revenue or are exempt from taxation. The analytical distinction in

balance sheet accounts is confirmed by the off balance grouping of costs and revenues in accounts of group "9". In

addition, the accounts group "9" records the costs and revenues that have not been booked on the balance sheet

accounts, and affect the determination of the tax base. These include salaries, social security contributions and

other employee benefits, as well as interest paid, which were paid during the reporting period and that relate to the

previous period.

3.5.3. The choice of the profit and loss account

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

Net result consists of:

• sales revenue,

• result from other operating activities

• result of financial operations,

• compulsory charging of financial result by corporate income tax.

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

"5".

3.5.4. The method of drawing up a cash flow statement

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

cash flows occurring during the reporting period, broken down by operating, investing and financing activities.

3.5.5. Statement of changes in equity

The Company prepares the statement of changes in equity.

3.5.6. Detail of the financial statements

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

following individual components:

a) statement of the financial standing,

b) profit and loss account,

c) statement of changes in equity capital,

d) cash flow account,

e) statement of total revenue,

f) information on accounting policies and explanatory notes.

Financial statements present information that is:

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

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

- faithfully present the financial results and financial position,

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

- is objective and impartial,

- is consistent with the prudence principle,

- is complete in all material respects.

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

- going concern principle;

- accrual principle,

- continuity of presentation principle;

- the materiality principle.

3.5.7. The materiality principle


33

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

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

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

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

in consultation with the entity's general manager.

3.5.8. New standards and interpretations adopted by the European Union, which are not applicable and

not previously applied by the Companies of the ZPUE SA Capital Group:

Amendments to IAS 19 "Employee Benefits" - amendments to accounting of benefits in the post-

employment period (effective for annual periods beginning on or after 1 January 2013),

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

IFRS 9 "Financial Instruments" (effective for annual periods beginning on or after 1 January 2015),

IFRS 10 "Consolidated Financial Statements" (effective for annual periods beginning on or after 1

January 2013),

IFRS 11 "Joint Arrangements" (effective for annual periods beginning on or after 1 January 2013),

IFRS 12 "Disclosure of Interests in Other Entities" (effective for annual periods beginning on or after 1

January 2013),

IFRS 13 "Fair Value Measurement" (effective for annual periods beginning on or after 1 January 2013),

IAS 27 (amended in 2011) "Separate Financial Statements" (effective for annual periods beginning on or

after 1 January 2013),

IAS 28 (amended in 2011) "Investments in Associates and Joint Ventures" (effective for annual periods

beginning on or after 1 January 2013),

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

Hyperinflation and Removal of Fixed Dates for First-time Adopters (effective for annual periods beginning on or

after 1 July 2011),

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

Government loans (effective for

for annual periods beginning on 1 January 2013 and thereafter),

Amendments to IFRS 7 Financial Instruments - Disclosures" – Offsetting Financial Assets

and Financial Liabilities (effective for annual periods beginning on 1 January 2013 and thereafter),

Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" –

mandatory date of entry into force and transitional provisions,

Amendments to IAS 12 "Income Taxes" - Deferred Tax: Recovery of Underlying Assets (effective

for annual periods beginning on or after 1 January 2012),

Amendments to IAS 32 "Financial Instruments: Presentation" – Offsetting Financial Assets and Financial

Liabilities (effective for annual periods beginning on or after 1 January 2014),

Amendments to various standards "Amendments to IFRS (2012)"- amendments introduced within the

procedures for implementation of annual amendments to IFRS published on 17 May 2012 (IFRS 1, IAS 1, IAS 16,

IAS 32 and IAS 34) focused primarily on resolving inconsistencies and clarifying vocabulary (effective for annual

periods beginning on or after 1 January 2013,

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

the production phase of the mine" (effective for annual periods beginning on or after 1 January 2013).

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

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

Group the aforesaid standards, interpretations and amendments to the standards would not exercise a material

impact on the consolidated financial statements, if the same had been applied as at the balance sheet date.

