st december 2012 3 st december 2012 - apator · 2013. 3. 18. · 3 consolidated quarterly statement...

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Consolidated quarterly statement of the capital group of Apator for four quarters in 2012 with concise quarterly report of Apator S.A.

Name of capital group: The capital group of Apator

Period included financial statement: 01.01.2012 – 31.12.2012 Reporting currency: Polish zloty (PLN)

Level of approximation: All the amounts in tables are quoted in thousands of Polish zloties (if not stated otherwise)

Contents:

1. Description of the organization of capital group of the issuer indicating the entities subject to consolidation ............. 3 1.1 Make-up of capital group of Apator on the day of issue of quarterly report that is at 31

st December 2012 ...... 3

1.2 The entities subject to consolidation at 31st December 2012 ............................................................................. 3

1.3 Business activity of capital group of Apator ........................................................................................................ 4 1.4 The employment in capital group of Apator ........................................................................................................ 5 2. Financial part of quarterly statement .......................................................................................................................... 5 2.2. Consolidated statement of capital group of Apator ............................................................................................. 8 2.2.1 Consolidated statement on financial position ..................................................................................................... 8 2.2.2 Information concerning the changes in contingent liabilities or contingent assets that occurred since the end of the recent financial year (off-balance sheet items) of capital group of Apator ............................................................. 10 2.2.3 Consolidated total income statement ............................................................................................................... 11 2.2.4 Consolidated statement on changes in equity .................................................................................................. 13 2.2.5 Consolidated cash flow account ....................................................................................................................... 15 2.2.6 Consolidated statement according to operating segments ............................................................................... 16 2.2.7 Geographical information ................................................................................................................................. 17 2.3. Individual statement of Apator SA .................................................................................................................... 18 2.3.1 Statement of financial position of parent entity - Apator SA ............................................................................. 18 2.3.2 Information on changes of contingent liabilities or contingent assets that occurred since the end of recent financial year (off balance sheet items) of parent entity - Apator SA ............................................................................... 20 2.3.3 Statement of total income of parent entity - Apator SA .................................................................................... 21 2.3.4 Statement in changes in equity of parent entity – Apator SA ........................................................................... 22 2.3.5 Cash flow account of parent entity – Apator SA ............................................................................................... 23 3. Information on principles assumed for preparation of the report, especially the information on changes in accounting principles (policy) used ................................................................................................................................. 24 3.1. Accounting principles ....................................................................................................................................... 24 3.2. Consolidation principles ................................................................................................................................... 24 4. Additional financial information ................................................................................................................................. 24 4.1 Weighted average number of shares ............................................................................................................... 25

4.1.1. Weighted average number of shares for individual statement ..................................................................... 25 4.1.2. Weighted average number of shares for consolidated statement ................................................................ 25

4.2 EUR exchange rates used for the conversion of selected financial data .......................................................... 25 4.3 Information on adjustments to provisions, provision and assets due to deferred income tax mentioned in the act concerning accounting and write downs of the value of elements in the assets ....................................................... 25

4.3.1. Consolidated statement ............................................................................................................................... 25 4.3.2. Individual statement .................................................................................................................................... 27

4.4 Mergers ............................................................................................................................................................ 28 4.5 Changes in accounting principles ..................................................................................................................... 29 5 Factors and events, especially not typical ones having the influence on financial results achieved by capital group of Apator ............................................................................................................................................................... 30 6 Analysis of financial results achieved by capital group of Apator ..................................................................... 31 6.1. Analysis of results achieved during four quarters and in the fourth quarter in 2012 ......................................... 31 6.1.1 Analysis of revenues ........................................................................................................................................ 31 6.1.2 Explanations concerning seasonal or regular nature of activity of the issuer ................................................... 34 6.1.3 The analysis of revenues on sales on foreign markets earned in the period of the four quarters and in the fourth quarter of 2012 ...................................................................................................................................................... 35 6.1.4 Analysis of consolidated statement of total income .......................................................................................... 36 6.1.5 Foreign trade balance ...................................................................................................................................... 38 7. Hedge transactions of capital group of Apator ................................................................................................. 39 8. Ratios of capital group of Apator ...................................................................................................................... 40 9. Changes in structure – mergers, takeover etc.................................................................................................. 40 10. Concise description of significant achievements or failures of the issuer including the list of the most important events in four quarters of 2012 ........................................................................................................................ 40 11. Events that occurred after the 31

st December 2012 that is after the day of the concise quarterly financial

statement is published ..................................................................................................................................................... 43 12. Forecast of financial results for 2012 ............................................................................................................... 44 13. The forecast of financial results for 2013 ......................................................................................................... 45 14. Shareholders .................................................................................................................................................... 45 14.1. Share capital at 31

st December 2012 ............................................................................................................... 45

14.2. Share capital at 11th

January 2013 ................................................................................................................... 45 14.3. Important shareholders .................................................................................................................................... 46 14.4. The posession and changes in ownership structure of the persons in management and supervisory body .... 46 15. Proceedings before the court, arbitration court or public authority ................................................................... 47

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16. Transactions with related entities ..................................................................................................................... 47 17. Information concerning the issue, purchase and repayment of non-equity and equity securities ..................... 49 18. Dividend ........................................................................................................................................................... 50 19. Loans or borrowings guarantees, granting a guarantee ................................................................................... 50 19.1. Loans and borrowings ...................................................................................................................................... 50 19.2. Information on borrowings granted ................................................................................................................... 51 19.3. Contigent liabilities ........................................................................................................................................... 51 20. Other information significant for the assessment of personnel, property, financial situations, financial result and their changes and information important for the assessment of the capacity of the issuer to perform its obligations.52 21. Factors that in opinion of the Executive Board of Apator SA will have the influence on results achieved by it in the perspective of at least one next quarter ................................................................................................................. 52 21.1. Zonal permit and location of the activity in Pomeranian Special Economic Zone............................................. 52 21.2. Sales of property .............................................................................................................................................. 53 21.3. Crucial external and internal factors for the development of capital group of Apator ....................................... 53 22. Risks and threats ............................................................................................................................................. 53 22.1. External risks and threats ................................................................................................................................. 53 23. The prospects of development of capital group of Apator ................................................................................ 54

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1. Description of the organization of capital group of the issuer indicating the entities subject to consolidation

1.1 Make-up of capital group of Apator on the day of issue of quarterly report that is at 31st

December 2012

Apator SA is the parent entity in capital group of Apator. Apator SA has got shares directly in six domestic entities and two foreign ones. Apator SA plays the leading role in capital group of Apator by the arrangement and co-ordination of collaboration of all the entities. Shares of the Company are quoted on RESPECT index and till 28

th December 2012 they were quoted on sWIG80 but since 28

th December 2012 shares of the

Company are quoted mWIG40 index The share of Apator SA in share capital of particular entities at 31

st December 2012 is showed in the table

below:

Name of entity Headquarters Relationships Share in capital

FAP Pafal SA Świdnica subsidiary 100,00%

Apator Metrix SA Tczew subsidiary 100,00%

Apator Powogaz SA Poznań subsidiary 100,00%

Apator Rector Sp. z o. o. Zielona Góra subsidiary 70,00%

Apator Control Sp. z o. o. Toruń subsidiary 100,00%

Apator Mining Sp. z o. o. Katowice subsidiary 100,00 %

Apator Elektro SA Moscow associated entity 50,00%

Apator GmbH Berlin subsidiary 100,00%

Moreover:

- Apator Powogaz SA is the owner of:

o 100 % of capital of Apator Metra s.r.o. (Czech Republic)

o 61, 60% of capital of Apator Telemetria sp. z o. o. (Słupsk),

o 61% of capital of Apator Metroteks sp. z o.o. (Ukraine),

o 50% of capital of Teplovodomer SA (Russia),

Apator Rector Sp. z o.o. is the owner of 60% of shares of Newind Sp. z o.o. (Wrocław) Apator Metrix SA is the owner of 50% of shares of George Wilson Industries Ltd. (GWi) (Coventry, United Kingdom)*

*) 50% shares in GWi Ltd were acquired on 5

th September 2012 (more information in point 4.4.)

