Raport finansowy 2013 - Apator · statement of Apator SA included 2 1. Selected financial data with...

Period included in financial statement: 01.01.2013 – 31.12.2013

Reporting currency: Polish zloty (PLN)

Roundings: All amounts are quoted in thousands of Polish zloty (if not stated otherwise)

2013 Consolidated quarterly financial statement of Apator Group for four quarters in 2013 with condensed quarterly financial

statement of Apator SA included 0

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Content ................................................................................................................................................................ 1. Selected financial data with essential items of condensed financial statement ........................................... 2 2. Organization of Capital Group ...................................................................................................................... 3 3. Consolidated financial statement of Apator Group ....................................................................................... 5 4. Description of achievements and failures of Apator Group in 2013 ........................................................... 20 5. Proceedings before the court, the appropriate body for arbitration or public authority .............................. 26 6. Transactions with related entities ............................................................................................................... 27 7. Information concerning the issue, buyout and repayment of non- controlling interest and capital securities

.................................................................................................................................................................... 27 8. Shareholders of parent entity ..................................................................................................................... 27 9. Dividend ...................................................................................................................................................... 29 10. Other information significant for the assessment of personnel, property and financial situation, financial

result and their changes and information significant to the assessment of the possibility of the performance of liabilities by the issuer. ...................................................................................................... 29

11. Events that occurred after 31st December 2013 that is after the day when condensed quarterly financial

statement was prepared. ............................................................................................................................ 30 12. Factors that in opinion of the Executive Board will have the impact on future results of Apator Group ... 30 13. Appendix: Separate financial statement of Apator SA ............................................................................... 32






1. Selected financial data with essential items of condensed financial statement

DESCRIPTION

In thousands of PLN In thousands of EUR

Current period Previous period Current period Previous period

Consolidated financial statement IV quarters 2013 IV quarters 2012 IV quarters 2013 IV quarters 2012

Sales revenues of products, goods and materials 679 101 668 824 161 268 160 251

Profit (loss) from operating activity 86 845 97 999 20 623 23 481

EBITDA 107 612 116 292 25 555 27 864

Gross profit (loss) 83 438 91 665 19 814 21 963

Net profit (loss) 68 966 95 320 16 377 22 838

Net profit (loss) for shareholders of parent entity in Apator Group 68 308 94 893 16 221 22 736

Net profit (loss) for non-controlling interest 658 427 156 102

Weighted average number of shares 29 507 028 29 507 028 29 507 028 29 507 028

Net profit (loss) per ordinary share [PLN/share]: 2,31 3,22 0,55 0,77

Cash flows from operating activity 42 469 97 913 10 240 23 950

Cash flows from investing activity (23 043) (12 106) (5 556) (2 961)

Cash flows from financing activity (44 906) (66 178) (10 828) (16 188)

Total cash flow (25 480) 19 629 (6 144) 4 801

Consolidated financial statement 31.12.2013 2012 31.12.2013 2012

Total assets 522 773 504 448 126 054 123 391

Fixed assets 262 208 249 359 63 225 60 995

Current assets 260 565 255 089 62 829 62 396

Equity with non-controlling interest 326 182 299 592 78 651 73 282

Non-controlling interest 1 582 1 160 381 284

Share capital 3 311 3 311 798 810

Long-term liabilities and reserves 30 806 45 364 7 428 11 096

Short-term liabilities and reserves and provisions 165 785 159 492 39 975 39 013


Book value per ordinary share [PLN/share]: 11,05 10,15 2,67 2,48






2. Organization of Capital Group

2.1. Activity of Apator Group

In 2013 the entities of Apator Group concentrated their activity in electric machines industry in two segments: metering

segment and switchgear segment. In the first segment the entities focused their activity on design, manufacturing and

selling of metering equipment (electricity meters, gas meters,water meters and heat meters ) communication and

information technology enabling communication and data exchange and IT systems supporting management of

distribution grid power as well.The activity in the second segments focused on design, manufacturing and selling of

protection solutions for distribution of electricity in low voltage power grids and safety making and breaking of electrical

circuits.

In 2014 took place change in classification of the segments of Apator Group in relations to the updating of strategy and

scheduled extension of Apator Group by Elkomtech S.A.

2.2. Make-up of Apator Group as at 31st

December 2013

Parent entity of Apator Group is Apator S.A. The Group consists of 15 entities including 7 subsidiaries. During 2013 the

Group was decreased due to the sale of Newind Sp. z o.o. by Apator Rector Sp. z o.o. on 31.05.2013

*) FAP Pafal SA as at 31.12.2013 had 19,1% own shares acquired from Apator SA. After redemption of these shares (in the first half of 2014) the share of Apator SA will be again 100% in capital of FAP Pafal SA.

2.3. Changes in the structure of Apator Group in 2013

Changes in the structure of Apator Group including in result of merger of entities, takeover or sale of entities of capital

group of the issuer long-term investments, division, restructuring and operation discontinued.

1) Apator Rector Sp. z o.o. – sale of Newind sp. z o.o.

On 31st May 2013 Apator Rector Sp. z o.o. sold all being in its possession the shares of Newind sp. z o.o. at 1.728 000

PLN (purchase at 1.043.700 PLN). Total costs of sales were 3.012 000 PLN (they regard the write off the value of assets

of the company and liabilities due to put option). Consolidated loss on sale of the shares was 1.284 000. PLN.

2) Apator Elektro – change in legal form

On 17th

October 2012 the General Shareholders Meeting of ZAO Apator Elektro (jonit stock company) took the decision

on reorganisation of the company by its liquidation and replacement by new company- OOO Apator Elektro (joint stock

company). On 26th

November 2012 new company - OOO Apator Elektro was registered where Apator SA has 50%

shares. OOO Apator Elektro took over the role of trade agent on Russian market replacing the former one - ZAO Apator

Elektro. The commencement of the activity in form of joint stock company has resulted from legal reasons (lower taxes).

ZAO Apator Elektro was liquidated on 15th January 2013.

Apator GmbH

100%

Apator Metrix

100%

GWI

50%

Inda

35%

FAP Pafal

80,9%*

Apator Control

100%

Apator Mining

100%

Apator Powogaz

100%

Apator Metra

100%

Apator Telemetria

61,6%

Apator Metroteks

61%

Teplovodomer

50%

Apator Rector

70%

Apator Elektro

50%






3) FAP Pafal SA – decrease of capital, restructuring of the company

In 2013, Apator SA sold to FAP Pafal SA in total 287 392 its own shares for the amount of 7.760 000 PLN. Purchasing

cost of these shares was 7.501 000 PLN. Part of shares (i.e. 181.210 shares) was already redeemed in 2013 and the

other part will be redeemed in the first half of 2014. Further to the above Apator SA as at 31.12.2013 had 80, 9% shares

of FAP Pafal SA, but after redemption it will have again 100% shares.

Restructuring process of FAP Pafal SA has been lasting and it is related to the transfer of manufacturing of electronic

electricity meters to Apator SA. Activity of FAP Pafal SA will be focused on manufacturing of inductive electricity meters

and rendering services related to them.

4) Apator Powogaz SA – increase of capital

On 12th

July 2013 (entry to National Court Register) share capital Apator Powogaz SA was increased from 753 500 PLN

to 4.000 000 PLN by emission of 64.930 shares. These shares were purchased in total by Apator SA.

5) George Wilson Industries Ltd. – acquisition of shares in Inda d.o.o.

George Wilson Industries Ltd. the company joint controlled by Apator Metrix SA on 03.09.2013 acquired 35% shares in

capital of Inda d.o.o. with headquarters in Ljubliana (Slovenia) at the price of 50 000 EUR (i.e. 213 600 PLN according to

average exchange rate of the National Bank of Poland as at 03.09.2013 being 1 EUR = 4,2720 PLN). The Inda d.o.o.

carries out research and development related to smart metering.

2.4. Entities subject to consolidation as at 31st

December 2013

Parent entity: Apator SA,

subsidiaries (direct and indirect) subject to consolidation by full method:

Company Headquarters Share in capital Relationships with Apator SA

Apator Mining Sp. z o. o. Katowice 100,00% Subsidiary of Apator SA

Apator Control Sp. z o. o. Toruń 100,00% Subsidiary of Apator SA

Apator Metrix SA Tczew 100,00% Subsidiary of Apator SA

FAP Pafal SA Świdnica 80,9%*) Subsidiary of Apator SA

Apator Rector Sp. z o. o. Zielona Góra 70,00% Subsidiary of Apator SA

Apator Powogaz SA Poznań 100,00% Subsidiary of Apator SA

Apator GmbH Berlin (Germany) 100,00% Subsidiary of Apator SA

Newind Sp. z o. o.**) Wrocław 60,00%

42,00%

Subsidiary indirectly of Apator SA through Apator Rector Sp. z o. o. Indirect share by Apator Rector Sp. z o. o.

Apator Metra s. r. o. Sumperk (Czech Republic) 100,00%

100,00%

Subsidiary indirectly of Apator SA through Apator Powogaz SA Indirect share through Apator Powogaz SA

TOV Apator Metroteks Kiev (Ukraine) 61,00%

61,00%


Apator Telemetria Sp. z o. o. Słupsk 61,60%

61,60%


*) FAP Pafal SA as at 31.12.2013 had 19, 1% own shares acquired from Apator SA. After redemption of these shares (in

the first half of 2014) the share of Apator SA will be again 100% in capital of FAP Pafal SA.






**) On 31st May 2013 all shares in Newind sp. z o.o. were sold.

entities joint controlled associated are evaluated by equity method:

Company Headquarters Share in capital Relationships with Apator SA

OOO Apator Elektro Moscow (Russia) 50,00% Joint controlled by Apator SA

ZAO Teplovodomer Mytishchi (Russia) 50,00%

50,00%

Indirectly joint controlled by Apator SA through Apator Powogaz SA Indirect share through Apator Powogaz SA

GWi Ltd. Coventry (Great Britain) 50,00%

50,00%

Joint controlled by Apator SA indirectly by Apator Metrix SA Indirect share through Apator Metrix SA

3. Consolidated financial statement of Apator Group

Consolidated and separated financial statements for four quarters of 2013 have been prepared in accordance with

International Accounting Standards (IAS / IFRS) and related to them interpretations announced in form of Regulations of

European Commission and Regulation of Ministry of Finance dated 19th

February 2009 on current and regular

information being transferred by the issuers of securities (Journal of Laws of the Republic of Poland No 33, item 259)

with later amendments.

Interim financial statements (consolidated and separated ones of parent entity) for the period of twelve months

completed on 31st December 2013 have been constructed according to IAS 34 (interim financial reporting). Interim

financial statements do not include all the information and disclosures that are required in annual/semi-annual financial

statement and they should be read together with semi-annual/annual statement of Apator Capital Group as at 31st

December 2012.