3.6. Adjustments for reserves, reserves from deferred income tax and impairment loss write-offs on the

value of assets

Consolidated data:

During the period from 1 January to 30 September 2012 impairment losses were written off on settlements

(receivables). The state of the write offs was as follows:

- as at 1.01.2012 – PLN 10,131,000


34

- decrease in impairment write offs on settlements – PLN 3,107,000

- increase in impairment write offs on settlements – PLN 2,071,000

- as at 30.09.2012 – PLN 9,095,000

The state of reserves for deferred income tax was as follows:

- as at 1.01.2012 – PLN 11,414,000

- - reversed provisions – PLN 312,000

- created provisions – PLN 3,759,000

- transactions excluded from consolidation - PLN 3,318,000

- as at 30.09.2012 – PLN 11,543,000

The state of assets from deferred income tax was as follows:

- as at 1.01.2012 – PLN 1,603,000

- decrease in assets from deferred income tax – PLN 149,000

- increase in assets from deferred income tax – PLN 108,000

- as at 30.09.2012 – PLN 11,543,000

Parent company's data:

During the period from 1 January to 30 September 2012 impairment losses were written off on settlements

(receivables). The state of the write offs was as follows:

- as at 1.01.2012 – PLN 7,397,000

- decrease in impairment write offs on settlements – PLN 3,107,000

- increase in impairment write offs on settlements – PLN 1,683,000

- as at 30.09.2012 – PLN 5,973,000

The state of reserves for deferred income tax was as follows:

- as of 1.01.2012 – PLN 7,219,000

- reversed provisions – PLN 138,000

- created provisions – PLN 3,698,000

- as at 30.09.2012 – PLN 10,779,000

The state of assets from deferred income tax was as follows:

- as at 1.01.2012 – PLN 724,000

- decrease in assets from deferred income tax – PLN 149,000

- increase in assets from deferred income tax – PLN 82,000

- as at 30.09.2012 – PLN 657,000

3.7 A concise description of the issuer’s achievements or setbacks during the period, to which the

statement refers to, with a list of the most significant events associated with them.

The most important events of the third quarter of 2012 included:

- admission to trading on the stock exchange of 381.873 F series ordinary bearer shares;

- signing (by ZPUE S.A. and its subsidiaries) Amendment 1 to the Multi-purpose credit line agreement

with BNP Paribas Bank Polska S.A. with its registered office in Warsaw;

- confirmation made by the National Centre for Research and Development with respect to the subsidy for

ZPUE S.A.'s project entitled "Automatic, overhead vacuum switch (autorecloser) with "smart grid"

network automatics function" under the "Innovative Economy Operational Programme for 2007-2013,

Action 1.4.

3.8 Factors and events during the period, particularly atypical ones, significantly affecting the financial

results achieved

In the Management Board's opinion, the 3rd quarter of 2012 did not see any major extraordinary factors or

occurrences which might significantly affect the financial results of ZPUE S.A. Capital Group.

3.9 Clarifications referring to seasons or cycles in the issuer’s business during the presented period.

The seasonality of production, which is characteristic for the industry in which ZPUE S.A. Capital Group operates,

makes the results achieved in the third quarter the most outstanding over the entire the year. This seasonal nature is

a result of demand for products in the industry being dependent mainly on investments in the energy sector.

Investment in the energy sector mostly takes place in the second half of the year.

3.10 Information concerning issues, purchases and payments of non-share and capital securities

In the reporting period, no issues, repurchases or repayment of debt and equity securities took place.


35

3.11 Information concerning dividend payout executed (or announced), jointly and calculated per share,

divided into ordinary and preference shares.

Pursuant to the dividend policy adopted by the Management Board of ZPUE S.A., which provides for that the

Company shall pay the dividend to the shareholders for a particular financial year on the annual basis, the

Management Board of ZPUE S.A. passed Resolution No 3/03/2012 of 19 March 2012 recommending the General

Shareholders' Meeting to allocate a part of the net profit generated by ZPUE S.A. in 2011 (in the amount of PLN

9,001,000) to the dividend payments to shareholders, which means the payment at the level of PLN 6.40 per

ordinary share and the payment of PLN 6.81 per each preference share. (Current report No 12/2012).

On 20 June 2012, the Ordinary General Meeting, pursuant to Resolution No 7/06/2012, decided to allocate a part

of the net profit generated by the Company in 2011 (in the amount of PLN 9,001,000) for the payment of

dividends. The gross amount of the dividend was PLN 6.40 per ordinary share and PLN 6.81 PLN per preference

share. The dividend was paid in full on 2 August 2012. The right to receive dividends was given to the

shareholders holding ZPUE S.A. shares as at 4 July 2012 (the dividend date). The shares eligible for dividends

include 100,000 registered shares of A series and 1,300,000 ordinary bearer shares of A, B, C, D, E, F series.

