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IMPEXMETAL GROUP

BUSINESS REPORT

FOR 2014

Date of approval of the report for publication:

17 March 2014

IMPEXMETAL SA: Group Business Report for 2014

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TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................. 3 2. APPROVAL OF THE REPORT FOR PUBLICATION. ........................................ 4

3. STRUCTURE OF THE GROUP .......................................................................... 4 4. SIGNIFICANT EVENTS .................................................................................... 10 5. BUSINESS ACTIVITY ....................................................................................... 14 6. FINANCIAL ANALYSIS .................................................................................... 20 7. CHARACTERISTICS OF THE STRUCTURES OF ASSETS AND LIABILITIES

…………………………………………………………………………………………..26 8. DESCRIPTION OF SIGNIFICANT OFF-BALANCE SHEET ITEMS ................. 29 9. MATERIAL CONTRACTS ................................................................................ 29 10. CAPITAL EXPENDITURES AND CHANGES IN THE STRUCTURE ............... 32 11. RESEARCH AND DEVELOPMENT .............................................................. 35

12. TRANSACTIONS WITH RELATED PARTIES .............................................. 35 13. CREDITS AND LOANS .................... BŁĄD! NIE ZDEFINIOWANO ZAKŁADKI. 14. SURETIES AND GUARANTEES ................................................................ 401

15. OWN SHARES ............................................................................................ 412 16. ISSUE OF SECURITIES .............................................................................. 412 17. DIVIDEND .................................................................................................... 412

18. FORECAST OF THE BOARD ..................................................................... 423 19. PRINCIPLES OF FINANCIAL RESOURCES MANAGEMENT................... 423 20. FEASIBILITY ASSESSMENT OF PLANNED INVESTMENTS (FINANCIAL

CONDITION) ................................................................................................ 423 21. UNUSUAL FACTORS AND EVENTS AFFECTING THE RESULT ............ 423

22. DESCRIPTION OF KEY RISK FACTORS .................................................. 423

23. PROSPECTS, ASSUMPTIONS AND DEVELOPMENT PLANS. GROUP'S STRATEGY ................................................................................................... 46

24. EMPLOYMENT.............................................................................................. 48

25. CHANGES IN THE KEY PRINCIPLES OF MANAGEMENT OF THE COMPANY AND ITS GROUP ....................................................................... 48

26. AGREEMENTS BETWEEN THE COMPANY AND THE MANAGEMENT STAFF, WHICH ANTICIPATE COMPENSATION IN CASE OF RESIGNATION OR REMOVAL FROM THE POSITION WITH NO VALID REASON OR IF THE DISMISSAL OR REMOVAL TAKES PLACE AS A RESULT OF A MERGER AFTER A TAKEOVER. ........................................ 48

27. PERSONNEL MANAGING AND SUPERVISING ACTIVITIES OF THE COMPANY. .................................................................................................4748

28. REMUNERATION OF THE MANAGEMENT BOARD AND SUPERVISORY BOARD ........................................................................................................ 534

29. COMPANY SHARES AND SHARES IN SUBSIDIARIES AND AFFILIATES HELD BY MANAGEMENT AND SUPERVISORY PERSONNEL. .............. 545

30. KNOWN AGREEMENTS (INCLUDING THOSE CONCLUDED AFTER THE END OF THE REPORTING DATE), WHICH MAY GIVE RISE TO CHANGES IN THE SHAREHOLDER AND BONDHOLDER STRUCTURE .................... 56

31. CONTROL SYSTEMS FOR EMPLOYEE STOCK OPTION PLANS ............ 56 32. AGREEMENT WITH THE AUDITOR ............................................................ 56 33. PROCEEDINGS PENDING ........................................................................... 56 34. STATEMENT OF COMPLIANCE WITH CORPORATE GOVERNANCE

PRINCIPLES .................................................................................................... 56


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1. INTRODUCTION

Impexmetal Spółka Akcyjna, hereinafter referred to as the Company, was established on 1 July 1995 in Warsaw,

through a transformation of the state-owned company Centrala Importowo – Eksportowa Impexmetal. Company's

business profile is associated with the trade in non-ferrous metals, their semi-finished products and alloys

(aluminium, copper, zinc, lead) as well as worldwide distribution of bearings. Since the mid-70s, the Company has

been carrying out transactions on the London Metal Exchange LME.

Currently, Impexmetal is one of largest Polish organisations with the structure of a manufacturing and trading

holding company. Impexmetal operates on all continents while maintaining contacts with hundreds of foreign

partners as well as the thousands of Polish companies. Impexmetal S.A. is the owner or major shareholder in 28

companies, including 5 manufacturing plants. In 2014, Impexmetal Group was employing nearly 1,900

employees.

The Company is based in Warsaw at ul. Łucka 7/9. The Company is registered in the District Court for the Capital

City of Warsaw, 12th Economic Department of National Court Register under the number 0000003679. The

Company has been assigned a statistical number 011135378 and tax number 525-00-03-551.

Impexmetal S.A. shares have been listed since 24 June 1997 on the Warsaw Stock Exchange - "Metal Industries"

Sector. In 2005, Impexmetal S.A. became part of Boryszew Group.

The Company is entitled to establish companies domestically and abroad with any business profile, to join other

companies and to set up branches and representative offices. The duration of the Company is unlimited.

Impexmetal S.A. is the parent company of the Impexmetal Group.

The primary business activities of the Impexmetal Group's companies included in the consolidated financial statements

are:

Manufacture of steel products from copper and its alloys,

Manufacture of products from copper and brass,

Manufacture of semi-finished products from copper and copper alloys,

Manufacture of products from zinc,

Purchase, processing and trading of battery scrap and non-ferrous metal waste, manufacture of lead,

Trading activities.

The parent company in relation to Impexmetal S.A. is Boryszew S.A.

The price of Impexmetal shares on the Warsaw Stock Exchange in 2014.

In 2014:

3,13,15

3,23,25

3,33,35

3,43,45

3,53,55

3,63,65

Kształtowanie się kursu akcji Impexmetal S.A. w 2014 r.


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Price of Impexmetal shares fell by 27,5% (PLN 0,95) from PLN 3.45 at the end of 2013 to PLN 2,50 at the end of 2014,

Average share price of the Company amounted to PLN 2.77 per share and it was lower by PLN 0.22 in comparison to the average share price in 2013,

Share price in 2014 ranged from PLN 2,17 (30.07) to PLN 3.80 (17.02),

Average daily trading of the Company's shares amounted to 206,000 shares,

2. APPROVAL OF THE REPORT FOR PUBLICATION.

This Impexmetal Group Business Report for 2014, an integral part of the consolidated financial statements of

Impexmetal for 2014, has been approved for publication by resolution of the Board on 17 March 2015 and

presents the Impexmetal Group's position in accordance with the requirements of law for the period from 1

January 2014 to 31 December 2014 with regard to the events that occurred up to the date of approval of these

financial statements for publication. A large part of the information contained in this business report has been

described in more detail in the Company's current reports available, among other places, on the Company's

website at: www.impexmetal.com.pl, where you can find more other information about the Company.

3. STRUCTURE OF THE GROUP

Impexmetal S.A. is the parent company of the Impexmetal Group. It owns domestic and foreign subsidiaries,

jointly controlled entities, associates, as the parent company of the Impexmetal Group it fulfils management and

supervisory functions in relation to the Group companies.

STRUCTURE OF IMPEXMETAL S.A.

Organisational structure of Impexmetal S.A. is as follows:

- Headquarters in Warsaw,

- Zakład Aluminium Konin in Konin,

- Sales Division in Warsaw.

The structure of the Company is the result of the merger of Impexmetal S.A. and Aluminium Konin-Impexmetal S.A.,

which took place on 30 June 2008.

Since 1 July 2008, as part of the organisational structure, Impexmetal S.A., the plant operates under the name

Aluminium Konin.

The principal activities of the Headquarters in Warsaw is the management of the Group and its aim is to increase

the Company's goodwill in the long term.

The main business of Aluminium Konin is the manufacture of highly-processed aluminium flat products. Thanks

to the modern machines Konin roll-mill is a significant entity on the European market of the aluminium products.

Strategic directions of the products offer’s development focus on automotive, electrotechnical and packaging

markets. Basing on its own experiences and cooperating with R & D institiutions Zakład Aluminium Konin

introduces to its offer a wide range of aluminium alloys with applications in, among others, cars heat exchangers

and enlarges its offer as far as innovations multilayers products are concerned.

The production potential focuses on two production plants (casting and rolling mill). The yearly production

capacity has been estimated on the level of 85 th. tonnes, out of which ca 40 % is a production of a high-margin

products realized under the long-term contracts.

The Sales Division of Impexmetal SA located in Warsaw, which operates within the organisational structure

Impexmetal S.A. since 1 April 2007, carried out trading activity by developing the sales to customers outside the

Group, with particular emphasis on the trading transactions (without trading in goods in Poland).

STRUCTURE OF IMPEXMETAL GROUP

As at 31 December 2014 the Impexmetal Group consists of 4 Production Segments and a separate Other

Operations Segment: (aluminium, copper, zinc and lead, bearings and trade and Other). The main companies of

the Group are:

Aluminum Segment: Impexmetal S.A. Zakład Aluminium Konin, Symonvit Ltd,

Copper Segment: Hutmen S.A., WM Dziedzice S.A.,

Zinc and Lead Segment: Baterpol S.A., ZM Silesia S.A.,Polski Cynk Sp. z o.o.

http://www.impexmetal.com.pl/


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Trading Segment: Impexmetal S.A. Sales Division., FŁT Polska. Sp. z o.o., FLT Bearings Ltd., FLT France

SAS, FLT Metals Ltd, Metalexfrance S.A.

Other Unassigned Segment: S&I S.A., SPV Lakme Investment Sp. z o.o., Impex – invest Sp. z o.o., SPV

Ipmexmetal Sp. z o.o., Eastside Capital Investments Sp. z o.o., Baterpol Recycler Sp. z o.o., Baterpol

Recycler Sp. z o.o. Sp. komandytowa, Baterpol Recycler Sp. z o.o. Sp. komandytowo – akcyjna, Baterpol

S.A. Sp. Komandytowa, Surowce Hutmen S.A. Sp. Komandytowa, Baterpol S.A. i Wspólnicy Sp.

Komandytowa, ZM Nieruchomości Sp. z o.o..

The diagram below shows the organisational structure of the Group:

Impexmetal Capital Group according to operating segments

Aluminum

Copper

Zinc and lead

Trade

Impexmetal S.A.

with the exclusion of the Sales Division

/parent company/

Symonvit Ltd.

SPV Impexmetal Sp. z o.o.

Hutmen S.A.

WM Dziedzice S.A.

Baterpol S.A.

ZM Silesia S.A.

Polski Cynk Sp. z o.o.

Baterpol Recykler Sp. z o.o

FŁT Polska Sp. z o.o.

FLT Bearings Ltd.

FLT France SAS

FLT Metals Ltd.

Metalexfrance S.A.

Impexmetal S.A. Sales Division

Other unassigned

S&I S.A.

SPV Lakme

Investment Sp. z o.o.

Impex-invest Sp. z o.o.

Eastside Capital Investments Sp. z o.o.

Baterpol Recykler Sp. z o.o. Sp. komandytowa

Baterpol S.A. Sp. komandytowa

Surowce Hutmen S.A. Sp. komandytowa

Baterpol S.A. i Wspólnicy Sp. komandytowa

Baterpol Recycler Sp. z o.o. Komandytowo – Akcyjna

ZM Nieruchomości Sp. z o.o.

Baterpol Recykler


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Impexmetal Group by % of share capital

100%

100%

13,48%

97,00%

100%

100%

97,03%

26,78%

2,72%

49,03%

78,55%

88,46%

98,35%

61,77%

11,54%

Impexmetal S.A.

71,30%

Surowce Hutmen S.A

Sp. komandytowa

Baterpol

Recykler Sp.z o.o.

99,66%

21,45%

Production companies – effective % share in own capital

Trading and service companies – effective % equity share

Other companies – effective % equity share

Companies in liquidation – effective % equity share

Hutmen S.A.

65,07%

WM Dziedzice S.A.

73,17%

100%

100% 100%

100%

FŁT Polska Sp. z o.o.

98,35%

FLT France SAS

98,35%

FLT Bearings Ltd.

98,35%

100%

100%

100%

SPV Impexmetal Sp. z o.o.

98,79% (*)

Baterpol S.A i Wspólnicy

Sp. komandytowa

Impex-Invest Sp. z o.o.

100%

Baterpol S.A.

99,66%

HMN Szopienice S.A.

in liquidation

61,56%

Baterpol S.A

Sp. komandytowa

Baterpol Recykler

Sp. z.o.o

Sp. komandytowa

Metalexfrance S.A.

98,35%

ZM Silesia S.A.

97,88% (**)


99,66%

SPV Lakme Investment

Sp. z o.o.

100%

Eastside Capital Investments Sp. z o.o.

100%

Symonvit Ltd.

100%

FLT& Metals Ltd.

100%

S&I S.A.

100%

Baterpol Recykler

Sp. z.o.o

Sp. Komandytowo-Akcyjna

ZM Nieruchomości Sp. z o.o. 97,03%

100%

(*) Zakład Utylizacji Odpadów Sp. z o.o. – unconsolidated subsidiary directly holds 2,98% of the capital, while Impexmetal S.A. holds 59,97% of the capital of Zakład Utylizacji Odpadów Sp. z o.o.

(**) Impexmetal S.A. holds 97,03% share capital and, moreover, ZM Silesia S.A. holds 0,87% of own shares.


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Structure of the Impexmetal Group as at 31 December 2014

Direct subsidiaries

Business activity

Effective share

of the parent

company in

the Company

(%)

Share in the

total number

of votes

(%)

Companies included in consolidation

FLT & Metals Ltd.,

United Kingdom

Trade 100.00 100.00

S & I S.A.,

Switzerland

Trade 100.00 100.00

FŁT Polska Sp. z

o.o., Warsaw

Distribution of bearings 98.35 98.35

ZM SILESIA S.A.,

Katowice

Manufacture of semi-finished products from zinc

and zinc alloys, zinc oxide and lead 97.88 97.03

Polski Cynk Sp. z

o.o., Oława

1) Trade 99.66 100.00

Hutmen S.A.,

Warsaw

2) Manufacture of copper plumbing pipes 65.07 65.23

Walcownia Metali

Dziedzice S.A.,

Czechowice-

Dziedzice S.A.

3)

Manufacture of copper products in the form of

semi-finished products, aluminium, other non-

ferrous metals and their alloys, moulding

73.17 98.09

SPV Lakme

Investment

Sp. z o.o., Warsaw

Development 100.00 100.00

Impex-invest Sp. z

o.o., Warsaw 4)

4) Investment 100.00 100.00

Eastside Capital

Investments

Sp. z o.o., Warsaw

Has not commenced business activities 100.00 100.00

Symonvit Ltd,

Cyprus

5) Has not conducted business activity 100.00 100.00

SPV Impexmetal Sp.

z o.o. Warsaw 5)

6) Management of intellectual property 63.16 99.55

1) of which Impexmetal S.A. holds directly 88.46% of the capital and votes at the GM and ZM Silesia S.A. holds

directly 11.54% of the capital and votes at the GM,

2) of which Impexmetal S.A. holds directly 2,72% of the capital and votes at the GM and Impex-Invest Sp. z o.o.

holds directly 49,03% of the capital and votes at the GM and SPV Impexmetal Sp.z o.o. holds directly 13,48%

of the capital and votes at the GM,

3) of which Impexmetal S.A. holds directly 26.78% of the capital and votes at the GM and Hutmen S.A. directly

holds 71.30% of equity and 71.52% of votes at the GM, in addition, the parent company to Impexmetal S.A. -

Boryszew S.A. - directly holds 1.92% of the capital and 1.91% of votes at the GM,

4) of which Impexmetal S.A. holds directly 78.55% of the capital and votes at the GM and Baterpol S.A. i

Wspólnicy spółka komandytowa holds directly 21.45% of the capital and votes at the GM,

5) company in liquidation since January 2015.

6) of which Impexmetal S.A. holds directly 8.64% of the capital and votes at the GM and Zakład Utylizacji

Odpadów Sp. z o.o. holds directly 90.91% of the capital and votes at the GM. After registration of the increase

of the company share capital on 26 January 2015 Impexmetal S.A. holds directly 97.00 % of the capital and

votes at the GM and Zakład Utylizacji Odpadów Sp. z o.o. holds directly 2.98% votes at the GM.


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Direct subsidiaries

Business activity

Effective

share of the

parent

company in

the Company

(%)

Share in the

total number

of votes

(%)

Entities not consolidated

Brassco Inc., USA

1) Non-operating company 98.03 100.00

Zakład Utylizacji Odpadów Sp. z

o.o., Konin

Environmental protection services 59.97 59.97

1) of which Impexmetal S.A. holds directly 94.34% of the capital and votes at the GM and Hutmen S.A. holds

directly 5.66% of the capital and votes at the GM

Indirect subsidiaries Lower level parent

companies Business activity

Effective

share of the

parent

company in

the Company

(%)

Share in the

total number

of votes

(%)


Baterpol S.A., Katowice Polski Cynk Sp. z o.o.

Purchase, processing of battery

scrap and production and

processing of lead and lead alloys

99.66 100.00

Huta Metali Nieżelaznych

Szopienice S.A. in

liquidation, Katowice


Production of rolled copper and

brass products (in liquidation since

26.09.2008)

61.56 61.77

BATERPOL RECYCLER

Sp. z o.o. Wrocław Polski Cynk Sp. z o.o. Zinc waste disposal 99.66 100.00

FLT Bearings Ltd.,

United Kingdom

FLT France SAS,

France Distribution of bearings 98.35 100.00

FLT France SAS, France FŁT Polska Sp. z o.o. Distribution of bearings 98.35 100.00

Metalexfrance S.A.,

France FŁT Polska Sp. z o.o. Trade 97.03 100.00

ZM Nieruchomości Sp. z

o.o. ZM Silesia S.A. Real Eastate Management 97,03 100,00

Non-consolidated entities

Przedsiębiorstwo

Usługowo-Handlowe

Hutnik Sp. z o.o. in

liquidation, Konin

Impex – Invest Sp. z

o.o. Non-operating company 94.00 94.00

FLT Wälzlager GmbH,

Germany FŁT Polska Sp. z o.o. Distribution of bearings 98.35 100.00

FLT & Metals s.r.l., Italy FŁT Polska Sp. z o.o. Distribution of bearings 98.35 100.00


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FLT (Wuxi) Trading Co.

Ltd., China FŁT Polska Sp. z o.o. Distribution of bearings 98.35 100.00

Indirect jointly

controlled entities

Lower level joint

control companies Business activity

Effective

share of the

parent

company in

the

Company

(%)

Share in the

total number

of votes/

(%)

MBO-Hutmen jv Sp. z

o.o., Wrocław Hutmen S.A.

Manufacture of adhesives and

white metal alloys 32.62 50.00

KATECH-Hutmen

Sp. z o.o., Ukraine

in liquidation

Hutmen S.A.

Purchase, processing and sale of

non-ferrous metals (operations

suspended since 01.04.2003)

32.62 50.00

Direct affiliates Business activity

Effective

share of the

parent

company in

the

Company

(%)

Share in the

total number

of votes

(%)

Remal Sp. z o.o., Konin Repair and manufacturing services 48.93 48.93

Przedsiębiorstwo

Automatyzacji i

Pomiarów Altech Sp. z

o.o., Konin

Services, automation and measurement 34.91 34.91


Partnerships Company partners Business activity

Baterpol S.A. i

Wspólnicy Spółka

Komandytowa,

Warsaw

General partners: Baterpol S.A., FLT Polska Sp. z o.o.,

limited partner: Impexmetal S.A., Wholesale of goods

Surowce Hutmen S.A.

Spółka Komandytowa,

Wrocław

General partner: Hutmen S.A.,

limited partners: Baterpol S.A., FŁT Polska Sp. z o.o

Special order wholesale of

other semi-finished products,

wholesale of waste and scrap

BATERPOL

RECYCLER Sp. z o.o.

Spółka Komandytowa,

Wrocław

General partner: BATERPOL RECYCLER Sp. z o.o.,

Limited partner: HMN Szopienice S.A. in liquidation




BATERPOL S.A. Spółka

Komandytowa, Katowice

General partner: Baterpol S.A.