3.1. Consolidated financial statement of financial position

DESCRIPTION Day

31.12.2013 31.12.2012

Fixed assets 262 208 249 359

Intangible assets 6 938 4 400

Goodwill of subordinated entities 63 706 66 248

Property, plant and equipment 146 135 139 183

Investment properties 1 721 1 735

Investments in associated entities consolidated by equity method 5 188 6 571

Other long-term financial assets 284 525

- in related entities - 8

- in other entities 284 517

Long-term borrowings granted 8 994 8 175

- related entities 8 994 8 175

Long -term receivables 5 719 1 590

- from other entities 5 719 1 590

Long-term prepayments 14 61

Deferred tax assets 23 509 20 871

Current assets 260 565 255 089

Inventories 98 258 94 053

Trade receivables 116 018 102 711

- from related entities 5 739 2 982


Current tax assets 1 318 63






DESCRIPTION Day

31.12.2013 31.12.2012

Receivables due to other taxes (excluding income tax) and other similar charges 5 285 5 535

Other short-term receivables 14 845 6 026

- from related entities - -


Other short-term financial assets 4 522 1 003

- in other entities 4 522 1 003

Short-term borrowings granted - -

- to related entities - -

Cash and cash equivalents 18 239 43 719

Short-term prepayments 1 729 1 979

Fixed assets classified as held for sale 351 -

TOTAL ASSETS 522 773 504 448






DESCRIPTION Day

31.12.2013 31.12.2012

Equity 326 182 299 592

Equity for shareholders of parent entity 324 600 298 432

Share capital 3 311 3 311

Other capitals 222 837 186 971

Reserve from remeasurements of defined benefit plan 355 400

Capital from evaluation of hedging transactions and exchange differences from consolidation 425 961

Undistributed financial result 97 672 106 789

- undistributed result from previous years 38 216 23 699

- result of current period 68 308 94 893

- write-offs from net profit in the financial year (negative value) (8 852) (11 803)

Non-controlling interest 1 582 1 160

Liabilities 196 591 204 856

Long-term and liabilities and reserves 30 806 45 364

Long-term loans and borrowings 10 443 12 887


Long-term liabilities 12 012 25 425

- towards other entities 12 012 25 425

Deferred income tax liabilities 1 485 -

Long-term reserves for employee benefit liabilities 6 866 7 012

Other long-term provisions - 40

Short-term liabilities and reserves 165 785 159 492

Short-term loans and borrowings 46 851 42 833

- from related entities - -


Trade liabilities 53 293 66 263

- towards related entities - 1


Current tax liabilities 6 162 7 606

Liabilities due to other taxes (excluding income tax) and other similar charges 9 269 9 246

Other short-term liabilities 32 647 18 902

- towards related entities - 1


Short-term reserves for employee benefit liabilities 10 582 10 348

Other short-term provisions 6 981 4 294

TOTAL LIABILITIES 522 773 504 448






Information concerning changes in contingent liabilities or contingent assets that occurred since

the end of the recent financial year (off balance sheet items) of Apator Group

DESCRIPTION Day

31.12.2013 31.12.2012

Contingent receivables 826 826

Contingent receivables due to other entities 826 826

Contingent liabilities 10 826 13 504

Contingent liabilities due to other entities 10 826 13 504

- due to guarantees and warranties granted 10 826 11 892

- due to import letter of credit - 1 612

Other off-balance-sheet items 172 933 160 138

Fixed assets tenanced 8 710 9 438

Ordinary mortgage 59 771 57 072

Bail mortgage 37 603 37 225

Hedging on property 35 058 33 449

Assignment of receivables 23 714 20 963

Deposits placed 36 36

Blank bills of exchange 2 494 1 838

Others- compulsory mortgage 5 547 117

Total off-balance-sheet items 184 585 174 468

Additionally the Group has got established the following hedging for the repayment of bank liabilities:

silent assignment of minimum 40% all the turnover of Apator S.A.,

assignment of insurance policy to properties of Apator S.A. located in Ostaszewo,

assignment of insurance policy to properties of Apator Mining Sp.z o.o. located in Pszów,

assignment of insurance policy to properties of Apator Powogaz S.A. located in Poznań

assignment of insurance policy to properties of FAP Pafal S.A. located in Świdnica,

assignment of insurance policy to properties Apator Metra located in Czech Republic,

assignment of insurance policy to current assets of Powogaz S.A.- hedging of inventories up to the amount of 20 m

PLN,

assignment of rights to current assets of Apator Mining Sp.z o.o.

assignment of insurance policy to current assets of FAP Pafal S.A. – hedging of inventories in manufacturing in

progress (the value not lower than 2 m PLN) and material inventories (value not lower than 2 m PLN)

authorisation to disposal of the cash collected on bank accounts of FAP Pafal S.A.

For the above described hedging the performance of bank operations at the end of the fourth quarter 2013 the entities of

Apator Group made declaration of voluntary submission to execution to the total amount of 246 m PLN. The declarations

regard bank loan contracts and bank guarantee ones. The declarations submitted regard maximum amount of liability of

the entities increased by bank costs.






Consolidated financial statement of changes in equity

DESCRIPTION

CAPITAL FOR THE SHAREHOLDERS OF PARENT ENTITY

Non-controlling interest

TOTAL EQUITY

Share capital Other capitals

Reserve of revaluation of

defined benefit plans

Capital on valuation of

hedging transactions and

exchange differences from

consolidation

Undistributed financial result

TOTAL

Balance as at 01.01.2013 3 311 186 971 400 961 106 789 298 432 1 160 299 592

Changes in equity since 01.01.2013 till 31.12.2013

Profit (loss) due to revaluation (55) (55) - (55)

Hedging instruments for cash flow, including: - - - 1 080 - 1 080 - 1 080

- profit (loss) considered in balance valuation for items being hedged - - - 1 080 - 1 080 - 1 080

Net exchange differences translated from financial statement to the currency of presentation

- - - (1 411) - (1 411) (5) (1 416)

Tax related to items presented in capital or transferred from capital - - 10 (205) - (195) - (195)

Net profit since 01.01.2013 till 31.12.2013 - - - - 68 308 68 308 658 68 966

Total income since 01.01.2013 till 31.12.2013 - - (45) (536) 68 308 67 727 653 68 380

Dividends - - - - (44 510) (44 510) (231) (44 741)

Settlement of interim dividend from previous year - - - - 11 803 11 803 - 11 803

Interim dividend paid towards dividend - - - - (8 852) (8 852) - (8 852)

Distribution of result for supplementary capital - 35 866 - - (35 866) - - -

Balance as at 31.12.2013 3 311 222 837 355 425 97 672 324 600 1 582 326 182






DESCRIPTION

CAPITAL FOR THE SHAREHOLDERS OF PARENT ENTITY Non-controlling interest

TOTAL EQUITY

DESCRIPTION

CAPITAL FOR THE SHAREHOLDERS OF PARENT ENTITY

Non-controlling interest

TOTAL EQUITY

Share capital Other capitals

Reserve of remeasurements of defined benefit

plans

Capital on valuation of

hedging transactions and

exchange differences from

consolidation


TOTAL

Balance as at 01.01.2012 3 511 165 106 - (4 991) 66 968 230 594 5 873 236 467

Adjustments to the opening balance - - - - 4 331 4 331 (4 732) (401)

Adjustments to the rules of accounting - - - - - - - -

Balance after changes made 3 511 165 106 - (4 991) 71 299 234 925 1 141 236 066


Profit (loss) due to revaluation - - 494 - 494 - 494

Hedging instruments for cash flow, including: - - - 8 139 - 8 139 - 8 139

- profit (loss) transferred to financial result - - - 8 139 - 8 139 - 8 139

Net exchange differences translated from financial statement to the currency of presentation

- - - (641) - (641) (14) (655)

Tax related to items presented in capital or transferred from capital - - (94) (1 546) - (1 640) - (1 640)

Net profit since 01.01.2012 till 31.12.2012 - - - 94 893 94 893 427 95 320

Total income since 01.01.2012 till 31.12.2012 - - 400 5 952 94 893 101 245 413 101 658

Dividends - - - - (24 755) (24 755) (173) (24 928)

Interim dividend paid towards dividend - - - - (11 803) (11 803) - (11 803)

Redemption of own shares (200) 1 624 - - (1 624) (200) - (200)

Redemption of own shares - 200 - - - 200 - 200

Distribution of result for supplementary capital - 25 726 - - (25 726) - - -

Reimbursement of loss from supplementary capital - (5 685) - - 5 685 - - -

Purchase of additional shares of subsidiary - - - - (1 180) (1 180) (221) (1 401)

Balance as at 31.12.2012 3 311 186 971 400 961 106 789 298 432 1 160 299 592






3.2. Consolidated financial statement of comprehensive income

DESCRIPTION

Period

01.10.2013 01.01.2013 01.10.2012 01.01.2012

31.12.2013 31.12.2013 31.12.2012 31.12.2012

Sales revenues 175 500 679 101 169 974 668 824

Sales revenues of products and services 157 585 619 447 149 788 600 001

- to related entities 9 704 49 943 9 156 39 550

- to other entities 147 881 569 504 140 632 560 451

Sales revenues of goods and materials 17 915 59 654 20 186 68 823

- to related entities 531 3 086 1 130 1 346


Cost of goods sold (120 840) (477 178) (123 979) (483 950)

Cost of products and services sold (104 970) (426 365) (105 873) (425 653)

- to related entities (4 967) (30 270) (7 150) (27 466)

- to other entities (100 003) (396 095) (98 723) (398 187)

Cost of goods and materials sold (15 870) (50 813) (18 106) (58 297)

- to related entities (437) (2 718) (1 098) (1 298)


Gross profit (loss) on sales 54 660 201 923 45 995 184 874

Costs of sales (11 571) (35 574) (10 506) (31 247)

Overheads (21 593) (77 195) (21 229) (75 980)

Profit (loss) on sales 21 496 89 154 14 260 77 647

Other operating revenues (costs), including (1 979) (3 300) (1 471) 18 146

Result on sales and liquidation of property plant and equipment and intangibles 349 532 1 842 22 909

Result on revaluation of non-financial fixed assets 55 133 (2 237) (2 237)

Result on valuation of property 20 160 (102) (102)

Result on revaluation of non-financial current assets (2 110) (1 640) (1 947) (2 137)

Result on reserves for retirement bonuses and jubilee awards 530 694 3 145 3 229

Result on other operating activity (823) (3 179) (2 172) (3 516)

Share in profits of entities consolidated by equity method (196) 1 268 876 2 206

Restructuring revenues (costs) (277) (277) - -

Profit (loss) on operating activity 19 044 86 845 13 665 97 999

EBITDA 24 249 107 612 18 699 116 292

Financial revenues (costs) (1 388) (3 407) (1 318) (6 334)

Interest on loans and borrowings (455) (1 908) (738) (2 986)

Result on other interest 95 739 194 678

Result on shares - (1 287) (536) (536)

Result on bills of exchange (3) (4) - -

Result on exchange differences (1 478) (3 039) (1 319) (5 131)

Result on currency transactions 1 186 3 620 1 021 2 176

Result on revaluation of financial current assets (821) (1 102) (117) (109)

Other financial revenues (costs) 88 (426) 177 (426)

Profit (loss) before tax 17 656 83 438 12 347 91 665

Current income tax (4 968) (16 115) (2 054) (16 566)

Deferred income tax 4 132 1 643 620 20 221

Net profit (loss) 16 820 68 966 10 913 95 320






DESCRIPTION

Period

01.10.2013 01.01.2013 01.10.2012 01.01.2012

31.12.2013 31.12.2013 31.12.2012 31.12.2012

Other total income

Other net total income 1 096 (586) 741 6 338

Items that can be reclassified to financial result in the future:

Trade differences of foreign entities (1 161) (1 416) 46 (655)

Net result on hedging including tax effect 2 034 875 295 6 593


Net actuarial gains/(losses) on defined benefit plans including tax effect 223 (45) 400 400

Total income in total 17 916 68 380 11 654 101 658

Net profit (loss), including: 16 820 68 966 10 913 95 320

shareholders of parent company 16 764 68 308 10 793 94 893

non-controlling interest 56 658 120 427

Total income in total, including: 17 916 68 380 11 654 101 658

shareholders of parent company 17 863 67 727 11 537 101 245

non-controlling interest 53 653 117 413

3.3. Consolidated cash flow account

DESCRIPTION

Period

01.01.2013 01.01.2012

31.12.2013 31.12.2012

Cash flow from operating activity

Profit before tax (continued operation) 83 438 91 665

Adjustments: 17 899 (1 507)

Amortization of intangible assets 1 579 1 379

Depreciation of property, plant and equipment 19 188 16 914

Write downs due to depreciation of property, plant and equipment (134) 2 238

(Profit) loss on sales of tangible fixed assets and intangibles (748) (23 492)