3.12 Events which took place following the date on which the Condensed Quarterly Financial Statement

was drawn up and not included in that statement, which could significantly affect the Issuer’s future

financial results

Pursuant to Resolution 1021/2012 of 12 October 2012 of the Management Board of Warsaw Stock Exchange, F

series ordinary bearer shares of ZPUE S.A. were admitted to trading on the primary market. Simultaneously, on 16

October 2012, the Management Board of Warsaw Stock Exchange admitted in the normal course of business

381,873 F series ordinary bearer shares of ZPUE S.A. to trading on the primary market. (Current report No

36/2012).

On 2 October 2012, ZPUE S.A. and its subsidiaries, i.e.ZPUE Gliwice Sp. z o.o., ZPUE Katowice S.A., ZPUE

Tools Sp. z o.o. and ZPUE Poles Sp. z o.o. on the first part, and BNP Paribas Bank Polski S.A. with its registered

office in Warsaw on the second part, entered into Amendment 1 to Multi-purpose credit line agreement no.

WAR/2001/11/167/CB of 5 July 2011. Pursuant to Amendment No 1 to the Agreement, ZPUE S.A. (as the current

borrower) and the Bank authorized ZPUE Gliwice Sp. z o.o. with its registered office in Gliwice, ZPUE Katowice

S.A. with its registered office in Katowice, ZPUE Poles Sp. z o.o. with its registered office in Włoszczowa and

ZPUE Tools Sp. z o.o. with its registered office in Włoszczowa to accede to the Agreement on the part of the

Borrower. Therefore, separate credit agreements entered into by and between the companies and the Bank were

merged into a single one. As a result of this consolidation, ZPUE S.A. Group increased the total credit limit up to

the amount of PLN 37,000,000.00. Furthermore, the Agreement allowed ZPUE S.A. Group to flexibly create

credit limits made available to each company within the Group. The term of credit shall end as at 4 July 2021

(Current Report No 34/2012).

A notification was published on the website of the National Centre for Research and Development, specifying that

the subsidy for ZPUE S.A.'s project entitled "Automatic, overhead vacuum switch (autorecloser) with "smart grid"

network automatics function" under the "Innovative Economy Operational Programme for 2007-2013. Action 1.4

(No POIG.01.04.00-26-030/12) was confirmed. Co-financing agreement will be entered into by and between the

Parties in November 2012 pursuant to the specimen submitted by the National Centre for Research and

Development, whereas its terms and conditions shall not differ from standard terms and conditions of agreements

relating to the project co-financing under the Innovative Economy Operational Programme. The value of co-

financing: PLN 2,847,909.00 The total value of the project eligible for co-financing was estimated to amount to

PLN 5,008,180.00. The aim of the project is to develop an automatic, overhead vacuum switch (autorecloser) with

"smart grid" network automatics function that will be used in three-phase, medium-voltage distribution networks.

Furthermore, it will be possible to use the appliance as an element of an overhead line or electric station or as a

vacuum switch automatically separating a selected network section or damaged junction.

The project in question is planned for completion in the fourth quarter of 2014. As a result of the investment

connected with the project, the product portfolio will be even larger. This should have a positive impact on the

future financial results of our Capital Group.

3.13 Changes in contingent liabilities or contingent assets, which occurred after the last financial year


36

1) The value of contingent liabilities as at 30 September 2010 equalled PLN 9,500,00. Contingent liabilities

result from the update of the patronage declaration of 8 July 2008 (the update was signed by the Management

Board of ZPUE S.A. on 29 July 2010) (the Company announced this in current report 14/2008), which

reduced the sum of the surety granted to STOLBUD Włoszczowa S.A., with registered office in

Włoszczowa, with regard to repaying the liabilities resulting from Contract No 270-1/4/RB/2007 signed with

PKO BP S.A. for the credit of PLN 5,400,000 PLN the current account. By way of this declaration, the

Management Board of ZPUE S.A. has granted a property surety on the repayment of the credit, up to the

amount of PLN 5,000,000, to STOLBUD Włoszczowa S.A.

Furthermore, the Management Board of ZPUE S.A. also signed a patronage declaration with regard to the

repayment of the liability of STOLBUD Włoszczowa S.A., up to the amount of PLN 4,500,000, resulting

from Contract No 202-127/3/I/10/2007 signed with PKO BP S.A. for a non-renewable working capital loan

of PLN 7,000,000.