Limited partner: BATERPOL RECYCLER Sp. z o.o., Spółka

Komandytowa




BATERPOL

RECYCLER Sp. z o.o.

Spółka Komandytowo -

Akcyjna, Katowice

General partner: BATERPOL RECYCLER Sp. z o.o.,

Limited partner: ZM Silesia S.A..

Manufacture of other inorganic

basic chemicals


10

4. SIGNIFICANT EVENTS

IMPEXMETAL S.A.

Sales of Boryszew S.A. shares

On June 17, 2014 Impexmetal S.A. sold 6 974 581 shares of Boryszew S.A. which constitute 3,17% of share

capital and the total number of votes at the General Meeting of Boryszew S.A. The transaction was conducted

outside the regulated market, based on two share transfer contracts. The selling of shares led to a decrease

below 5% of the previously held share of Impexmetal S.A. in the total number of votes at the General Meeting of

Boryszew S.A. Before the transaction Impexmetal S.A. held 12 000 000 shares of Boryszew S.A. which

constituted 5,45% of share capital and the total number of votes at the General Meeting of Boryszew S.A. After

the sales transaction Impexmetal S.A. held 5 025 419 shares of Boryszew S.A. which constituted 2,28% of share

capital and the total number of votes at the General Meeting of Boryszew S.A.

Purchase of Boryszew S.A. shares

Impexmetal S.A., acting within the authorization granted by Boryszew S.A. by means of Resolution no. 19 of the

General Meeting of Boryszew S.A. from June 25, 2014 regarding the granting of authorization to the Management

Board of The Company for acquiring shares of Boryszew S.A., as well as pursuant to art. 362 § 1 point 8) and art.

362 § 4 of the Code of Commercial Companies, purchased in 2014 (i.e. from 16.10 to 23.10.2014) at the Warsaw

Stock Exchange a total of

974 581 shares of Boryszew S.A., with a face value of PLN 1,00 each.

The above shares provide 974 581 votes and the General Meeting and constitute 0,41% of the share capital of

Boryszew S.A.

As of December 31, 2014 the Company holds 6 000 000 shares of Boryszew S.A. which constitute 2,5% of share

capital and entitle to 6 000 000 votes at the General Meeting of Boryszew S.A.

Purchase of Alchemia S.A. shares

On January 27, 2014 Impexmetal purchased 600 000 shares of Alchemia S.A., which constitutes 0,23% of the

Company's share capital.

On February 11 and 13, 2014 Impexmetal purchased 1 000 000 shares of Alchemia S.A., which constitutes

0,38% of the Company's share capital.

On July 8, 10, 14, 24, 25 and 28, 2014 Impexmetal S.A. acquired 14 895 000 shares of Alchemia S.A., which

constitutes 5,73% of the Company's share capital.

On September 2, 29 and 30, 2014 Impexmetal S.A. acquired 2 420 000 shares of Alchemia S.A., which

constitutes 1,21% of the Company's share capital.

On November 26, 2014 Impexmetal purchased 2 000 000 shares of Alchemia S.A., which constitutes 0,77% of

the Company's share capital.

On December 2 and 19, 2014 Impexmetal purchased 1 040 000 shares of Alchemia S.A., which constitutes

0,40% of the Company's share capital.

On December 30, 2014 Impexmetal sold 236 000 shares of Alchemia S.A., which constitutes 0,12% of the


As of December 31, 2014 Impexmetal S.A. held 37 804 000 shares of Alchemia S.A., constituting 18,90% of the

Company's share capital and providing 37 804 000 votes at the General Meeting, which constitutes 18,90% of the

total number of votes at the General Meeting of Alchemia S.A.

Changes of entries in the registry of pledges

Impexmetal S.A. received the following decisions regarding changes of entries in the registry of pledges, which

constitute collateral of Bank PKO BP S.A., seated in Warsaw, on account of a credit granted for the amount of

PLN 75 000 000 with a maturity date of 31.01.2017.

1. Decision of the District Court for Poznań – Nowe Miasto and Wilda in Poznań, VII Commercial Division –

Register of Pledges, regarding a change of entry in the Register of Pledges made on May 6, 2014 regarding the

change of the highest surety sum to the amount of PLN 112 500 000. The (net) evidence value of machines and

equipment in the accounting books as of 31.03.2014 equals: PLN 8 551 022,28.

2. Decision of the District Court for the Capital City of Warsaw, XI Commercial Division – Register of Pledges,

regarding a change of entry in the Register of Pledges made on May 9, 2014 regarding the change of the highest


11

surety sum to the amount of PLN 112 500 000. The (net) evidence value of machines and equipment in the

accounting books as of 31.03.2014 equals: PLN 11 630 279,49.

3. Decision of the District Court for the Capital City of Warsaw, XI Commercial Division – Register of Pledges,

regarding a change of entry in the Register of Pledges made on May 9, 2014 regarding the change of the highest

surety sum to the amount of PLN 112 500 000. The (net) evidence value of machines and equipment in the

accounting books as of 31.03.2014 equals: PLN 13 504 360,04.

Creating registry pledges on shares

From January 27 to February 17, 2014 the Company received 6 decisions of the District Court for the Capital City

of Warsaw in Warsaw – XI Commercial Division of the Register of Pledges, regarding the entry of publicly listed

securities into the register of pledges.

The following securities, belonging to Impexmetal, were the subject of the pledge:

2 087 605 shares of Alchemia S.A. The face value of the pledged shares amounted to PLN 2 713

886,50, while their carrying value in the accounting books of Impexmetal S.A. as of December 31, 2013

equaled: PLN 11 064 306,50. The above shares constitute 1,01% of the share capital of Alchemia S.A.

and provide 1,01% of votes at the general meeting.

2 500 000 shares of Alchemia S.A. The face value of the pledged shares amounted to PLN 3 250 000,

while their carrying value in the accounting books of Impexmetal S.A. as of December 31, 2013 equaled:

PLN 13 250 000. The above shares constitute 1,20% of the share capital of Alchemia S.A. and provide

1,20% of votes at the general meeting.









47 528 518 shares of Boryszew S.A. The face value of the pledged shares amounted to PLN 4 752

851,80, while their carrying value in the accounting books of Impexmetal S.A. as of December 31, 2013

equaled: PLN 23 764 259. The above shares constitute 2,16% of the share capital of Boryszew S.A. and

provide 2,16% of votes at the general meeting.





The above pledges have been made for Alior Bank S.A. seated in Warsaw, as the Bank's collateral on account of:

Credit Agreement no. U0002485936637 regarding a non-renewable credit for financing current activity, from

December 18, 2013, in the amount of PLN 50 000 000.

Purchase of high-value shares

On February 28, 2014 the Company purchased 101 series A registered bonds with a face value of PLN 1 000

000,00 each, issued as part of the Program of issuing registered bonds of Boryszew S.A.

The covered bonds replace 101 series G and K bonds of Boryszew S.A. with a face value of PLN 1 000 000,00

each, issued by Boryszew S.A. as part of a Program of 3-year registered bonds, covered by Impexmetal S.A. on

October 1, 2012 (38 series G pieces) and on September 2, 2013 (63 series K pieces), whose maturity lapsed on

February 28, 2014. The bonds were acquired at the Issuing Price for a total amount of PLN 101 000 000,00. The

interest rates of the bonds was based on market conditions. Maturity date: September 30, 2015.

Boryszew S.A. made an early redemption of the above bonds.

Establishing a mortgage

On April 11, 2014 the Company received notice from the District Court in Konin – VI Land Register Division from

09.04.2014 regarding an entry of a contractual joint mortgage into the Land Register.

The mortgage has been created on the ownership rights and rights to perpetual usufruct of Impexmetal S.A. with

regard to property included in Land Register no.: KN1N/00031899/8 and KN1N/00070991/8. The mortgage was


12

created up to the sum of PLN 34 000 000 for: Bank Millennium S.A., seated in Warsaw, as the Bank's collateral

on account of: Credit Contract no. 6782/14/475/04 from 13.02.2014.

Acquisition of receivables of Tensho Poland Corporation Spółka z o.o. (currently Boryszew Tensho Poland Spółka z o.o.)

On June 17, 2014 Impexmetal S.A. concluded an agreement with Sanko Corp. Ltd. for the acquisition of

receivables of Sanko Corp. Ltd. owed to Tensho Poland Corporation Spółka z o.o. (TPC) on account of a loan

contract in the amount of EUR 1 750 000 as well as an agreement for the acquisition of receivables of Tensho

Electric Industries Co., Ltd. owed to TPC in the amount of EUR 7 250 000, i.e. for a total sum of EUR 9 000 000

(equivalent of PLN 37 314 000,00, converted as per the average exchange rate announced by the National Bank

of Poland on June 16, 2014).

Payment for the above receivables was made by transferring 6 974 581 shares of Boryszew S.A.

by Impexmetal S.A. onto Tensho Electric Industries Co., Ltd., in the amount constituting an equivalent of EUR 7

250 000 (5 618 412 shares of Boryszew S.A.) as well as onto Sanko Co., Ltd., in the amount constituting an

equivalent of EUR 1 750 000 (1 356 169 shares of Boryszew S.A.).

The Parties agreed that within 2 years of the date of concluding the agreement, the shares will be blocked on a

brokerage account.

After 2 years Impexmetal S.A. will be entitled to purchase (call option) for an amount equal to the price of

acquired shares plus 20%, while Tensho Electric Industries Co. Ltd, and Sanko Corp. Ltd. shall be entitled to sell

(put option) for a price equal to the purchase price.

After analyzing the terms and conditions of the above-mentioned agreements and taking into account the 2-year blockage of shares on a brokerage account as well as the call and put options, the sold shares of Boryszew S.A. have been recognized in accordance with IAS 39 as assets which do not classify for the cease of their inclusion. These shares have been recognized as available-for-sale assets and other long-term liabilities. As of 31.12.2014 the value of these assets equals PLN 40 million (the assets are measured up to fair value by capitals), while the value of liabilities related to these assets amounts to PLN 38,4 million.

Call for the subscription of Hutmen S.A. shares

On September 25, 2014 Impexmetal S.A. together with Boryszew S.A., SPV Boryszew 3 Sp. z o.o. and Impex-

Invest Sp. z o.o., acting jointly as the Caller, called for the subscription 8 869 415 shares of Hutmen S.A. seated

in Warsaw which, together with the shares already held by the subsidiaries in parent company of Boryszew S.A.,

was to allow for reaching 100% of votes at the General Meeting of Hutmen S.A.

The entity purchasing the shares was SPV Boryszew 3 Sp. z o.o. – a subsidiary of Boryszew S.A. The purchase

price in the Call was determined at PLN 4,90 per share, which corresponds to the criteria described in provisions

of art. 79 of the Act of July 29, 2005 on public offering and the conditions for introducing financial instruments to

organized trading and public companies (i.e. Journal of Laws 2013, item 1382).

The Call was announced in relation to the intent of exceeding 66% of the total number of votes at the General

Meeting and in relation to the intent of waiving the dematerialization of Hutmen S.A. shares, i.e. pursuant to art.

74 section 1 and art. 91 section 6 of the above-mentioned act on public offering (...).

At the same time, a request was submitted for assembling a General Meeting of Hutmen S.A. and including in the

proceedings a resolution regarding the waiving of share dematerialization as well as resolutions pertaining the

changes in the Statute, especially with regard to replacing bearer bonds with registered bonds.

As a result of the call, SPV Boryszew 3 Sp. z o.o. acquired 4 670 254 shares of Hutmen S.A., which constituted

18,24% of the company's shares and entitled it to 18,24 % of votes at the General Meeting.

As a result of the call, the Boryszew Group held a total of 21 397 109 shares of Hutmen S.A., which constituted

83,59% of the company's shares and entitled it to 83,59% of votes at the General Meeting.

On October 31, 2014 the Extraordinary General Meeting of Hutmen S.A. passed a resolution on waiving the

dematerialization of all dematerialized shares of Hutmen S.A., i.e. a total of 25 596 270 shares with a face value

of PLN 10 each, by restoring their documentation form.

Receiving a claim for payment

On October 3, 2014 the Company received a claim submitted to the Arbitration Court at the National Chamber of

Commerce in Warsaw by MTMG – Morski Terminal Masowy Gdynia Spółka z o.o. for the payment of PLN 9,7

million in relation to Impexmetal S.A. terminating, in November 2008, an agreement regarding the offloading of


13

aluminum oxide by MTMG for the manufacturing purposes of Aluminium Konin.

Impexmetal S.A. closed down the Electrolysis Division in February 2009 due to the rapid increase of power

prices, related to their release for industrial recipients.

Impexmetal S.A. submitted a response to the claim, motioning for the dismissing of the claim in its entirety, as

lacking factual and legal grounds.

Hutmen S.A.

On January 27, 2014 Hutmen S.A. signed a bilateral agreement with KGHM Polska Miedź S.A.

seated in Lubin. The agreement was signed for a specified period of time, from 01.01.2014 to 31.12.2014. The

Parties may extend the duration of the agreement by two years (max. to the end of 2016). The subject of the

agreement involves the manufacturing and delivery of round copper ingots by KGHM Polska Miedź S.A.

The estimated value of the agreement, according to the performance of copper as of the day of concluding the

agreement, equaled PLN net 212,4 million for the delivery of the base amount and PLN net 279,4 million for the

delivery taking into account the Purchaser's options. Collateral for claims attributable to the seller with regard to

Hutmen S.A. is a register pledge of fixed assets with a value of at least PLN 5 million and a promissory note with

a promissory note declaration up to the amount of PLN 5 million.

SPV Impexmetal Sp. z o.o./Symonvit Ltd.

Concluding an agreement for the purchase of industrial property rights between SPV Impexmetal Sp. z

o.o. and Symonvit Ltd.

On October 15, 2014 SPV Impexmetal Spółka z o.o. concluded agreements for the purchase of industrial property

rights with Symonvit Ltd. The total value of the agreements is PLN 162 million.

Baterpol Recycler Spółka z o.o. SKA

On October 7, 2014 Baterpol Recycler Spółka z o.o. SKA sold developed plots with a total area of 12,87 ha,

located in Katowice, for the sum of PLN 18,9 million.

EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

IMPEXMETAL S.A.

On 26 January 2015 the Company signed two agreements with Glencore International AG on buying primary

aluminium in ingots to provide for the needs of the Aluminium Konin plant.

The estimated value of the contracts amounts to approx. PLN 158 million and was determined based on the

current listing prices of aluminium at the LME and the current foreign exchange rates. Duration of the agreements

is the period 2015-2016. Terms and conditions of the contract do not differ from those customarily applied in case

of similar commercial contracts.

On 25 February 2015, the Company concluded a contract Valeo Systemes Thermiques for supply of aluminium

products to production facilities of Valeo Group in 2015-2016. The estimated value of the contract over the period

of its duration amounts to approx. PLN 282 million and has been determined based on the current listing prices of

aluminium at the LME and the current foreign exchange rates. Terms and conditions of the contract do not differ

from those customarily applied in case of similar commercial contracts.

Impexmetal S.A. is Valeo’s supplier of aluminium bands used in production of heat exchangers for motor vehicles.

On 2 March 2015 the Company signed a contract with Trafigura PTE, Ltd. on supplying primary aluminium in

ingots to provide for the needs of the Aluminium Konin plant. The total value of agreements concluded with

Trafigura PTE, Ltd. in the last 12 months period amounts to about PLN 298 million and it exceeds 10% of the

income that comes from the sales of Impexmetal Capital Group.

The most valuable of these agreements is a contract concluded on 2 March 2015 on buying primary aluminium in

ingots to provide for the needs of the Aluminium Konin plant. The estimated value of the contract amounts to

approx. PLN 233,1 million and was determined based on the current listing prices of aluminium at the LME and

the current foreign exchange rates. The contract is valid for 2015-2016. Terms and conditions of the contract do

not differ from those customarily applied in case of similar commercial contracts.


14

HUTMEN S.A.

On 7 January 2015, the Management Board of Hutmen S.A. signed an annex to the contract concluded with

KGHM Polska Miedź S.A. on 27 January 2014 for production and delivery of aluminium ingots. The contract is

valid for 1 January to 31 December 2015.

WALCOWNIA METALI DZIEDZICE S.A. (ROLLING PLANT)

On 13 January 2015, Walcownia Metali „Dziedzice” S.A. signed a contract with Mennicą Polską S.A. with its

registered office in Warsaw.

The contract covers production and delivery of coin blanks. The contract was concluded for a definite period of

time from 15 December 2014 to 30 November 2015.

5. BUSINESS ACTIVITY

The Impexmetal Group is mainly involved in processing non-ferrous metals. It is a manufacturer of aluminium,

copper, zinc and lead. It forms the largest holding company in Poland, engaging in the manufacture of non-ferrous

metals. In addition, it carries out trading activity of bearings and other metals. In accordance with IFRS 8, five

main business segments are distinguished:

Aluminium

Copper

Zinc and Lead

Trade

Other

The following describes in detail the most important segments of the Group's activities, sales, markets,

competition, raw materials and sources of supply.

ALUMINUM SEGMENT

a) Business activity

The Aluminum Segment includes the following companies: Zakład Aluminium Konin (Impexmetal SA),

Symonvit Ltd., SPV Impexmetal Sp. z o.o.

Zakład Aluminium Konin (AKI) is a producer of a wide range of aluminium products, having applications

in many economic sectors. AKI is a leader in Poland and one of the dozen in Europe as far as aluminium

products producers are concerned.

The main products in the Aluminium Segment include:

thin strips (packaging industry)

hot rolled strips: (used in electrical engineering industry, machine building, general application)

cold rolled strips: (construction industry, general application)

thin sheets: (automotive industry, packaging industry, construction industry, electrical

engineering industry)

hot rolled sheets: (rolled-mill charge)

cold rolled sheets: (automotive industry, packaging industry, construction industry, electrical

engineering industry, general application)

claded strips: (automotive and electrotechnical industries).

Symonvit Ltd and SPV Impexmetal Sp. z o.o. are engaged in the management of intellectual property.

Symonvit Ltd is now in liquidation.

b) Sales and markets

Quantitative sales and revenues from sales in the Aluminium Segment in 2014 and 2013 are presented

below:

Company Products Quantity [T] [T] Value [TPLN]

2014 2013 2014 2013

Impexmetal (Zakład Huta Aluminium Konin)


15

Cold rolled sheets 23 420 24 194 228 932 238 301

Cold rolled strips 24 166 23 820 241 966 241 191

Thin sheets 7 683 8 376 83 297 94 868

Thin strips 14 529 14 433 163 744 165 614

other 972 1 461 51 500 61 208

Total 70 770 72 285 769 439 801 182

Symonvit 10 733 13 926

SPV Impexmetal 2 912 0

Total AluminiumSegment 70 770 72 285 783 084 815 108

The 2014 ended for Impexmetal S.A. with a slightly the same level of sales in terms of volume. The

influence on the lack of the substantial increase of the sale volume has got both investment processes,

which reduced the production capacity in the 1H of the year and a slight decrease of economic situation

in the 2H of 2014.

The main directions of sales in the Aluminium Segment in the years 2014 - 2013 are shown in the

following table:

Sales structure [%] 2014 2013

Country 51% 50%

Czech Republic 9% 9%

Germany 9% 11%

UK 5% 0%

France 4% 5%

Ukraine 3% 3%

Sweden 2% 2%

Switzerland 2% 2%

Finland 2% 3%

Austria 2% 2%

Other 12% 13%

Exports as % of total sales 49% 50%

In 2014, the main directions of sales in the Aluminium Segment did not changed significantly. The largest

market segment for export sales for the Aluminium Segment is still Germany. Traditionally Aluminium

Konin have still stron positions on Scandinavian market providing its productis to Denmark, Sweden,

Finland and Norway

c) Market share

The rolled aluminium products market is estimated at around 20 million tons in the world and 4 million

tons in Europe. The share of Aluminium Konin in the global market is estimated at 0.4%, while the share

of the European market at 2%. The actual share, through the products offered by Aluminium Konin, is

much higher, because the offer of Aluminium Konin does not cover all types of rolled products available

in the market.

d) Competition

On the markets in which Aluminium Konin participates, there are different groups of competitors. They

can be divided according to geographical location, scale of operations and technological level. Due to the

geographical structure of sales, the main competitors are companies operating in Europe. The

importance of other markets is marginal and is gaining importance in periods of favourable exchange

rates.