(Profit) loss on sales of financial assets available for sales (1 202) -

(Profit) loss from evaluation of investment properties at the fair value. (160) 102

(Profits) losses from the change of fair value of derivatives (1 048) (2 010)

Cost of interest 2 458 4 083

Share in (profits) losses of associated entities (1 268) (2 206)

Interest received (378) (97)

Other adjustments (388) 1 582

Cash from operating activity before taking into consideration changes in current assets 101 337 90 158

Change in inventories (4 278) (2 466)

Change in receivables (41 818) 20 434

Change in liabilities 2 181 4 957

Change in reserves and provisions 2 880 (2 844)

Change in accruals and prepayments 153 (753)

Other adjustments 299 (228)

Cash generated by operating activity 60 754 109 258

Income tax paid (18 285) (11 345)

Net cash from operating activity 42 469 97 913

Cash flow from investing activity

Outflows for the purchase of intangibles (3 927) (1 574)

Inflows from the sale of intangibles (97) -






DESCRIPTION

Period

01.01.2013 01.01.2012

31.12.2013 31.12.2012

Outflows for the purchase of tangible fixed assets (18 892) (26 583)

Inflows from the sales of tangible fixed assets 1 830 28 160

Outflows for the purchase of financial assets available for sales (1) -

Inflows from the sales of financial assets available for sales 4 -

Outflows for the purchase of financial assets held for trading - -

Inflows from sales of financial assets held for trading 240 750

Investments in subsidiaries 286 (1 402)

Inflows from sales of subsidiaries (278) -

Inflows from subsidies received - -

Borrowings granted (982) (8 175)

Interest received 297 68

Dividends received 1 776 -

Other inflows(outflows) (3 299) (3 350)

Net cash from investing activity (23 043) (12 106)

Change in reserves and provisions 2 880 (2 844)


Other adjustments 299 (228)


Income tax paid (18 285) (11 345)



Outflows for the purchase of intangibles (3 927) (1 574)

Inflows from the sale of intangibles (97) -


Inflows from the sales of tangible fixed assets 1 830 28 160


Inflows from the sales of financial assets available for sales 4 -

Outflows for the purchase of financial assets held for trading - -

Inflows from sales of financial assets held for trading 240 750

Investments in subsidiaries 286 (1 402)

Inflows from sales of subsidiaries (278) -

Inflows from subsidies received - -

Borrowings granted (982) (8 175)


Dividends received 1 776 -


Net cash from investing activity (23 043) (12 106)



Inflows from loans and borrowings taken 41 880 71 906

Repayment of loans and borrowings (40 326) (95 408)

Interest (2 183) (3 779)

Dividends paid (41 701) (36 644)






DESCRIPTION

Period

01.01.2013 01.01.2012

31.12.2013 31.12.2012

Repayment of liabilities under finance lease contracts (2 329) (2 039)

Other inflows(outflows) (247) (214)

Net cash from financing activity (44 906) (66 178)

Increase(decrease) of net cash and cash equivalents (25 480) 19 629

Cash and cash equivalents at the beginning of the period 43 719 24 090

Cash and cash equivalents at the end of the period 18 239 43 719

3.4. Consolidated financial statement pursuant to operating segments

Activity of Apator Group is concentrated on two key segments of electrical machines sector:

metering

switchgear

Description

Metering equipment

Switchgear Other Unallocated

items TOTAL

Financial results of operating segments since 01.01.2013 till 31.12.2013

Total revenues 485 881 159 503 33 717 - 679 101

Sales outside 439 581 152 774 33 717 X 626 072

Sales to related entities 46 300 6 729 - X 53 029

Total costs (356 577) (125 448) (30 727) - (512 752)

Costs borne outside (327 877) (121 160) (30 727) X (479 764)

Costs borne to related entities (28 700) (4 288) - X (32 988)

Result of segment 129 304 34 055 2 990 - 166 349

Unallocated costs X X X (80 772) (80 772)

Share in profits of entities consolidated by equity method X X X 1 268 1 268

Profit (loss) on operating activity 129 304 34 055 2 990 (79 504) 86 845

Financial revenues X X X 5 034 5 034

- interest X X X 1 346 1 346

Financial costs X X X (8 441) (8 441)

- Interest X X X (2 515) (2 515)

Profit (loss) before tax 129 304 34 055 2 990 (82 911) 83 438

Income tax X X X (14 472) (14 472)

Non-controlling interest X X X (658) (658)

Net profit (loss) 129 304 34 055 2 990 (98 041) 68 308

Other information on segments as at 31.12.2013

Total assets, including: 303 899 81 777 1 085 136 012 522 773

Property, plant and equipment 88 580 14 634 - X 103 214

Intangibles 4 077 1 488 - X 5 565

Goodwill of subordinated entities 63 631 75 - X 63 706

Inventories 73 372 24 866 20 X 98 258

Trade receivables 74 239 40 714 1 065 X 116 018

Unallocated assets X X X 136 012 136 012

Trade liabilities 32 438 20 672 183 X 53 293

Financial results of operating segments since 01.01.2012 till 31.12.2012

Total revenues 424 822 151 119 92 883 - 668 824

Sales outside 388 932 146 113 92 883 X 627 928

Sales to related entities 35 890 5 006 - X 40 896

Total costs (312 237) (118 448) (84 512) - (515 197)

Costs borne outside (287 792) (114 129) (84 512) X (486 433)

Costs borne to related entities (24 445) (4 319) - X (28 764)

Result of segment 112 585 32 671 8 371 - 153 627

Unallocated costs X X X (57 834) (57 834)






Description

Metering equipment

Switchgear Other Unallocated

items TOTAL

Share in profits of entities consolidated by equity method X X X 2 206 2 206

Profit (loss) on operating activity 112 585 32 671 8 371 (55 628) 97 999

Financial revenues X X X 3 505 3 505

- interest X X X 1 165 1 165

Financial costs X X X (9 839) (9 839)

- interest X X X (3 473) (3 473)

Profit (loss) before tax 112 585 32 671 8 371 (61 962) 91 665

Income tax X X X 3 655 3 655

Non-controlling interest X X X (427) (427)

Net profit(loss) 112 585 32 671 8 371 (58 734) 94 893

Other information on segments as at 31.12.2012

Total assets, including: 279 789 63 208 20 822 140 629 504 448

Property, plant and equipment 82 610 13 113 1 226 X 96 949

Intangibles 2 807 931 120 X 3 858

Goodwill of subordinated entities 62 884 75 3 289 X 66 248

Inventories 75 079 18 902 72 X 94 053

Trade receivables 56 409 30 187 16 115 X 102 711

Unallocated assets X X X 140 629 140 629

Trade liabilities 35 969 13 841 16 453 X 66 263

3.5. Geographical information

Apator Group conducts the activity in the following geographical areas:

Home – sales at home

EU – sales performed in European Union countries

Export – sales performed in other countries

DESCRIPTION

CONTINUED OPERATION

TOTAL

Home Export EU

Sales revenues in geographical segments since 01.01.2013 till 31.12.2013

Total revenues 369 844 153 386 155 871 679 101

Sales outside 369 844 100 964 155 264 626 072

Sales to related entities - 52 422 607 53 029

Sales revenues in geographical segments since 01.01.2012 till 31.12.2012

Total revenues 428 011 105 309 135 504 668 824

Sales outside 428 011 64 413 135 504 627 928

Sales to related entities - 40 896 - 40 896

3.6. Loans and borrowings of subsidiaries in Apator Group as at 31.12.2013

DESCRIPTION

LOANS AND BORROWINGS

Short-term loans and borrowings

Long-term loans and borrowings

Total

Apator SA 35 702 0 35 702

Apator Control sp. z o. o. 0 0 0

Apator GmbH 90 0 90

Apator Metrix SA 2 516 6 667 9 183

Apator Mining sp. z o. o. 1 029 0 1 029

Grupa Apator Powogaz 1 259 3 776 5 035

Apator Rector sp. z o.o. 6 345 0 6 345

Pafal SA 0 0 0

Total 46 941 10 443 57 384

Borrowing granted to Apator GmbH by Apator SA 90 0 90

Total Apator Group (consolidated data) 46 851 10 443 57 294






3.7. Guarantee of loan or borrowing, granting guarantee

Apator SA and subsidiaries have not granted any guarantee on loan, borrowing or guarantee to entities from outside of

the Group which value would exceed 10% of equities of the issuer.

Apator SA granted on 25th

April 2013 subsidiary - Apator Control Sp. z o.o. the guarantee of proper performance of the

contract by Apator Control Sp. z o.o. towards Arcelor Mittal Poland SA within Apator Group. The value of the guarantee

exceeded 10% of equity of Pastor SA. Maximum value of the guarantee is 24, 8 m PLN and it includes the entire value of

the contract. Based on the contract concluded Apator Control Sp. z o.o. is obliged to pay the commission from the

guarantee annual amount 1,3% for each commenced month of the guarantee. The guarantee was granted for the

period since 25th April 2013 till 22

nd March 2014

3.8. Borrowings granted

On 24th

May 2013 the contract was concluded and based on it, Apator S.A. granted subsidiary - Apator Control Sp. z o.o.

the borrowing in amount of 3.000 000 PLN. As at 31.12.2013 Apator Control repaid the borrowing with interest charged

on time.

Apator SA has the receivables due to the borrowing granted to Apator GmbH. The borrowing as at 31st December 2013

was 21 000 Eur i.e. 87 000 PLN. The deadline for the repayment of the borrowing is on 31st May 2014.

Apator Metrix SA has the receivables due to borrowings granted to its joint controlled entity - GWi Ltd.:

Entity the borrowing was granted to

Title

Amount of borrowing

according to the contract

Date of borrowing

granted

As at 31.12.2013

Currency Due date Interest rate

GWI Ltd - joint controlled company

Borrowing granted for current activity of the company

1 450 000,00 05.09.2012 1 450 000,00 GBP 2016 3 p.p above base

rate of Barclays Bank PLC



150 000,00 05.09.2012 150 000,00 GBP 2016 3 p.p above base




75 000,00 03.10.2012 75 000,00 GBP 2016 3 p.p above base




50 000,00 17.07.2013 50 000,00 GBP 2016 3 p.p above base




50 000,00 20.08.2013 50 000,00 GBP 2016 3 p.p above base




100 000,00 04.11.2013 100 000,00 GBP 2016 3 p.p above base


TOTAL 1 875 000,00 1 875 000,00 GBP

The value of the above borrowings was 1.875 000 GBP (i.e. according to the exchange rate of the National Bank of Poland for the days of their

granting – 9.923 000 PLN). As at 31st December 2013 was in total 1.875 000 GBP (i.e. 8.993 800 PLN according to the purchase exchange rate of

dominant bank dated 31st December 2013 where 1 GNP = 4,7968 PLN). In total till 31st December 2013, GWI Ltd. paid to Apator Metrix SA the

interest of 364 600 PLN on borrowings.

3.9. Principles adopted during preparation of financial statement, particularly information on changes

in principles used in accounting

Principles of accounting

The consolidated financial statements of Apator Group are compiled according to International Financial Reporting Standards since the year 2005 according to the requirement imposed by the amendment of the accounting act. Apator SA also used the possibilities granted by the new Act on accounting and it decided that: - separated statements of Apator SA shall be compiled according to IFRS/IAS, - statements of entities included in Apator Capital Group shall be compiled according to IFRS/IAS (both separated and consolidated statements). Financial statements (separated and consolidated) at 31

st December 2013 were prepared according to






International Financial Reporting Standards (IFRS/IAS) and interpretations related to them announced in the form of Regulations of the European Commission, in Polish zloty, due to the fact that Polish zloty is the main currency in which economic operations are performed by Apator Group. Financial statements of foreign entities included in Apator Capital Group were calculated into the reporting currency according to rules resulting from International Accounting Standard No. 21. Financial statements were prepared according to the assumptions on continued activity of the companies of Apator Group in the foreseeable future. As of the day of report preparation there are no circumstances putting the continued operation of the companies of Apator Group at risk. Financial statements were prepared according to the historical cost accounting convention that was modified in the case of fixed assets and financial instruments. Detailed accounting principles used by Apator Group were presented in RS 2012 consolidated statement.