The contingent liabilities in question were granted with the consent of the Supervisory Board (Resolution No

11/2010) and will be binding until 30 June 2014.

2) On 10 October 2012 the Issuer was notified about the expiry of a property surety on the payment of liabilities

of Stolbud Włoszczowa S.A. with its registered office in Włoszczowa. The surety was granted by ZPUE S.A.

pursuant to the Cash transfer agreement (deposit) of 14 March 2011, entered into with Alior Bank S.A. with

its registered office in Warsaw. The expiry of this surety is connected with the complete repayment by

STOLBUD Włoszczowa S.A. of the credit under the Current Account Credit Agreement No

U0001631804685.

3.14 List of the effects of changes to the structure of the Company, including business entities

consolidation, take over or sale of the capital group’s entities, long-term investments, division, restructure

and ceasing business operations.

Over the third quarter of 2012 there were no changes to the structure of the Company, including business entities

consolidation, take over or sale of the capital group’s entities, long-term investments, division, restructure and

ceasing business operations.

3.15 The position of the Management Board concerning the possibility of meeting the previously

released, current year’s profit forecasts early, in the light of results presented in the quarterly statement in

relation to forecast profits.

The Management ZPUE S.A. does not publish financial performance forecasts. As a rule only the actual results

achieved by the Company are presented to the investors.

3.16 Shareholders who either directly or indirectly own in excess of 5% of the overall number of votes at

the GM of ZPUE S.A. as of the date of passing the quarterly report, together with the number of shares

owned by those entities, their percentage share in the capital, number of votes from these at the annual

general meeting and their percentage share in the total number of votes at the GM, as well as a list of the

changes to the ownership structure of significant issuer’s share packages during the period since the last

quarterly report was passed.

As at 14 November 2012 (date of the quarterly report publication)

Shareholder Number and type of shares Percentage

share in the

share capital

Number

of votes

at the

GM

Percentag

e of votes

at the GM

Małgorzata Wypychewicz1 18,100 of A series registered preference shares

1.29% 90,500 5.03%

KORONEA S.à r.l.

(Bogusław Wypychewicz is a

parent entity for KORONEA

S.à r.l.)2

140,001 ordinary bearer shares

10.00% 140,001 7.78%

KORONEA INVESTMENT

S.à r.l.

(Bogusław Wypychewicz is a

parent entity for KORONEA

INVESTMENT S.à r.l.)3

81,900 of A series registered preference shares


51.45% 1,047,851 58.21%

Aviva Investors Poland S.A.4 109,007 ordinary bearer shares 7.79% 109,007 6.06%


37

(entity acting for Aviva

Investors Poland

Towarzystwo Funduszy

Inwestycyjnych S.A., which

is a body of the investment

funds which are the direct

holders of the shares of:

Aviva Investors Fundusz

Inwestycyjny Otwarty and

Aviva Investors

Specjalistyczny Fundusz

Inwestycyjny Otwarty)

AMPLICO PTE S.A.5 (an

entity managing the funds:

AMPLICO Otwarty Fundusz

Emerytalny and MetLife

Amplico Dobrowolny

Fundusz Emerytalny)

118,005 ordinary bearer shares 8.43% 118,005 6.56%

Other shareholders 294,636 ordinary bearer shares 21.04% 294,636 16.36%

TOTAL 1,400,000 shares 100.00% 1,800,000 100.00%

1 as at 27 June 2012 r. (Current Report No 31/2012)

2as at 27 June 2012 (Current Report No 30/2012) 3as at 27 June 2012 (Current Report No 30/2012) 4 As at 25 November 2011 (Current Report No 47/2011)

5 as at 29 March2012 (Current Report No 15/2012)

As at the quarterly report publication date, ZPUE S.A. share capital stood at PLN 12,362,000 and was divided into

1,400,000 shares with a nominal value of PLN 8.83 each.

1,400,000 shares consisted of: 100,000 A series registered preference shares and 1,300,000 ordinary bearer shares.

As at 15.05.2012 (the date of the previous quarterly report publication)

Shareholder Number and type of shares Percentage

share in the

share capital

Number of

votes at the

GM

Percentage

of votes at

the GM

Bogusław Wypychewicz 50,000 A series nominative preference shares


4.68% 265,584 14.76%

Małgorzata Wypychewicz 42,000 A series registered preference shares


4.14% 225,905 12.55%

KORONEA S.à r.l.