The biggest manufacturers operating on the European market are:


16

Global concerns: ALCOA, CONSTELLIUM, NOVELIS, ALERIS, GRÄNGES, HYDRO

They are the leaders in technology with a recognised brand.

Independent European companies: ALINVEST, IMPOL, ELVAL, ALCOMET, ALRO, TLM,

AMAG and companies in Turkey: ASSAN, PMS, TEKNIK.

These companies represent a diversified technological level and, just like Aluminium Konin,

offer a wide mix of products within a single plant.

e) Raw materials and sources of supply

The basic raw materials used for manufacturing in the Aluminium Segment are aluminium ingots and

blocks. The company diversifies its supply sources, purchasing the basic raw materials from the well-

known producers of aluminium (Rusal, Glencore, Trafigura) and suplementing tchem by purchase of

aluminium scraps.

f) Key parameters for the Segment

Amount of commercial premiums that have an impact on revenues and results

Amount of aid for the main raw material (aluminium), level of scrap prices, which affect the amount of

manufacturing costs

COPPER SEGMENT


In the Copper Segment, the Group had two key manufacturers: Hutmen S.A. and WM Dziedzice S.A.,

which operate in partially overlapping markets.

The main products in this segment include:

Rods and wires made of copper and copper alloys - for the construction industry, electronics and

the electrotechnical industry,

Copper plumbing pipes - for construction, and general purpose pipes,

Copper alloy pipes for the power engineering industry, shipbuilding and heat engineering,

Brass and bronze strips - for the construction industry, electronics and the electrotechnical industry,

Discs for the monetary industry.

The most important markets for the products in the copper segment is the construction industry,

electronics, the electrotechnical industry, the metallurgical industry and mints.


The volume and value of the Copper Segment in 2014 and 2013 are presented below:

Company Products

Volume [T] Value [TPLN]

2014 2013 2014 2013

Hutmen

Cast alloys

3 944 3 426 77 346 62 901

Copper wires, rods and profiles

3 923 4 196 102 954 117 157

Copper pipes

4 325 4 216 112 715 118 007

Bronze rods and pipes

758 665 22 291 20 955

Materials

175 507 127 533

Other

4 592 4 251

Total 12 950 12 503 495 405 450 804

WM Dziedzice

Rods

18 673 16 665 328 444 310 003

Pipes

3 693 3 311 82 546 82 171

Strips

1 267 1 337 18 671 25 478

Discs and keys

1 448 2 802 36 410 86 402

Other

8 163 5 735 32 780 29 538


17

Total 33 244 29 850 498 851 533 592

Consolidation adjustments -166 208 -114 181

Razem Segment Miedź 46 195 42 353 828 048

The 2014 ended for the Copper Segment with a higher level of sales in terms of volume by 9% and in

terms of value by 1%. The largest increase of the sales occurred in WM Dziedzice S.A., through which

the Company achieved the highest volume in its history.

The main directions of sales in the Copper Segment in the years 2014 - 2013 are shown in the following

table:


Country 36% 40%

Germany 26% 23%


Slovakia 6% 0%

USA 2% 7%

Italy 2% 2%

Hungary 2% 1%

The Netherlands 1% 3%

UK 1% 1%

Bulgaria 1% 2%

Other 9% 9%


In 2014, exports become the main market. Export growth of 4% was mainly due to an increase by PLN

28,6 million of sales on the Germany market and by PLN 10,6 million on for the Czech market.

c) Market share

Market share in the Copper Segment should be analysed in division into product ranges, mainly because

of their different applications and user groups.

In 2014, the Copper Segment companies occupied the position of a minor supplier on the European

market. The largest share of the European market amounted to about 3% for copper rods and profiles.

Share in global markets in the Copper Segment is negligible and does not exceed 1%.

In 2014, the share of products in the Copper Segment in the domestic market, broken down by product

ranges, amounted to:

Ms rods market - about 50%,

Casting bronze market - about 60%,

Copper plumbing pipes market - about 47%,

Ms pipes market - about 50%,

Market for copper rods and profiles - about 5%.

d) Competition

Foreign competition in the Copper Segment includes such global concerns as:

KM Europa Metal AG - the world's largest manufacturer in the non-ferrous metals industry. The annual

output is over 600,000 tons of copper and copper alloys,

Wieland AG - a German company specialising in the manufacture of non-ferrous metals, which owns 9

production plants around the world, makes about 500,000 tons of copper and its alloys,


18

MKM - German manufacturer of semi-finished copper and copper alloy products (wires, pipes, flat bars,

rods, strips, plates).

Domestic competition includes:

Walcownia Metali Nieżelaznych Gliwice – Łabędy - manufacturer of strips and plates made of copper,

brass and bronze; casting brass and bronze. Production capacity of the company is 4,600 tons per year.

On the domestic market, the company sells about 800 tons of brass sheets and strips.


The main raw materials used in the Copper Segment include scrap copper, scrap brass and copper

cathodes. These materials are purchased mainly on the domestic market and supplemented with

imports.


Level of copper prices, due to the occurrence of substitution for copper plumbing pipes used in the

construction industry,

Repair policy in the power engineering sector, the main customer for condenser tubes

ZINC AND LEAD SEGMENT


Zinc and Lead Segment includes the following manufacturer: Baterpol S.A., ZM Silesia S.A. and two

non-production companies: Polski Cynk Sp. z o.o. and Baterpol Recycler Sp. z o.o.

Each company operates on different product markets. Baterpol S.A. deals with recycling of batteries and

lead processing. ZM Silesia S.A. is engaged in the processing of zinc and lead.

The main products in this segment include:

Refined lead and alloy lead - used mainly for the production of batteries,

Zinc sheet and zinc/titanium sheet for roofing and flashings,

Zinc anodes used in electroplating,

Zinc and zinc/aluminium wire used for metal spraying,

Casting alloys for the steel industry,

Zinc oxides - used in the tyre industry, pharmaceutical industry and feed industry,

Lead oxides - used in batteries.

Products in this segment are primarily used in the manufacture of batteries, in the construction industry,

rubber industry, electroplating and metallurgy.


Quantitative sales and revenues from sales in the Zinc and Lead Segment in 2014 and 2013 are

presented below:

Company Products Volume [T] Value [TPLN]

2014 2013 2014 2013

Baterpol

Lead and lead alloys 37 138 37 792 267 090 280 360

Lead products 722 718 13 838 13 565

By-products 4 592 5 090

Processing services 6 402 300 9 010 149

Other 8 238 3 972

Total 44 262 38 810 302 768 303 136

ZM Silesia (Silesia Branch)

Metal sheet 8 466 8 975 81 551 78 685


19

Anodes 2 043 1 767 16 417 13 024

Wire 2 011 1 868 20 757 18 005

Alloys 1 099 1 680 8 235 11 890

Other 1 1 23 485 13 922

Total 13 620 14 291 150 445 135 526

ZM Silesia (Oława Branch)

Zinc and lead oxides 25 125 23 980 177 395 163 125

Other 31 41 44 622 27 137

Total 25 156 24 021 222 017 190 262

Polski Cynk 1 036 1 036

Baterpol Recycler 144 653 6 309

Total Zinc and Lead Segment 83 038 77 123 820 919 636 269

The 2014 ended for the Zinc and Lead Segment with quantitative sales higher by 8%, i.e. by 5,900 tons

compared to 2013. The largest growth occurred in Baterpol S.A. and amounted to 14%.

The main directions of sales in the Zinc and Lead Segment in the years 2014 - 2013 are shown in the

following table:


Country 66% 70%

Germany 8% 8%

Slovakia 7% 6%

France 5% 4%


Italy 2% 2%

Spain 2% 1%

South Korea 1% 0%

Hungary 1% 1%

Austria 1% 1%

Other 3% 4%


The share of domestic sales in the Zinc and Lead Segment in 2014 amounted to 66pp. %. Increases in

sales volumes occurred mainly in sales directed towards domestic market, Slovakia and France.

c) Market share

Market share in the Zinc and Lead Segment should be analysed in division into product ranges, because

of their different applications and user groups.

Share of the Zinc and Lead Segment in the European market, broken down by product ranges in 2014,

are estimated at:

Lead oxides market - about 15%,

Zinc wire market - about 7%,

Zinc oxides market - about 7%,

Zinc/titanium sheet market - about 4%,

Lead and alloys market - about 2%.


20

Share of the Zinc and Lead Segment in the domestic market, broken down by ranges, in 2014:

Lead oxides market - about 97%,

Zinc wire market - about 83%,

Zinc oxides market - about 50%,

Zinc/titanium sheet market - about 44%,

Zinc anode market - about 38%,

Lead and alloys market - about 30%,

Zinc casting alloys market - about 8%.

d) Competition

Foreign competition in the market for zinc/titanium sheets and strips includes two of the leading

companies - Rheinzink and VM Zinc, which are owned by, respectively, Grillo and Umicore.

On the domestic market, the most important competitor for lead and alloys is Orzeł Biały. The other two

competitors on the market are Huta Cynku "Miasteczko Śląskie" SA and KGHM Polska Miedź SA,

which have a limited product assortment, and the manufacture of lead is in the case of these two

companies an "extra task", carried out in addition to the main activity.


The Zinc and Lead Segment mainly buys battery scrap, zinc and lead. These raw materials are

purchased mainly domestically.


Prices and availability of battery scrap,

Demand in the automotive and construction industries, which are the main customers in the Zinc and

Lead Segment

TRADING SEGMENT


The Trading Segment includes the following Companies/entities: Bearings companies (FŁT Polska Sp. z

o.o., FLT Bearings Ltd., FLT France SAS), Trading Division (Impexmetal S.A.), FLT Metals Ltd. and

Metalexfrance.

In terms of bearings, through FŁT Polska and its foreign subsidiaries, the Impexmetal Group is an

important supplier to world-famous manufacturers of cars and agricultural machinery.

Other entities are mainly engaged in non-ferrous metals trade.

b) Competition

Competitors for the bearings are mainly distributors of Swedish bearings (SKF), Asian bearings and from

European countries in Central - Eastern Europe.

Competitors in terms of trading non-ferrous metals are mainly well-known large international trading

companies, manufacturers of metals, and local trading companies.

c) Raw materials and sources of supply

Bearings are purchased mainly on the domestic market and the Chinese market. Non-ferrous metals are

bought mainly on the European market and the domestic market.

d) Key parameters for the Segment"

Situation in the automotive industry, the main customer for the segment,

Relations with FŁT Kraśnik, which is the main supplier of one of the core companies in the Trading

Segment


21

6. FINANCIAL ANALYSIS

ANALYSIS OF SELECTED ITEMS IN THE PROFIT OR LOSS

Selected items in the Impexmetal Group's profit and loss statement for 2014 compared to 2013 are shown in the

following table:

in millions PLN 2014 2013

Cash revenue on sales 2,819.5 2,728.7

Products 2,079.0 2,135.3

Goods and materials 740.5 461

Gross profit on sales 213.7 193.8

Gain on sales 102.3 79.9

EBIDTA 181.3 125

Operating profit 129.1 72.8

Gross profit 119.6 74.6

Net profit from continuing operations 112.5 65.2

Net profit from discontinued operations 9.3 20.9

Total net profit 121.8 86.1

The following chart presents the impact of individual components of the income statement on the consolidated net

result for 2014

IMPACT OF KEY MARKET CONDITIONS AND OTHER ON THE FINANCIAL RESULT

SALES REVENUES


Sales revenues, including: 2,819.5 2,728.7

Aluminum Segment 783.1 815.1

Copper Segment 828.0 870.2


22

Zinc and Lead Segment 820.9 636.3

Trading Segment 684.2 591.9

Other Segments and corrections -296.8 -184.9


Over 3% increase in sales revenue was mainly the result of the increase in sales revenue of goods and material.

Moreover the increase in sales has also the impact of following factors:

Increase in the volume of sales in the Group Companies,

changes in prices of metals on world markets and prices of currencies,

worse macroeconomic situation in Poland and the Euro zone

SALES VOLUMES

Another factor that had an impact on revenues in 2014 was the level of sales volumes in the Impexmetal Group

companies. Manufacturing companies sold, as part of continuing operations in 2014, 199,400 tons, more by 4%,

tons of products than in the corresponding period last year.

A half of the Group companies achieved a higher volume of sales than in the same period in the previous year,

including: Baterpol S.A. with an increase of 6,500 tons (15%), WM Dziedzice S.A. with an increase of 3,400 tons

(i.e. 24%), ZM Silesia S.A./ Oława Branch with an increase of 1,200 tons (5%) and Hutmen S.A. with an increase

of 400 tons (3,6%). It is worth noting that WM Dziedzice S.A. achieved the highest sales volume in its history.

PRICES OF METALS AND CURRENCIES

Another factor that has significantly affected revenues are metal and currency prices. Average annual prices of

basic metals on the LME and exchange rates according to the NBP are presented in the following table and

charts:

2014 2013

Aluminium [USD] 1 867 1 845

Copper [USD] 6 862 7 325

Zinc [USD] 2 164 1 909

Lead [USD] 2 096 2 141

EUR 4,18 4,20

USD 3,15 3,16

Aluminium [PLN] 5 885 5 834

Copper [PLN] 21 629 23 158

Zinc [PLN] 6 821 6 036

0

10

20

30

40

50

2013 2014

Wolumen sprzedaży GK Impexmetal 4Q2011 vs 4Q2012

działalność kontynuowana [tys. T]

wzrost o 6%

0

10

20

30

40

50

2013 2014



wzrost o 6%

0

10

20

30

40

50

2013 2014



wzrost o 6%

191,8199,4

100

110

120

130

140

150

160

170

180

190

200

210

220

230

2013 2014

Wolumen sprzedaży GK Impexmetal 2013 vs 2014


wzrost o 4 %


23

Lead [PLN] 6 606 6 769

Source: LME, NBP daily listing

The prices of metals on the London Metal Exchange (LME) have a decisive impact on the revenues from sales

due to the fact that about 90% of total sales in the Impexmetal Group are generated by companies operating in

the non-ferrous metals industry. The level of metals prices is the main component of the price of products.

In the analysed 2014, the average price of aluminium increase by 1%, zinc by 13% and the price of copper

fell by 6% and lead by 2%.

Metal prices also affect the price of scrap metal, including scrap battery, which is the ma in raw material used

for the manufacture of lead in Baterpol S.A. In 2014 the average price of scrap battery was actually about

2% lower than in 2013, which have a positive impact on the result.

The dynamics of the daily fluctuations of metal prices in 2013 - 2014 were as shown the following charts:

Due to the prevailing settlement of transactions in foreign currencies, exchange rates have a very significant

impact.

The price level of the dollar has an impact on the Group's revenue and the results of Baterpol S.A. - the sole

manufacturer of metal in the Group, which has a manufacturer margin. The price level of the euro is important for

the Group, due to the fact of the dominance of metal processing margins of companies, denominated in that

currency, and a 54% share of export sales, primarily to the euro zone.

1 845

7 325

1 9092 141

1 867

6 862

2 164 2 096

Aluminium Miedź Cynk Ołów

2013 2014

Średnie ceny metali na LME [USD ]

4,20

3,16

4,18

3,15

EUR USD

2013 2014

Średnie kursy USD i EUR w NBP [PLN]

1 000

1 500

2 000

2 500

3 000

3 500Średnie ceny Al [USD/T] na rok 2013 i 2014

5 000

6 000

7 000

8 000

9 000

10 000

11 000

Średnie ceny Cu [USD/T] na rok 2013 i 2014

1 000

1 500

2 000

2 500

3 000

3 500Średnie ceny Pb [USD/T] na rok 2013 i 2014

1 000

1 500

2 000

2 500

3 000

3 500

Średnie ceny Zn [USD/T] na rok 2013 i 2014


24

The dynamics of the daily fluctuations of currency exchange rates in 2014 - 2013 were as shown the following

charts:

Warto podkreślić, że w porównianiu do 2013 roku sytuacja na rynku notowań walut i metali była w 2014 roku

stabilniejsza, co można zaobserwować badając amplitudę zmian na powyższych wykresach.

MACROECONOMIC SITUATION

The overall macroeconomic situation in 2014 was more unfavourable compared to 2013. This was a

consequence of the decreased activity of the European economies in the first half of the year.

PMIs determining the level of activity in the industry in the most important economies for the Impexmetal

S.A., namely the Euro zone (including Germany) and Poland, which decrease in first half of the year.

In the firs half of the year the PMIs of Poland and Germany has reached the level below of 50 points, which

is the border of the crisis. From the middle of 2014 the improvement of the above indices may be seen. During

last months they stabilized, to level out in December 2014 at 50.6 pts. for EU, 51.2 pts. for Germany and 52.8 pts.

for Poland.

Apart from the fall of the PMI indexes, according to Eurostat, in IH 2014 an increase of GDP was noticed in

comparison to 2013 in the most important sectors of the Group. In 2014 the growth rate amounted

respectively: 3.2 % - Poland; 1.5 % - Germany; 1.3 % - European Union.

More that the half of the Impexmetal Capital Group’s products is exported. The most important export

direction are the European Union’s countries – with share of 49 % in 2014. Germany, with the share of sale

of 17 % maintains the biggest export country.

RESULTS

Gross profit on sales increased by PLN 19.9 million to the level of PLN 213.7 million. This was due to

better results in Zinc and Lead Segment and Copper Segment.

The increase in cost of sales was primarily the result of higher sales volume.

2,5

3,0

3,5

4,0

Średnie notowania USD w NBP na rok 2013 i 2014

3,5

4,0

4,5

5,0

Średnie notowania EUR w NBP na rok 2013 i 2014

Aluminium23%

Miedź24%Cynk i olów

24%

Handel20%

pozostałe0%

Korekty i wyłączenia

-9%

Przychody w rozbiciu na segmenty w 2014 roku

Aluminium26%

Miedź28%

Cynk i olów21%

Handel19%

pozostałe0%


-6%

Przychody w rozbiciu na segmenty w 2014 roku


25

Lower overhead costs amounted to 7% and were associated with a continued policy of optimisation of

fixed costs.

Balance of operating income/expenses amounted to PLN 26,9 million and was higher by 34 million

compared to 2013. The biggest influence on the increase of the above mentioned balance had the result

on the sale of fixed assets. It was connected, among others, wit the sale transaction of ca 13 ha of land in

Katowice of value of PLN 18.9 m. It has been shown in the item “ Adjustements and Exclusions”.

The operating result (EBIT) in main operating segments was as follows:


Earnings from operating activities, including: 129.1 72.8

Aluminium Segment 43.0 37.4

Copper Segment 23.2 16.5

Zinc and Lead Segment 24.8 2.2

Trading Segment 18.1 18.6

The contribution of individual segments to the operating result of the Impexmetal Group is shown in the charts

below:

The level of operating results in 2014 in the individual segments was a result of:

Higher results in the Zinc and Lead Segment - an increase in operating results in both companies of the

segment (i.e. Baterpol S.A. and ZM Silesia S.A. The positive operating result and the scope of the

improvement in Baterpol S.A. should be noted. These resulted from lower material costs, higher sales

volumes and from conducted reorganizational activities

Higher results in the Copper Segment - an increase in operating results occurred in both companies in

the segment (i.e. WM Dziedzice S.A. and Hutmen S.A.). The increase in the operational results of WM

Dziedzice S.A. is mainly due to high volumes of sales (growth by 11.3%), increase in the trade profit margins

and improvement in technological processes. Hutmen S.A. recorded higher result mainly due to higher

sales volumes and reduction of manufacturing costs.

Higher results in the Aluminium Segment - an increase in the operational results due to more

favourable balance from remaining operational activity (in 2013 the operational result contained a negative

balance/cost of the created reserves in the sum PLN 5.1 million, whereas in 2014 the same balance

amounted to plus PLN 0.1 million). The sales outcome of this entity decreased by PLN 0.5 million during

2014, mainly because of lower volume of sales caused by the shutdown of a part of the production line, on

which investment and modernization works took place. Investment works were completed in Q2 2014.

Lower results in the Trading Segment - the decrease was PLN 0.5 million and resulted from a decline in

marketing margins, mainly in the Department of Commerce (Impexmetal).

Aluminium33%

Miedź18%

Cynk i olów19%

Handel14%

pozostałe0%


16%

EBIT w rozbiciu na segmenty w 2014 roku

Aluminium49%

Miedź22%

Cynk i olów3%

Handel24%

pozostałe-1%


-1%

EBIT w rozbiciu na segmenty w 2014 roku


26

Balance of financial income/expenses amounted to PLN (9.6) million and is lower by PLN 11.3 million, which

is mainly due to the higher negative balance of foreign exchange gains and derivative financial instruments.