Principles of consolidation

Consolidated financial statement of a capital group includes the data of APATOR SA - parent company and the

companies being under its control. The control takes place when a parent company is directly or indirectly in the

possession of more than 50% of votes in the given business entity or is able to influence on the financial and operational

policy of subordinated subsidiary in order to gain profit from its operations.

Related entities use uniform accounting principles binding in the parent company and they use homogenous form and

scope of individual and consolidated reports that are the bases for consolidation in a capital group.Consolidated financial

report of a capital group is prepared for balance day and for the financial period, specified for separated financial

statement of the parent company.

For the day of purchase, the assets and equity and liabilities of purchased company are estimated according to their fair

market value. The excess of the purchase price above the fair market value of the identifiable taken over net assets of

the company is presented as company value. If the purchase price of the company is lower than the fair market value of

the identifiable taken over net assets of the company, the difference is presented as a profit in the income statement for

the period in which the purchase took place. The share of minority shareholders is presented in an appropriate proportion

of fair market value of assets and capitals. Financial results of companies purchased or sold during the year are

presented in the consolidated statement in accordance with the date of their purchase or sale.

The method of consolidation was used while preparing the consolidated report by adding individual items of financial

statements, exclusions and other corrections. Exclusions include:

- value of shares of subsidiaries held by the parent company quoted in purchase price;

- mutual receivables and liabilities and other similar accounts of consolidated companies;

- profit and costs resulted from economic operations between consolidated companies;

- profit and costs resulted from economic operations between consolidated companies included in the value of

consolidated assets;

- dividends calculated or paid by consolidated entities to other consolidated entities

3.10. Additional financial information

Average weighted number of shares

Book value per share was calculated based on division of equities by weighted average number of shares but the profit

per share was calculated based on division of net profit on continued operation by weighted average number of shares

Weighted average number of shares for consolidated financial statement as at 31st December 2013, and as at 31

st

December 2012 is 29.507.028 and it includes the shares being in possession of subsidiary.

EUR exchange rates used to translate selected financial data

Items in assets and liabilities and cash flow account – according to Eur average exchange rate binding on the date of

preparation of the financial statement.






Items in income statement – according to Eur average exchange rate being the arithmetical mean of Eur exchange rates

being announced by the National Bank of Poland binding on the last day of the month

DESCRIPTION IV quarters 2013 2012

Eur / PLN Eur / PLN

Comprehensive income statement 4,2110 4,1736

Cash flow statement 4,1472 4,0882

Financial position statement 4,1472 4,0882

3.11. Information on adjustments due to provisions and reserves and provisions due to deferred

income tax assets mentioned in act of accounting, write downs made of the value of elements of

assets.

Deferred income tax assets and income tax provision

DESCRIPTION Status at the beginning of

the period

Change due to take over/ exclusion of

entity

Net exchange differences

translated from financial statement

to currency presented

Charging the result due to the change

in temporary differences and tax

loss

Increase (decrease) of equity due to the change of

temporary differences

Status at the end of the period

Deferred income tax since 01.01.2013 till 31.12.2013

Deferred income tax assets 29 150 (636) (16) 3 131 (48) 31 581

Reserve for employee benefits 2 263 - (2) (11) 12 2 262

Reserve for bonuses 836 - (1) 521 - 1 356

Provisions for margins of revenues - - - - - -

Provision for warranty repairs 773 (8) (2) 347 - 1 110

Provisions for future costs 647 (468) - 353 - 532

Salaries and wages, insurance fees unpaid 371 1 - 133 - 505

Write downs of property, plant and equipment and intangibles

557 - - (25) - 532

Inventory write downs 932 - (9) 238 - 1 161

Receivables write downs 417 - - (43) - 374

Valuation at fair value - derivatives 90 - - (25) (60) 5

Valuation at fair value-other financial assets 1 - - - - 1

Tax loss 27 - - (27) - -

Tax Relief due to operation in Pomeranian Special Economic Zone

20 006 - - 577 - 20 583

Book amortization and depreciation apart to tax one 119 - - 44 - 163

Internal transactions 599 - - 197 - 796

Differences due to finance lease contracts 150 (134) - (3) - 13

Temporary differences due to long-term contracts (construction contracts)

385 - - (262) - 123

Other costs not taxed in the period, including: 977 (27) (2) 1 117 - 2 065






DESCRIPTION Status at the beginning of the period

Change due to take over/ exclusion of entity

Net exchange differences translated from financial statement to currency presented

Charging the result due to the change in temporary differences and tax loss

Increase (decrease) of equity due to the change of temporary differences



Deferred tax liabilities 8 279 (245) (111) 1 488 147 9 558

Valuation at the fair value - property 10 - - 30 - 40

Valuation at the fair value - derivatives 363 - - 174 145 682

Valuation at the fair value-other financial assets - - - - - -

Balance sheet amortization and depreciation apart to tax one

6 164 - (111) (218) - 5 835

Excess of nominal value over book value of apportionment 238 - - - - 238

Differences due to finance lease contracts 450 (213) - 122 - 359

Liquidated damages received 225 - - (68) - 157

Temporary differences due to long-term contracts (construction contracts)

496 - - 1 721 - 2 217

Other revenues not taxed in the period, including: 333 (32) - (273) 2 30

Total X (391) 95 1 643 (195) X

Deferred income tax assets 20 871 X X X X 23 509

Deferred tax liabilities - X X X X 1 485

Effective tax rate

DESCRIPTION

Period

01.01.2013 01.01.2012

31.12.2013 31.12.2012

Profit (loss) before tax, including: 83 438 91 665

Income tax calculated according to binding tax rate, including: 15 827 17 397

Adjustments (1 355) (21 052)

Possible tax on tax free revenues (permanent differences), including: (858) (2 306)

- including income related to special economic zone permission (393) (1 354)

Tax on cost not being costs of revenues (permanent differences) 1 872 2 572

Tax on internal transactions in the group (permanent differences) (306) (443)

Tax on items not included in financial result of the period 118 (321)

Asset to be taxed due to operation in Pomeranian Special Economic Zone (2 721) (20 006)

Adjustment to tax loss from previous years 88 (442)

Other deductions 452 (106)

Income tax specified in comprehensive income statement 14 472 (3 655)

Effective tax rate 17,34% -3,99%

Write-downs of non-current & current assets






DESCRIPTION Status at the beginning of

the period

Change in the period (increase"+", decrease "-")

Net exchange differences

translated from financial

statement to the currency

presented

Status at the end of the

period

Goodwill of subsidiaries 335 - - 335

Property, plant and equipment 2 930 (134) - 2 796

Other financial assets 211 26 - 237

Inventories 4 668 1 081 (51) 5 698

Receivables 5 464 67 (50) 5 481

Total 13 608 1 040 (101) 14 547

Provisions for liabilities

DESCRIPTION

BENEFITS FOR EMPLOYEES OTHER PROVISIONS

TOTAL Severance payments,

jubilee awards (actuary)

Restructuring reserve

(benefits) Bonuses Leaves Guarantees

Provision due to not

completed construction

contract (penalties,

compensations)

Others

Provision for not performed margin on sale to associated

entity

Value of provisions and reserves at the beginning of the period

8 727 1 323 4 751 2 559 3 864 206 156 108 21 694

Changes due to takeover/exclusion of the entity

- - - - (40) (1 912) - - (1 952)

Increase- provision charging current result - 277 4 653 699 4 653 2 604 - 216 13 102

Decrease- write off on revenues of amounts unused

(324) - - - - - (129) - (453)

Reserves and provisions used- settlement of the costs

(365) - (4 533) (351) (2 734) - - - (7 983)

Revaluation of reserves recognized in other total income

55 - - - - - - - 55

Net exchange differences translated from financial statement to currency of presentation

- - (12) (11) (11) - - - (34)

Value of provisions and reserves at the end of the period

8 093 1 600 4 859 2 896 5 732 898 27 324 24 429

- long-term reserves 6 866 - - - - - - - 6 866

- short-term reserves and provisions 1 227 1 600 4 859 2 896 5 732 898 27 324 17 563

3.12. Changes in accounting principles in consolidated financial statement for 2012

Apator Capital Group introduced some amendments to financial statement prepared on the day and for the period ending

on 31st December 2012, being the result of amendment made to the standard IAS 19 „Employee benefits”. In accordance

with the standard amended, the cost of the programme of defined benefits covering revaluation of net liabilities due to

defined benefits has been recognized in other comprehensive income.Further to the above amendment other

comprehensive income was charged against the profit in amount of 493 000 PLN adjusted by the tax in amount of 93

000 PLN.

4. Description of achievements and failures of Apator Group in 2013

4.1. Performance of the forecast of financial results

The forecast of financial results for 2013 anticipated to obtain consolidated revenues in amount of 700 – 730 m PLN and

consolidated net profit in the range 68 – 71 m PLN The main assumption of the forecast was the activity of Apator Group

in entire period of the forecast in unchanged make-up.






Performance of the forecast Lower range Performance

Consolidated revenues on sales of products,goods and materials

700 000 679 101 97,01%

Consolidated net profit*) 68 000 68 966 101,42%

*)Apator SA does not refer to the forecast of consolidated net profit for the shareholders of parent entity published in current report due to the

change in accounting principles of the purchase option of minority packages that took place after the forecast was published. In result of

adjustment the options are considered as they have already been made (with non-controlling interest excluded). Further to the above the profit of

Apator Group in 99% is for shareholders of parent entity. Detail conditions of making adjustments have been described in point 6.18 of

condensed interim consolidated financial statement.

In spite of the change in the make-up of the Group (sale of Newind sp. z o.o. on 31st May 2013) the forecast of financial

results has been performed at the lower range.

Decrease of the capital group caused:

decrease of revenues – in the forecast was included 80 m PLN of annual revenues of Newind Sp. z o.o.,

performance January-May 2013 - 23,5 m PLN,

improvement of profitability – activity of Newind Sp. z o.o. was low margin one.

4.2. Analysis of financial results achieved

When the comparative analysis of financial results for 2013 in relations to 2012 was made, one should consider the

following significant single events that took place in 2012:

sale of property by Apator SA for 36 m PLN,

commencement of use of investment tax relief with regard to the transfer of activity by Apator SA to Pomeranian

Special Economic Zone,

enter the assets in the book on deferred income tax due to investment tax relief in amount of 20 m PLN.

Analysis of revenues on sales and explanations regarding seasonal nature of sale

In 2013 the make-up of the capital group was reduced due to the sale of shares of Newind sp. z o.o. on 31st May 2013

In spite of the impact of activity of Newind sp. z o.o. on revenues on sales of the group in four quarters 2012 was 80.007

000 PLN and in the period of January-May 2013 was 23.501 000 PLN that is the drop by 56.506 000 PLN y/y., Apator

Group in 2013 earned the revenues on sales and net profit assumed.

In the period of four quarters of 2013 consolidated revenues on sales were at the level of 679 101 000 PLN. In relation

to:

revenues reported for 2012 are slightly higher – increase by 10.277 000 PLN (1, 5%),

revenues adjusted for 2012 are significantly higher – increase by 66.783 000 PLN (11, 3%), after revenues of

Newind sp. z o.o. were excluded from both periods.

With regard to manufacturing of investment products by Apator Group and when analysis of revenues is made the

seasonal nature of sales is gently evident but its influence becomes less and less. As a role Apator Group achieves

higher revenues in the third and fourth quarter however it was not noticeable in 2013 due to lack of possibility to

compare the quarters caused by the sale of Newind Sp. z o.o.