(Bogusław Wypychewicz

is a parent entity for

KORONEA S.à r.l.)

8,000 A series registered preference shares


53.92% 786,863 43.71%

Aviva Investors Poland

S.A. Aviva Investors

Poland S.A. (entity acting

for Aviva Investors Poland

Towarzystwo Funduszy

Inwestycyjnych S.A.,

which is a body of the

investment funds which

are the direct holders of the

shares of: Aviva Investors

Fundusz Inwestycyjny

Otwarty and Aviva

Investors Specjalistyczny

Fundusz Inwestycyjny

Otwarty)


AMPLICO PTE S.A.

AMPLICO PTE S.A. (an

entity managing the funds:

AMPLICO Otwarty



38

Fundusz Emerytalny and

MetLife Amplico

Dobrowolny Fundusz

Emerytalny)

Other shareholders 294,636 ordinary bearer shares 21.04% 294,636 16.36%

TOTAL 1,400,000 shares 100.00% 1,800,000 100.00%

On 22 June 2012, Małgorzata Wypychewicz made a non-cash contribution to KORONEA S.à r.l. with its

registered office in Luxembourg. This contribution included 23,900 A series registered preference shares of ZPUE

S.A.

On 22 June 2012, Bogusław Wypychewiczmade a non-cash contribution to KORONEA S.à r.l. with its registered

office in Luxembourg. This contribution included 50,000 A series registered preference shares of ZPUE S.A.

On 25 June 2012, Małgorzata Wypychewicz made a non-cash contribution to KORONEA S.à r.l. with its

registered office in Luxembourg. This contribution included 15,905 ordinary bearer shares identified with the

following trading symbol: KDPW PLZPUE000012.

On 25 June 2012, Bogusław Wypychewicz made a non-cash contribution to KORONEA S.à r.l. with its registered

office in Luxembourg. This contribution included 15.584 ordinary bearer shares identified with the following

trading symbol: KDPW PLZPUE000012.

Taking account of the aforesaid transactions, KORONEA S.à r.l. with its registered office in Luxembourg, held

jointly 860,261 shares of ZPUE S.A., representing a total of 61.44 % of the Company's share capital and entitling

to 1,187,852 votes, i.e. 65.99 % of the overall number of votes at the Company's General Meeting.

Information about these transactions was included in Current Report No 28/2012 and 29/2012.

As a result of transaction of 27 July 2012, KORONEA S.à r.l. with its registered office in Luxembourg disposed of

720,251 shares of ZPUE S.A. for the benefit of KORONEA INVESTMENT S.à r.l. with its registered office in

Luxembourg. These shares included: 81,900 A series registered preference shares, 381,873 F ordinary bearer

shares and 256,478 ordinary bearer shares identified with the following trading symbol: KDPW PLZPUE000012.

As a result of the transaction:

1) KORONEA S.à r.l. with its registered office in Luxembourg holds 140,001 shares, representing a total of

10% of the share capital and entitling to 140,001 votes, i.e. 7.78% of the overall number of votes at the

Company's General Meeting, whereas:

2) KORONEA INVESTMENT S.à r.l. with its registered office in Luxembourg holds 720,251 shares,

representing a total of 51.45 % of the share capital and entitling to 1,047,851 votes, i.e. 58.21% of the

overall number of votes at the Company's General Meeting.

Information about these transactions was included in Current Report No 30/2012 and 31/2012.

3.17 A statement of changes in the ownership of shares or rights to them by the issuer’s management

and persons in supervisory positions, along with an indication of changes in the state of ownership since the

previous quarterly report was passed.

Statement of changes in ownership of shares and preference rights (options) by the member of Supervisory Board

as at 14 November 2012, and changes in ownership of shares in the period since the last periodic report, i.e. from

15 May 2012, is presented in the table below.

Shareholder Number and type of shares (as at 15.05.2012) Number and type of shares (as at 14.11.2012)

Bogusław Wypychewicz

50,000 registered preference shares

(A series)

15,584 ordinary bearer shares -

Małgorzata Wypychewicz


(A series)



(A series)

KORONEA S.à r.l.



KORONEA S.à r.l.)


(A series)




39

KORONEA

INVESTMENT S.à r.l.