Net result from continuing operations amounted to PLN 112.5 million and was lower by PLN 47.3 million.

After taking into account net result from discontinued operations in the amount of PLN 9.3 million, the net

result in 2014 amounted to PLN 121.8 million. It was higher by PLN 35.7 million than the result achieved in

2013.

A result lower by PLN 11.6 million on the discontinued operations resulted from the lower outcomes of HMN

Szopienice S.A. , in liquidation. Their decrease was exclusively the effect of the lack of one-time event in 2014,

event such as the targeted donation of PLN 14.0 million for utilization of post-production sludge. The received

donation still helps to utilize production sludge.

7. CHARACTERISTICS OF THE STRUCTURES OF ASSETS AND LIABILITIES

ANALYSIS OF SELECTED BALANCE SHEET ITEMS

Selected items from the consolidated balance sheet of the Impexmetal Group are shown in the table below:


Fixed assets 1,051.6 934.8

including:

Tangible fixed assets 541.5 559.4

Intangible assets 8.5 9.1

Shares and stocks 9.6 11.9

Long-term financial assets 409.8 272.2

Current assets 936.5 866.1

including:

Inventories 466.8 395.8

Receivables 298.5 327.2

Loans granted 53.7 53.9

Cash and cash equivalents 21.3 36.6

Other 96.2 52.5

Assets held for sale 11.0 33.2

Balance sheet total 1,999.1 1,834.00

Equity 1,198.4 1,071.20

including capital attributable to equity holders 1,075.3 958.5

Long-term liabilities 210.4 131.1

including: loans, leasings 92.7 55.0

Short-term creditors includings: 556.1 567.8

loans, leasings 305.8 355.9

trade payables 201.3 169.9

The increase in assets was the result of:

PLN 116.8 mln - increase in the level of fixed assets,

PLN 70.5 mln - increase in the level of current assets,


27

PLN (22.2) mln - decrease in assets held for sale (HMN Szopienice in liquidation).

The increase in fixed assets was mainly related to the growth of granted long term loans which increased by PLN

71.4 and increas in financial assets, the level of which increased by PLN 66.0 mln. The increase of loans granted is a

result primarily from the loans granted to Boryszew Group. The increase of the level in financial assets is a result

primarily from the acquisition of shares of companies listed on the Warsaw Stock Exchange.

The increase in current assets was primarily the result of:

PLN 70.1 mln - increase in the level of inventories,

PLN 12.2 mln – increase in financial assets available for sale,

PLN (15.3) mln - decrease in cash and cash equivalents.

The decrease in assets held for sale (HMN Szopienice in liquidation) concerns the lack of grant in 2014 for the

ulilization of muds (in 2013 the grant qamounted to PLN 14.0 mln) as well as the lower level of sale of fixed assets in

2014.

In the structure of liabilities, the biggest changes occurred in equity, which increased by PLN 127.28 mln to the level of

PLN 1,198.4 million. The increase of equity resulted primarily from the positive financial results achieved.

The level of liabilities in 2014 increased by PLN 67.5 mln and was a resultant of an increase in long-term liabilities

by PLN 79.3 mln, and an increase in current liabilities of PLN 11.8 mln.

ANALYSIS OF WORKING CAPITAL


Non-cash working capital 564.0 553.1

Inventory turnover (days) 60 52

Turnover of trade receivables (in days) 38 43

Turnover of trade liabilities (in days) 26 22

Turnover of working capital 72 73 Working capital = inventories + trade receivables - trade payables.

Turnover indicators are calculated for revenue.

The demand for working capital at the end of 2014 amounted to PLN 564.0 mln. The demand for working capital

decreased relative to the end of 2013 by 2%, or by PLN 10.9 mln. Apart from the nominal increase of the working

capital’s demand, the real demand decreases by 1 day.

INTEREST-BEARING DEBT ANALYSIS

The main indicators characterising the interest-bearing liabilities of the Impexmetal Group are presented below:


Total interest-bearing liabilities 398.5 411.0

Long-term interest-bearing liabilities 92.7 55.0

including: bonds 0.0 0.0

including: loans, borrowings, leases 92.7 55.0

Short-term interest-bearing liabilities 305.8 355.9

including: bonds 0,0 0.0

including: loans, borrowings, leases 305.8 355.9

Cash and cash equivalents 21.3 36.6

Net debt 377.2 374.4


28

Interest-bearing liabilities / equity 0.3 0.4

Net debt/EBITDA 40.4 17.9

Interest-bearing liabilities = long-term liabilities + short-term liabilities (loans and credits + issuance of debt securities + lease)

Net debt = interest-bearing liabilities - cash and cash equivalents

Interest-bearing debt of the Impexmetal Group as at 31.12.2014 amounted to PLN 398,5 mln and increased

compared to 31.12.2013 by PLN 12.5 mln.

The increase in debt in 2014 was mainly due to the acquisition of shares of companies listed on the WSE.

LIQUIDITY ANALYSIS

Liquidity ratios are presented in the following table:


Current ratio 1.7 1.5

Quick ratio 0.8 0.8

Current ratio = current assets / current liabilities

Quick ratio = (current assets - inventories) / current liabilities

In 2014, the current ratio increased by the level PLN 1.7 and quick ratio remained at the same level as last year.

The Group has sufficient liquidity for the implementation of current and future obligations.

ANALYSIS OF SELECTED ITEMS IN CASH FLOWS AND CAPITAL EXPENDITURES

The main items of the consolidated statement of cash flows for the Impexmetal Group in 2014 compared with the

same period of the previous year are presented below:


Net operating cash flow 124.9 141.0

Net investment cash flow -119.0 -196.6

Net financial assets -21.3 55.6

Total net cash flow -15.5 0,1

The graph below shows the main components of the factors that shaped the cash flows for the Impexmetal Group

in 2014.


29

Positive cash flows from operating activities were earmarked by the Impexmetal Group primarily for capital

expenditures related to the purchase of financial assets, including shares in companies listed on the Warsaw

Stock Exchange and bonds issued by the Boryszew Group companies.

In 2014, the Impexmetal Group incurred net investments expenses for tangible fixed assets in the amount of

PLN 46.8 million, mainly for replacement and modernisation investments in the following companies:

Impexmetal S.A. – PLN 30.3 mln,

WM Dziedzice S.A. – PLN 4.5 mln,

Baterpol – PLN 4.0 mln,

ZM Silesia S.A. – PLN 4.9 mln,

Hutmen S.A. - PLN 2.2 mln,

FŁT Polska Sp. z o.o. – PLN 0.8 mln

In May 2014 in Aluminium Konin a modernization investment with a total value of more than PLN 40 mln was

ended, which allowed to increase the production capacity by 10.000 tons of rolled products with the highest

margin.

8. DESCRIPTION OF SIGNIFICANT OFF-BALANCE SHEET ITEMS

SIGNIFICANT OFF-BALANCE SHEET COMMITMENTS IN GROUP COMPANIES FOR ENTITIES INCLUDED

IN CONSOLIDATION

Guarantee in the amount of $ 2 million, which was granted by Impexmetal for FLT & Metals Ltd. for the

transaction limit for ring brokers on the London Metal Exchange. This guarantee does not apply to a specific

credit or transaction debt, but secures the settlement of futures concluded by FLT & Metals Ltd. on an

ongoing basis for the needs of the Group companies which are settled upon their maturity. Futures protect

the physical side (actual settlement) of the execution of commercial contracts of the Group companies.

Agreements on the partial conditional redemption of the loan granted to Baterpol S.A. from WFOŚiGW

funds. The surety was granted by Impexmetal S.A. for WFOŚiGW up to the amount of PLN 1,772,000.

Surety granted by Impexmetal S.A. for trade payables of WM Dziedzice S.A. in relation to the supply of raw

materials up to the amount of EUR 1 mln.

Surety granted by Impexmetal S.A. as mortgage to the amount of PLN 2.5 million established on the property of

the Company, as security for the payment of liabilities of ZM Silesia S.A. to Bank Handlowy in Warszawa S.A.

under the overdraft agreement

Surety for the bill of exchange granted by Impexmetal S.A. to the amount of PLN 14,036,00 (plus any interest and

costs) for the obligations of HMN Szopienice S.A. in liquidation to the National Fund for Environmental Protection

and Water Management in Warsaw for the possible improper execution of the grant agreement.

SIGNIFICANT OFF-BALANCE SHEET COMMITMENTS IN GROUP COMPANIES FOR ENTITIES NOT

INCLUDED IN CONSOLIDATION

Surety granted by Impexmetal S.A. as a registered pledge on 1,131,260 shares of Boryszew S.A. owned by

Impexmetal S.A. as security for the payment of liabilities of Boryszew S.A. under the credit agreements with Alior

Bank S.A.

The guarantee granted by Impexmetal S.A. in the form of blocking 2,000,000 own shares of Impexmetal S.A.

established for Deutsche Bank PBC S.A. as security for the payment of obligations of a natural person under a

loan agreement.

The contingent liability of HMN Szopienice S.A. in liquidation from subsidies to WFOŚiGW in the total amount of

PLN 4 million .

The contingent liability of Impexmetal S.A. contracts with an estimated value PLN 5 mln.

9. MATERIAL CONTRACTS

Commercial activities of the Group companies is based on a large number of contracts with suppliers and buyers

of goods. These are usually traditional transactions involving the purchase (domestic and abroad) of materials for

production and the sale of goods produced goods on the domestic and foreign market.


30

IMPEXMETAL S.A.

In 2014, entities whose participation in the supply accounted for over 10% of sales revenues of the Company

were:

Company Contract

date

Subject of the

contract

Estimated value

of the contract in

2014.

Share in the

supply [%]

Relationshi

p with the

issuer

Rusal Marketing

GmbH

28.10.2013 Supply of

aluminium blocks

PLN 119 million 13.4% None

J.Aron &

Company

2013/2014 Purchase of

primary aluminium

PLN 89 million 10.1% none

The value of purchase/sale contracts of the Company's other contractors did not exceed 10% of the sales

revenues of Impexmetal S.A. in 2013.

The following table contains a list of agreements/contracts which are the most important for the commercial and

production activity of Impexmetal S.A.

Supply contracts

Company Contract date Subject of the contract Estimated value of the

contract in 2014.

Supplier of aluminium 2014 Purchase of primary aluminium PLN 56 million

Supplier of scrap 2014 Purchase of aluminium scrap PLN 68 million

Sale contracts

As the portfolio of AKI’s clients is highly diversified, contracts with partners exceeding 10 % of sale revenues do not take place. Three of the biggest clients in 2014 constituted ca 20 % of sale revenues. Below is the information on the biggest contracts realized in 2014.


contract in 2014.

Customer in the

automotive industry 25.01.2013

Sale of aluminium strips and

sheets PLN 78 million

Customer in the

packaging industry 06.02.2013

Sale of aluminium strips and

sheets PLN 50 million

MATERIAL CONTRACTS IN GROUP COMPANIES

HUTMEN S.A.


contract in 2014.

Supplier of semi-

finished copper

products

27.01.2014

29.07.2014

Purchase of semi products

PLN 231 million

Supplier of semi-

finished copper

products Current order

Purchase of semi products

PLN 123 million

WALCOWNIA METALI DZIEDZICE S.A.



31

contract in 2014.

Supplier of scrap 19.07.2013 Purchase of scrap PLN 160 million

ZM SILESIA S.A.


contract in 2014.

Supplier of raw materials. 28.11.2013 Purchase of zinc PLN 116 million

BATERPOL S.A.


contract in 2014.

Baterpol Recycler Sp. z o.o. 28.02.2014 Purchase of lead and alloys PLN 102 million

Customer in the battery

industry - Sales of lead and alloys PLN 65 million

FŁT POLSKA SPÓŁKA Z O.O.


contract in 2014.

Supplier of bearings Current order Sales of bearings PLN 94 million

Supplier of bearings Current order Sales of bearings PLN 30 million

INSURANCE CONTRACT

Impexmetal S.A. and its subsidiaries in 2014 held insurance policies as part of general agreements entered into

by the parent company Boryszew S.A. with several insurance companies for the entire Boryszew Group.

Insured Subject of insurance Period of insurance

Impexmetal Capital Group

Companies

Property owned from all risks 01.04.2014 - 31.03.2015

Lost profits from all risks 01.04.2014 - 31.03.2015

Electronic equipment 01.04.2014 - 31.03.2015

Equipment against damage 01.04.2014 - 31.03.2015

Loss of profits from damage to

machinery and equipment

01.04.2014 - 31.03.2015

Business liability insurance

including liability for property use

01.04.2014 - 31.03.2015

Liability of board members of the

group

01.10.2014 - 30.09.2015

Insurance of loads in transport 01.04.2014 - 31.03.2015

Communication insurance (OC,

AC, NW

Annual period of insurance

Liability insurance for

bookkeeping and tax consultancy

services

Annual period of insurance


32

Trade receivables unspecified period of time

10. CAPITAL EXPENDITURES AND CHANGES IN THE STRUCTURE

DISPOSAL OF SHARES IN SUSMED SP. Z O.O.

On 29 April 2014 Hutmen S.A. disposed of 7 436 shares, constituting 100% of the share capital

and of votes at the General Meeting of the Shareholders of the company acting under the name of Susmed

Spółka z ograniczoną odpowiedzialnością (limited liability company) based in Toruń to an entity from outside of

the Capital Group.

Changes in the Capital Group structure in 2014 Disposal of Susmed Sp. z o.o. shares

On April 29, 2014 Hutmen S.A. disposed of 7 436 shares constituting 100% of the share capital and votes at the

General Meeting of Shareholders of Susmed Sp. z o.o. seated in Toruń in favor of an entity from outside of the

Impexmetal Capital Group.

Disposal of shares in Baterpol Recycler Sp. z o.o. Spółka Komandytowo - Akcyjna by Baterpol S.A.

On August 11, 2014 Baterpol S.A. disposed of 1 000 A series shares with a face value of PLN 100,00 each,

constituting 100% share capital in Baterpol Recycler Sp. z o.o. Spółka Komandytowo – Akcyjna. The shares were

purchased by ZM Silesia S.A.

Increase of share capital in Baterpol Recycler Sp. z o.o. Spółka Komandytowo – Akcyjna

On August 14, 2014, the Extraordinary General Meeting of Baterpol Recycler spółka z ograniczoną odpowiedzialnością spółka komandytowo – akcyjna adopted a resolution regarding the increase of the company's share capital from PLN 100 000,00 to PLN 200 000,00 through the issuing of 1 000 Class B shares with a face value of PLN 100,00 each as part of private subscription. Moreover, a resolution was adopted regarding the change of the Company's Statute. The offer to take up the Class B shares was presented to the sole shareholder of the company, i.e. ZM Silesia S.A.

On August 14, 2014 ZM Silesia S.A. accepted the offer to take up the shares. The Class B shares were covered with a contribution in kind in the form of perpetual usufruct right to plots located in Katowice at Al. Korfantego, with a total value of PLN 19 182 000,00. ZM Silesia S.A. transferred the perpetual usufruct right to lands and ownership of properties onto Baterpol Recycler spółka z ograniczoną odpowiedzialnością S.K.A.

On October 29, 2014, the District Court for Katowice – Wschód in Katowice, VIII Commercial Division of the National Court Register registered an increase of the Company's share capital in the Register of Entrepreneurs.

Establishment of ZM Nieruchomości Sp. z o.o.

On September 12, 2014, ZM Silesia S.A. established a company called ZM Nieruchomości Sp. z o.o. The

registered office of the new Company is Katowice. The share capital is PLN 5 000,00 and is divided into 100

equal and undivided shares with a face value of PLN 50,00 each. ZM Silesia S.A. took up all the shares in the


The Court entered the new entity into the Register of Entrepreneurs kept by the National Court Register on

October 22, 2014.

Liquidation of Katech-Hutmen Sp. z o.o.

On September 24, 2014 Hutmen S.A. obtained information from the Proxy of Hutmen S.A. regarding the start of

liquidation of Katech-Hutmen Sp. z o.o. under the Ukrainian law. The company has not conducted activity since

April 1, 2003 and is excluded from consolidation.

Increase of share capital in SPV Impexmetal Spółka z o.o.

On October 15, 2014, the Extraordinary General Meeting of SPV Impexmetal Sp. z o.o., with a registered seat in

Warsaw, increased the share capital of the Company from PLN 1 100 000,00 (one million one hundred thousand


33

Polish zlotys) to PLN 33 527 000,00 (thirty three million five hundred twenty seven thousand Polish zlotys), i.e. by

a sum of PLN 32 427 000,00 (thirty two million four hundred twenty seven thousand Polish zlotys), by creating 32

427 (thirty two thousand four hundred twenty seven) new shares with a face value of PLN 1 000,00 (one thousand

Polish zlotys) each. All newly-created shares will be taken up by Impexmetal S.A. at a price of PLN 5 000,00 per 1

share (five thousand Polish zlotys).

On January 26, 2015 the District Court for the Capital City of Warsaw in Warsaw, XII Commercial Division of the National

Court Register made an entry regarding the increase of the Company's share capital in the Register of Entrepreneurs.

Sales of Hutmen S.A. shares to a subsidiary

On December 30, 2014 Impexmetal S.A. transferred 3 451 196 shares of Hutmen to SPV Impexmetal Sp. z o.o. based on a civil law contract and orders. The shares constitute 13,48% of that company's share capital and provide 13,48 votes at the General Meeting of the company. As a result of transferring the shares, Impexmetal S.A. holds 695 195 shares of Hutmen S.A., which constitutes 2,72% of that company's share capital and which entitled to 2,72% of votes at the General Meeting.

Changes in the Group structure after December 31, 2014 Liquidation of Symonvit Limited

On January 7, 2015 a petition was filed to the registry court in Limassol (Cyprus) regarding Members' voluntary

winding up of Symonvit Ltd., in which Impexmetal S.A. holds 100% shares.

Increase of share capital in Impex-Invest Sp. z o.o.

On January 22, 2015, the Extraordinary General Meeting of Impex-Invest Sp. z o.o. adopted a resolution

regarding the increase of share capital from the sum of PLN 46 246 000,00 to PLN 46 746 000,00, i.e. by an

amount of PLN 500 000,00, through creating 500 new shares with a face value of PLN 1 000,00 each. All newly-

created shares were taken up by Impexmetal S.A. and were covered by a contribution in kind. Currently,

Impexmetal S.A. directly holds 79% of capital and votes at the General Meeting, while the second shareholder –

Baterpol S.A. i Wspólnicy s.k. – directly holds 21% of capital and votes at the General Meeting.

Increase of share capital in Eastside Capital Investments Sp. z o.o.

On January 20, 2015, the Extraordinary General Meeting of Eastside Capital Investments Sp. z o.o. adopted a

resolution regarding the increase of share capital from the sum of PLN 50 000,00 to PLN 100 000,00, i.e. by an

amount of PLN 50 000,00, through creating 50 new shares with a face value of PLN 1 000,00 each. All newly-

created shares were taken up by Impexmetal S.A. and were covered by a contribution in kind. Currently,

Impexmetal S.A. directly holds 100% of share and capital at the General Meeting.

Shareholding structure of Impexmetal S.A.

According to our knowledge, at the date of this report, shareholders holding directly, or indirectly through

subsidiaries, at least 5% of the total number of votes at the General Meeting of the Company are:

Shareholders Number of

shares

Share

Number of

votes

Share

in the share

capital

in the total

number of

votes

Boryszew S.A.(*) 106 180 964 53,09% 106 180 964 53,09%

w tym Impexmetal SA(**) 7.210.000 3,60% 7.210.000 3,60%

ING Powszechne Towarzystwo Emerytalne S.A. 16 105 263 8,05% 16 105 263 8,05%

Other shareholders 77 713 773 38,86% 77 713 773 38,86%

All shares/votes 200,000,000 100.00% 200,000,000 100.00%


34

(*) Shares purchased under the share buyback programme. Impexmetal S.A. does not exercise the voting rights

from own shares at the Annual General Meeting.

The Company has no preferred shares. Each share carries one vote at the General Meeting.