2013 I quarter II quarter III quarter IV quarter

Revenues on sales 167 441 173 470 162 690 175 500

Share (%) 24,66% 25,54% 23,96% 25,84%

In the structure of the product line of Apator Group metering segment is dominant that share is 72% after four quarters of

2013. The revenues in particular segments were as follows:






metering equipment – 485.881 000 PLN, increase by 14% y/y, achieved mainly in water and heat and gas line,

switchgear equipment – 159.503 000 PLN, increase by 6% y/y, decrease of revenues on sales of mining equipment

in the segment due to crisis on that market and increase of sales of products for power engineering and industry.

The increase of control equipment has increased due to the performance of big contract with Arcelor Mittal Poland

SA.

Other sales – 33.717 000 PLN, decrease by 64% y/y caused by less revenues on sales of IT equipment by 56.506

000 PLN (with Newind Sp. z o.o. excluded- not significant decrease by 2.660 000 PLN).

Apator Group has performed the sales in geographical aspect:

sales on domestic market in amount of 369.844 000 PLN – decrease by 14% y/y, sales adjusted (after exclusion of

Newind Sp. z o.o.) was at comparable level - not significant decrease by 0,5% y/y,

sales on foreign market in amount of 309.257 000 PLN, increase by 28% y/y, including:

to European Union at the level of 155.871 000 PLN, increase by 15% y/y,

to other countries at the level of 153.386 000 PLN, increase by 46% y/y.

The revenues of Apator Group in 2013 were of high dynamic growth on foreign markets. The share of export in revenues

increased from 36% to 46% y/y. The growth rate of sales on foreign markets was 28, 4% and it exceeded the level of

annual average growth rate achieving the value of 27, 5% for the recent 6 years. In 2013, the value of 88% of export was

the sales of products of metering segment and other 12% were the sales of products of switchgear segment. The

business lines that have achieved the highest growth in export were as follows:

water and heat,

gas.

In 2013 Apator Group delivered its products to 69 countries. Markets of the highest sales are as follows:

Russia – 62.226 000 PLN, increase by 17% y/y (business lines: water and heat, switchgear, gas),

Denmark – 55.195 000 PLN, increase by 30% y/y (business lines: gas - intended to Dutch market),

Germany – 28.707 000 PLN, increase by 17% y/y (business lines: electricity, switchgear, gas),

Ethiopia – 26.274 000 PLN, increase by 308% y/y (business lines: water and heat),

Czech Republic – 21.495 000 PLN increase by 19% y/y (business lines: water and heat, mainly the activity of

Apator Metra s.r.o. from Czech Republic),

Turkey – 13.444 000 PLN, increase by 9% y/y, (business lines: water and heat, switchgear, gas)

Ukraine – 11.110 000 PLN, increase by 24% y/y, (business lines: water and heat, switchgear, gas)

Marocco – 8.517 000 PLN, lack of sales in 2012 (business lines: electricity).

Analysis of comprehensive income account for four quarters in 2013.

In the period of four quarters 2013, Apator Group achieved the following results:

Results reported I-IV quarters

2013 I-IV quarters

2012 Dynamics

Revenues on sales of products,goods and materials 679 101 668 824 101,5%

Manufacturing costs of products,goods and materials sold 477 178 483 950 98,6%

Gross profit on sale 201 923 184 874 109,2%

Selling cost 35 574 31 247 113,9%

Overheads 77 195 75 980 101,6%

Profit on sale 89 154 77 647 114,8%

Result on other operating activity -3 300 18 149 -18,2%

Share in profit of entities consolidated by equity method 1 268 2 206 57,5%

Revenues/costs of restructuring -277 0 0,0%

Profit on operating activity 86 845 97 999 88,6%






Results reported I-IV quarters

2013 I-IV quarters

2012 Dynamics

EBITDA 107 612 116 292 92,5%

Result on financing activity -3 407 -6 334 53,8%

Profit/loss before tax 83 438 91 665 91,0%

Current income tax 16 115 16 566 97,3%

Deferred income tax -1 643 -20 221 91,9%

Net profit 68 966 95 320 72,4%

The following factors and single events had the impact on the above reported financial results in relation to four quarters

in 2012:

sale of shares of Newind sp. z o.o. on 31.05.2013 ,

sale of property by Apator SA in 2012 of value 36.137 000 PLN, that increased operating profit in 2012 by positive

result on those sales in amount of 21.253 000 PLN,

enter the asset in the book on deferred income tax that was recognized due to commencement of activity in

Pomeranian Special Econmic Zone. The asset as at 31.12.2012 was 20.006 000 PLN and it increased the net result

in 2012.

After the periods analysed have been made to be compared each other by excluding the above mentioned factors, the

results achieved in four quarters 2013 are definitely better on both side of revenues and on side of profits, with the

increase of profitability at the same time.

Results adjusted I-IV quarters 2013 I-IV quarters 2012 Dynamics

Total sale 655 600 588 817 111,3%

Profit on sale 90 214 76 081 118,6%

Operating profit 87 814 75 320 116,6%

EBITDA 108 400 93 263 116,2%

Net profit 70 870 57 263 123,8%

Profitability on sale 13,8% 12,9%

Profitability of EBITDA 16,5% 15,8%

Profitability of net profit 10,8% 9,7%

Key growth factors:

high growth dynamics of export with the maintenance of favourable Eur exchange rate in relation to PLN (business

lines: water, heat and gas),

operating lever,

development of products, optimization of manufacturing processes, decrease of prices of raw materials

(copper,silver),

tight supervision of overheads

Analysis of comprehensive income account for fourth quarter 2013

Comprehensive income statement for IV quarter in 2013 is as follows:

Results reported IV quarter

2013 IV quarter

2012 Dynamics

Revenues on sales of products,goods and materials 175 500 169 974 103,3%

Manufacturing costs of products,goods and materials sold 120 840 123 979 97,5%






Results reported IV quarter

2013 IV quarter

2012 Dynamics

Gross profit on sale 54 660 45 995 118,8%

Costs of sales 11 571 10 506 110,1%

Overheads 21 593 21 229 101,7%

Profit on sale 21 496 14 260 150,7%

Result on other operating activity -1 979 -1 471 -34,5%

Share in profit of entities consolidated by equity method -196 876 -22,4%

Revenues/cost of restructuring -277 0 0,0%

Profit on operating activity 19 044 13 665 139,4%

EBITDA 24 249 18 699 129,7%

Result on financing activity -1 388 -1 318 105,3%

Profit/loss before tax 17 656 12 347 143,0%

Current income tax 4 968 2 054 241,9%

Deferred income tax -4 132 -620 -566,5%

Net profit 16 820 10 913 154,1%

After the comparability has been obtained for:

fourth quarter in 2013 by exclusion of asset due to zone tax relief,

fourth quarter in 2012 by exclusion the impact of sale of property, assets due to zone tax relief and activity of Newind

sp. z o.o.,

Apator Group achieved in the recent quarter in 2013 definitely better financial results. The increase of revenues on sales,

increase of profit and profitability has occurred.

Adjusted results IV quarter 2013 IV quarter 2012 Dynamics

Total sale 175 500 148 309 118,3%

Profit on sale 21 496 13 690 157,0%

Operating profit 19 044 11 284 168,8%

EBITDA 24 249 16 210 149,6%

Net profit 14 054 8 624 163,0%

Profitability on sale 12,2% 9,2%

Profitability on EBITDA 13,8% 10,9%

Profitability of net profit 8,0% 5,8%

Analysis of financial position

High value of cash generated in financial year 2012 (+43.719 000 PLN) and increased by cash earned by current basic

operating activity (+42.469 000 PLN) are used in investment process (-23.043 000 PLN). Investments mainly concern the

acquisition of tangible fixed assets (-18.892 000 PLN) and intangibles (-3.927 000 PLN).

Furthermore, cash from operating activity enabled to finance (in financing activity):

payment of dividend in amount of: -41.701 000 PLN,

repayment of loans and borrowings in amount of: -40.326 000 PLN

The above presented cash flow in total at the end of the fourth quarter in 2013 was in amount of +18.239 000 PLN.

Presented cash flow of Apator Group confirms very good financial position of the group that allows to invest and to make

the repayment of liabilities on time.






Ratios Formula I-IV quarters 2013 I-IV quarters 2012

Net debt loans and borrowings – cash and equivalents – short-term borrowings granted

39 055 12 001

Net debt/EBITDA loans and borrowings– cash and equivalents – short-term borrowings granted/EBITDA

0,36 0,10

Capex Tangible and intangible investment expenditure 22 819 28 157

Working capital (Current assets – cash)/(Short-term liabilities – short term loans and borrowings)

123 392 94 711

4.3. Condensed description of significant achievements or failures and presentation of factors and

events, particularly not typical ones having the impact on financial results achieved.

Achievements:

1. Good financial position:

increase of adjusted results: revenues on sales by 11%, profit on sales by 19%, EBITDA by 16% and margin of

EBITDA to the level of 16,5%, low debt 0,36 xEBITDA,

increase of adjusted EBITDA and profitability in both segments: metering and switchgear.

2. Significant increase of sales on foreign markets (by 28, 4%), particularly of the line; water, heat and gas with maintenance high Eur and American Dollar exchange rates. Increase of share of export in revenues on sales from 36% to 45, 5% y/y.

3. Completion of low margin activity in the range of supply of IT equipment –sale of Newind sp. z o.o. 4. Updating of strategy of development of Apator Group and conclusion of preliminary contract of purchase of

Elkomtech SA.

Elkomtech SA

In result of updating of the strategy made the directions of development of Apator Group for 2014-2019 were determined and the decision on investment in the automation of power grid was made. The result of the analysis of the market and negotiations conducted was the conclusion of preliminary purchase contract of 100% of Przedsiębiorstwo Wdrożeń Postępu Technicznego Elkomtech SA with headquarters in Łódź on 23

rd December 2013.

The transaction of purchase of Elkomtech SA is aimed to complete the offer of Apator Group by IT solutions and remote

control engineering equipment enabling to develop and to supply comprehensive systems for the automation of power

grid operation destined for power industry.

The subject matter of the contract is acquisition of 14.005 registered shares of Elkomtech SA. The purchase price of

shares is 90 m PLN and it will be suitably reduced by the net value of debt or increased by net value pursuant to the

status defined on working day before signature of final contract (estimation of - 98 mPLN). Transaction will be financed

mainly from bank loan.

The conclusion of final contract depends on the following conditions:

consent to acceptance by the President of the Office of Competition and Consumer Protection,

change in terms and conditions of employment of the members of the Executive Board of Elkomtech SA,

preparation and submission of financial statement for 2013 by Elkomtech S.A. to Apator SA

In case of failure of meeting of the above conditions at the latest on 31st May 2014 the preliminary contract will be

terminated.

In opinion of the Executive Board of Apator S.A. the conditions will be met and the transaction of purchase of Elkomtech

SA will be finalized at the end of the first quarter of 2014.

Failures:

1. Negative assessment of two year activity of Newind sp. z o.o. in the structure of Apator Group:

Acquisition of shares of Newind Sp. z o.o. has not brought expected synergy effects for Apator Group,

Newind Sp. z o.o. has not performed provisions of the investment contract concerning the pace of development

of own IT solutions and their integration with the products of Apator Group.

2. Lack of growth of sales on domestic market in 20013.






The list of other important events that occurred in 2013:

1. On 20th

March 2013 the Executive Board of Apator SA announced that in the period since 13th

January 2012 till 20th

March 2013 the entities of Apator Group (Apator SA included) concluded with PGE Dystrybucja SA 42 contracts that satisfied in total the conditions the criteria of significant contract. Total net value of the contracts was 22, 9 m PLN and they concerned the supply of electricity metres and the inventory power grids.