KORONEA

INVESTMENT S.à r.l.)

-

81,900 of A series registered preference shares


Henryka Grzybek1 110 ordinary bearer shares -

Teresa Wypychewicz1 - -

Czesław Wypychewicz1 - -

Tomasz Stępień2 - 3000 ordinary bearer shares

Krzysztof Jamróz2 - -

Piotr Kukurba2 - -

1 acted as a Member of the Supervisory Board until 20 June 2012 2 has been acting as a Member of the Supervisory Board since 20 June 2012

Statement of changes in ownership of shares and preference rights (options) by persons in management positions

and commercial proxies as at 14 November 2012, and changes in ownership of shares in the period since the last

periodic report, i.e. from 15 May 2012, is presented in the table below.

Shareholder Number and type of shares (as at

15.05.2012) Number and type of shares (as at 14.11.2012)

Andrzej Grzybek 1,000 ordinary bearer shares 1,000 ordinary bearer shares

Stanisław Toborek 343 ordinary bearer shares 343 ordinary bearer shares

Mariusz Synowiec - -

Piotr Zawadzki 4,678 ordinary bearer shares 4,400 ordinary bearer shares

Tomasz Stępień1 3,734 ordinary bearer shares -

Henryk Arkit 176 ordinary bearer shares 176 ordinary bearer shares

Dariusz Górski 299 ordinary bearer shares 299 ordinary bearer shares 1 acted as commercial proxy until 19 June 2012

3.18 Information on legal proceedings before a court, authority respective for arbitrage proceedings or a

public administration authority, taking into consideration information on:

a. proceedings involving liabilities or receivables of the Issuer or its subsidiary, the value of which amounts

to at least 10% of the Issuer's equity capital, together with information on the object of the proceedings

and value thereof, date on which the proceedings were initiated, parties to the proceedings and the

Issuer's position on the matter

b. two or more procedures involving liabilities or receivables whose total value is at least 10% of the

issuer's equity capital, defining the total value of individual proceedings in the group of liabilities and

receivables with the issuer's position on the matter, with reference to the largest procedures in the group

of liabilities and receivables - indicating their subject, the value of the subject of the dispute, the date the

procedure was instigated and the parties to the procedure,

In reporting period, before the body appropriate for arbitration proceedings or public administration there were no

legal proceedings begun or finished involving liabilities or receivables of ZPUE S.A. or its subsidiaries, whose

individual or total value amounted to at least 10% of the ZPUE S.A.'s equity capital, which could materially affect

the future results and the financial standing of the Group.

3.19 Information on significant settlements arising out of court cases


40

During the third quarter of 2012 ZPUE S.A. and its subsidiaries did not registered significant settlements arising

out of court cases.

3.20 Information on significant purchase and sale transactions with respect to property, plant and

equipment and on the significant obligation arising out of the purchase of property, plant and equipment

During the third quarter ZPUE S.A. and its subsidiaries did not make significant purchase and sale transactions

with respect to property, plant and equipment; therefore they do not have significant liabilities resulting from the

purchase of the property, plant and equipment.

3.21 Information on the transactions entered into by the Issuer or its subsidiary with affiliated

companies, if these transactions individually or collectively are significant and were made on conditions

other than market conditions, with indication of their value, with the reservation that information on

individual transactions can be grouped by type except when information on individual transactions is

required to understand how they affect the issuer's assets, financial standing and the financial result,

defining:

a. information on the entity with which the transaction has been entered into,

b. information on relationships between the issuer or subsidiary with the entity which is party to the

transaction,

c. information on the subject of the transaction,

d. major conditions of the transaction, with particular attention to financial results and indicating

specific conditions stipulated by the parties which are peculiar to this agreement, especially those

which differ from the conditions generally applied to a given type of agreement,

e. other information about these transactions, if this is necessary for an understanding of the issuer's

material and financial situation and financial result,

f. all changes to transactions with affiliated entities, described in the last annual report, which could

significantly affect the issuer's material and financial situation and financial result.

During the reporting period in question neither ZPUE S.A. nor subsidiaries concluded any transactions under non-

market conditions.

3.22 Information concerning a loan or credit surety or guarantee issued by the Issuer or the Issuer’s

subsidiary – overall to a single entity or their subsidiary, if the total value of the existing sureties or

guaranty constitutes in excess of 10% of the Company’s equity capital.