1.2 The entities subject to consolidation at 31

st December 2012

parent entity: Apator SA,

subsidiaries (indirectly or directly) subject to consolidation by the full method:

Entity Headquarters Share in capital Relatioship with Apator SA

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

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

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

FAP Pafal SA Świdnica 100,00% Subsidiary of Apator SA

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

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Entity Headquarters Share in capital Relatioship with Apator SA

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

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

Newind Sp. z o. o. Wrocław 60,00%

42,00%

Subsidiary indirectly through Apator Rector Sp. z o. o. Indirect share through Apator Rector Sp. z o. o.

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

100,00%

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

Apator Metroteks Sp. z o. o. Kiev (Ukraine) 61,00%

61,00%


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

61,60%


associated entities evaluated by equity method:

Entity Headquarters Share in capital Relationship with Apator SA

Apator Elektro SA Moscow (Russia) 50,00% Associated with Apator SA

Teplovodomer SA Mytishchi (Russia) 50,00%

50,00%

Associated indirectly through Apator Powogaz SA Indirect share through Apator Powogaz SA

GWi Ltd. Coventry (United Kingdom)

50%

50%

Associated indirectly through Apator Metrix SA Indirect share through Apator Metrix SA

1.3 Business activity of capital group of Apator The capital group of APATOR concentrates its activity on two segments of electric machines sector: metering and switchgear ones. The table below presents the scope of activity of particular companies in capital group of Apator:

Metering segment Switchgear segment Other sales

FAP Pafal SA Apator Mining Sp. z o. o.

Newind Sp. z o. o.

Apator Metrix SA z GWi Ltd. Apator Control Sp. z o. o.

Apator Powogaz with entities: Apator Metra, Metroteks, Teplovodomer,

Apator Telemetria Apator Elektro SA

Apator Rector Sp. z o. o.

Apator SA

Apator GmbH

The capital group of Apator offers smart meters in metering segment:

1) electricity meters,

2) gas meters,

3) water meters,

4) heat meters, 5) start-up and service of systems of AMI/AMM class (Automated Meter Management), 6) start-up and service of prepayment systems

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The offer of capital group of Apator covers both hardware and software included in smart metering and smart grids integrated systems. It is comprehensive one and it includes complete chain of values from manufacturing of metering equipment to analysis, visualisation and making available of metering data. The offer of capital group of Apator in switchgear segment covers the equipment for safe making and breaking of electrical circuits. The entities operating in this segment in contrary to the entities in metering segment run business on independent segments of the market. 1.4 The employment in capital group of Apator The table below includes data concerning the employment in capital group of Apator excluding entities consolidated by equity method that is; Teplovodomer SA, Apator Elektro SA and GWi Ltd.

Name of entity 31.12.2012 31.12.2011 increase/decrease

Dynamics

persons

Apator SA 474 446 28 106,28%

FAP Pafal SA 313 332 -19 94,28%

Apator Metrix SA 291 292 -1 99,66%

Apator Mining sp. z o. o. 117 115 2 101,74%

Apator Control sp. z o. o. 61 57 4 107,02%

Apator Rector Sp. z o. o. 154 118 36 130,51%

Newind Sp. z o.o. 41 28 13 146,43%

Grupa Apator Powogaz 536 529 7 101,32%

including: Apator Powogaz SA 344 356 -12 96,63%

Apator GmbH 2 2 0 100,00%

Total 1 989 1 919 70 103,65%

The employment in capital group of Apator at 31

st December 2012 increased in relation to the employment at

31st December 2011 by 70 persons. Main changes in the employment regarded:

parent entity – increase of employment mainly in manufacturing departments,

Apator Rector sp. z o. o. – increase caused by the necessity to increase the competence and capacity in implementation areas (software engineers) and business support (system analysts and application developers),

2. Financial part of quarterly statement Consolidated and individual financial statements for the fourth quarter of 2012 have been prepared in accordance with International Accounting Standards (IAS / IFRS) and related to them interpretations announced in form of Regulations of European Commission and Regulation of Ministry of Finance dated 19

th February 2009 on current and regular information being transferred by the issuers of securities

(Journal of Laws of the Republic of Poland No 33, item 259) with later amendments. Interim financial statements (consolidated and individual of parent entity) for the period of twelve months completed on 31

st December 2012 have been constructed according to IAS 34 (Interim financial reporting).

Interim financial statements do not include all the information and disclosures that are required in annual/semi-annual financial statement and they should be read together with semi-annual/annual statement of capital group of Apator at 31

st December 2011.

Selected financial data with essential items included in concise financial statement (also converted to EUR) presenting accumulated data for all complete quarters of current and previous financial year

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DESCRIPTION

in thousands of PLN in thousands of EUR

Current period

Previous period

Current period

Previous period

Consolidated statement Four quarters

2012 Four quarters

2011 Four quarters

2012 Four quarters

2011

Sales revenues of products, goods and materials 667 482 537 019 159 930 129 712

Profit (loss) from operating activity (continued operation) 100 287 71 760 24 029 17 333

Gross profit (loss) (continued operation) 94 265 64 367 22 586 15 547

Net profit (loss) 97 899 51 516 23 457 12 443

Net profit (loss) for shareholders of parent entity in group of Apator 93 420 47 296 22 384 11 424

Net profit (loss) for non-controlling interest 4 479 4 220 1 073 1 019

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

Net profit (loss) per ordinary share 3,17 1,60 0,76 0,39

Cash flows from operating activity 96 160 44 563 23 521 10 089

Cash flows from investment activity (9 973) (37 265) (2 439) (8 437)

Cash flows from financing activity (66 549) (372) (16 278) (84)

Total cash flows 19 638 6 926 4 804 1 568

Consolidated statements 31.12.2012 2011 rok 31.12.2012 2011 rok

Total assets 546 716 466 481 133 731 105 615

Fixed assets 290 277 203 808 71 004 46 144

Current assets 256 439 262 673 62 727 59 471

Equity with non-controlling interest 302 126 236 467 73 902 53 538

Non-controlling interest 7 364 5 873 1 801 1 330

Share capital 3 311 3 511 810 795

Long-term liabilities and provisions 85 321 54 044 20 870 12 236

Short-term liabilities and provisions 159 269 175 970 38 958 39 841


Net book value per ordninary share [PLN/share] 10,24 8,01 2,50 1,81

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DESCRIPTION

in thousands of PLN in thousands of EUR

Current period

Previous period

Current period

Previous period

Individual statement Four quarters

2012 Four quarters

2011 Four quarters

2012 Four quarters

2011

Sales revenues of products, goods and materials (continued operation) 183 411 156 092 43 946 37 702

Profit (loss) from operating activity (continued operation) 29 810 11 863 7 143 2 865

Gross profit (loss) (continued operation) 55 925 39 790 13 400 9 611

Net profit (loss) for shareholders of parent entity in group of Apator 72 224 37 731 17 305 9 114


Net profit (loss) per ordinary share [PLN/share] 2,15 1,07 0,51 0,26

Cash flows from operating activity 23 217 1 095 5 679 248

Cash flows from investment activity 36 587 (548) 8 949 (124)

Cash flows from financing activity (55 318) (1 150) (13 531) (260)

Total cash flows 4 486 (603) 1 097 (136)

Individual statement 31.12.2012 2011 rok 31.12.2012 2011 rok

Total assets 275 519 256 274 67 393 58 023

Fixed assets 221 766 188 150 54 245 42 599

Current assets 53 753 68 124 13 148 15 424

Equity with non-controlling interest 200 962 165 192 49 157 37 401

Share capital 3 311 3 511 810 795

Long-term liabilities and provisions 5 608 21 746 1 372 4 923

Short-term liabilities and provisions 68 949 69 336 16 865 15 698


Net book value per ordninary share [PLN/share] 5,97 4,71 1,46 1,07

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2.2. Consolidated statement of capital group of Apator

2.2.1 Consolidated statement on financial position

DESCRIPTION Day

31.12.2012 31.12.2011

Fixed assets 290 277 203 808

Intangible assets 4 385 4 031

Goodwill of subordinated entities 65 090 64 155

Property, plant and equipment 139 190 128 795

Investment properties 1 735 1 859

Investments in associated entities consolidated by equity method 12 285 729

Other long-term financial assets 36 661 -

- in related entities 36 144 -

- in other entities 517 -

Long-term borrowings granted 8 175 -

- to related entities 8 175 -

Long -term receivables 1 503 1 988

- from other entities 1 503 1 988

Long-term prepayments 61 31

Deferred tax assets 21 192 2 220

Current assets 256 439 262 673

Inventories 95 024 91 587

Trade receivables 103 229 123 704

-from related entities 2 982 8 222


Tax, customs and social insurance receivables 7 174 8 069

Other short-term receivables 4 672 3 186

- from related entities - 229


Other short-term financial assets 752 354

- in other entities 752 354

Cash and cash equivalents 43 728 24 090

Short-term prepayments 1 860 1 256

Fixed assets classified as held for sale - 10 427

TOTAL ASSETS 546 716 466 481

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DESCRIPTION Day

31.12.2012 31.12.2011

Equity 302 126 236 467

Equity for shareholders of parent entity 294 762 230 594

Share capital 3 311 3 511

Other capitals 186 052 165 106

Capital from evaluation of hedging transaction and exchange rate differences from consolidation 916 (4 991)