2. Since 29th March 2013 the shares of Apator SA are quoted for the following time in WIGdiv – dividend index at

Warsaw Stock Exchange.

3. Apator Control Sp. z o.o. – subsidiary and ArcelorMittal Poland SA the contract of the supply of the control equipment and accessories for industrial automatics in “Electrical revamping of Long Rail project”. The contract should be performed till 28

th February 2014 and the value of the contract is 24, 8 m PLN. Apator SA granted the

guarantee of the best performance of the contract by subsidiary Apator Control Sp. z o.o. towards ArcelorMittal Poland SA. The maximum amount of the guarantee is 24, 8 m PLN and it was granted till 22

nd March 2014.

4. On 26th

June 2013 the Executive Board of Apator SA announced that the insurance contracts would be continued due to actions performed or discontinued actions related to the performance of the function of the member of the Management of Apator Group. Insurance contracts were concluded for the period since 1

st July 2013 till 30

th June

2014 with the following insurance companies:

AIG – in the scope of basic insurance with the insurance amount of 30 m PLN,

ACE – in the scope of excess insurance with the insurance amount of 20 m PLN.

5. On 10th

September 2013 the Executive Board announced that Apator SA prolonged till 9th

September 2014

the term of the obligation of the contract concluded with Bank Handlowy w Warszawie SA. concerning the bank guarantee granted to the amount of 20 m PLN.

6. On 8th

November 2013 the Executive Board of Apator SA announced that during the recent 12 months subsidiary - Apator Powogaz SA concluded with z Addis Ababa Water and Sewerage Authority three contracts for the supply of water meters of total value 6.991 000 USD, i.e. 22.386 000 PLN.

7. On 12th

December 2013 the Executive Board of Apator SA appointed KPMG sp. z o.o. sp. k. for the review and auditing of separated and consolidated financial statements for 2014 – 2016.

8. On 20th

December 2013 Apator SA concluded the co-operation contract in the scope of switchgear equipment with OOO Apator Elektro for 2014 of the value of 12 m Eur. The contract will be performed for about 4 – 6 m Eur.

5. Proceedings before the court, the appropriate body for arbitration or public authority

Proceedings (including two or more) regarding the commitments or receivables of Apator SA or its subsidiaries, taken at

arbitration court or public authority regarding the issuer and subsidiaries are not 10% of equities of the issuer.

Furthermore:

The Executive Board of Apator S.A. has completed the appeal process from the decision of the Polish Financial

Supervisory Authority dated 17th

April 2012 where the Company was punished by the amount of 150 000 PLN

for lack of the announcement,

The Executive Board of Apator SA has been continuing the appeal process from the decision of Tax Chamber

in Bydgoszcz where the tax obligation had been defined in amount of 1.256 000 PLN plus interest resulting of

the control carried out in 2012 in the scope of settlement of income tax from legal entities for 2009. Apator SA

on 13th May 2013 submitted the cassation appeal to the Supreme Administration Court.

On 28.06.2013 the District Court in Ostrava announced the verdict ordering Apator Metra s.r.o. to make

payment towards the former partner of Metra Ńumperk - Jaroslav Macháček in amount of 2,8 m PLN

( i.e. 16,6 m CZK according to the average exchange rate of the National Bank of Poland dated 28.06.2013 of

1 CZK = 0,1669 PLN), as a compensation of the price of shares purchased from him:

- effects to Apator Metra s.r.o : the company made payment to the former partner in amount of 1,06 m PLN (i.e. 6,6 m

CZK ), but the remaining part of the amount of 1,74 PLN (10 m CZK) was appealed to the court. At the same time the

company made the provision for the interest and additional in amount of 1 m PLN.

- effects to Apator Powogaz Group: Apator Powogaz SA has received the part of payment for the shares of Apator Metra

s.r.o. in amount of 3,4 m PLN (i.e. 0,8 m Eur according to exchange rate of Raiffeisen Bank Polska SA dated 23.12.2010






that is 1 Eur = 4,0802 PLN). The amount of 1, 4 m PLN increased the result of other operating activity and other part in

amount of 2 m PLN is the liability,

- effects to Apator Group: any solution will not have the impact on consolidated financial statement of Apator Group.

6. Transactions with related entities

In 2013, Apator SA or its other subsidiary did not conclude transactions with related entities that would be as single or

together significant one and were concluded on other conditions than the market ones.

The cooperation between entities of Apator Group is performed on market conditions and it mainly concerns:

electronic electricity meters – co-operation with Apator SA and FAP Pafal SA,

switchgear equipment – co-operation with Apator SA and OOO Apator Elektro,

heat meters – co-operation with Apator S.A. and Apator Powogaz SA,

water maters and heat meters and heat cost allocators – co-operation between entities of Apator Powogaz

Group,

export to German market via Apator GmbH-Apator SA,Pafal SA, Apator Metrix SA.

In the scope of financial activity between entities in Apator Group, the dividends are being transferred. During four

quarters 2013 Apator SA received from subsidiaries the dividends in total amount of 36.635 000 PLN, i.e. by 30% higher

than in the same period in the previous year.

7. Information concerning the issue, buyout and repayment of non-controlling interest and capital

securities

In the period of four quarters of 2013 Apator SA did not make the issue, buyout or repayment of non-controlling interest and capital securities.

8. Shareholders of parent entity

8.1. Share capital

Share capital of Apator SA as at 31st December 2013 was 3.310.702,80 PLN and it consisted of 33.107.028 shares of

nominal value of 0,10 PLN each.

Shares and votes Number of shares Structure of shares

(%) Number of votes Structure of votes (%)

Registered shares 7 754 130 23,42% 31 016 520 55,02%

Bearer shares 25 352 898 76,58% 25 352 898 44,98%

Total shares 33 107 028 100,00% 56 369 418 100,00%

In result of conversion of 30 000 registered shares to ordinary bearer shares performed on 4

th January 2013 the total

number of votes was reduced from 56.369.418 to 56.279.418. Therefore, the basis to calculations on the day of

publication of the financial statement (19thFebruary 2014) is share capital of 3.310.702,80 PLN that consists of

33.107.028 shares of nominal value 0,10 PLN each that is divided into:






Shares and votes Number of shares Structure of shares (%) Number of votes Structure of votes (%)

Registered shares 7 724 130 23,33% 30 896 520 54,90%

Bearer shares 25 382 898 76,67% 25 382 898 45,10%

Total shares 33 107 028 100,00% 56 279 418 100,00%

Each bearer share entitles to one vote but registered shares are preferred ones and they entitle to four votes at general

shareholders meeting.

8.2. Possession and changes in ownership structure of important shareholders

Shareholders holding at least 5% of total number of votes

Description

As at 30th November 2013 As at 19

th February 2014 Change

shares votes shares (%) votes (%)

shares votes shares (%) votes (%) purchase sales

Apator Mining 3 600 000 3 600 000 10,87% 6,39% 3 600 000 3 600 000 10,87% 6,40% - -

Mariusz Lewicki 2 045 643 5 539 650 6,18% 9,83% 2 046 500 5 540 507 6,18% 9,84% 857 -

Tadeusz Sosgórnik 1 900 503 4 879 809 5,74% 8,66% 1 900 503 4 879 809 5,74% 8,67% - -

Danuta Guzowska 1 520 279 4 382 921 4,59% 7,78% 1 520 279 4 382 921 4,59% 7,79% - -

Zbigniew Jaworski 1 333 869 3 616 413 4,03% 6,42% 1 334 922 3 617 466 4,03% 6,43% 1 053 -

Janusz Marzygliński 1 047 657 3 501 933 3,16% 6,21% 1 042 731 3 497 007 3,15% 6,21% - 4 926

Aviva OFE * 2 905 628 2 905 628 8,78% 5,15% - - - - - -

Total 14 353 579 28 426 354 43,36% 50,43% 11 444 935 25 517 710 34,57% 45,34% 1 910 4 926

*) On 8th January 2014 AVIVA OFE advised that in result of selling transaction part of the shares of Apator SA, the 5% threshold of votes dropped in Apator SA

8.3. Possession and changes in ownership structure of persons in management and supervisory

bodies

Persons in management body:

Description

As at 30th November 2013 As at 19


shares votes shares

(%) votes (%)

shares votes shares

(%) votes (%)

purchase sales

Andrzej Szostak 0 0 0,00% 0,00% 0 0 0,00% 0,00% - -

Tomasz Habryka 0 0 0,00% 0,00% 0 0 0,00% 0,00% - -

Jerzy Kuś 200 200 0,00% 0,00% 200 200 0,00% 0,00% - -

Janina Karaszewska – Zandrowicz

434 500 1 424 500 1,31% 2,53% 434 500 1 424 500 1,31% 2,53% - -

Mirosław Klepacki 0 0 0,00% 0,00% 0 0 0,00% 0,00% - -

Krzysztof Malec 99 396 0,00% 0,00% 99 396 0,00% 0,00% - -

Total 434 799 1 425 096 1,31% 2,53% 434 799 1 425 096 1,31% 2,53% 0 0

Persons in supervisory body:

Description As at 30

th November 2013 As at 19


shares votes shares (%) votes (%) shares votes shares (%) votes (%) purchase sale

Janusz Niedźwiecki 436 518 1 734 639 1,32% 3,08% 436 518 1 734 639 1,32% 3,08% - -

Mariusz Lewicki 2 045 643 5 539 650 6,18% 9,83% 2 046 500 5 540 507 6,18% 9,84% 857 -

Danuta Guzowska 1 520 279 4 382 921 4,59% 7,78% 1 520 279 4 382 921 4,59% 7,79% - -

Janusz Marzygliński 1 047 657 3 501 933 3,16% 6,21% 1 042 731 3 497 007 3,15% 6,21% - 4 926

Marcin Murawski 0 0 0,00% 0,00% 0 0 0,00% 0,00% - -

Krzysztof Kwiatkowski 0 0 0,00% 0,00% 0 0 0,00% 0,00% - -

Total 5 050 097 15 159 143 15,25% 26,89% 5 046 028 15 155 074 15,24% 26,93% 857 4926






9. Dividend

Dividend from the profit for 2012

The dividend in gross value of 1, 40 PLN per share from the profit of 2012 was paid i.e. total value was 46, 3 m PLN.

Interim dividend towards dividend was paid on 13th

December 2012 in gross value of 0,40 PLN per share , other part of

dividend was paid on 26th July 2013 in gross value of 1,00 PLN per share.

Dividend from the profit in 2012 Number of shares Interim dividend towards

dividend per share Other part of interim dividend from the profit in 2012

per share Dividend

Registered shares 7 754 130 0,40 PLN 1,00 PLN 10 855 782,00 PLN

Bearer shares 25 352 898 0,40 PLN 1,00 PLN 35 494 057,2 PLN

Total shares 33 107 028 0,40 PLN 1,00 PLN 46 349 839,20 PLN

Declaration of payment of dividend from the profit for 2013

The Executive Board of Apator S.A. declares the payment of dividend from the profit for 2013 at least in gross amount of

0, 60 PLN per share. High investment expenditure related to the planned extension of Apator Group by Elkomtech SA

was taken into account during the establishment of declared level of dividend.

The final decision will be made on 16th

June 2014 at ordinary general shareholders meeting.

On 23rd

December 2013 interim dividend towards dividend in gross amount of 0, 30 PLN per share was paid.

Interim dividend towards dividend from the profit in 2013

Number of shares Interim dividend towards dividend

per share Interim dividend towards dividend

Registered shares 7 754 130 0,30 PLN 2.326.239,00 PLN

Bearer shares 25 352 898 0,30 PLN 7.605.869,40 PLN

Total shares 33 107 028 0,30 PLN 9.932.108,40 PLN

Total declared dividend from the profit in 2013 is gross amount of 0, 60 PLN per share that is in total 19, 9 m PLN.