11. RESEARCH AND DEVELOPMENT

IMPEXMETAL S.A. ZAKŁAD ALUMINIUM KONIN

These alloys were developed as part of the project "Development of technology for production of strips from

aluminium alloys with special functional properties", completed in 2012; the project was carried out within the

framework of the scientific and industrial consortium of: This project was carried out within the Initech project in

scientific and industrial consortium: Non-Ferrous Metals Institute, Light Metals branch in Skawina and Impexmetal

S.A. - Huta Aluminium Konin. Further validation processes conducted in 2014 at final customers led to the use of

new alloys in new projects with customers from the automotive industries, effectively replacing the older

generation alloys. During this period new customers from the automotive industry were also acquired, who

conducted validation tests and started constant cooperation using developed alloys. The new alloys, as compared

to those offered to date, show more resistance to corrosion, higher durability and higher thermal resistance.

Moreover, in the course of internal R&D works, the company improved the production technology for selected

products for the automotive, electrical engineering and packaging sectors

WM DZIEDZICE S.A.

In 2014, the Company conducted the following research and development works:

the introduction to sales of new products, mainly in the range of the rods and tubes (for new shapes, new

alloys)

Preparations for the implementation to production new shapes of the profile tubes, wires and new alloys.

technological modifications covering most stages of production, in the field of technology, machinery and

auxiliaries. Their goal was to reduce manufacturing costs by improving yields and improve the quality and

increase production capacity.

In 2015, tasks will be continued in order to extend the range of manufactured products to copper alloys. Works

are being continued on the introduction to sales the shaped rods with custom lengths (900-1100mm) and

tolerance up to 2mm. In addition, works will be conducted on new sections and profiles. In addition, in 2015 steps

are planned in order to improve the organization of work and increase productivity on the production of coin

blanks in this including: unification of tool bodies for cutting, modification of loading and modification of the drive of

annealing furnace.

HUTMEN S.A.

In 2014 Hutmen S.A. together with the Mining and Metallurgy Academy worked on the study, which was designed

to evaluate the existing technology and identify opportunities to optimize it aiming to reduce remelting costs,

mostly brass dross, and possibly lead-bearing materials in the KOGD oven. The modification of process allowed

to reduce energy consumption and temperature of the process and improve its efficiency. In addition, tests were

carried out of processing Cu-Zn-Al catalysts allowing to recover copper and zinc contained in the catalysts.

As a result of the modification of the process gas consumption was decreased by approx. 10%, oxygen by

approx. 20% and the process temperature was reduced by approx. 50°C. Processing time has not changed, and

the recovery of metal increased by approx. 5%, which directly resulted in an increase in efficiency of the process.

ZM SILESIA S.A.

In 2014, Huta Oława Branch introduced into a range of products granulated zinc white and won regular customers

at approx. 40tons/month, while obtaining the increase of margin throughput by approx. $40/ton.

The planned development of the Company's branch involves the development of zinc white production based on

research and development project co-financed by national funds (GECKO) and investment in the purchase of a

new furnace for the production of zinc white of a Canadian company Burns Energy, which will increase the

capacity of the Department of approx. 30%, while reducing the costs of processing. This project is subject to a

submitted in January 2015, application for the grant of white certificates.


35

12. TRANSACTIONS WITH RELATED PARTIES

Transactions between related parties are mainly trade transactions concluded between the Group companies for

the sale or purchase of goods with a typical, traditional character for the Group.

Trade transactions included the following commodities: zinc and zinc products, products made of copper and

copper alloys, aluminium products, copper scrap, etc.

Transactions of non-commercial nature between related parties:

Purchase of bonds issued by Impexmetal S.A.

On September 30, 2014 and November 21, 2014 Symonvit Ltd. acquired a total of 27 bonds with a face value of

PLN 1 000 000,00 each. The bonds were acquired at the issuing price for a total amount of PLN 27 000 000,00.

The interest rates of the bonds was based on market conditions. Maturity date for bonds

September 30, 2015

On November 27, 2014 FŁT Polska Sp. z o.o. acquired 5 bonds with a face value of PLN 1 000 000,00 each. The

bonds were acquired at the issuing price for a total amount of PLN 5 000 000,00. The interest rates of the bonds

was based on market conditions. Maturity date for bonds: September 30, 2015

On December 3, 2014 Baterpol S.A. acquired 5 bonds with a face value of PLN 1 000 000,00 each. The bonds

were acquired at the issuing price for a total amount of PLN 5 000 000,00. The interest rates of the bonds was

based on market conditions. Maturity date for bonds: December 31, 2015

More information has been revealed in the financial statement of Impexmetal S.A.

Early redemption of Impexmetal S.A. bonds

On December 18, 2014 Impexmetal S.A. redeemed 27 registered bonds:

– 9 pieces of registered bonds with a total face value of PLN 1 000 000,00 each, for a total amount of PLN 9 000

000,00. The bonds had been issued on September 30, 2014 with a maturity date of September 30, 2015.

– 18 pieces of registered bonds with a total face value of PLN 1 000 000,00 each, for a total amount of PLN 18

000 000,00. The bonds had been issued on November 21, 2014 with a maturity date of September 30, 2015.

The bonds were purchased according to their face value increased by interest due. The obligations were

purchased for redemption.

Acquisition of bonds issued by the parent entity – Boryszew S.A.

On February 28, 2014 the Company purchased 101 series A registered bonds with a face value of PLN 1 000

000,00 each, issued as part of the Program of issuing registered bonds of Boryszew S.A.

The covered bonds replace 101 series G and K bonds of Boryszew S.A. with a face value of PLN 1 000 000,00

each, issued by Boryszew S.A. as part of a Program of 3-year registered bonds, covered by Impexmetal S.A. on

October 1, 2012 (38 series G pieces) and on September 2, 2013 (63 series K pieces), whose maturity lapsed on

February 28, 2014. The bonds were acquired at the Issuing Price for a total amount of PLN 101 000 000,00. The

interest rates of the bonds was based on market conditions.

Maturity date: September 30, 2015.

Boryszew S.A. made an earlier redemption of all series A bonds on July 31 and September 30, 2014.

On July 1, 2014 Impexmetal S.A. purchased 4 series BC registered bonds with a face value of EUR 500 000,00

each, issued as part of the Program of issuing 5-year registered bonds of Boryszew S.A. The bonds were

acquired at the Issuing Price for a total amount of EUR 2 000 000,00. The interest rates of the bonds was based

on market conditions.

Maturity date: September 30, 2015.

Boryszew S.A. made an earlier redemption of all series BC bonds on September 30, 2014.

Purchase of bonds issued by an associated entity

Impexmetal S.A. acquired bonds issued by Unibax Sp. z o.o.: – 5 series C bonds with a total value of PLN 1 000 000,00. Maturity date: 30.06.2015. The interest rate was based on market conditions. – 5 series D bonds with a total value of PLN 2 000 000,00. Maturity date: 30.06.2015. The interest rate was based on market conditions.


36

– 4 series E bonds with a total value of PLN 1 600 000,00. Maturity date: 30.06.2015. The interest rate was based on market conditions. – 5 series F bonds with a total value of PLN 5 000 000,00. Maturity date: 30.06.2015. The interest rate was based on market conditions. – 5 series H bonds with a total value of PLN 2 300 000,00. Maturity date: 30.06.2015. The interest rate was based on market conditions.

Early redemption of bonds issued by Boryszew S.A.

On July 28, 2014 Boryszew S.A. made an earlier redemption of 70 registered bonds with a face value of PLN 1

000 000 each and with a total face value of PLN 70.000.000,00, acquired by Impexmetal S.A.

The bonds had been issued on February 28, 2014 with a maturity date of September 30, 2015.

On September 30, 2014 Boryszew S.A. made an earlier redemption of 31 registered bonds with a face value of

PLN 1 000 000 each and with a total face value of PLN 31 000 000,00, acquired by Impexmetal S.A. The bonds

had been issued on February 28, 2014 with a maturity date of September 30, 2015.

On September 30, 2014 Boryszew S.A. made an earlier redemption of 4 series BC registered bonds with a face

value of EUR 500 000 each and with a total face value of EUR 2 000 000,00, acquired by Impexmetal S.A. The

bonds had been issued on July 1, 2014 with a maturity date of September 30, 2015.

Conclusion of loan contracts

On June 17, 2014 Impexmetal S.A. acquired receivables due from Tensho Poland Corporation Spółka z o.o. (currently: Boryszew Tensho Poland Sp. z o.o.) on account of loan contracts, and thus entered into the rights of a loaner of loans of a total amount of EUR 9 000 000 – details have been described in pt. 46 Significant events pertaining to the issuer's activity.

On July 17, 2014 Impexmetal S.A. awarded Boryszew S.A. Maflow Division in Tychy with a cash loan in the

amount of PLN 5 000 000,00, and with a maturity date of June 30, 2015. The loan was granted according to

market conditions. On 19.09.2014 Impexmetal S.A. awarded Boryszew S.A. with a cash loan in the amount of EUR 4 000 000, with a maturity date of 30.06.2015. The loan was granted according to market conditions. On November 21, 2014 Impexmetal S.A. awarded Boryszew S.A. with a cash loan in the amount of PLN 11 000 000,00, with a maturity date of December 31, 2015 The loan was granted according to market conditions. On May 27, 2014 the amount of loan granted by Impexmetal S.A. to Impex-Invest Sp. z o.o. was increased from PLN 400 000 to PLN 420 000. The maturity date was extended to 30.06.2015. By means of an annex from 31.12.2014, the amount of available limit of loan granted by Impexmetal S.A. to Impex-Invest Sp. z o.o. was increased from PLN 420 000 to PLN 440 000 and the maturity date was extended to 31.12.2015.

On October 15, 2014 Baterpol Recycler Spółka z o.o. SKA granted Impexmetal S.A. with a cash loan in the

amount of PLN 7 000 000,00, and with a maturity date of June 30, 2015. The loan was granted according to

market conditions.

Issuing and acquisition of bonds by associated entities

On July 31, 2014 S&I S.A., a subsidiary of Impexmetal S.A., purchased 10 series A1 bonds with a face value of

PLN 200 000 each, issued by Boryszew Automotive Plastics Sp. z o.o., a subsidiary of Boryszew S.A. The bonds

were acquired at the Issuing Price for a total amount of PLN 2 000 000. The interest rates of the bonds was based

on market conditions. Maturity date: July 31, 2015.

The above bonds replace 10 series A bonds with a face value of PLN 200 000,00 each, issued by Boryszew Automotive Plastics Spółka z o.o. as part of the Program of issuing registered bonds on July 10, 2013.

On July 31, 2014 Hutmen S.A., a subsidiary of Impexmetal S.A., purchased 5 series A2 bonds with a face value of PLN 200 000 each, issued by Boryszew Automotive Plastics Sp. z o.o., a subsidiary of Boryszew S.A. The bonds were acquired at the Issuing Price for a total amount of PLN 1 000 000. The interest rates of the bonds was based on market conditions. Maturity date: July 31, 2015. The above bonds replace 5 series B bonds with a face value of PLN 200 000,00 each, issued by Boryszew

Automotive Plastics Spółka z o.o. as part of the Program of issuing registered bonds on July 11, 2013.

On July 31, 2014 ZM Silesia S.A., a subsidiary of Impexmetal S.A., purchased 13 series A4 bonds with a face value of PLN 200 000 each, issued by Boryszew Automotive Plastics Sp. z o.o., a subsidiary of Boryszew S.A.


37

The bonds were acquired at the Issuing Price for a total amount of PLN 2 600 000. The interest rates of the bonds was based on market conditions. Maturity date: July 31, 2015. The above bonds replace 13 series E bonds with a face value of PLN 200 000,00 each, issued by Boryszew

Automotive Plastics Spółka z o.o. as part of a Program of issuing registered on September 6, 2013.

On July 31, 2014 Symonvit Ltd. purchased 31 series A5 bonds with a face value of PLN 200 000 each, issued by Boryszew Automotive Plastics Sp. z o.o.. The bonds were purchased at the Issuing Price for a total sum of PLN 6 200 000. The interest rates of the bonds was based on market conditions. Maturity date: July 31, 2015.

The above bonds replace 25 series F and G bonds with a face value of PLN 200 000,00 each, issued by Boryszew Automotive Plastics Spółka z o.o. as part of the Program of issuing registered bonds on October 8 and October 24, 2013.

On September 19, 2014 WM Dziedzice S.A. acquired 20 registered bonds with a face value of PLN 1 000 000 each, issued by SPV Boryszew 3 Sp. z o.o. The maturity date for bonds was determined at December 31, 2015. The interest rates of the bonds was based on market conditions.

On September 22, 2014 Hutmen S.A. acquired 5 registered bonds with a face value of PLN 1 000 000 each,

issued by SPV Boryszew 3 Sp. z o.o. The maturity date for bonds was determined at December 31, 2015. The

interest rates of the bonds was based on market conditions.

On September 30, 2014 Baterpol S.A. SK acquired 10 registered bonds with a face value of PLN 100 000,00 each,

issued by Baterpol S.A. The maturity date for bonds was determined at September 30, 2019. The interest rates of

the bonds was based on market conditions.

Purchase of bonds issued by associated entities

On November 20, 2014 an entity associated with Boryszew S.A. made an earlier redemption of 31 registered

bonds with a face value of PLN 200 000 each and with a total face value of PLN 6 200 000. The bonds had been

issued on July 31, 2014 with a maturity date of July 31, 2015. The bonds were purchased according to their face

value increased by interest due, for redemption.


38

Liabilities on account of credits and loans

Item

Name of entity

Type of credit

Credit amount in accordance

with the contract

Date of repaying

credit

31/12/2014 31/12/2013

in PLN ths

including

in PLN ths

including

up to 12 months up to 12 months

1. PKO BP S.A. overdraft / working capital facility

75 000 thousand PLN

31.10.2015 18 358 18 358 46 868 46 868

31.01.2017 45 008 - - -

2. Bank Pekao S.A. overdraft 50 000 thousand PLN

30.06.2015 40 490 40 490 49 277 49 277

3. Raiffeisen Bank Polska S.A. overdraft / working capital facility

50 000 thousand PLN

02.02.2016 39 931 14 357 46 768 21 885

4. Bank Millennium S.A. overdraft 17 000 thousand PLN

19.10.2015 7 470 7 470 464 464

5. Bank Millennium S.A. working capital facility 15 000 thousand PLN

12.02.2016 15 000 - - -

6. Bank Zachodni WBK S.A. overdraft 30 000 thousand PLN

31.05.2015 28 814 28 814 21 479 21 479

7. Alior Bank S.A. working capital facility - - - - 38 080 9 996

8. Bank Millennium S.A. factoring 36 000 thousand PLN

28.09.2015 20 152 20 152 20 297 20 297

9. Raiffeisen Bank Polska S.A. factoring 21 312 thousand PLN

15.03.2016 10 802 10 802 8 238 8 238

10. Coface Poland Factoring Sp. z o.o

factoring 40 000 thousand PLN

indefinitely 60 60 - -

11. PKO BP S.A. working capital facility 12 500 thousand PLN

09.04.2015 11 378 11 378 9 845 9 845

12. Bank Ochrony Środowiska S.A. working capital facility 12 500 thousand PLN

01.10.2015 1 924 1 924 2 257 2 257

13. Bank Ochrony Środowiska S.A. working capital facility 5 000 thousand PLN

14.10.2016 4 972 - - -

14. Bank Handlowy S.A. working capital facility 4 000 thousand PLN

16.03.2015 3 177 3 177 1 006 1 006

15. Coface Poland Factoring Sp. z o.o.


31.03.2015 3 719 3 719 3 579 3 579

16. Alior Bank S.A. overdraft 25 000 thousand PLN

30.09.2015 12 775 12 775 14 361 14 361

17. BZ WBK S.A. overdraft 30 000 thousand PLN

31.05.2015 21 246 21 246 35 934 35 934

18. BZ WBK Faktor Sp. z o.o. factoring 10 000 thousand PLN

indefinitely - - 5 361 5 361

19. Bank Handlowy S.A. overdraft 2 000 thousand 30.09.2014 - - 887 887


39

PLN

Item

Name of entity Type of credit Credit amount in

accordance with the contract

Date of repaying

credit

31/12/2014 31/12/2013

including

including

in PLN ths up to 12 months in PLN ths up to 12 months

20. Bank Millennium S.A. overdraft 16 400 thousand

PLN 18.02.2015 10 080 10 080 15 956 15 956

21. Coface Poland Factoring Sp. z o.o.


indefinitely 125 125 - -

22. Credit Agricole Bank Polska S.A overdraft 23 000 thousand PLN

17.02.2015 8 602 8 602 - -

23. PKO BP S.A. overdraft 15 000 thousand PLN

26.05.2015 8 835 8 835 - -

24. Bank Handlowy S.A. overdraft 18 000 thousand PLN

07.10.2015 13 594 13 594 16 123 16 123

25. PKO BP S.A. overdraft 30 000 thousand PLN

19.10.2015 18 138 18 138 26 489 26 489

26. Bank Millennium S.A. loan 10 000 thousand PLN

08.07.2015 8 449 8 449 - -

27. WFOŚiGW loan 691 thousand PLN

15.02.2019 691 154 - -

28. BOŚ S.A. / WFOŚiGW investment 10 303 thousand PLN

30.06.2014 - - 386 386

29. Alior Bank S.A. overdraft 10 000 thousand PLN

30.09.2015 9 659 9 659 936 936

30. Raiffeisen Bank Polska S.A. overdraft / multicurrency 27 000 thousand PLN

27.03.2014 - - 11 524 11 524

31. PKO BP S.A. overdraft / revolving 32 000 thousand PLN

31.10.2015 13 114 13 114 21 177 21 177

32. Bank Handlowy S.A. overdraft / multicurrency 10 000 thousand PLN

07.10.2015 9 837 9 837 - -

33. WFOŚiGW investment loan 3 500 thousand PLN

30.09.2018 1 875 500 2 375 500

34. Raiffeisen Bank Polska S.A. overdraft 2 000 thousand EUR

15.10.2015 2 092 2 092 5 754 5 754

35. DnB NORD overdraft 3 000 thousand PLN

31.12.2015 2 839 2 839 2 927 2 927

36. PEKAO SA overdraft 3 000 thousand PLN

30.06.2015 2 861 2 861 1 975 1 975

37. FLT Wälzlager GmbH loan 500 thousand EUR

30.09.2015 2 142 2 142 - -

38. Crédit du Nord factoring 101 thousand EUR

10.01.2014 - - 419 419

39. Societe Generale working capital facility 1 thousand EUR

31.03.2014 - - 4 4

Total

398 209 305 743 410 746 355 904


40

LOANS GRANTED

As at 31 December 2014 loans granted to unconsolidated entities include:

- loans granted to related entities in the amount of:

16 962

PLN

thousand

- Boryszew S.A. Maflow Branch in Tychy

11 052

PLN

thousand

- Boryszew S.A.

17 117

PLN

thousand

- Boryszew S.A. 4 000 EUR

9 709

PLN

thousand

- Boryszew Oberflächentechnik Deutschland GmbH

2 269

EUR

2 845

PLN

thousand

- AKT Plastikarska Technologie Cechy spol. s.r.o.

665

EUR

8 919

PLN

thousand

- Boryszew Formenbau Deutschland GmbH

2 084

EUR

6 409

PLN

thousand

- BRS YMOS GmbH

1 498

EUR

13 386

PLN

thousand

- Theysohn Kunststoff GmbH

3 128

EUR

38 704

PLN

thousand

- Boryszew Tensho Poland Sp. z o.o.

9 000

EUR

- loans granted to other entities in the amount of:

665 PLN

thousand

- Ostrana Internationale Handelsges MBH Austria – EUR 156 thousand

amount fully covered by impairment provision.

13. SURETIES AND GUARANTEES

GUARANTEES AND SURETIES GRANTED BY INVESTMENT S.A. AS AT 21.12.2014

Item Entity receiving

guarantee or surety

Amount denominated in

foreign currencies

Amount in PLN thousand

Entity issuing guarantee or

surety

Date of execution

1.

FLT & Metals Ltd. 2 000 thousand.

USD 7 015

thousand PLN

Impexmetal S.A. No deadline

2.

Baterpol SA 1 772 thousand

PLN Impexmetal S.A No deadline

3.

WM Dziedzice S.A. 1 000 thousand

EUR 4 262

thousand PLN

Impexmetal S.A. 31.07.2015 r.

4.

ZM Silesia S.A. 2 500 thousand

PLN Impexmetal S.A. No deadline

5.

HMN Szopienice SA 14 036 thousand


TOTAL sureties granted to consolidated entities

29 585

thousand

PLN

1.