Undistributed financial result 104 483 66 968

- undistributed result from previous years 22 866 19 672

- result of current period 93 420 47 296

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

Non-controlling interest 7 364 5 873

Liabilities 244 590 230 014

Long-term and liabilities and provisions 85 321 54 044

Long-term loans and borrowings 12 887 21 669


Long-term liabilities 65 428 20 917

- towards other entities 65 428 20 917

Deferred income tax provisions - -

Long-term provisions for employee benefit liabilities 7 005 11 134

Other long-term provisions 1 324

Short-term liabilities and provisions 159 269 175 970

Short-term loans and borrowings 42 833 58 299

- from related entities - -


Trade liabilities 64 284 59 356

- towards related entities 1 -


Tax, customs and social insurance liabilities 16 822 11 562

Other short-term liabilities 18 825 26 180


Short-term provisions for employee benefit liabilities 9 679 9 185

Other short-term provisions 6 826 4 388

Liabilities related to fixed assets classified as held for sale - 7 000

TOTAL LIABILITIES 546 716 466 481

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2.2.2 Information concerning the changes in contingent liabilities or contingent assets that occurred since the end of the recent financial year (off-balance sheet items) of capital group of Apator

DESCRIPTION Day

31.12.2012 31.12.2011

Contingent receivables 826 31 514

Contingent receivables due to other entities 826 31 514

Contingent liabilities 13 504 30 185

Contingent liabilities connected with related entities - 8 800

- due to guarranties and warranties granted to related entities - 8 800

Contingent liabilities due to other entities 13 504 21 385

- due to guarranties and warranties granted 11 892 21 385

- due to import letter of credit 1 612 -

Other off-balance-sheet items 160 138 122 342

Fixed assets tenanced 9 438 9 578

Ordinary mortgage 57 072 25 615

Bail mortgage 37 225 25 362

Hedging on property 33 449 22 500

Assignment of receivables 20 963 25 299

Deposits placed 36 199

Blank bills of exchnage 1 838 13 789

Other – complusory mortgage 117 -

Total off-balance-sheet items 174 468 184 041

Moreover, capital group of Apator has got established following hedges for the repayments of liabilities to the bank: - silent assignment of minimum 40% of all the turn over of Apator S.A., - assignment of laws under insurance contract of property of Apator S.A. located in Ostaszewo, - assignment of laws under insurance policy of property of Apator Mining Sp. z o.o. located in Pszów, - assignment of laws under insurance contract of property of Apator Powogaz S.A. located in Poznań, - assignment of laws under insurance contract of property of Apator Metra located in Czech Republic, - assignment of laws under insurance contract of current assets of Apator Powogaz SA, hedging of inventory up to the amount of 24 955 000 PLN Further to described hedging for the performance of the bank contracts at the end of 2012, the entities of capital group of Apator made the statements on voluntary submission to enforcement to the total amount of 221 m PLN. These statements regard loan contracts and bank guarantee contracts. The statements submitted are equal the amount of maximum liability of the entities increased by bank costs.

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2.2.3 Consolidated total income statement

DESCRIPTION

Period

01.10.2012 01.01.2012 01.10.2011 01.01.2011

31.12.2012 31.12.2012 31.12.2011 31.12.2011

Continued operation

Sales revenues 168 632 667 482 164 819 537 019

Sales revenues of products and services 148 463 598 676 159 796 494 053

- to related entities 9 156 39 550 10 801 35 934

- to other entities 139 307 559 126 148 995 458 119

Sales revenues of goods and materials 20 169 68 806 5 023 42 966

- to related entities 1 130 1 346 94 362


Cost of goods sold (122 572) (482 543) (117 825) (371 688)

Cost of products and services sold (104 466) (424 246) (115 506) (337 410)

- to related entities (7 151) (27 467) (7 008) (23 412)

- to other entities (97 315) (396 779) (108 498) (313 998)

Cost of goods and materials sold (18 106) (58 297) (2 319) (34 278)

- to related entities (1 098) (1 298) (81) (316)


Gross profit (loss) on sales 46 060 184 939 46 994 165 331

Selling costs (10 387) (31 128) (7 929) (30 445)

Overheads (21 386) (76 137) (19 689) (66 008)

Profit (loss) on sales 14 287 77 674 19 376 68 878

Other operating revenues (costs), including 760 20 377 742 3 841

Result on sales and liquidation of property plant and equipment and intangibles 1 848 22 915 791 1 245

Result on revaluation of non financial fixed assets (2 238) (2 238) (131) 49

Result on valuation of property (102) (102) 64 64

Result on revaluation of non financial current assets (319) (509) (356) (252)

Result on provisions for retirement bonuses and jubilee awards 3 854 3 938 (252) (218)

Result on other operating activity (2 283) (3 627) 626 2 953

Share in profits of entities consolidated by equity method 906 2 236 177 364

Restructuring revenues (costs) - - (1 323) (1 323)

Profit (loss) on operating activity 15 953 100 287 18 972 71 760

Financial revenues (costs), including: (1 090) (6 022) (3 193) (7 393)

Interest on loans and borrowings (737) (2 985) (697) (2 570)

Result on other interest 193 677 84 816

Result on shares - - (1) (1)

Result on bills of exchange - - 6 -

Result on exchange rate differences (1 295) (5 107) (660) (3 859)

Result on currency transactions 799 1 954 (1 788) (804)

Wynik na aktualizacji finansowego majątku obrotowego/ Result on revaluation of finnacial current assets

13 21 (73) (193)

Expenditures on purchase of shares in subsidiary after taking control over it - - (3) (3)

Other financial revenues (costs) (63) (582) (61) (779)

Profit (loss) before tax 14 863 94 265 15 779 64 367

Current income tax (2 304) (16 816) (5 314) (13 233)

Deferred income tax 849 20 450 1 764 382

Net profit (loss) 13 408 97 899 12 229 51 516

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DESCRIPTION

Period

01.10.2012 01.01.2012 01.10.2011 01.01.2011

31.12.2012 31.12.2012 31.12.2011 31.12.2011

Other total incomes

Other net total incomes 296 5 893 1 420 (4 737)

Exchange rate differences translated of foreign entities 1 (700) (261) 1 293

Hedging accounting result 364 8 139 2 117 (7 445)

Income tax regarding other total incomes (69) (1 546) (436) 1 415

Total income in total 13 704 103 792 13 649 46 779

Net profit (loss), including: 13 408 97 899 12 229 51 516

shareholders of parent company 12 694 93 420 11 549 47 296

non-controlling interest 714 4 479 680 4 220

Total incomes in total, including 13 704 103 792 13 649 46 779

shareholders of parent company 12 993 99 327 12 956 42 542

non-controlling interest 711 4 465 693 4 237

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2.2.4 Consolidated statement on changes in equity

DESCRIPTION

CAPITAL FOR THE SHAREHOLDERS OF PARENT ENTITY

Non-controlling

interest

TOTAL EQUITY

Share capital Other

capitals

Capital on valuation of hedging transactions and exchange rate differences from consolidation

Undistributed financial result

TOTAL

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

Changes in equity since 01.01.2012 till 31.12.2012

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

- profit (loss) considered in balance valuation for items being hedged - - 8 139 - 8 139 - 8 139

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

- - (686) - (686) (14) (700)

Tax related to items presented in capital or transfered from capital - - (1 546) - (1 546) - (1 546)

Net profit for the period since 01.01.2012 till 31.12.2012 - - - 93 420 93 420 4 479 97 899

Total income since 01.01.2012 till 31.12.2012 - - 5 907 93 420 99 327 4 465 103 792

Dividends - - - (22 176) (22 176) (2 753) (24 929)

Advance payments made towards dividend - - - (11 803) (11 803) - (11 803)