10. Other information significant for the assessment of personnel, property and financial situation,

financial result and their changes and information significant to the assessment of the possibility

of the performance of liabilities by the issuer.

Till 24thJune 2013 the Executive Board of Apator SA operated with the following make-up:

Janusz Niedźwiecki – President of the Executive Board,

Tomasz Habryka – Member of the Executive Board,

Jerzy Kuś – Member of the Execuitve Board.

Since 25th June 2013 the Executive Board of Apator S.A. was nominated for the next tenure for 2013 – 2015 in the

following make-up:

Andrzej Szostak – President of the Executive Board,

Tomasz Habryka – Member of the Executive Board,

Jerzy Kuś – Member of the Execuitve Board.

The President of the Executive Board of the previous tenure – Janusz Niedźwiecki was nominated the Member of the

Supervisory Board of Apator SA by Ordinary General Shareholders Meeting where he is the Chairman of the body.






11. Events that occurred after 31st

December 2013 that is after the day when condensed quarterly

financial statement was prepared.

1. On 8th

January 2014 Aviva Powszechne Towarzystwo Emerytalne Aviva BZ WBK SA advised about the lowering by Aviva OFE the 5% threshold of votes in Apator SA.

2. On 13th

January 2014 subsidiary - Apator Powogaz SA and associated entity - ZAO Teplovodomer concluded frame co-operation contract for 2014 for the value of 56, 2 m PLN for the supply of water meters and heat meters.

3. On 21st January 2014 the proposal was submitted to the Office of Competition and Consumer Protection for the

consent to take over the control of Elkomtech SA. 4. On 31

st January 2014 the share capital was increased in subsidiary- Apator GmbH (Germany) from 50 000 Eur to

70 000 Eur. 5. On 3

rd February 2014 it was announced that during recent 12 months the entities of Apator Group concluded with

Tauron Dystrybucja the contracts of total value of 27, 9 m PLN. 6. On 3

rd February 2014 Apator SA received the notification about the winning of unlimited tender organized by PGE

Dystrybucja for the supply of metering equipment for electricity of the value of 20, 2 m PLN. The appeal procedure submitted by competitors is under consideration.

7. On 12th

February 2014, FAP Pafal SA purchased the next 111 000 own shares from Apator SA in order to redeem

them and paid for them 2.997 000 PLN. The purchase cost of the shares incurred by Apator SA was 2.897 000 PLN.

The shares will be redeemed in the first half of 2014.

8. On 17th February 2014 it was announced that during the recent 12 months subsidiary Apator

Mining sp. z o.o. and Kompania Węglowa concluded the contracts of total value of 21, 8 m PLN.

9. On 18th February 2014 the Executive Board of Apator SA accepted the offer to purchase 30% shares of Apator

Rector Sp. z o.o. The purchase of shares will be not later than till 7th

July 2014. The purchase price was specified in

investment contract (concluded in 2010) and it was established at the level of 17, 9 m PLN.

12. Factors that in opinion of the Executive Board will have the impact on future results of Apator

Group

12.1. Strategy of activity of Apator Group for 2014 – 2019

Mission

Apator Group is the partner of entities managing the distribution of infrastructure for all utility services in the scope of

development and supply of the systems, equipment and services innovative and complied with open standards providing

effective and safe deployment of power grid infrastructure. Safety and corporate social responsibility are determinants of

our activity.

Vision

Apator Group is leading supplier of metering and data read out equipment and systems for all utility services with

particular consideration of electricity distribution.

Location in value chain:

Poland: development of data communication systems and co-operating equipment enabling to remote

monitoring,control and data read out ,

other markets: development of smart equipment, co-operation with partners in the scope of system integration ,

Geographical range:

Poland: leader in respect of the share in the market (position 1-3) in all business lines,

CIS, CEE and UE: leading, reputable supplier with evident, steady share in selected far-reaching markets,

other markets: opportunistic approach, supply of products and rendering services without the involvement of

significant R&D resources.

Main financial objectives

annual average growth rate of consolidated EBITDA 2014 - 2019 in the range of 10 – 15% (about 2 – 2,5x growth of

the value),






target revenues over 1,5 bn PLN,

over 60% of revenues from foreign markets,

50% EBITDA from distribution of electricity.

Strategy assumes to make use of chances of development resulting from regulation and technology trends related to the

need of improvement of effectiveness of making use of utility services among other things by automation, remote

monitoring and control within distribution infrastructure of power grid.

Strategic objectives accepted to be performed are based on organic development of Apator Group strengthened by

competence of Elkomtech SA. The objectives do not take into account possible next acquisitions.

The development of the essential activity of Apator Group will be performed within target business model based on

strategic, integrating function of IT (ICT) services and products in two basic segments:

metering (business lines: water, heat ,electricity and gas),

automation of power grid (remote monitoring and control, automation and protection, smart switchgear).

Strategy of Apator Group anticipates:

making use of numerous product synergies – strengthening of integrating role of ICT and inclusion of new items in

value chain and offering more comprehensive offer to key customers,

making use of cost, operating and business synergies – strategic financing, HR and marketing, wider co-operation

with partners in branch, active participation in establishment and acceptance of international standards of

interoperation for new technologies.

12.2. Extension of Apator Group by Elkomtech SA

Since the second quarter 2014 Apator Group should operate in the make-up extended by Elkomtech SA. The takeover of

the company is the result of of updated strategy of Apator Group and it is aimed to extend the offer of Apator Group

particularly in the scope of value chain being offered to customers.

Elkomtech S.A. is leading Polish supplier of IT systems of SCAD class and operating with them telemechanical and

protection equipment and other power grid equipment for dispersed systems providing the possibility of remote control

and supervision over power grid in entire voltage range.

Purchase transaction of 100% shares of Elkomtech SA will have positive impact on future results of Apator Group among

other things on consolidation process that should occur since II quarter of 2014. Furthermore synergy of competence of

Elkomtech SA and Apator Group will allow:

comprehensive service of customers of power engineering branch in the scope of systems and smart equipment,

offering comprehensive tool for the automation of power grid operation for entire voltage range,

current diagnosis of power grid and its flexible management ability.

12.3. Forecast of financial results for 2014

The forecast of consolidated financial results for 2014 is as follows:

Description Forecast for 2014 Performance in 2013 Dynamics

Consolidated revenues on sales of products,goods and materials 730 000 – 760 000 679 101 107,50% - 111,91%

Consolidated net profit 75 000 – 78 000 68 966 108,75% - 113,10%

During preparation of the forecast the following were taken into account:






takeover of 100% shares of Elkomtech SA and consolidation of results of the company since II quarter 2014,

financing of purchase transaction of shares of Elkomtech SA from bank loan in amount to 100 m PLN,

buyout of 30% shares of Apator Rector sp. z o.o. for the amount of 17,9 m PLN,

maintenance of high share of export in revenues on sales in total,

average Eur exchange rate euro accepted in amount of 4,10 PLN,

making use of investment tax relief due to activity of Pomeranian Special Economic Zone.

13. Appendix: Separate financial statement of Apator SA

13.1. Selected financial data including the essential items of condensed financial statement

DESCRIPTION

in thousands of PLN in thousands of EUR

Current period

Previous period

Current period

Previous period

Separated financial statement IV quarters 2013 IV quarters 2012 IV quarters 2013 IV quarters 2012

Sales revenues of products, goods and materials (continued operation) 167 863 183 411 39 863 43 946

Profit (loss) from operating activity (continued operation) 14 870 28 264 3 531 6 772

EBITDA 23 834 35 456 5 660 8 495

Gross profit (loss) (continued operation) 51 360 54 380 12 197 13 030

Net profit (loss) for shareholders of parent entity in Apator Group 51 282 70 393 12 178 16 866


Net profit (loss) per ordinary share [PLN/share]: 1,55 2,08 0,37 0,50

Cash flows from operating activity 15 180 25 463 3 660 6 228

Cash flows from investing activity 26 559 34 342 6 404 8 400

Cash flows from financing activity (44 951) (55 319) (10 839) (13 531)

Total cash flows (3 212) 4 486 (775) 1 097

Separated financial statement 31.12.2013 2012 31.12.2013 2012

Total assets 274 339 273 799 66 150 66 973

Fixed assets 220 466 221 493 53 160 54 179

Current assets 53 873 52 306 12 990 12 794

Equity with non-controlling interest 207 195 199 082 49 960 48 697

Share capital 3 311 3 311 798 810

Long-term liabilities and reserves 6 029 5 609 1 454 1 372

Short-term liabilities,reserves and provisions 61 115 69 108 14 736 16 904


Book value per ordinary share [PLN/share]: 6,26 5,91 1,51 1,45






13.2. Financial statement of financial position of parent entity – Apator SA

DESCRIPTION Day

31.12.2013 31.12.2012

Fixed assets 220 466 221 493

Intangible assets 4 269 3 057

Property, plant and equipment 71 942 69 272

Investment properties 1 319 1 303

Other long-term financial assets 121 885 126 380

- in related entities 121 601 125 863


Long-term borrowings granted - 83

- to related entities - 83

Long -term receivables 41 943

- from other entities 41 943

Deferred tax assets 21 010 20 455

Current assets 53 873 52 306

Inventories 19 835 18 898

Trade receivables 28 395 25 675

- from related entities 3 094 1 946


Current tax assets 1 142 -

Receivables due to other taxes (excluding income tax) and other similar charges 743 1 666

Other short-term receivables 909 415

- from related entities - 12

- from other entities 909 403

Other short-term financial assets 779 131


Short-term borrowings granted 85 214

- to related entities 85 214

Cash and cash equivalents 1 354 4 566

Short-term prepayments 631 741

TOTAL ASSETS 274 339 273 799






DESCRIPTION Day

31.12.2013 31.12.2012

Equity 207 195 199 082

Equity for shareholders of parent entity 207 195 199 082

Share capital 3 311 3 311

Other capitals 162 305 138 311

Capital from remeasurements of defined benefit plans (170) (49)

Capital from evaluation of hedging transactions and exchange differences from consolidation 350 359

Undistributed financial result 41 399 57 150

- undistributed result from previous years 49 -

- result of current period 51 282 70 393

- write-offs from net profit in the financial year (negative value) (9 932) (13 243)

Liabilities 67 144 74 717

Long-term liabilities,reserves and provisions 6 029 5 609

Long-term liabilities 1 423 1 024


Deferred income tax liability - -

Long-term reserves for employee benefit liabilities 4 606 4 585

Short-term liabilities ,reserves and provisions 61 115 69 108

Short-term loans and borrowings 35 702 35 58


Trade liabilities 14 394 13 092

- towards related entities 2 694 2 893


Current tax liabilities - 4 009

Liabilities due to other taxes (excluding income tax) and other similar charges 2 554 2 069

Other short-term liabilities 5 202 11 546

- towards related entities 85 212


Short-term reserves for employee benefit liabilities 2 366 2 459

Other short-term provisions 897 575

TOTAL LIABILITIES 274 339 273 799






Information concerning changes in contingent liabilities or contingent assets that occurred since

the end of the recent financial year. (off- balance sheet items) of parent entity - Apator SA.

DESCRIPTION Day

31.12.2013 31.12.2012

Contingent receivables 826 826

Contingent receivables due to other entities 826 826

Contingent liabilities 29 618 4 468

Contingent liabilities connected with related entities 24 760 -

- due to guarantees and warranties granted to related entities 24 760 -

Contingent liabilities due to other entities 4 858 4 468

- due to guaranties and warranties granted 4 858 4 468

Other off-balance-sheet items 47 731 51 448

Fixed assets tenanced 3 512 3 968

Ordinary mortgage 37 000 37 000

Hedging on property 1 183 4 444

Assignment of receivables 6 000 6 000

Deposits placed 36 36

Total off-balance-sheet items 78 175 56 742

Moreover, the company has got the hedging for the repayment of receivables by silent assignment of minimum 40% of

all trading of Apator S.A., and also by the assignment of property insurance policy of property of Apator SA located in

Ostaszewo as the hedging of revolving line for bank guaranties to be granted.