Boryszew SA 3 146 thousand


2.

Boryszew SA 3 336 thousand


3.

Osoba Fizyczna 5 000 thousand


TOTAL sureties granted to non-consolidated

entities 11 482

thousand PLN


41

14. OWN SHARES

In carrying out the share redemption programme adopted by the Extraordinary General Meeting of Impexmetal

S.A. under Resolution No. 8 of 15 November 2010, the Company, as part of the purchase, purchased on the

Warsaw Stock Exchange till 31 December Company acquired 7,210,000 shares entitling to 7,210,000 votes,

which represents 3,605% of votes at the General Meeting of the Company.

In 2014 Impexmetal did not purchase own shares.

SHARES IN IMPEXMETAL S.A. HELD BY THE PARENT COMPANIES, ENTITIES BELONGING TO THE

IMPEXMETAL GROUP AND PERSONS ACTING ON THEIR BEHALF.

According to the last report of the parent company Boryszew S.A. dated 11 October 2013:

Boryszew S.A. held directly 99,052,964 shares of Impexmetal S.A., representing 49.53% of the share capital

and entitling to 99,052,964 votes at the General Meeting of Impexmetal S.A.,

Boryszew Group held directly 106,180,964 shares of Impexmetal S.A., representing 53.09% of the share

capital and entitling to 106,180,964 votes at the General Meeting of Impexmetal S.A.

Affiliate Remal Sp. z o.o. with its registered office holds 96,665 shares of Impexmetal S.A.

15. ISSUE OF SECURITIES

In the period from 1 January 2014 until the date of approval of the report for publication, Impexmetal S.A. did not

issue shares or inform of its intention to issue shares.

Issuance of registered series E and F bonds

On 30 September 2014, Impexmetal S.A. issued 5 registered series E bonds and 4 registered series F bonds with a

nominal value of PLN 1 million each, for a total amount of PLN 9 million. Maturity date: 30 September 2015. The

interest rate on the bonds is based on market rates.

Issuance of registered series G bonds

On 21 November 2014, Impexmetal S.A. issued 18 registered series G bonds with a nominal value of PLN 1 million

each, for a total amount of PLN 18 million. Maturity date: 30 September 2015. The interest rate on the bonds is based

on market rates

Issuance of registered series H bonds

On 27 November 2014, Impexmetal S.A. issued 5 registered series H bonds with a nominal value of PLN 1 million

each, for a total amount of PLN 5 million. Maturity date: 30 September 2015. The interest rate on the bonds is based

on market rates.

Issuance of registered series I bonds

On 3 December 2014, Impexmetal S.A. issued 15registered series I bonds with a nominal value of PLN 1 million

each, for a total amount of PLN 5 million. Maturity date: 31 December 2015. The interest rate on the bonds is based

on market rates

16. DIVIDEND

Proposed distribution of profit for 2014

The Management Board recommends the profit for 2014 in the amount of PLN 59,224,000 to be allocated to

reserve capital.

Distribution of profit for the previous reporting period

According to the resolution of the Annual General Meeting of Impexmetal S.A. adopted on 25 June 2014 , the

Company's net profit for 2013 of PLN 32,420,896.16 has been allocated in full to reserve capital.


42

17. FORECAST OF THE BOARD

In the period covered by this report, no financial forecasts relating to 2013 were published.

18. PRINCIPLES OF FINANCIAL RESOURCES MANAGEMENT

The Group pursues an active policy of management of financial resources. The organisational structure of the

financial divisions of the Group companies is closely tailored to the specifics of each company. The Group carries

out a strategy of continuous improvement of the financing structure. The Group cooperates with several Polish

banks but is also in talks with other financial institutions in order to optimise the costs of financing.

Due to the nature and size of the Group liquidity monitoring for a period of three weeks ahead is carried out on an

ongoing basis in the form of a report.

The Group companies service an interests debt without delay, both in terms of principal repayment and interests.

Impexmetal S.A. conducts continuous monitoring of overdue receivables in respect of the whole Group. This is

important due to the fact that the customers of the Group companies are often the same customers, which may

result in the accumulation of receivables overdue at the Group level - measurement of risk by customer.

Companies continuously monitor the turnover of working capital and seek to reduce the payment period of

receivables and simultaneously extend the period of liabilities’ repayment. Unfortunately, this process is not easy

to carry out especially in respect to key raw materials suppliers. Companies pursue an active policy of financial

risk management and volatility management in commodity prices. Most of the companies in the Group introduced

a risk management policy approved by the Supervisory Board. Company policy governs the rules of the

application of safeguards reflected in the physical side of conducted trade activity. Impexmetal S.A. monitors the

number and size of open positions within the Group on a weekly basis, both in the currency market and the

metals market, and makes a monthly valuation of these items.

19. FEASIBILITY ASSESSMENT OF PLANNED INVESTMENTS (FINANCIAL

CONDITION)

Group companies finance their investments from their own resources or from external resources (loans, debt

securities, lease). Immediately before starting the investment it is assessed by the statutory bodies of the

Company.

Companies take action to finance investments primarily using long-term credit. This applies to equity investments

and investments in fixed assets.

At present, the arrangement of financing for viable investment projects is not a problem and the financing banks

are willing to finance such projects with long-term debt.

20. UNUSUAL FACTORS AND EVENTS AFFECTING THE RESULT

The most important event having an influence on the result on the basic activity in 2014 was the limitation of the

sale of rolled products manufactured in AKI. The decrease of sale took place in 1Q2014 and was a result of

modernization of cold rolling-mill, which 3-month standstill considerably limited the production possibilities of the

plant. The sale decrease in comparison to 2013 amounted in 1H over 3 th. tonnes while in 2H the sale was higher

by almost 1.6 th. tonnes in comparison to the previous year.

The second important factor was a significant increase of purchase costs of the basic raw materials. During 2014,

the purchase bonus for the primary aluminium (which constituted almost 50 % of the total used raw materials)

increased by ca 200 USD/t. This factor significantly influenced the profitability of net sale apart from the

favourable stocks structuree and higher margins on sale of the rolled products.

The sale of real estates of the Group, located in Katowice, should be also included to the abnormal events having

influence on the 2014 results, with the amount of PLN 18.9 mln.

sprzedaż nieruchomości Grupy połozonej w Katowicach, z wpływem na wynik w wysokości 18,9 mln złotych.

21. DESCRIPTION OF KEY RISK FACTORS

Impexmetal Group's activities are associated with exposure to market risk (including currency risk, interest rate

risk and commodity risk) as well as credit risk and liquidity risk.


43

MARKET RISK - METAL PRICES AND EXCHANGE RATES

The main risks arising from the specificity of the Group's activities are risks associated with the price of metals on

the London Metal Exchange (LME) and the change in exchange rates.

DESCRIPTION OF EXPOSURE

The exposure identified so far in the Impexmetal Group defines essentially two types of risks: - risk of changes in metal prices,

- risk of changes in exchange rates

Metals whose price changes affect the development of the Group's results are: copper, aluminum, lead, zinc and, to a lesser extent, silver. Both the first and the second exposure occurs at the strategic /basic/ level and at the operational level. Strategic risk on the price of metals has been identified in Baterpol S.A., and is associated with future revenue and cash flows, which have not yet been contracted. Operational risk on the price of metals has been identified in the following companies: Impexmetal S.A., Baterpol S.A., Hutmen S.A., Walcowania Metali Dziedzice S.A, Zakłady Metalurgiczne Silesia S.A., and is associated with future revenue and cash flows that have already been contracted, i.e. the hedge of the fair value of the contract.

Regarding the strategic risk in terms of currency, it can be divided into two types of risks: - strategic risk associated with the currency of the metal (generally USD/PLN) - strategic risk associated with the processing margin (USD/PLN and EUR/PLN) The first type of risk occurs, as in the case of metal, in Baterpol S.A., and the other in the following Companies: Impexmetal S.A., Baterpol S.A., Hutmen S.A., Walcowania Metali Dziedzice S.A., Zakłady Metalurgiczne Silesia S.A. In the case of currency operational risk, it is mainly a derivative of metal operational risk; therefore, in order to obtain the full hedging effect, it is necessary to also protect the currency exposure. In addition, there is still operational risk from the time of determining a fixed sale or purchase price (e.g. issuance of a sale invoice) until the inflow of payment or the payment of obligations.

Strategic risk in individual companies is closely related to the specificity of their business activities. In the case of metal, the companies determine the so-called net exposure, i.e. cost items are deducted from sales based on the database of LME prices, whereas the cost items are also based on this database, the difference being the net exposure, which is hedged. Strategic exposure on currencies associated with the processing margin achieved is calculated by multiplying the processing margin by the amount of sales of finished products. In the case of operational risk, it arises mainly as a result of the mismatch of the databases for the purchase of raw materials and the sales of products.

Due to the interest debt with a variable coupon used mainly to fund the operations of the Impexmetal Group companies, companies are exposed to changes in interest rates. Interest rate risk profile of the Companies lies in the fact that the rise in interest rates has a negative effect. Due to the smaller impact of interest rates on the costs and revenues of the Companies, the risk of changes in interest rates is not the primary risk from the point of view of the size of the cash flows of companies. This risk, like the metal price risk and exchange rate risk, is constantly monitored.

OBJECTIVES, POLICIES AND PROCESSES FOR MANAGING THE RISK AND THE METHODS USED TO

MEASURE RISK

Objectives, policies and processes for managing risks

The main objective of the Group's risk management policy is to ensure the stability of cash flows and additionally securing the fair value of contracts. The process of managing specific risks is delegated to specific Companies of the Group. The Companies determine and implement the risk management policy, and it is there that the process of determining the exposure, preparation of strategies, entering into transactions, and checking and booking them takes place.


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Risk measurement methods

Currently, risk measurement at the strategic level in the Companies is based on data from the approved current business plan for the period and the updated current purchase and sales plans. In case of operational hedging, risk measurement is based on the updated current purchase and sales plans, inventories, and realized sales. Structure and organization of risk management functions

The organization of risk management functions in the Impexmetal Group takes place on two levels. At the level of individual Companies, a risk management policy is created, methodology for calculating the exposure is established, the exposure on both the currency and metal is calculated, and a hedging strategy is determined, i.e. determining what quantities should be hedged in which instruments and for what periods. At the level of the Companies, negotiations of transaction terms are held, transactions are concluded, possibly confirmed by the institutions with which they are concluded, transactions are booked, closed and settled. In addition, the companies carry out hedge accounting. The second level of the organization of risk management takes place at the Impexmetal Group level and at the level of the Supervisory Boards of various Companies that present their policies in supervisory board meetings. In addition to the cell dealing with the matters of hedging at Impexmetal S.A., key documentation on risk management policies is provided on an ongoing basis in the individual Group companies. The Group has a detailed system of reporting all derivative transactions concluded and held by the companies. Scope and characteristics of reporting systems and risk monitoring

The reporting system in the Impexmetal Group has several steps. The first step is: reporting to the Management Boards of the individual companies. The order and frequency of these reports is determined by the individual Boards. In addition, the Boards present information about hedges – at meetings of supervisory boards, and the frequency and level of detail of this information depends on the specific supervisory boards. In addition, since 2007, a detailed weekly reporting system has been introduced in the Impexmetal Group. These reports are characterized by a high degree of detail and include, among others, the volume and currency of transactions, the level of hedging, the date of the conclusion and settlement of transactions, settlement formulas and institutions through which these transactions were made. Hedging transactions executed on the LME contracted to FLT & Metals Limited (Company from the Capital Group), are subject to double confirmation immediately by fax, electronically by e-mail or phone by the other person authorized for this purpose. The maximum time for the confirmation of the order is 30 minutes, and the procedure in practice excludes a mistake when entering into the transaction. The scope of detail the aforementioned report makes it possible to control current transactions. Due to the nature of activity, risk monitoring takes place mainly at the level of specific Companies, additional risk analysis and control takes place at the level of the Group as part of the weekly reporting to Impexmetal S.A. Description of risk hedging policies

The Management Boards of the individual companies are responsible for the implementation of risk hedging policies. Policies are designed to determine in detail the risks incurred by specific companies and to present an approach to these risks, and optionally include limits to which hedges can be implemented. Policies include objectives that the companies set for themselves, and the hedges implemented should help in achieving these objectives. Processes for monitoring the effectiveness of hedging and other risk management tools

In case of transactions for which it is possible to use hedging relationships, Impexmetal Group companies have implemented hedge accounting. For each reporting period, the companies carry out an assessment of the effectiveness of hedging relationships held and effectiveness tests are performed in terms of maintaining these relationships in specific intervals. In addition, during the reporting periods, effectiveness is monitored by analyzing deviations of the hedged item and the hedging item from standard items. Additionally, the risk management process at the Impexmetal Group uses the information systems of REUTERS, MetalPrice, which allow for ongoing monitoring of market data and valuation of items held. Description of policies and procedures to avoid risk concentration

As far as possible, all Impexmetal Group companies try to diversify all risks, both those associated with contractors with regard to purchases of raw materials as well as finished goods sold, by concluding contracts with several entities, as in the case of financial institutions with which the companies have cooperation agreements. In the case of limits on hedging transactions, the companies try to have strong limits, relevant to the transactions concluded, so that in the event of a negative valuation of the fair value of the transactions held, they do not have


45

to make margin deposits. A similar situation takes place in the case of credit lines, especially regarding revolving credit. Regarding the concentration of the main market risks: for metal, currencies and interest rates, in relation to the wide range of activities of the entire Group, risks are distributed fairly evenly onto the main metals, the production and processing of which is dealt with by specific companies, and which include: aluminum, lead, copper, zinc and, to a lesser extent, silver. Regarding the concentration of currency risk, it focuses mainly on the risk of the USD/PLN and EUR/PLN exchange rate, and in minimum quantities on other exchange rates. In the case of interest rate risk, it focuses mainly on the PLN, but also occurs on the EUR and the U.S. dollar.

MARKET RISK - INTEREST RATES

Because of the interest debt with a variable coupon mainly used to fund the operations of the Impexmetal Group

companies, activity of the Group is exposed to changes in interest rates. Interest rate risk profile of the

Companies lies in the fact that the rise in interest rates has a negative effect on the level of costs. Due to the

lower importance of interest rates, the risk of their change is not the primary risk from the point of view of the size

of the cash flows of companies.

This risk, like the metals price risk and exchange rate risk, is constantly monitored and analyzed. If a persistent

upward trend in interest rates is observed, the Group is ready to enter into hedging transactions for that risk.

CREDIT RISK

Impexmetal Group's credit risk is related to market conditions leading to the need for deferred payments. Group

Companies monitor the creditworthiness of counterparties to which goods are sold and use various types of

collateral in the form of, e.g., guarantees, letters of credit or bills of exchange.

Most Impexmetal Group companies insure trade receivables, which greatly reduces credit risk.

Investments in debt instruments of other entities are also exposed to credit risk. Group companies are trying to

assess the creditworthiness and prospects of entities which provide funding in the best possible way. Unusual

events, such as turmoil in financial markets, may increase the risk of recoverability of these investments and

significantly extend the time horizon for the release of funds. Group companies primarily invest in debt securities

of affiliated entities.

LIQUIDITY RISK

In order to limit the liquidity risk of the Group, both actual and forecasted cash flows are monitored on an ongoing basis. By tracking the maturity of financial assets and liabilities, they are properly adjusted and thus appropriate cash balances are maintained. The Group uses the services of banks, in which it has the open credit lines. Demand for external financing is continuously monitored. The Group's objective is to provide such level of funding that is sufficient from the point of view of its realized operations. Liquidity risk is also thoroughly analysed with respect to the hedging activities. In case of limits on hedging

transactions, the Group companies try to have strong limits, relevant to the concluded transactions, so that in the

event of a negative valuation of the fair value of the transactions held, they do not have to make margin deposits.

According to the best judgement of the Board, the potential risk to maintain the company's liquidity may be the

situation on the financial markets. A sharp rise in metal prices on world markets, forcing greater involvement of

working capital for the implementation of quantitative sales targets could also have a negative impact on liquidity.

The companies currently have sufficient potential to take out new loans. Despite the uncertainity of the market,

the banking sector has increased its activity, particularly in regard to companies with a better, more stable

financial condition.

Sensitivity of the Group's results on the risk of volatility of global metal prices and exchange rates is described in

Note 45 of the consolidated financial statement.

22. PROSPECTS, ASSUMPTIONS AND DEVELOPMENT PLANS. GROUP'S

STRATEGY

The goal adopted by the Impexmetal Group is strengthening its high market position in the sector of non-ferrous

metals through a systematic increase in sales, expanding the product range and changing the sales structure in

the direction of growth of the share of products with higher margins. The result should be an increase in assets

and profitability of companies and thise increase of goodwill for their shareholders over the long term.


46

Short-term development actions and plans are focused on completing the investments taking place in the Group

companies and maximising their effects, as well as the continuation of the processes of organisational and asset

restructuring in connection with the dynamically changing market conditions.

In May 2014 Huta Aluminium Konin (Impexmetal S.A.) completed an investment project of more than PLN 40

million that will increase the capacity by 10 thousand tonnes of rolled products generating highest margins.

The primary factor in determining the development plans of Huta Aluminium Konin is the forecast of the growth of

aluminium and aluminium alloys market. When it comes to the European market for rolled products (which is the

Company's business), the YoY growth in consumption until 2020 is expected to be 3.5%, which translated into in

an increase of approx. 1 million tonnes of rolled products. Domestic market dynamics is expected to exceed that

number, to app. 5% YoY. Industries attracting the largest increase in consumption of aluminium include

transportation (automotive), packaging materials and construction industry. Based on these considerations

Impexmetal S.A. plans to expand production capacity of the facility in Konin, and the key assumptions of the

Company's Management Board development programme are as follows:

increase of sales to 130 thousand tonnes/year

installation of new equipment facilitating the expansion of rolled products production,

construction of state-of-the-art recycling centre for aluminium

implementation of investment tasks for 2015-2018, achieving the target sales level by 2020.

Proposal of a development programme was filed with the Company’s supervisory bodies and is currently

undergoing a detailed scrutiny. At the same time, investment projects approved for 2015 include acquisition of a

melting furnace, saws for billets and slabs cutting as well as a pusher furnace for heating hot rolling blocks. These

investments will increase production of rolling ingot by approx. 20 thousand. tonnes/year and clad products by 5

thousand tonnes/year. They will also increase capacity of the hot rolling mill which is essential for the target level

of production volumes.

WM „Dziedzice” S.A. has been subject to a whole series of activities with the objective to enhance production

capacity, mainly in case of brass pipes and bars and increase sales volumes. Consistent action in this respect are

intended to improve net profit of the Company through an increase of sales and reduction of manufacturing costs.

The objective of the Company’s Management Board is to achieve sustained profitability of the production plant

through:

improvement of product quality

improvement of yields

reduction of manufacturing costs

Hutmen S.A. takes decisive action to achieve a sustainable return on sales. This is accomplished through the

following activities:

Development of the manufacture of copper and niche products;

Reduction in processing costs and general and administrative expenses;

Increase of the material yield,

Sale of unnecessary non-productive assets in Hutmen Group companies,

Rental and leasing of unnecessary production and office area, including actions to change zoning for the

Hutmen S.A. areas for the implementation of commercial and residential infrastructure.

Baterpol S.A. plans to introduce operational and organisational changes in relation to 2014, including

Further increase in of the share in the battery scrap market,

Intensifying supplier acquisition for other lead-bearing materials and battery scrap outside the country;

Further adaptation to the existing laws in order to reduce the risks of continuation of operations,

Improving the process of production of alloys expected by customers.

The 2015 objectives of the strategy adopted for Silesia Plant include:

continued works on improvement of product quality,

launch of black patinated sheet metal,

modernisation of the method of production in case of grey patinated sheet metal - improvement of surface

quality,

increase of profit on sales of traded goods and materials (drainpipes system, Z1 zinc);

optimization tasks in terms of operating costs.


47

Huta Oława strategic objectives include:

development of zinc white production based on research and development project co-financed by national

funds (GECKO) and investment in a new Burns Energy (of Canada) furnace for the production of zinc white,

which will increase the capacity of the Branch by approx. 30%, while reducing the costs of processing. This

project is included in white certificate application, in January 2015,

optimisation of zinc white production costs by reducing gas consumption, automation and optimisation of the

roasting process aimed at lowering unit production costs and increasing production capacity,

further optimisation efforts in terms of operating costs.