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

Redemption of own shares - 1 824 - (1 624) 200 - 200

Distribution of result for supplementary capital - 24 807 - (24 807) - - -

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

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

Balance at 31.12.2012 3 311 186 052 916 104 483 294 762 7 364 302 126

Balance at 01.01.2011 3 511 135 136 (238) 69 495 207 904 3 299 211 203

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DESCRIPTION

CAPITAL FOR THE SHAREHOLDERS OF PARENT ENTITY

Non-controlling

interest

TOTAL EQUITY

Share capital Other

capitals

Capital on valuation of hedging transactions and exchange rate differences from consolidation


TOTAL

Adjustments to the opening balance - 13 771 1 (16 821) (3 049) - (3 049)

Adjustments to the rules of accounting - (6 169) - (480) (6 649) - (6 649)

Balance after changes made 3 511 142 738 (237) 52 194 198 206 3 299 201 505


Hedging instruments for cash flow, including - - (7 445) - (7 445) - (7 445)

- profit (loss) considered in balance valuation for items being hedged - - (7 445) - (7 445) - (7 445)

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

- - 1 276 - 1 276 17 1 293

Tax related to items presented in capital or transfered from capital - - 1 415 - 1 415 - 1 415

Net profit since 01.01.2011 till 31.12.2011 - - - 47 296 47 296 4 220 51 516

Total income since 01.01.2011 till 31.12.2011 - - (4 754) 47 296 42 542 4 237 46 779

Dividends - (13 771) - (3 933) (17 704) (2 359) (20 063)

Settlement of interim dividend from previous year - - - 7 377 7 377 - 7 377

Distribution of result for supplementary capital - 36 459 - (36 459) - - -

Reimbursement of loss from supplementary capital - (320) - 320 - - -

Consolidation of subsidiary - - - - - 696 696

Purchase of additional shares of subsidiary - - - 173 173 - 173

Balance at 31.12.2011 3 511 165 106 (4 991) 66 968 230 594 5 873 236 467

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2.2.5 Consolidated cash flow account

DESCRIPTION

Period

01.01.2012 01.01.2011

31.12.2012 31.12.2011

Cash flow from operating activity

Profit before tax (continued operation) 94 265 64 367

Adjustments: (6 044) 23 139

Amortization of intangible assets 1 379 1 442

Depreciation of property, plant and equipment 16 902 15 333

Write downs due to depreciation of property,plant and equipment 2 238 (49)

(Profit) loss on sales of fixed assets and intangibles (27 757) (1 232)

(Profit) loss from evaluation of investment properties according to fair value. 102 (64)

(Profits) losses from the change of fair value of derivatives (1 788) 3 277

Cost of interest 4 082 3 056

Share in (profits) losses of associated entities (2 236) (364)

Interest received (29) (38)

Other adjustments 1 063 1 778

Cash from operating activity before taking into consideration changes in current assets 88 221 87 506

Change in inventories (3 437) (23 409)

Change in receivables 19 706 (34 293)

Change in liabilities 5 240 27 969

Change in provisions (1 520) 338

Change in accruals and prepayments (632) (106)

Other adjustments (123) (607)

Cash generated by operating activity 107 455 57 398

Income tax paid (11 295) (12 835)

Net cash from operating activity 96 160 44 563

Cash flow from investment activity

Outflows for the purchase of intangibles (1 514) (480)

Outflows for the purchase of tangible assets (26 690) (39 551)

Inflows from the sales of tangible fixed assets 30 408 1 307

Inflows from sales of financial assests held for trading 750 43

Investments in subsidiaries (1 402) -

Borrowings granted (8 175) (35)

Inflows from repayment of borrowings granted - 35

Interest received - 8

Dividends received - 96

Other inflows(outflows) (3 350) 1 312

Net cash from investment activity (9 973) (37 265)

Cash flow from finacial activity

Net inflows from the issue of shares - 580

Inflows from loans and borrowings taken 70 906 68 119

Repayment of loans and borrowings (94 578) (52 093)

Interest (3 783) (2 871)

Dividends paid (36 644) (12 684)

Repayment of reliabilities under finance lease contracts (2 236) (1 217)

Other inflows(outflows) (214) (206)

Net cash from financial activity (66 549) (372)

Increase(decrease) of net cash and cash equivalents 19 638 6 926

Cash and cash equivalents at the beginning of the period 24 090 17 164

Cash and cash equivalents at the end of the period 43 728 24 090

16





2.2.6 Consolidated statement according to operating segments

The activity of capital group of Apator is focused on two key segments in electric machines sector:

metering

switchgear The capital group of Apator is aimed at comprehensive provision of metering and data read out of utility services and equipment for safe making and breaking of electrical circuits.

DESCRIPTION Metering

equipment Switchgear Other

Unalocated items

TOTAL

Financial results of operating segments since 01.01.2012 till 31.12.2012

Total revenues 424 976 151 119 91 387 - 667 482

Sales outside 389 086 146 113 91 387 - 626 586

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

Total costs (312 159) (118 415) (83 097) - (513 671)

Costs borned outside (287 713) (114 096) (83 097) - (484 906)

Costs borned to related entities (24 446) (4 319) - - (28 765)

Result of segment 112 817 32 704 8 290 - 153 811

Unalocated costs - - - (55 760) (55 760)

Share in profits of entities consolidated by equity method

- - - 2 236 2 236

Profit (loss) on operating activity 112 817 32 704 8 290 (53 524) 100 287

Financial revenues - - - 2 850 2 850

- interest - - - 1 165 1 165

Financial costs - - - (8 872) (8 872)

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

Profit (loss) before tax 112 817 32 704 8 290 (59 546) 94 265

Income tax - - - 3 634 3 634

Non-controlling interest - - - (4 479) (4 479)

Net profit (loss) 112 817 32 704 8 290 (60 391) 93 420

Other information on segments at 31.12.2012

Total assets, including: 282 176 60 689 21 277 182 574 546 716

Property, plant and equipment 82 625 13 113 1 217 - 96 955

Intangibles 2 793 931 120 - 3 844

Goodwill of subordinated entities 61 184 75 3 831 - 65 090

Inventories 77 139 16 315 1 570 - 95 024

Trade receivables 58 435 30 255 14 539 - 103 229

Unlocated assets - - - 182 574 182 574

Trade liabilities 37 669 11 833 14 782 - 64 284



Unalocated items

TOTAL

Financial results of operating segments since 01.01.2011 till 31.12.2011

Total revenues 368 400 139 133 29 486 - 537 019

Sales outside 341 452 129 841 29 430 - 500 723

Sales to related entities 26 948 9 292 56 - 36 296

Total costs (271 029) (108 045) (23 059) - (402 133)

Costs borned outside (253 205) (102 186) (23 014) - (378 405)

Costs borned to related entities (17 824) (5 859) (45) - (23 728)

Result of segment 97 371 31 088 6 427 - 134 886

Unalocated costs - - - (63 490) (63 490)

17







Unalocated items

TOTAL

Share in profits of entities consolidated by equity method

- - - 364 364

Profit (loss) on operating activity 97 371 31 088 6 427 (63 126) 71 760

Financial revenues - - - 18 717 18 717

- interest - - - 1 027 1 027

Financial costs - - - (26 110) (26 110)

- interest - - - (2 780) (2 780)

Profit (loss) before tax 97 371 31 088 6 427 (70 519) 64 367

Income tax - - - (12 851) (12 851)

Non-controlling interest - - - (4 220) (4 220)

Net profit(loss) 97 371 31 088 6 427 (87 590) 47 296

Other information on segments at 31.12.2011

Total assets, including: 273 067 79 584 18 840 94 990 466 481

Property, plant and equipment 75 784 11 675 1 065 - 88 524

Intangibles 2 248 1 209 64 - 3 521

Goodwill of subordinated entities 60 390 75 3 690 - 64 155

Inventories 63 208 20 426 7 953 - 91 587

Trade receivables 71 437 46 199 6 068 - 123 704

Unlocated assets - - - 94 990 94 990

Trade liabilities 25 092 17 182 17 082 - 59 356

2.2.7 Geographical information

The capital group of Apator has separated three areas of its activities:

Home – domestic sales

Export – sales abroad

European Union – sales to EU countries

DESCRIPTION Home Export EU TOTAL

Sales revenues in geographical segments since 01.01.2012 till 31.12.2012

Total revenues 426 702 105 309 135 471 667 482

Sales outside 426 702 64 413 135 471 626 586

Sales to related entities - 40 896 - 40 896

Sales revenues in geographical segments since 01.01.2011 till 31.12.2011

Total revenues 343 301 81 978 111 740 537 019

Sales outside 343 301 45 682 111 740 500 723

Sales to related entities - 36 296 - 36 296

18





2.3. Individual statement of Apator SA

2.3.1 Statement of financial position of parent entity - Apator SA

DESCRIPTION Day

31.12.2012 31.12.2011

Fixed assets 221 766 188 150

Intangible assets 3 057 3 173

Property, plant and equipment 69 272 56 240

Investment properties 1 303 1 405

Other long-term financial assets 126 379 125 862

- in related entities 125 862 125 862

-in other entities 517 -

Long-term borrowings granted 83 324

- to related entities 83 324

Long -term receivables 943 1 117

- from other entities 943 1 117

Deferred tax assets 20 729 29

Current assets 53 753 68 124

Inventories 18 664 22 289

Trade receivables 25 775 31 534

- from related entities 1 946 6 603


Tax, customs and social insurance receivables 3 288 4 609

Other short-term receivables 423 1 259

- from related entities 12 9

- from other entities 411 1 250

Other short-term financial assets 131 -

- in other entities 131 -

Short-term borrowings granted 214 230

- related entities 214 230

Cash and cash equivalents 4 566 80

Short-term prepayments 692 391

Fixed assets classified as held for sale - 7 732

TOTAL ASSETS 275 519 256 274

19





DESCRIPTION Day

31.12.2012 31.12.2011

Equity 200 962 165 192

Equity for shareholders of parent entity 200 962 165 192

Share capital 3 311 3 511

Other capitals 138 311 125 410

Capital from evaluation of hedging transaction and exchange rate differences from consolidation 359 (1 460)

Undistributed financial result 58 981 37 731

- result of current period 72 224 37 731

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

Liabilities 74 557 91 082

Long-term and liabilities and provisions 5 608 21 746

Long-term loans and borrowings - 15 000

- from other entities - 15 000

Long-term liabilities 1 023 2 190


Long-term provisions for employee benefit liabilities 4 585 4 556

Short-term liabilities and provisions 68 949 69 336

Short-term loans and borrowings 35 358 35 147


Trade liabilities 12 935 14 406

- towards related entities 2 952 3 406


Tax, customs and social insurance liabilities 6 077 1 279

Other short-term liabilities 11 545 9 434

- towards related entities 211 417


Short-term provisions for employee benefit liabilities 2 459 1 618

Other short-term provisions 575 452

Liabilities related to fixed assets classified as held for sale - 7 000

TOTAL LIABILITIES 275 519 256 274

20





2.3.2 Information on changes of contingent liabilities or contingent assets that occurred since the end of recent financial year (off balance sheet items) of parent entity - Apator SA

DESCRIPTION Day

31.12.2012 31.12.2011

Contingent receivables 826 31 514

Contingent receivables due to other entities 826 31 514

Contingent liabilities 6 080 25 616

Contingent liabilities connected with related entities - 8 000

-due to guarranties and warranties granted to related entities - 8 000

Contingent liabilities due to other entities 6 080 17 616

- due to guarranties and warranties granted 4 468 17 616

- other 1 612 -

Other off-balance-sheet items 51 448 27 611

Fixed assets tenanced 3 968 7 681

Ordinary mortgage 37 000 11 000

Bail mortgage - 2 750

Hedging on property 4 444 -

Assignment of receivables 6 000 6 000

Deposits placed 36 180

Total off-balance-sheet items 58 354 84 741

Moreover, the Company has the hedging of repayment of the limit of receivables by silent assignment of minimal 40% of all trade turn over of Apator S.A., and also the assignment of the rights of insurance contract of the properties of Apator S.A. located in Ostaszewo as the hedging of revolving line for bank loan granting. Apator S.A. made the statements on voluntary submission to enforcement for the total amount of 86,25 m PLN at the end of December 2012 under the above described hedging of the performance of bank contract. The statements regard: limit contract of receivables (Raiffeisen Bank Polska S.A.), loan on current account contract (Bank Handlowy w Warszawie S.A.), and revolving line contract for bank guarantee to be granted (Bank Handlowy w Warszawie S.A.). The statements submitted regard the amount of maximum liability of the Company increased by bank costs.

21





2.3.3 Statement of total income of parent entity - Apator SA

DESCRIPTION

Period

01.10.2012 01.01.2012 01.10.2011 01.01.2011

31.12.2012 31.12.2012 31.12.2011 31.12.2011

Sales revenues 37 675 183 411 41 103 156 092

Sales revenues of products and services 34 404 151 346 33 724 120 913



Sales revenues of goods and materials 3 271 32 065 7 379 35 179



Cost of goods sold (29 127) (140 437) (28 361) (113 830)

Cost of products and services sold (26 346) (112 163) (21 881) (82 186)



Cost of goods and materials sold (2 781) (28 274) (6 480) (31 644)



Gross profit (loss) on sales 8 548 42 974 12 742 42 262

Selling costs (2 862) (10 254) (3 561) (12 912)

Overheads (5 963) (24 147) (5 533) (19 288)

Profit (loss) on sales (277) 8 573 3 648 10 062

Other operating revenues (costs), including: 1 367 21 237 (642) 1 801

Result on sales and liquidation of property plant and equipment and intangibles 1 728 22 873 (348) (258)

Result on valuation of property (102) (102) 64 64

Result on revaluation of non financial current assets (76) (137) 240 259

Result on provisions for retirement bonuses and jubilee awards (534) (534) 137 87

Result on other operating activity 351 (863) (735) 1 649

Profit (loss) on operating activity 1 090 29 810 3 006 11 863

Financial revenues (costs): 1 662 26 115 (1 644) 27 927

Dividends and shares in profits 2 104 28 200 - 30 652

- from related entities 2 104 28 200 - 30 652

Interest on loans and borrowings (418) (1 607) (322) (1 272)

Result on other interest 43 148 21 143

Result on exchange rate differences (104) (1 162) (859) (2 133)

Result on currency transactions 102 560 (424) 1 222

Result on revaluation of finnacial current assets (46) 24 (21) (15)

Other financial revenues (costs) (19) (48) (39) (670)

Profit (loss) before tax 2 752 55 925 1 362 39 790

Current income tax 1 105 (4 828) (360) (1 683)

Deferred income tax 179 21 127 (72) (376)

Net profit (loss) 4 036 72 224 930 37 731

Other total incomes

Other net total incomes 372 1 819 566 (1 460)

Result on hedging accounting 459 2 246 698 (1 803)

Income tax regarding other total incomes (87) (427) (132) 343

Total income in total 4 408 74 043 1 496 36 271

22





2.3.4 Statement in changes in equity of parent entity – Apator SA

DESCRIPTION Share capital Other capitals Capital on valuation of hedging

transactions and exchange differences from consolidation


TOTAL

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


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

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

Tax related to items presented in capital or transfered from capital - - (427) - (427)

Net profit since 01.01.2012 till 31.12.2012 - - - 72 224 72 224

Total income since 01.01.2012 till 31.12.2012 - - 1 819 72 224 74 043

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

Advance payments paid towards dividend - - - (13 243) (13 243)

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

Redemption of own shares (200) 200 - - -

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

Balance at 31.12.2012 3 311 138 311 359 58 981 200 962

Balance at 01.01.2011 3 511 111 383 - 32 483 147 377

Adjustments to the rules of accounting - (6 169) - - (6 169)

Balance after changes made 3 511 105 214 - 32 483 141 208


Hedging instruments for cash flow, including - - (1 803) - (1 803)

- profit (loss) considered in balance valuation for items being hedged - - (1 803) - (1 803)

Tax related to items presented in capital or transfered from capital - - 343 - 343

Net profit since 01.01.2011 till 31.12.2011 - - - 37 731 37 731

Total income since 01.01.2011 till 31.12.2011 - - (1 460) 37 731 36 271

Dividends - - - (21 064) (21 064)

Settlement of interim dividend from previous year - - - 8 777 8 777

Distribution of result for supplementary capital - 20 196 - (20 196) -

Balance at 31.12.2011 3 511 125 410 (1 460) 37 731 165 192

23

Consolidated quarterly statement of the capital group of Apator for four quarters in 2012 with concise quarterly report of Apator SA