In the 3rd quarter of 2012 neither ZPUE S.A. nor any of its subsidiaries grant credit or sureties, nor did they issue

guarantees, including to any entity or subsidiary of this entity, whose total value was at least 10% of the Issuer's

equity capital.

3.23 Information on outstanding credits or loans or on the violation of material terms of the credit or loan

contract that were not remedied until the end of the reporting period.

During the third quarter of 2012 there were no circumstances connected with outstanding credit or loans or

connected with the violation of the material terms of the credit or loan contracts that were not remedied until the

end of the reporting period (both with respect to ZPUE S.A. and to its subsidiaries).

3.24 Other information, which in the Issuer's opinion is important to assess its human resources,

property, finances, financial result and their changes as well as information, which is crucial in the

assessment of the Issuer's ability to fulfil its obligations.

After the end of the third quarter of 2012 ZPUE S.A. and its subsidiaries, i.e. ZPUE Gliwice Sp. z o.o., ZPUE

Katowice S.A., ZPUE Tools Sp. z o.o. and ZPUE Poles Sp. z o.o. on the first part, and BNP Paribas Bank Polski

S.A. with its registered office in Warsaw on the second part, entered into Amendment 1 to Multi-purpose credit

line agreement no. WAR/2001/11/167/CB of 5 July 2011. Pursuant to Amendment No 1 to the Agreement, ZPUE

S.A. (as the current borrower) and the Bank authorized ZPUE Gliwice Sp. z o.o. with its registered office in

Gliwice, ZPUE Katowice S.A. with its registered office in Katowice, ZPUE Poles Sp. z o.o. with its registered

office in Włoszczowa and ZPUE Tools Sp. z o.o. with its registered office in Włoszczowa to accede to the

Agreement on the part of the Borrower. Therefore, separate credit agreements entered into by and between the


41

companies and the Bank were merged into a single one. As a result of this consolidation, ZPUE S.A. Group

increased the total credit limit up to the amount of PLN 37,000,000.00. Furthermore, the Agreement allowed

ZPUE S.A. Group to flexibly create credit limits made available to each company within the Group. The term of

credit shall end as at 4 July 2021 (Current Report No 34/2012).

On 19 October 2012, the Management Board of ZPUE S.A. announced the booked turnover from trade with ABB

Sp. z o.o. with its registered office in Warsaw (from the purchase of medium- and low-voltage electrical

equipment as well as as oil and dry distribution transformers). The turnover value during the period from

November 2011 to the day of the report's publication amounted to PLN 23,518,000, i.e. they exceeded 10% of

ZPUE S.A.'s equity capital referred to in the report for the first six months of 2012. (Current report No 40/2012).

The National Centre for Research and Development confirmed the subsidy with respect to ZPUE S.A.'s project

entitled "Automatic, overhead vacuum switch (autorecloser) with "smart grid" network automatics function" under

the "Innovative Economy Operational Programme for 2007-2013, Action 1.4. The Parties will enter into Co-

financing agreement in November 2012. The value of co-financing: PLN 2,847,909.00. The total value of the

project eligible for co-financing was estimated to amount to PLN 5,008,180.00.

3.25 Factors, which in the Issuer’s opinion will affect the results achieved by them in view of the next

quarter or longer

The major factors which could influence the financial situation of ZPUE S.A. Capital Group Companies over the

next quarter at least include:

- the market conditions in the electrical power industry - depending on the investments carried out by power

plants, direct investors and power contractors, the sales revenue achieved by Companies will reach a higher

or lower value;

- exchange rate fluctuations (mainly the EURO) which affect the mark-up on export sales and operating

costs;

- fluctuations in the WIBOR and EURIBOR reference rates, based on which interest on credit is calculated,

which may cause a rise or fall in financial costs.

3.26 In the event that the condensed financial statement was examined by an entity authorised to

examine financial statements, the quarterly report contains the relevant opinion on the examination or a

report on the review of the condensed financial statement

The Financial Statements of the companies of ZPUE S.A. Capital Group for the 3rd quarter of 2012 were not

subject to a review or audit by an entity authorised to investigate financial statements.

Włoszczowa, 14 November 2012

The Board:

President of the Management Board Andrzej Grzybek ………………………….

Member of the Management Board Stanisław Toborek ………………………….

Member of the Management Board Mariusz Synowiec ………………………….

consolidated financial statement of zpue...

Documents