23. EMPLOYMENT

Average employment in the various occupational groups in the companies included in the Impexmetal Group in

2014 in full-time equivalents is presented in the table below:

period ended

31/12/2014

period ended

31/12/2013

Manual positions 1,421 1,426

Non-manual positions 462 486

Employees on parental leave - 2

Total 1,883 1,914

24. CHANGES IN THE KEY PRINCIPLES OF MANAGEMENT OF THE COMPANY

AND ITS GROUP

Do dnia 28 lipca 2014 roku Zarząd Impexmetal S.A. funkcjonował w składzie jednoosobowym, w osobie Prezesa

Zarządu. Zgodnie z postanowieniami Statutu Spółki w przypadku Zarządu jednoosobowego do reprezentacji

Spółki uprawniony jest Prezes Zarządu jednoosobowo.

W dniu 28 lipca 2014 roku Rada Nadzorcza Impexmetal S.A. podjęła uchwałę o powołaniu Członka Zarządu, od

tego czasu Zarząd Impexmetal S.A. funcjonuje w składzie dwuosobowym. Stosownie do postanowień Statutu

Spółki od dnia 28 lipca 2014 roku do składania woli i podpisywania w imieniu Spółki wymagane jest

współdziałanie dwóch członków Zarządu albo jednego członka Zarządu łącznie z prokurentem.

25. AGREEMENTS BETWEEN THE COMPANY AND THE MANAGEMENT

STAFF, WHICH ANTICIPATE COMPENSATION IN CASE OF RESIGNATION

OR REMOVAL FROM THE POSITION WITH NO VALID REASON OR IF THE

DISMISSAL OR REMOVAL TAKES PLACE AS A RESULT OF A MERGER

AFTER A TAKEOVER.

Agreements between Impexmetal S.A. and its managers do not provide other payments than those under the

Labour Code.

26. PERSONNEL MANAGING AND SUPERVISING ACTIVITIES OF THE

COMPANY.

THE BOARD OF IMPEXMETAL S.A.

As at 1 January 2014, the composition of the Management Board of the Company was as follows:

Małgorzata Iwanejko - President of the Board, General Director

On 28 July 2014, the Supervisory Board appointed Mr Jan Wożniak to serve as a Member of the Management

Board of Impexmetal S.A. and Development Director.


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As at the date of publication of the report, the composition of the Management Board is as follows:

Małgorzata Iwanejko - President of the Board, General Director

Jan Woźniak – Member of the Managemet Board, Development Director

Mrs. Małgorzata Iwanejko took the position of President of the Board, Director General of Impexmetal S.A. in

May 2012. She graduated from the School of Economics in Warsaw and completed post-graduate studies MBA

Diploma in Management MBA in the UK.

In 2002 - 2006 she served as Advisor in Nafta Polska S.A. In 2006, she was the President of the Board of Zakłady

Azotowe "Puławy" S.A., where earlier in the years 1996 to 2002 she served as Head of the Commercial Division.

From 2007 to 2012 she held the position of President of the Board, General Director of Boryszew S.A. and

Member of the Supervisory Board of Impexmetal S.A.

Mr. Jan Woźniak has graduated Poznań Institute of Technology, Mechanical-Technology Faculty, specialization – plastic processing. From the beginning of his professional career Mr. Jan Woźniak was related to Huta Aluminium Konin (further Impexmetal S.A.) and other companies from the Capital Group of Impexmetal. From 2011 untill now Mr. Jan Woźniak is a President of the Management Board of Walcowania Metali Dziedzice S.A. From 2006 to 2011 he was a Member of the Management Board, Development Director of ZM Silesia S.A. and earlier from 1997 to 2000 he was a President of the Management Board of ZM “Skawina” S.A. From 1973 to 1998 he worked in Huta Aluminium Konin (further Impexmetal S.A.) in Trade and Technical Departments as a Manager. Mr. Jan WOźniak was also a Technical Director of engineering in Mostostal Export (Weimar, Germany), a Member of the Supervisory Board of Huta Metali Nieżelaznych “Szopienice” S.A. in liquidation and a Member of the Supervisory Board of Baterpol S.A.

Powers of the Board

The Board conducts Company’s business and represents the Company. The Board is responsible for the fair

conduct the Company's affairs and the implementation of its statutory functions, in accordance with the law and

good practice.

The scope of Board’s responsibilities includes all affairs not reserved for the General Meeting or the Supervisory

Board. The Board develops the Company's strategy and is responsible for its implementation and execution. The

strategy is subject to approval of the Supervisory Board. The Company Board carefully analyses all actions and

decisions.

Resolutions of the Board are required for matters beyond the scope of ordinary management, in particular

regarding:

Regulations of the Board,

Organisational Regulations of the Company,

Borrowing,

Granting guarantees and sureties,

Sale and purchase of fixed assets with a value exceeding the equivalent of PLN 30,000,

Approval of the Company business report and the Company's financial statements and consolidated

financial statements of the Group for the previous year,

Conclusions as to the distribution of profit or covering of loss of the Company,

Adoption of the development programme of the Company and the Group,

Adoption of the budget of the Company and the Group and its possible correction,

Establishing proxies,

Establishing attorneys, under civil law, to perform specific actions within their powers (with the exception of

one-time powers of attorney to make certain legal actions and powers of attorney to sign the papers and

documents that do not cause incurring liabilities by the Company or disposal of property rights of the

Company as well as general power of attorney)

Adoption of the payroll system and work regulations based on agreements with the trade unions,

Taking a position on issues ordered by the Supervisory Board in the form of a resolution.

The Board recommends to the Supervisory Board to appoint an auditor, after an analysis of the offers submitted.

To make declarations of intent and sign on behalf of the Company, joint action by two members of the Board or

one member of the Board with a proxy or an attorney is required. In case of a one-man Board, the President of

the Board is authorised to make declarations of intent and sign on behalf of the Company individually.


49

The Board holds meetings as necessary. At the Board meetings, employees of the Company or any other person

competent to discuss the matter may be invited.

The Board implements the statutory management functions in the form of:

Resolutions adopted at the meetings of the Board,

Proposals to the Supervisory Board, the General Meeting or the court,

Making declarations of intent,

Implementation of the resolutions of the Supervisory Board and the General Meeting.

Rules for adopting resolutions

Resolutions of the Board are adopted by an absolute majority of the votes present. In case of a tie vote, the vote

of the President of the Board is decisive.

Member of the Board absent from the meeting shall, on the first day at work, agree and commit to the resolutions

passed in his absence, confirming this fact with his signature on the original minutes.

Board meetings are minuted and signed by the members present at the meeting of the Board.

Members of the Board shall be obliged to inform the Supervisory Board of any conflict of interest in relation to

their function or its possible occurrence.

The principles of remuneration of Board members is determined by the Supervisory Board of the Company, taking

into account the responsibilities and function as well as the economic and financial situation of the Company.

The total amount of remuneration of all members of the Board and of the individual members of the Board broken

down into its various elements is disclosed in the annual report.

The Board makes every effort to ensure that the Company carries out effective business activity respecting the

interests of all groups of shareholders and other groups associated with the Company's interest.

SUPERVISORY BOARD OF IMPEXMETAL S.A.

As at 1 January 2014, the composition of the Management Board of the Company was as follows:

Arkadiusz Krężel - Chairman of the Supervisory Board

Zygmunt Urbaniak - Vice-Chairman of the Supervisory Board

Waldemar Zwierz - Secretary of the Supervisory Board

Piotr Szeliga - Member of the Supervisory Board

Robert Skoczeń - Member of the Supervisory Board

In connection with the expiration of the term of the Supervisory Board on 25 June 2014, the General

Meeting passed a resolution to appoint the Supervisory Board for another term in the composition:





Mrs. Karina Wściubiak-Hankó - Member of the Supervisory Board

As at the date of publication of the report, the composition of the Supervisory Board is as follows





Mrs. Karina Wściubiak-Hankó - Member of the Supervisory Board

CVS OF MEMBERS OF THE SUPERVISORY BOARD OFIMPEXMETAL S.A.:


Mr. Arkadiusz Krężel was appointed to the Supervisory Board of Impexmetal S.A. in 2006. He also holds

supervisory functions in the Impexmetal Group: ZM SILESIA S.A. and in foreign trade companies of the

IMPEXMETAL Group. Since 2006 he is a member of the Supervisory Board of Boryszew S.A.

Mr. Arkadiusz Krężel graduated from the Silesian University of Technology in Gliwice, majoring in Automation and

Electrification of Mining.


50

In 1992 - 2006 he served as President of the Board of Agencja Rozwoju Przemysłu S.A. In the period 1981 - 1992

he worked in the "Kazimierz - Juliusz" coal mine in Sosnowiec. Since 1991, he has served on the Supervisory

Boards in a number of companies from different industries, including Agencja Węgla Kamiennego S.A., Po lski

Bank Rozwoju S.A., Polskie Koleje Państwowe S.A., PLIVA Kraków Zakłady Farmaceutyczne S.A., Centrala

Zaopatrzenia Hutnictwa S.A. He is a member of the Board of the Franco-Polish Chamber of Commerce in Paris,

and the Polish - Japanese Economic Committee,

Zygmunt Urbaniak - Vice-Chairman of the Supervisory Board,

Since 2005, Mr. Zygmunt Urbaniak sits on the Supervisory Board of Impexmetal S.A. and in the Boryszew Group

and Impexmetal Group companies.

Mr. Zygmunt Urbaniak is a graduate of the Faculty of Economic Sciences at the Nicolaus Copernicus University in

Toruń.

In 1991 - 1996 he served as chief financial officer in limited companies, including Karo BHZ, Karo, Unibax. Before

that, for nearly 10 years, he worked as chief accountant in a state enterprise. In 1995 - 1996, he served as

Chairman of the Supervisory Board of "Zakłady Naprawcze Taboru Kolejowego" S.A. in Oleśnica. Since

December 1996 he has been the director of "Karo - Roman Karkosik" in Czerników. From 1999 to 2006, with an

interval of about one year, he served as Chairman of the Supervisory Board of Boryszew S.A. Currently, he holds

the position of Vice-Chairman of the Supervisory Board of Boryszew S.A. and Chairman of the Supervisory Board

of Hutmen S.A.

Waldemar Zwierz - Secretary of the Supervisory Board,

Mr. Waldemar Zwierz became a member of the Supervisory Board of Impexmetal S.A. in 2009.

Mr. Waldemar Zwierz has a degree in economics. He graduated from the Warsaw Agricultural University, Faculty

of Economics and Agriculture. He also completed post-graduate studies with a major in Optimisation and

Econometric Methods at the School of Economics in Warsaw. In 1988 he received a PhD degree.

In 1994 - 1995 he was Economic and Financial Director in the Agency for Restructuring and Modernisation of

Agriculture in Warsaw. From 1995 to 1997 he served as Deputy Director of the Department of Banking

Operations at the Headquarters of Bank Gospodarki Żywnościowej in Warsaw. In 1997 - 2001 he held the

position of Economic and Financial Director at Boryszew S.A., where from 2001 to 2005 he was also a Member of

the Board and Director of the Finance Office. In 2005 - 2007 he held the position of Managing Director at

Boryszew S.A. Boryszew Branch in Sochaczew. In 2007, he was appointed President of the Board at Suwary

S.A., and from 2007 to 2009, he served as President of the Board of Boryszew Erg S.A.

He is currently also a Member of the Supervisory Board of Hutmen S.A.

Piotr Szeliga - Member of the Supervisory Board,

Mr. Piotr Szeliga has been a member of the Supervisory Board of Impexmetal since 2012.

Mr. Piotr Szeliga graduated from the University of Economics in Krakow and completed post-graduate studies at

the Stockholm University / Stockholm International Banking Institute. He is a certified auditor and holder of the

ACCA Diploma in International Financial Reporting.

In 1996 - 2000 he served as Experienced Senior Consultant - Project Manager at Arthur Andersen Sp. z o.o.

Then, from 2000 to 2003, he was financial controller at ce-market.com S.A. He has been working with the

Impexmetal Group since 2003, where until 2007 he worked successively as: Financial Director of Planning and

Group Development, Director of Accounting; Acting Chief Financial Officer, Member of the Board Chief Financial

Officer of Impexmetal S.A. In 2006 he held the following positions at Boryszew S.A.: Director of Accounting,

Acting Chief Financial Officer and Managerial Control Advisor. From 2007 to 2012 he held the position of

President of the Board, Director General of Impexmetal S.A. Since 2012, he has been President of the Board of

Boryszew S.A. He is a member of supervisory boards in Impexmetal Group companies such as Impexmetal S.A.,

Hutmen S.A., HMN Szopienice S.A. in liquidation, ZM Silesia S.A., FŁT Polska Sp. z o.o., Baterpol S.A..

Karina Wściubiak-Hankó - Member of the Supervisory Board,

Mrs. Karina Wściubiak – Hańko is a Master of Science in management, specialised in finances of enterprises,

MBA gained on Wrocław University of Economics. She graduated from the High School of Foreign Languages

and Economy in Częstochowa, Wrocław Academy of Economics as well as post-diploma Study of Accounting and

Controlling in Częstochowa. She has gained her professional experience in Boryszew S.A. – a stock-exchange

listed company and then Skotan S.A. She has taken a chair of a member of the Supervisory Board in several

companies, among others: Skotan S.A. (till now), Midas S.A, where she took a chair of a Management Board’s


51

President for a period of 2 years. Since 2001 she has taken a chair of a Management Board’s President in

Alchemia S.A.

The Supervisory Board operates in accordance with the Articles of Association of the Company and the

Regulations of the Supervisory Board of Impexmetal S.A., approved by the General Meeting of the Company.

According to the Articles of Association, the Supervisory Board consists of at least five members. Members of the

Supervisory Board are appointed and dismissed by the General Meeting. In place of a Supervisory Board

member whose term expired during the term of the Board, the Supervisory Board is required to appoint another

person. Appointment of members of the Supervisory Board during the term of the Supervisory Board must be

approved by the next General Meeting. In case of refusal of approval of any member of the Supervisory Board

appointed during the term, the General Meeting shall elect a new Board member in place of the person whose

appointment has not been approved.

The term of the Supervisory Board lasts three years and is shared by all members of the Board.

The Supervisory Board at its first meeting, in a secret vote, selects a Chairman, Vice-Chairman and Secretary

from its members.

TASKS OF THE SUPERVISORY BOARD

The Supervisory Board exercises permanent supervision over the activities of the Company in all areas of its

operations. Members of the Supervisory Board when exercising their functions have a duty to act in the interests

of the Company. The Supervisory Board especially focuses on measures to improve the efficiency of

management of the Company in order to maximise the financial performance of the company, increase its stock

market value and ensure its long-term development.

Specific powers of the Supervisory Board include:

Determining the remuneration of the members of the Board,

Appointment and dismissal of members of the Board or the entire Board by secret ballot,

Suspension, for valid reasons, a member of the Board or the entire Board, in a secret ballot,

Delegation of members of the Supervisory Board for a period not longer than three months to temporarily

perform the duties of members of the Board who have been dismissed, have resigned or cannot perform

their duties for other reasons,

At the request of the Board, granting permission for the establishment of branches abroad,

Approval of the acquisition rights or incurring liabilities whose value exceeds PLN 5,000,000 (five million), if

as a result of these activities, the Company will acquire fixed assets, as defined in the tax legislation,

Approval of the acquisition and disposal of property, perpetual usufruct or share in property,

Selection of a certified auditor to audit the financial statements,

Assessment of the Company's business report and financial statements for the previous financial year in

respect of their compliance with the books and documents as well as the facts, as well as the proposals of

the Board concerning the distribution of profit or covering of loss, as well as submitting an annual written

report on the results of this assessment to the General Meeting,

Acceptance of the Company's internal objectives in the form of a resolution of the consolidated text of the

Articles of Association of the Company,

Expressing consent for activities to subscribe to, disposal of or acquire shares where the transaction value

exceeds PLN 10,000,000 (ten million),

Submitting opinions on draft resolutions submitted by the Board to the General Meeting.

Approval of annual plans of the company.

The Supervisory Board shall meet as required, but not less frequently than three times a year.

Meetings of the Supervisory Board shall be convened by the Chairman of the Board on its own initiative or at the

request of authorised parties.

In case of a request of the Board or a member of the Supervisory Board to convene a meeting, the Chairman of

the Supervisory Board is obligated to convene a meeting within two weeks of receipt of the request.

Members of the Board are invited to attend meetings of the Supervisory Board, and in the case of discussing

matters concerning them directly, in particular, dismissal, liability and remuneration, the meetings of the

Supervisory Board shall be held without the participation of members of the board.


52

Meetings of the Supervisory Board may be held without formally convening the meeting, if all members have been

notified and consent to holding the meeting and to including specified issues on the agenda. Resolutions may be

taken only on issues on the agenda.

The Chairman administers and manages the work of the Supervisory Board and represent it to other bodies of the

Company and others.

There is no Audit Committee or Remuneration Committee within the structure of the Supervisory Board.

The Supervisory Board consists of a minimum number of members as specified in the regulations (5) and in this

situation, according to Article 18 Section 3 of the Articles of Association, the duties of the Audit Committee are

fulfilled by the Supervisory Board in plenary session.

For the validity of the Supervisory Board's resolutions, proper notice of the meeting of all the members of the

Board and the presence of at least half of the members of the Boards, including the Chairman or Vice-Chairman,

is required.

If the Supervisory Board meeting is not convened by the Chairman, the applicant may convene it independently

specifying the date, time and proposed agenda.

The agenda of the Supervisory Board meeting is determined 7 days before the scheduled date of the meeting and

approved by the Chairman, and then along with the materials submitted to the members of the Board, unless

there are exceptional circumstances justifying shortening this period. The agenda may be amended or

supplemented if all the Supervisory Board members are present and express consent.

The Chairman may shorten the above period, but not more than to two days.

In order to enable the Supervisory Board to exercise constant supervision over the Company's activities, the

Management Board provides the basic financial information about the Company and the Impexmetal Group, as

well as information about any events that could significantly affect the results of operations or the condition of the

Company's assets.

At each meeting of the Supervisory Board, the Management Board reports all relevant matters relating to the

Company's operations. In cases of urgency, the members of the Supervisory Board shall be informed by the

Management Board by circulation. The Chairman may, on its own initiative or at the request of the Management

Board or members of the Supervisory Board, invite to the meeting other persons, particularly employees of the

Company, responsible for matters considered at the meeting.

The Supervisory Board may - without prejudice to the competence of other bodies of the Company - express

opinions on all matters relating to the Company, including it can submit motions and proposals to the

Management Board, which, in this case, is obligated to notify the Chairman of the intended use of these motions

and proposals within twenty-one days from the date of submission.

Members of the Supervisory Board may exercise their rights and obligations only personally.

The Supervisory Board adopts resolutions by an absolute majority of votes, i.e. the number of votes exceeding

half of the valid votes cast, in the presence of at least half of the members of the Supervisory Board, and when all

the members have been invited.

If the number of votes cast "for" the resolution is equal to the sum of votes "against" and "abstained", the

Chairman has the casting vote.

The Supervisory Board may adopt resolutions in writing or using means of telecommunication. A resolution is

valid if all Members of the Supervisory Board have been notified of the contents of the draft resolution.

Supervisory Board members may also participate in the adoption of resolutions, giving their vote in writing via

another Supervisory Board member.

Voting in writing does not apply to matters introduced into the Supervisory Board meeting’s agenda during the

meeting. Voting is open ballot.

A secret ballot is used for elections and matters of appeal of the Chairman, the Vice-Chairman or Secretary of the

Supervisory Board and matters related to the appointment and dismissal of members of the Management Board,

as well as to suspend the activities of individual members or the entire Management Board for important reasons,

and at the request of any member of the Supervisory Board participating in the meeting.

Meetings of the Supervisory Board shall be minuted. The minutes shall be signed by all the Supervisory Board

members present at the meeting. List of persons present at the meeting is attached to the minutes.


53

The administrative and technical support of the Supervisory Board shall be ensured by the Management Board,

indicating from among the employees of the Company persons directly responsible for organisational and

technical support as well as documentation of the Supervisory Board.

Members of the Supervisory Board are obligated to inform the other members of the Supervisory Board of any

conflict of interest in relation to their function. The model declaration is specified by the Supervisory Board

Regulations.