Name of capital group: Capital group of Apator

Period included in the fincial statement: 01.01.2012 – 31.12.2012 Reporting currency: Polish złoty (PLN)

Level of approximation: All amounts in tables are quoted in thousand Polish zloty ( if not stated otherwise)

2.3.5 Cash flow account of parent entity – Apator SA

DESCRIPTION

Period

01.01.2012 01.01.2011

31.12.2012 31.12.2011

Cash flow from operating activity

Profit before tax (continued operation) 55 925 39 790

Adjustments: (46 441) (22 797)

Amortization of intangible assets 1 028 870

Depreciation of property, plant and equipment 6 163 5 040

(Profit) loss on sales of fixed assets and intangibles (27 666) (93)

(Profit) loss from evaluation of investment properties according to fair value. 102 (64)

(Profits) losses from the change of fair value of derivatives (613) 1 571

Cost of interest 2 354 1 685

Interest received (13) (18)

Dividends received (28 200) (30 652)

Other adjustments 404 (1 136)

Cash from operating activity before taking into consideration changes in current assets 9 484 16 993

Change in inventories 3 624 (7 371)

Change in receivables 7 735 (5 001)

Change in liabilities 2 130 (1 920)

Change in provisions 993 322

Change in accruals and prepayments (301) (50)

Cash generated by operating activity 23 665 2 973

Income tax paid (448) (1 878)

Net cash from operating activity 23 217 1 095

Cash flow from investment activity

Outflows for the purchase of intangibles (739) (1 288)

Outflows for the purchase of tangible assets (17 546) (31 395)

Inflows from the sales of tangible fixed assets 29 422 135

Investments in subsidiaries - (5 000)

Inflows from repayment of borrowings granted 222 160

Interest received 14 16

Dividends received 28 200 30 649

Other inflows(outflows) (2 986) 6 175

Net cash from investment activity 36 587 (548)

Cash flow from finacial activity

Inflows from loans and borrowings taken 26 150 38 841

Repayment of loans and borrowings (41 000) (26 000)

Interest (2 272) (1 674)

Dividends paid (38 059) (12 286)

Repayment of reliabilities under finance lease contracts (116) (27)

Other inflows(outflows) (21) (4)

Net cash from financial activity (55 318) (1 150)

Increase(decrease) of net cash and cash equivalents 4 486 (603)

Cash and cash equivalents at the beginning of the period 80 683

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

24





3. Information on principles assumed for preparation of the statement, especially

the information on changes in accounting principles (policy) used

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

st December 2012 were prepared according to

International Financial Reporting Standards (IFRS/IAS) and interpretations related to them announced in the form of Regulations of the European Commission, in Polish zloty, due to the fact that Polish zloty is the main currency in which economic operations are performed in capital group of Apator. Financial statements of foreign entities included in the capital group of Apator were calculated into the reporting currency according to rules resulting from International Accounting Standard No. 21. Financial statements were prepared according to the assumptions on continued activity of the companies of capital group of Apator in the foreseeable future. As of the day of report preparation there are no circumstances putting the continued operation of the companies of the capital group of Apator at risk. Financial statements were prepared according to the historical cost accounting convention that was modified in the case of fixed assets and financial instruments. Detailed accounting principals used by capital group of Apator were presented in RS 2011 consolidated statement. 3.2. Consolidation principles Consolidated financial statement of a capital group includes the data of APATOR SA - parent company and the companies being under its control. The control takes place when a parent company is directly or indirectly in the possession of more than 50% of votes in the given business entity or is able to influence on the financial and operational policy of subordinated subsidiary in order to gain profit from its operations. Associated companies use uniform accounting principles binding in the parent company and they use homogenous form and scope of individual and consolidated reports that are the bases for consolidation in a capital group. Consolidated financial report of a capital group is prepared for balance day and for the financial period, specified for individual report of the parent company. For the day of purchase, the assets and equity and liabilities of purchased company are estimated according to their fair market value. The excess of the purchase price above the fair market value of the identifiable taken over net assets of the company is presented as company value. If the purchase price of the company is lower than the fair market value of the identifiable taken over net assets of the company, the difference is presented as a profit in the income statement for the period in which the purchase took place. The share of minority shareholders is presented in an appropriate proportion of fair market value of assets and capitals. Financial results of companies purchased or sold during the year are presented in the consolidated statement in accordance with the date of their purchase or sale. The method of consolidation was used while preparing the consolidated report by adding individual positions of reports, exclusions and other corrections. Exclusions include: - value of shares of subsidiaries held by the parent company quoted in purchase price; - mutual dues and liabilities and other similar accounts of consolidated companies; - profit and costs resulted from economic operations between consolidated companies; - profit and costs resulted from economic operations between consolidated companies included in the value of consolidated assets; - dividends calculated or paid by consolidated companies to other consolidated companies

4. Additional financial information

25





4.1 Weighted average number of shares Book value per share was calculated based on division of equities by weighted average number of shares but the profit per share was calculated based on division of net profit on continued operation by weighted average number of shares. 4.1.1. Weighted average number of shares for individual statement Weighted average number of shares at 31

st December 2012 is 33.669.870. It includes the redemption

of 2 m of own shares of Apator S.A. that were gratuitously acquired from Apator Mining Sp. z o.o. Weighted average number of shares at 31

st December 2011 was 35.107.028 and it is equal number of

shares. 4.1.2. Weighted average number of shares for consolidated statement Weighted average number of shares at 31

st December 2012 and at 31

st December 2011

is 29.507.028 and it includes shares being in possession of subsidiary. 4.2 EUR exchange rates used for the calculation of selected financial data Items in assets and liabilities and in cash flow account – according to average exchange rate binding on the day of preparation of the statement. Items in income statement- according to average EUR exchange rate being the arithmetical mean of exchange rates are announced by the National Bank of Poland binding on the last day of the month.

DESCRIPTION

Four quarters 2012

2011 Four quarters

2011

Eur / PLN Eur / PLN Eur / PLN

Total income statement 4,1736 X 4,1401

Cash flow statement 4,0882 X 4,4168

Financial position statement 4,0882 4,4168 X

4.3 Information on adjustments to provisions, provision and assets due to deferred income

tax mentioned in the act concerning accounting and write downs of the value of elements in the assets

4.3.1. Consolidated statement Deferred income tax assets and Income tax provision

DESCRIPTION Status at the beginning of

the period

Net exchange rate differences translated from

financial statement to

currency presented

Charging the result due to the

changes in temporary

differences and tax loss

Increase (decrease) of equity due to the change of

temporary differences

Status at the end of the

period

Deferred income tax since 01.01.2012 till 31.12.2012

Deferred income tax assets 11 149 (17) 19 188 (1 359) 28 961

Provision for employee benefits 2 919 (2) (656) - 2 261

Provision for bonuses 721 (2) 94 - 813

Provision for margins of revenues 24 - (5) - 19

Provision for warranty repairs 851 (2) (58) - 791

Provision for future costs 196 - 542 - 738

Salaries and wages, insurance fees unpaid 347 - 49 - 396

Write downs of property, plant and equipment and intangibles

132 - 425 - 557

Inventory write downs 842 (7) 96 - 931

Receivables write downs 386 - 8 - 394

Valuation at the level of fair value - derivatives

1 762 - (313) (1 359) 90

Valuation at the level of fair value-other financial assets

1 - - - 1

26






the period



currency presented


changes in temporary





period

Tax loss 483 - (474) - 9

Tax Relief due to operation in Pomeranian Special Economic Zone

- - 20 006 - 20 006

Balance amortization apart to tax one 60 - 58 - 118

Internal transactions 747 - (158) - 589

Differences due to finance lease contracts 155 - (8) - 147

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

936 - (551) - 385

Other costs not taxed in the period, including: 587 (4) 133 - 716


the period



currency presented


change in temporary





period

Provisions due to deferred tax 8 929 (85) (1 262) 187 7 769

Valuation at the level of fair value - property 29 - (19) - 10

Valuation at the level of fair value - derivatives

107 - 26 187 320

Valuation at the level of fair value-other financial assets

1 - 72 - 73

Balance amortization apart to tax one 7 636 (85) (1 636) - 5 915

Excess of nominal value over book value of apportionment

238 - - - 238

Differences due to finance lease contracts 356 - 95 - 451

Liquidated damages received 380 - (155) - 225

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

58 - 438 - 496

Other revenues not taxed in the period, including:

124 - (83) - 41

Total X 68 20 450 (1 546) X

Total deferred income tax assets 2 220 X X X 21 192

Provisions due to deferred tax - X X X -

Effective tax rate

DESCRIPTION

Period

01.01.2012 01.01.2011

31.12.2012 31.12.2011

Gross profit, including: 94 265 64 367

- Taxable by binding rate in Poland 91 894 61 744

- Taxable by binding rate in Germany 356 8

- Taxable by binding rate in Czech Republic 1 945 2 471

- Taxable by binding rate in Ukraine 70 144

Income tax calculated according to binding tax rate, including: 17 898 12 234

27





Adjustments (21 532) 617

Possible tax on tax free revenues (permanent differences), including: (2 422) (829)

- on income related to zone permission (1 338) -

Tax on cost not being costs of revenues (permanent differences) 1 913 2 707

Tax on internal transactions in the group (permanent differences) (207) (3)

Tax on items not included in financial result of the period (296) (315)

Asset to be taxed due to operation in Special Economic Zone (20 006) -

Adjustment to tax loss from past years (514) (924)

Other tax deductions - (19)

Income tax specified in total income statement (3 634) 12 851

Effective tax rate -3,86% 19,97%

Write-downs of non-current & current assets

DESCRIPTION Status at the

beginning of the period

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

Net exchange rate diffferences translated from financial

statement to the currency presented

Status at the end of the period

Goodwill of subsidiaries 335 - - 335

Property, plant and equipment 549 2 381 - 2 930

Other financial assets 211 - - 211

Invetories 4 385 296 (18) 4 663

Receivables 3 919 (44) (33) 3 842

Fixed assets classified as held for sales 144 (144) - -

Total 9 543 2 489 (51) 11 981

4.3.2. Individual statement Deferred income tax assets and Income tax provision


the period

Charging the result due to the change

in temporary differences and tax

loss

Increase (decrease) of

equity due to the change of temporary differences

Status at the end of the period

Deferred income tax since 01.01.2012 till 31.12.2012

Deferred income tax assets 2 334 20 111 (329) 22 116

Provision for employee benefits 994 102 - 1 096

Provision for bonuses 57 21 - 78

Provision for margins of revenues 24 (24) - -

Provision for warranty repairs 86 23 - 109

Provision for future costs 30 (5) - 25

Salaries and wages, insurance fees unpaid 175 21 - 196

Inventory write downs 104 6 - 110

Receivables write downs 123 16 - 139

Valuation at the level of fair value - derivatives 423 (61) (329) 33

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

Tasx relief due to operation in Special Economic Zone - 20 006 - 20 006

Other costs not taxed in the period, including: 50 6 - 56

Provisions due to deferred tax 2 305 (1 016) 98 1 387

Valuation at the level of fair value - property 29 (19) - 10

Valuation at the level of fair value - derivatives - 55 98 153

Balance amortization apart to tax one 1 535 (814) - 721

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

Liquidated damages received 380 (155) - 225

Other revenues not taxed in the period, including: 123 (83) - 40

28





Total X 21 127 (427) X

Total deferred income tax assets 29 X X 20 729

Provision due to deferred tax in total - X X -

Effective tax rate

DESCRIPTION

Period

01.01.2012 01.01.2011

31.12.2012 31.12.2011

Gross profit 55 925 39 790

Tax rate 19,00% 19,00%

Income tax calculated according to binding tax rate 10 626 7 560

Possible tax on tax free revenues (permanent differences) (6 906) (5 969)

- including on dividend from related entities (5 358) (5 805)

- on income related to zone permission (1 338) -

Tax on cost not being costs of revenues (permanent differences) (13) 573

Asset to be taxed due to operation Special Economic Zone (20 006) -

Adjustment to tax loss from past years - (106)

Income tax specified in total income statement (16 299) 2 058

Effective tax rate -29,14% 5,17%

Write-downs of non-current & current assets

DESCRIPTION Status at the beginning of the period Change in the period

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

period

Other financial assets

1 537 - 1 537

Invetories 545 34 579

Receivables 659 80 739

Total 2 741 114 2 855

4.4 Mergers

On 5

th September 2012 subsidiary - Apator Metrix S.A. concluded the contract of acquisition of 4 m

shares (50%) of George Wilson Industries Ltd with headquarters in Coventry, the United Kingdom. Purchase price of 4 million shares is 2.050.001 GBP but Apator Metrix S.A. paid on the day of conclusion of the contract for the shares acquired 1 GBP. The outstanding part of the price in amount of 2 050 000 GBP will be paid after the financial statement for financial year 2015 is approved and provided GWi will achieve the profit before tax in total amount of 7 593 000 GBP within 3 financial years (since 2013 till 2015). Contingent payment increases in consolidated balance of the capital group of Apator the item: Investments in associated entities and consolidated by equity method in relation with long term liabilities were taken into account during the estimation of the goodwill of GWI. Apator Metrix S.A. has the right to acquire outstanding 50% shares in the period since 2017 till 2019. The purchase price of outstanding shares depends on performance of EBITDA by GWi while guaranteed purchase price of those shares is 3 m GBP. The option of purchase has been evaluated and included in consolidated balance of the capital group of Apator as the derivative in the item: “Other long term financial assets” in relation to long term liabilities. Fair value of assets and liabilities took over on the day of acquisition of 50% of shares of the entity is presented in the table below.

29





DESCRIPTION TOTAL

Fixed assets 24 904

Property, plant and equipment 6 499

Deferred tax assets 18 405

Current assets 9 135

Inventories 4 630

Receivables 2 843

Prepayments 1 390

Cash and cash equivalents 272

TOTAL ASSETS 34 039

Long-term liabilities and provisions 15 299

Liabilities 15 299

Short-term liabilities and provisions 4 904

Liabilities 3 351

Provisions 1 553

Liabilities and provisions in total 20 203

Net assets 13 836

Net assets purchased in total 6 918

Godwill of the entity on the day of purchase 2 471

Purchase price 9 389

On the day of conclusion of the contract of acquisition of shares in GWi, Apator Metrix S.A. granted the loan to GWi in amount of 1,6 m GBP that is presented in consolidated statement on financial position and consolidated cash flow account.

4.5 Changes in accounting principles

Apator S.A. has introduced some changes in presentation of individual and consolidated financial statements and the following amendments were made in relation to the statement of 2011.

Change (1) – Change in presentation of assets and provisions due to deferred tax (netting).The change introduced does not have the influence on net profit and equities.

Changes in individual statement:

ITEMS IN STATEMENT CHANGE (1)

Statement of Financial Position

Fixed assets (2 305)

Deferred tax assets (2 305)

TOTAL ASSETS (2 305)

Liabilities (2 305)

Long-term liabilities and provisions (2 305)

Deferred income tax provision (2 305)

TOTAL LIABILITIES (2 305)

Changes in consolidated statement:

ITEMS IN STATEMENT CHANGE (1)

Statement of Financial Position

Fixed assets (8 929)

Deferred tax assets (8 929)

TOTAL ASSETS (8 929)

Liabilities (8 929)

Long-term and liabilities and provisions (8 929)

Deferred income tax provision (8 929)

TOTAL LIABILITIES (8 929)

30

Consolidated quarterly statement of capital group of Apator for four quarters of 2012 with concise quarterly statement of Apator SA

Name of the capital group: Grupa Apator

Reporting period: 01.01.2011 – 30.09.2011 Reporting currency: Polish zloty (PLN)

Rounding: All the amounts are given in thousands of Polish zloty (if not stated otherwise)

5 Factors and events, especially not typical ones having the influence on financial results achieved by capital group of Apator

The following factors had the influence on the operation of the capital group of Apator during four quarters in 2012:

Construction of Apator SA in Pomeranian Special Economic Zone and calculation of assets due to settlement of possible investment relief The construction was completed according to the schedule assumed that is in March 2012. The transfer to new location of all the activity during the second quarter of 2012 was performed fluently. During the transfer of manufacturing processes the Company bore higher costs such like; amortization costs of the property in two locations, temporary financing of the increased inventories. In total it was spent 38 m PLN for the purchase of land, changing its status and construction that had the influence on financing costs of the Company. Since the moment of getting the permission for the construction (permission no. 69/PSSE to run business activity in the area of Pomeranian Special Economic Zone in Ostaszewo till 31.12.2012 investment expenses were 46 855 000 PLN. At 1

st June 2012 the asset for deferred income tax for legal entities was calculated in amount of

20 357 000 PLN due to possibility to make use of tax relief. At 31st December 2012 the asset was

20 006 000 PLN.