Within the above described hedging for the performance of bank contracts at the end of December 2013, Apator S.A.

made the declarations of voluntary submission to the notary deed of execution for the total amount of 86,25 m PLN. The

declarations regard: limit receivables contract (Raiffeisen Bank Polska S.A.), overdraft contract (Bank Handlowy w

Warszawie S.A.), revolving line contract for bank guarantee to be granted (Bank Handlowy w Warszawie S.A.). The

declarations submitted refer to the amount of maximum liability of the Company increased by bank charges.






Financial statement of changes in equity of Apator SA

DESCRIPTION Share capital Other

capitals

Reserve from remeasurements of


Capital on valuation of hedging transactions and exchange

differences from consolidation


TOTAL

Balance as at 01.01.2013 3 311 138 311 (49) 359 57 150 199 082


Profit (loss) due to revaluation - - (150) - - (150)

Hedging instruments for cash flow, including: - - - (12) - (12)

- profit (loss) considered in balance valuation for items being hedged - - - (12) - (12)

Tax related to items presented in capital or transferred from capital - - 28 3 - 31

Net profit since 01.01.2013 till 31.12.2013 - - - - 51 282 51 282

Comprehensive income since 01.01.2013 till 31.12.2013 - - (122) (9) 51 282 51 151

Dividends - - - - (46 350) (46 350)

Settlement of interim dividend towards dividend from previous year - - - - 13 243 13 243

Interim dividends paid towards dividend - - - - (9 932) (9 932)

Distribution of result for supplementary capital - 23 994 - - (23 994) -

Balance as at 31.12.2013 3 311 162 305 (171) 350 41 399 207 194






DESCRIPTION Share capital Other

capitals

Reserve from remeasurements of


Capital on valuation of hedging transactions and exchange

differences from consolidation


TOTAL

Balance as at 01.01.2012 3 511 125 410 - (1 460) 37 731 165 192


Profit (loss) due to revaluation - - (60) - - (60)

Hedging instruments for cash flow, including: - - - 2 246 - 2 246

- profit (loss) considered in balance valuation for items being hedged - - - 2 246 - 2 246

Tax related to items presented in capital or transferred from capital - - 11 (427) - (416)

Net profit since 01.01.2012 till 31.12.2012 - - - - 70 393 70 393

Comprehensive income since 01.01.2012 till 31.12.2012 - - (49) 1 819 70 393 72 163

Dividends - - - - (24 830) (24 830)

Interim dividends paid towards dividend - - - - (13 243) (13 243)

Purchase of own shares - (200) - - - (200)

Redemption of own shares (200) 200 - - - -

Distribution of result for supplementary capital - 12 901 - - (12 901) -

Balance as at 31.12.2012 3 311 138 311 (49) 359 57 150 199 082






13.3. Financial statement of comprehensive income of parent entity - Apator SA

DESCRIPTION

Period

01.10.2013 01.01.2013 01.10.2012 01.01.2012

31.12.2013 31.12.2013 31.12.2012 31.12.2012

Sales revenues 41 976 167 863 37 675 183 411

Sales revenues of products and services 38 681 154 595 34 404 151 346

- to related entities 6 154 28 100 3 609 28 206


Sales revenues of goods and materials 3 295 13 268 3 271 32 065

- to related entities 188 2 117 1 236 6 421


Cost of goods sold (30 456) (120 048) (29 128) (140 438)

Cost of products and services sold (27 511) (108 446) (26 347) (112 164)

- to related entities (4 375) (19 780) (3 634) (23 029)


Cost of goods and materials sold (2 945) (11 602) (2 781) (28 274)

- to related entities (173) (1 997) (1 193) (5 761)


Gross profit (loss) on sales 11 520 47 815 8 547 42 973

Costs of sales (2 807) (9 389) (2 828) (10 220)

Overheads (7 099) (24 341) (5 979) (24 163)

Profit (loss) on sales 1 614 14 085 (260) 8 590

Other operating revenues (costs), including: 408 785 (196) 19 674

Result on sales and liquidation of property plant and equipment and intangibles - (1) 1 729 22 874

Result on valuation of property 20 160 (102) (102)

Result on revaluation of non-financial current assets 165 160 (1 699) (1 760)

Result on reserves for retirement bonuses and jubilee awards 559 496 (474) (474)

Result on other operating activity (336) (30) 350 (864)

Profit (loss) on operating activity 2 022 14 870 (456) 28 264

EBITDA 4 305 23 834 1 524 35 456

Financial revenues (costs) 249 36 490 1 663 26 116

Dividends and shares in profits - 36 635 2 104 28 200

- from related entities - 36 635 2 104 28 200

Interest on loans and borrowings (322) (1 320) (418) (1 607)

Result on other interest (44) (50) 43 148

Result on shares - 255 -

Result on exchange differences 143 162 (103) (1 161)

Result on currency transactions 435 799 102 560

Result on revaluation of financial current assets (69) (27) (47) 23

Other financial revenues (costs) 106 36 (18) (47)

Profit (loss) before tax 2 271 51 360 1 207 54 380

Current income tax (372) (602) 1 104 (4 829)

Deferred income tax 2 864 524 (106) 20 842

Net profit (loss) 4 763 51 282 2 205 70 393

Other comprehensive income

Other net comprehensive income 293 (131) 323 1 770


Net result on hedging accounting including tax effect 295 (9) 372 1 819


Net actuarial gains/(losses) on defined benefit plans including tax effect (2) (122) (49) (49)

Comprehensive income in total 5 056 51 151 2 528 72 163






13.4. Cash flow account of parent entity - Apator SA

DESCRIPTION

Period

01.01.2013 01.01.2012

31.12.2013 31.12.2012

Cash flow from operating activity

Profit before tax (continued operation) 51 360 54 380

Adjustments: (27 499) (42 180)

Amortization of intangible assets 1 170 1 029

Depreciation of property, plant and equipment 7 794 6 163

(Profit) loss on sales of tangible fixed assets and intangibles (215) (23 405)

(Profit) loss on sales of financial assets available for sales (255) -

(Profit) loss from evaluation of investment properties at the fair value. (160) 102

(Profits) losses from the change of fair value of derivatives (441) (613)

Cost of interest 1 463 2 354

Interest received (62) (13)

Dividends received (36 635) (28 200)

Other adjustments (158) 403

Cash from operating activity before taking into consideration changes in current assets 23 861 12 200

Change in inventories (937) 3 391

Change in receivables (1 442) 9 466

Change in liabilities (758) 272

Change in reserves and provisions 100 933



Income tax paid (5 754) (449)


Cash flow from investment activity

Outflows for the purchase of intangibles (2 527) (739)


Inflows from the sales of tangible fixed assets 598 27 177


Inflows from the sales of financial assets available for sales 7 764 -

Investments in subsidiaries (3 247) -

Borrowings granted (3 000) -

Inflows from repayment of borrowings granted 3 227 222


Dividends received 36 635 28 200


Net cash from investing activity 26 559 34 342

Cash flow from financing activity

Inflows from loans and borrowings taken 5 000 26 150

Repayment of loans and borrowings (4 638) (41 000)

Interest (1 420) (2 273)

Dividends paid (43 050) (38 059)

Repayment of liabilities under finance lease contracts (782) (116)

Other inflows(outflows) (61) (21)

Net cash from financing activity (44 951) (55 319)

Increase (decrease) of net cash and cash equivalents (3 212) 4 486

Cash and cash equivalents at the beginning of the period 4 566 80

Cash and cash equivalents at the end of the period 1 354 4 566






13.5. Additional financial information

Weighted average number of shares for separate financial statement as at 31st December 2013 is 33.107.028 and it is

equal to the number of shares.

Weighted average number of shares as at 31st December 2012 is 33.669.870. It takes into consideration the redemption

of 2 million own shares of Apator S.A. that were acquired free of charge from Apator Mining Sp. z o.o.

13.6. Information on adjustments due to reserves and provisions, provision and assets due to

deferred income tax mentioned in the accounting act, write downs of values of the components

of the assets

Deferred income tax assets and income tax assets

DESCRIPTION Status at the

beginning of the period

Charging the result due to the change in

temporary differences and tax

loss

Increase (decrease) of equity due to the

change of temporary differences



Deferred income tax assets 22 092 613 25 22 730

Reserve for employee benefits 1 095 (94) 28 1 029

Reserve for bonuses 78 (16) - 62

Reserve for margins of revenues - - - -

Provision for warranty repairs 109 9 - 118

Reserve and provision for future costs 25 151 - 176

Salaries and wages, insurance fees unpaid 170 85 - 255

Inventory write downs 110 (21) - 89

Receivables write downs 139 (34) - 105

Valuation at the fair value - derivatives 33 (30) (3) -

Valuation at the fair value-other financial assets 268 - - 268

Tax relief due to operation in Pomeranian Special Economic Zone 20 006 577 - 20 583

Other costs not taxed in the period, including: 59 (14) - 45

Deferred tax liabilities 1 637 89 (6) 1 720

Valuation at the fair value - property 10 30 - 40

Valuation at the fair value - derivatives 153 54 (6) 201

Book amortization and depreciation apart to tax one 971 91 - 1 062

Excess of nominal value over book value of apportionment 238 - - 238

Liquidated damages received 225 (67) - 158

Other revenues not taxed in the period, including: 40 (19) - 21

Total X 524 31 X

Deferred income tax assets 20 455 (124) 28 21 010

Deferred tax liabilities - (70) 6 -

Effective tax rate






DESCRIPTION

Period

01.01.2013 01.01.2012

31.12.2013 31.12.2012

Profit (loss) before tax 51 360 54 380

Tax rate 19,00% 19,00%

Income tax calculated according to binding tax rate 9 758 10 332

Possible tax on tax free revenues (permanent differences) (7 532) (6 925)

- including dividend from related entities (6 961) (5 358)

- including income related to special economic zone permission (393) (1 354)

Tax on cost not being costs of revenues (permanent differences) 381 675

Asset to be taxed due to operation in Pomeranian Special Economic Zone (2 721) (20 006)

Adjustment of tax loss from previous years 211 -

Other deductions (19) (89)

Income tax specified in comprehensive income statement 78 (16 013)

Effective tax rate 0,15% -29,45%

Write-downs of fixed & current assets

DESCRIPTION Status at the beginning of the

period Change in the period

(increase "+", decrease "-") Status at the end of the period

Other financial assets 1 537 - 1 537

Inventories 579 (111) 468

Receivables 2 362 (186) 2 176

Total 4 478 (297) 4 181

Provisions for liabilities

DESCRIPTION

BENEFITS FOR EMPLOYEES

OTHER PROVISIONS TOTAL

Severance payments, jubilee awards (actuary)

Bonuses

Leaves

Guarantees

Value of provisions and reserves at the beginning of the period 5 768 578 698 575 7 619

Increase- establishment of reserve and provision charging current result

(497) 645 208 322 678

Reserve used - (578) - - (578)

Revaluation of reserve recognized in other total income 150 - - - 150

Value of provisions and reserves at the end of the period,including:

5 421 645 906 897 7 869

- long-term reserves 4 606 - - - 4 606

- short-term provisions and reserves 815 645 906 897 3 263

13.7. Changes in accounting principles in separate financial statement for 2012

Apator S.A. made change in financial statement prepared for and period ending on 31st December 2012 result of the

change of the standard IAS 19 „Employee benefits”. Pursuant to the standard changed the cost of the programme of

defined employee benefits covering revaluation of net liabilities due to specified benefits of specified benefits of Apator

S.A. recognized in other comprehensive income. Due to the above change the loss in amount of 60 000 PLN adjusted by

tax in amount of 11 000 PLN was charged against the other comprehensive income.

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