Remuneration of the members of the Supervisory Board is established by the General Meeting, and the

remuneration of Supervisory Board members, delegated to temporarily perform the duties of a member of the

Management Board shall be determined by the resolution of the Supervisory Board.

The total remuneration of all members of the Supervisory Board, as well as its individual members, is disclosed in

the annual report.

The specific rules for the operation of the Supervisory Board are determined by the Regulations of the

Supervisory Board of Impexmetal S.A.

27. REMUNERATION OF THE MANAGEMENT BOARD AND SUPERVISORY

BOARD

Gross remuneration including social security contributions of the Members of the Board of the Parent

Company and other key management personnel of the Group for 2014.

Paid

Potentially

due Total

Management Board 540 160 700

of which:

Małgorzata Iwanejko 519 160 679

Jan Woźniak 21 - 21

Other Key Management Staff (*) 6,985 330 7,315

Total 7,525 490 8,015

(*) The other key management personnel of the Group includes: Proxies of the Parent Company, members of the Management

and Supervisory Boards of fully consolidated Companies

Gross remuneration including social security contributions of the Members of the Board of the Parent

Company and other key management personnel of the Group for 2013.

Paid

Potentially

due Total

Management Board 648 150 798

of which:

Małgorzata Iwanejko 525 150 675

Piotr Szeliga 123 - 123

Other Key Management Staff (*) 7,142 316 7,458

Total 7,790 466 8,256

(*) The other key management personnel of the Group includes: Proxies of the Parent Company, members of the Management

and Supervisory Boards of fully consolidated Companies

Gross remuneration of the Members of the Supervisory Board of the Parent Company

2013 2014


54

Arkadiusz Krężel

186 189

Robert Skoczeń

70 35

Zygmunt Urbaniak

94 95

Karina Wściubiak – Hankó - 36

Waldemar Zwierz

75 76

Total 425 431

Gross remuneration for performing functions in subsidiaries

2013 2014

Members of the Management Board - 567

of which:

Jan Woźniak

- 567

2013 2014

Members of the Supervisory Board 132 125

of which:

Arkadiusz Krężel

36 29

Piotr Szeliga

12 12

Zygmunt Urbaniak

48 48

Waldemar Zwierz

36 36

28. COMPANY SHARES AND SHARES IN SUBSIDIARIES AND AFFILIATES

HELD BY MANAGEMENT AND SUPERVISORY PERSONNEL.

SHARES HELD BY THE MEMBERS OF THE MANAGEMENT BOARD AND SUPERVISORY BOARD

Person Number of shares

Małgorzata Iwanejko 20,000

SHARES AND STOCK IN COMPANIES AFFILIATED WITH THE ISSUER HELD BY THE MEMBERS OF THE

MANAGEMENT BOARD AND SUPERVISORY BOARD

Person Function Company Number of

shares

Arkadiusz Krężel Chairman of the Supervisory Board Metalexfrance S.A. 5

Małgorzata Iwanejko President of the Board Skotan S.A. 3,360

Małgorzata Iwanejko President of the Board Boryszew S.A. 50,013

Waldemar Zwierz Supervisory Board Member Boryszew S.A. 25,200


55

29. KNOWN AGREEMENTS (INCLUDING THOSE CONCLUDED AFTER THE

END OF THE REPORTING DATE), WHICH MAY GIVE RISE TO CHANGES

IN THE SHAREHOLDER AND BONDHOLDER STRUCTURE

The Company is not aware of any agreements which may give rise to changes in the current shareholder and

bondholder structure.

30. CONTROL SYSTEMS FOR EMPLOYEE STOCK OPTION PLANS In the reporting period, the Company did not issue any shares and did not introduce employee share schemes.

31. AGREEMENT WITH THE AUDITOR On 21 July 2014, the Supervisory Board of Impexmetal S.A. selected Deloitte Polska Spółka z ograniczoną

odpowiedzialnością Sp. k. (formerly Deloitte Audit Sp. z o.o.) based in Warsaw at ul, Jana Pawła II 19 to audit the

financial statements of Impexmetal S.A. and the Impexmetal Group for the period from 1 January 2014 to 31

December 2014. Deloitte Polska Sp. z o.o. Sp. k. is registered in the list of entities authorised to audit financial

statements under number 73, kept by the National Chamber of Statutory Auditors. The contract with Deloitte

Polska Sp. z o.o. Sp. k. was signed on 21 July 2014 for the period of auditing the financial statements for 2014.

The Company used the services of the said auditor to audit and review the financial statements for the years

2001-2003, 2005-2007 and 2009-2013. The Supervisory Board selected the auditor in accordance with their

powers, as set out in the Articles of Association of the Company, and in accordance with applicable law.

According to the contract for the audit of the separate and consolidated financial statements for 2014, the

remuneration amounts to PLN 195,000 net. In 2014, the Company recognised the costs amounting to PLN

109,000, and a provision was created for the remaining amount of PLN 86,000.

Gross remuneration for the entity authorised to audit financial statements paid or payable for

period ended

31/12/2014

period ended

31/12/2013

Audit of the annual financial statements

151 185

Other certification services, including reviewing the financial statements

89 123

Other services

19 34

Total 259 342

32. PROCEEDINGS PENDING

a. Proceedings regarding liabilities or debts of the Company or its subsidiaries, the value of which constitutes

at least 10% of the Company's share capital

None

b. Two or more proceedings relating to liabilities or debts with a total value of at least 10% of the Company's

equity

None

33. STATEMENT OF COMPLIANCE WITH CORPORATE GOVERNANCE

PRINCIPLES

The Board of Impexmetal S.A., pursuant to Article 91 Section 5 and 4 of the 19 February 2009 Regulation of the

Minister of Finance Regarding Current and Periodic Information Published by Issuers of Securities and Conditions

for Recognising as Equivalent Information Required by the Laws of a Non-Member State, hereby submits a report

on the application of corporate governance principles by Impexmetal S.A. in 2014.

I. Indication of corporate governance principles governing Impexmetal S.A. and the place where the text

of the principles is available, and an indication of the extent to which the Company has departed from the

provisions of the corporate governance principles with the reasons for the departure.


56

The Board of Impexmetal S.A. hereby declares that as a company listed on the Warsaw Stock Exchange

pursuant to Article 29 of the Rules of the Stock Exchange, it is subject to corporate governance rules contained in

the document "Best Practices of WSE Listed Companies" adopted by the Stock Exchange Council on 4 July

2007.

On 31 August 2011 and 19 October 2011, the Stock Exchange Council adopted resolutions on changes to the

Best Practice for WSE Listed Companies. The amendments entered into force on 1 January 2012. On 21

November 2012, the Stock Exchange Council adopted a resolution on amendments to the Best Practice for WSE

Listed Companies, which entered into force on 1 January 2013.

The corporate governance principles are available on the website dedicated to corporate governance on the

Warsaw Stock Exchange: www.corp‐gov.gpw.pl

The Company strives to make every possible effort to apply the principles of corporate governance in all areas.

In addition, in order to implement a transparent and effective information policy, the Company provides fast and

secure access to information for shareholders, analysts and investors using both traditional and modern

technology to publish information about the Company to the greatest possible extent.

In 2013, the Company complied with the principles of corporate governance contained in the document "Best

Practices of WSE Listed Companies", with the exception of:

Recommendation No. I.5

The Company does not have a remuneration policy adopted arbitrarily. Principles of remuneration of Supervisory

Board members shall be determined by the General Meeting of Shareholders and remuneration of the

Management Board shall be determined by the Supervisory Board. Remuneration of the Management Board are

related to the Company's financial results.

The Company publishes annually in the annual report information on the remuneration of managers and

supervisors in accordance with Article 91. 6 Section 17 of the Regulation of the Minister of Finance on current and

periodic information of 19 February 2009


The Company does not apply the principle of parity between men and women in the exercise of functions in the

Management Board and Supervisory Board. Election of the Management Board and the Supervisory Board

members shall be made respectively by the Supervisory Board and the Annual General Meeting of the Company

on the basis of candidate competences.


The Company has not complied with this recommendation in 2013. Implementation of this recommendation at the

moment entails risks related to, among others, the quality of communication, delays in data transmission, etc., as

well as undermining the effectiveness of the Resolutions adopted by the General Meeting. The Company does

not exclude the implementation of this principle of Best Practice for WSE Listed Companies in the future.

Principle No. I. 9a

The Company does not record its general meetings. The Company publishes information required under

applicable laws relating to the convening of the general meeting, including the agenda and draft resolutions, and

immediately after the general meeting, it informs about the content of the resolutions adopted together with

information on the results of the votes on resolutions, as well as information on withdrawal from consideration any

of the items on the agenda and information about the objections raised to the minutes, if such situations occur.

Management believes that the publication of current reports and publication of information on the General

Meeting on the Company's website guarantees the fulfilment of shareholder rights.

Principle No. II.1.14)

The Company has not published information on its website regarding the rules governing changes in the entity

authorized to audit financial statements (or lack thereof). This information will be published in the nearest time.

Principle No. III.6

In accordance with current law, members of the Supervisory Board are appointed independently by the General

Meeting. The Company has no influence on the decisions of shareholders, including it is not able to ensure that

they will appoint at least two independent members of the Supervisory Board. Limiting the shareholders with

http://www.corp‐gov.gpw.pl/


57

regard to the freedom to choose the members of the Supervisory Board is not justified in the opinion of the

Company

Principle No. III.8

Due to the fact that the Supervisory Board is composed of five members there are no separate committees

established within the Supervisory Board. The tasks of the committees referred to in Appendix I to the

Commission Recommendation (...), are performed directly by the Supervisory Board.

Principle No. IV. 10

The Company's Articles of Association do not contain provisions allowing participation in the general meeting by

electronic means, in accordance with the provisions of the Commercial Companies Code and the Regulations of

the General Meeting of the Company do not provide for the exercise of voting rights at the general meeting by

correspondence or by means of electronic communication, of which the Company informs in each notice

convening a general meeting.

The Company has procedures for documenting general meetings as well as an information policy to ensure that

all Shareholders can exercise their rights. The Company does not exclude the possibility of the use of these

principles in the future.

II. Key characteristics of internal control and risk management systems used in the issuer's enterprise, in

regard to the process of preparing financial statements and consolidated financial statements.

The data for the financial reports are generated from the Company's computer accounting system, where all

business events are booked. Only authorised individuals have access to this system. The system has password

protection and functions limiting access.

AS PART OF INTERNAL CONTROL AND RISK MANAGEMENT IN REGARD TO THE PROCESS OF

PREPARATION OF FINANCIAL STATEMENTS, THE FOLLOWING PROCEDURES HAVE BEEN

IMPLEMENTED IN IMPEXMETAL S.A.:

Procedure for the preparation and publication of the consolidated quarterly reports,

Procedure for the preparation and publication of the consolidated semi-annual reports,

Procedure for the preparation and publication of the annual reports,

THESE PROCEDURES DEFINE THE SCOPE OF THE TASKS AND RESPONSIBILITIES OF THE VARIOUS

DEPARTMENTS/INDIVIDUALS IN THE PREPARATION OF PERIODIC REPORTS, ENSURING THEIR

QUALITY AND CORRECTNESS, AND THEIR PUBLICATION.

All persons involved in the preparation of periodic reports are included in the list of access to confidential

information, prepared separately in respect of each interim report, and are required to maintain the confidentiality

of information held in connection with the preparation of reports to the time of their publication, in accordance with

the Company's "Rules of access, circulation and protection of confidential information in Impexmetal S.A."

CEOs of subsidiaries and joint ventures of Impexmetal S.A. as well as Managing Directors of Branches/Plants are

responsible for the appointment of persons responsible (proxies) for timely and accurate transfer of information

necessary for the preparation of consolidated reports.

Timetable for the preparation of the financial statements is determined each time in a separate document

prepared by the Accounting Department, which prepares the financial statements.

Chief Accountant is responsible for supervising the preparation of the reports and their formal verification.

The Board of Impexmetal S.A. is responsible for approving interim reports, signing statements included in annual

and semi-annual reports and statements on the compliance of the financial statements, as well as statements

regarding the selection of the entity authorised to audit financial statements.

The annual financial statements are audited by an auditor. The auditor also reviews the semi-annual financial

statements of the Company.

The Company continuously monitors changes in laws and external regulations relating to reporting requirements

for companies, and updates the accounting principles which are used to prepare financial statements.

III. List of shareholders owning, directly or indirectly, significant blocks of shares with a listing of the

number of shares owned by the said entities, their percentage ownership of the share capital, the number

of votes arising from these shares and their percentage of the total number of votes at the General

Meeting.

As of 31 December 2013, shareholders holding blocks of shares exceeding 5% of the share capital and the total

number of votes at the General Meeting of Impexmetal S.A. were: Boryszew Group and ING Powszechne

Towarzystwo Emerytalne S.A.


58

The shareholding structure as at the date of the report are presented below:

Shareholders Number of

shares

Share

Number of

votes

Share

in the share

capital

in the total

number of

votes

Boryszew S.A.(*) 106 180 964 53,09% 106 180 964 53,09%

w tym Impexmetal SA(**) 7.210.000 3,60% 7.210.000 3,60%

ING Powszechne Towarzystwo Emerytalne S.A. 16 105 263 8,05% 16 105 263 8,05%

Other shareholders 77 713 773 38,86% 77 713 773 38,86%

All shares/votes 200,000,000 100.00% 200,000,000 100.00%

(*) Shares purchased under the share buyback programme. Impexmetal S.A. does not exercise the voting rights

from own shares at the Annual General Meeting.

IV. A listing of all owners of securities which grant special rights of control, with a description of these

rights.

The Company did not issue any securities with special control rights. All shares are equal, one share entitles to

one vote at the general meeting.

List of all restrictions on voting rights, such as restrictions on the execution of voting rights by a

shareholder of a defined part or amount of votes, time-related restrictions on the execution of voting

rights or subscriptions, in accordance with which, in cooperation with the company, equity rights related

to securities are separate from the ownership of securities.

In the Company, there are no restrictions on voting rights, such as restrictions on the execution of voting rights by

a shareholder of a defined part or amount of votes, time-related restrictions on the execution of voting rights or

subscriptions, in accordance with which, in cooperation with the company, equity rights related to securities are

separate from the ownership of securities.

VI Indication of all restrictions on the transfer of ownership rights to securities of the issuer

There are no restrictions on the transfer of ownership rights to securities of the Company.

VII Description of principles respecting the appointment and dismissal of management personnel and

their rights, in particular the right to decide on the issuance or buyback of shares

The Management Board is a statutory body of Impexmetal S.A., which operates under the provisions of the

Commercial Companies Code and the Regulations of the Management Board of Impexmetal S.A.

The Management Board may consist of one or more members. The number of Board members is determined by

the Supervisory Board.

President of the Management Board is appointed and dismissed by the Supervisory Board. The Supervisory

Board appoints and dismisses the other Members of the Board at the request of the President of the Board or on

its own initiative.

The term of the Management Board is three years and is shared by all members of the Board. The mandate of

the member of the Management Board expires expires no later than the date of the General Meeting approving

the financial statements for the last full financial year of serving as a member of the Management Board.

The decision to issue or repurchase shares, in accordance with the Articles of Association of the Company,

belongs to the General Meeting of the Company.

VIII. Description of rules for amending the articles of association of the issuer

Changes in the Articles of Association of the Company are carried out by the General Meeting of Impexmetal S.A.


59

Draft resolutions for the General Meeting regarding changes to the Articles of Association of the Company,

prepared by the Management Board, include the existing provisions of the Articles of Association and the

proposed changes. Resolutions of the General Meeting on amendments to the Articles of Association are adopted

by a majority of three-fourths of the votes cast. Amendments to the Articles of Association take effect upon entry

into the National Court Register. After registering the change in the NCR, the Supervisory Board approves the

consolidated text of the Articles of Association of the Company.

IX. The manner of functioning of the general meeting and its basic rights, and a description of the rights

of shareholders and the manner of their execution, in particular the principles arising from the

regulations of the General Meeting, if such regulations have been passed and are not a direct result of

existing law.

Convening, preparation and conduct of the General Meeting takes places in the manner and on the terms

specified in the Code of Commercial Companies, the Articles of Association and Regulations of the General

Meeting.

General Meetings are held in the Company's registered office in Warsaw during hours which allow the

shareholders to participate in General Meetings.

According to the Articles of Association, the General Meeting has the power to:

Review and approval of the Company business report and financial statements for the previous financial

year and granting acknowledgement of the fulfilment of duties to the Board Members,

Distribution of profit or covering of loss, including the determination of the amount allocated for dividends,

Review and approval of the Group's consolidated financial statements,

Change of the Company's business profile,

Amendments to the Company's Articles of Association,

Increasing and decreasing the share capital,

Redemption of shares,

Merger, division and transformation of the Company,

Dissolution and liquidation of the Company,

Issuance of convertible bonds or bonds with pre-emptive rights and issuance of subscription warrants

referred to in Article 453 Section 2 of the Commercial Companies Code

Sale or lease of the enterprise or its organised part, and establishment of limited property rights,

Purchase of own shares in the case referred to in Article 362 Section 1.2 of the Commercial Companies

Code and authorisation to their acquisition in the case referred to in Article 362 Section 1.8 of the

Commercial Companies Code

All provisions regarding claims for reparation of damage caused by establishing the Company or through its

management or supervision,

Conclusion of the agreement referred to in Article 7 of the Commercial Companies Code.

The Board uses best efforts so that the General Meeting convened at the request of shareholders is held on the

dates indicated in the request.

The request to convene the General Meeting and to put certain issues on its agenda, submitted by authorised

entities, should be justified.

In line with the practice adopted by the Company, all relevant materials for the General Meeting are made

available to shareholders in accordance with applicable provisions of the Commercial Companies Code and

Regulation of the Minister of Finance on current and periodic information published by issuers of securities.

Chairman of the General Meeting shall ensure the proper and efficient conduct of the General Meeting. He shall

also ensure the protection of the rights and interests of all shareholders.

Shareholders may participate in the General Meeting and execute their voting rights in person or through a proxy.

Each person entitled to attend the General Meeting is entitled to submit proposals. Person entitled to attend the

General Meeting is entitled, at any point on the agenda, to take the floor once for less than five minutes and to

make one reply for less than three minutes.

The General Meeting can adjourn the meeting by a majority of two thirds of votes. In total, the breaks may not

exceed thirty days.

The General Meeting shall be valid regardless of the number of shares represented.


60

Each share gives the shareholder the right to one vote at the General Meeting.

Members of the Supervisory and Management Board shall participate in every General Meeting, and in the case

of inability to attend a general meeting, they shall present a written explanation. This explanation is presented at

the General Meeting.

If financial matters are to be the subject of the gerenal meeting, an auditor shall participate in the meeting.

Members of the Management Board and the Supervisory Board and the auditor - if necessary, who are present at

the General Meetings, provide explanations and information to the meeting participants relating to the Company

within the limits of their powers and to the extent necessary to resolve issues discussed.

Bodies of the Company shall not limit the information requested, in particular by the General Meeting, but at the

same time shall respect the regulations in force in public companies.

All matters submitted to the General Meeting shall first be presented to the Supervisory Board for review.

The General Meeting shall take decisions in the form of resolutions adopted by a vote. Voting on procedural

matters relates only to matters related to the conduct of the Meeting. Resolutions shall be passed by an absolute

majority of votes cast unless the provisions of the Commercial Companies Code or the Articles of Association of

the Company provide other conditions for the adoption of resolutions in individual cases.

The requirement to obtain an absolute majority is met if more than half of the valid votes were cast on the

adoption of a given resolution.

The General Meeting is minuted by a notary.

Regulations of the General Meeting are available on the Company's website at: www.impexmetal.com.pl

Regulations of the General Meeting in force in the Company include, among others, provisions relating to the

conduct of elections, including the possibility to elect the Supervisory Board by voting in separate groups.

Candidates for members of the Supervisory Board submitted to the general meeting shall always be justified.

Curriculum vitae of the candidate is attached to the materials transmitted.

In 2013, the Company applied the general principle of not cancelling or changing already announced the dates of

general meetings.

In 2013, the Company did not take advantage of the possibility of transmitting the general meeting via the

Internet.

The website of the Company at www.impexmetal.com.pl contains all corporate documents of the Company, as

well as current and periodic reports.

The company's website is also available in English.

Signatures of persons representing the Company and approving this report for publication:

Małgorzata Iwanejko - President of the Board, Director General

Jan Woźniak – Member of the Board, Development Director



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