Revenues on sale of the property in Toruń On 5

th July 2012 Apator SA sold the properties located in Toruń at Żółkiewskiego to Galeria Copernicus

Toruń 2 Sp. z o.o. with headquarters in Warsaw. Revenues con sales of the properties were 34,1 m PLN plus extra 2 m PLN for the performance of road investments by Apator SA and the support of some some projects of the city of Toruń. The result of sale of the property after tax was 17,2 m PLN. Repayment of long term loan On 29

th June 2012 Apator SA paid the last installmetn of long term loan in amount of 11 m PLN.

(value of entire loan was 45 mPLN)

High sales level The capital group of Apator, in spite of economic crisis reached very high revenues on sales of 667 482 000 PLN in 2012. It is the increase by 130 463 000 PLN (by 24%) in relation to 2011.

Overheads and sales costs The share of sales costs in revenues on sales in total in relation to previous years had further decrease. The similar case is with the share of overheads that decreased definitely lower than the level in previous years.

31





Share of selling costs and overheads in revenues in total

in capital group of Apator in the period 2003 - 2012

14,0%

12,3%12,7% 12,5%

13,5%

14,9%

4,7%

5,7%

6,8%6,7%6,2%

5,8%6,2%

6,5%6,1%

7,7%

13,5%

11,4%

12,3%

15,0%

4%

6%

8%

10%

12%

14%

16%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Share of selling costs in revenues in total Share of overheads in revenues in total

costs of products In 2012 in capital group of Apator the share of own sales costs in revenues on sales in total increased from 69,2% to 72,3%, mainly due to very high share of cost of products in Newind sp. z o.o. (differing from the level of ratios in other entities in the capital group of Apator).

Share of costs of goods in revenues in total in

capital groupof Apator in the period 2003 - 2012

72,3%

69,2%

66,4%

63,1%

66,8%67,1%65,6%64,9%

69,4%

59,9%

55%

60%

65%

70%

75%

80%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

6 Analysis of financial results achieved by capital group of Apator

6.1. Analysis of results achieved during four quarters and in the fourth quarter in 2012

6.1.1 Analysis of revenues

The bar chart below shows revenues on sales achieved by capital group of Apator in the fourth quarter and four quarters in 2003 – 2012 (000’PLN).

32





30

76

3

58

77

1

85

68

3

81

70

1

81

85

7

10

1 2

18

13

6 6

49

16

8 6

32

99

66

1 16

4 8

19

106 000

200 946

288 820 292 606311 349

356 191 367 557

409 778

537 019

667 482

124%

131%

111%

103%

190%

144%

101%

106% 1

14%

102%

121%

135%

102%

122%

100%

95%

146%

191%

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

IV quarter I-IV quarters dynamika przychodów ze sprzedaży

Sales structure according to revenues on sales of products and services and materials and goods shows the table below.

Description Fourth quarter 2012

(000’PLN)

Structure fourth quarter

2012

Fourth quarter 2011

(000’PLN)


2011 Change Dynamics

Revenues on products and services sold 148 463 88,04% 159 796 96,95% -11 333 92,91%

Revenues on materials and goods sold 20 169 11,96% 5 023 3,05% 15 146 401,53%

Total revenues 168 632 100,00% 164 819 100,00% 3 813 102,31%

Revenues in fourth quarter in 2012 were at higher level than in 2011however, the sales structure changed:

increase of sales of goods and materials took place in IV quarter in 2012 and in the whole year what was the result of the activity of Newind sp. z o.o.

decrease of revenues on sales of products took place in result of lower sales on domestic market (slow down of the economy, long holiday break in December).

Description

Four quarters

2012 (000’ PLN)

Structure four quarters

2012

Four quarters

2011 (000’PLN)



Revenues on products and services sold 598 676 89,69% 494 053 92,00% 104 623 121,18%

Revenues on materials and goods sold 68 806 10,31% 42 966 8,00% 25 840 160,14%

Total revenues 667 482 100,00% 537 019 100,00% 130 463 124,29%

Similarly, the accumulated value of revenues on sales in 2012 reached very high amount of 667 482 000 PLN, higher by 130 463 000 PLN than in similar period of the previous year. Increase of revenues on sales is mainly the result of increase of sales of metering equipment and IT developments and services being offered by Newind Sp. z o.o., that are included in other sales.

Geographical sales structure is showed in the table below.

33





Description

Fourth quarter

2012 (000’PLN)

Structure fourth quarter 2012

Fourth quarter

2011 (000’PLN)


Change Dynamics

Domestic sales 107 192 63,57% 107 190 65,03% 2 100,00%

Export 61 440 36,43% 57 629 34,97% 3 811 106,61%

Total revenues 168 632 100,00% 164 819 100,00% 3 813 102,31%

Description

Four quarters

2012 (000’ PLN)

Structure four

quarters 2012

Four quarters

2011 (000’PLN)

Structure four

quarters 2011

Change Dynamics

Domestic sales 426 702 63,93% 343 301 63,93% 83 401 124,29%

Export 240 780 36,07% 193 718 36,07% 47 062 124,29%

Total revenues 667 482 100,00% 537 019 100,00% 130 463 124,29%

In the period since January till December in 2012 both domestic sales and export significantly increased, each suitable by 24% in relation to the previous year.

The table below shows revenues on sales according to segments.

Description Fourth quarter

2012 (000’PLN)

Structure fourth

quarter 2012

Fourth quarter

2011 (000’PLN)



Metering equipment 102 945 61,05% 107 230 65,06% -4 285 96,00%

Switchgear equipment 43 130 25,58% 41 479 25,17% 1 651 103,98%

Other sales 22 557 13,38% 16 110 9,77% 6 447 140,02%

Total revenues 168 632 100% 164 819 100% 3 813 102,31%

Description Four quarters

2012 (000’ PLN)

Structure four

quarters 2012

Four quarters

2011 (000’PLN)



Metering equipment 424 976 63,67% 368 400 68,60% 56 576 115,36%

Switchgear equipment 151 119 22,64% 139 133 25,91% 11 986 108,61%

Other sales 91 387 13,69% 29 486 5,49% 61 901 309,93%

Total revenues 667 482 100% 537 019 100% 130 463 124,29%

The share of other sales in revenues in total increased from 5% to 14%. Essential influence on the results achieved of other sales in 2012 in relation to 2011 had the conclusion of the contract by Newind sp. z o.o. and Zakład Ubezpieczeń Społecznych of the delivery and license granted for the software for modernization of technical and system infrastructure of Electronic Exchange of Documents System of the net value of 32, 9 m PLN.

34





Sales structure in 2012

Other sales

14%

Switchgear

segment

23%

Metering

segment

63%

Sales structure in 2011

Metering

segment

69%

Switchgear

segment

26%

Other sales

5%

6.1.2 Explanations concerning seasonal or regular nature of activity of the issuer

Taking into consideration the manufacturing of investment goods by capital group of Apator while having analysed the revenues in particular quarters one can find the seasonal phenomena regarding the selling.

The table below shows that in the majority of cases the demand for the products of capital group of Apator was at the highest level in the third and fourth quarters each year.

Revenues on sales of capital group of Apator (000’PLN)

Year I quarter II quarter III quarter IV quarter

2003 23 087 26 208 26 636 30 763

2004 25 454 57 569 56 673 58 771

2005 53 182 66 726 82 772 85 683

2006 63 527 74 423 72 872 81 701

2007 67 412 76 147 85 938 81 857

2008 62 950 90 650 102 930 99 661

2009 90 661 85 667 90 011 101 218

2010 77 040 91 590 104 426 136 649

2011 107 171 119 951 145 078 164 819

2012 163 146 146 900 188 804 168 632

The share of sales in particular quarters in relation to total turn over of capital group of Apator in percentage is the following:

Share of particular quarters in total sales of capital group of Apator (%)

Year I quarter II quarter III quarter IV quarter

2003 21,64% 24,56% 24,96% 28,83%

2004 12,83% 29,01% 28,56% 29,61%

2005 18,44% 23,14% 28,70% 29,71%

2006 21,72% 25,44% 24,91% 27,93%

2007 21,65% 24,46% 27,60% 26,29%

2008 17,67% 25,45% 28,90% 27,98%

2009 24,67% 23,31% 24,49% 27,54%

2010 18,80% 22,36% 25,49% 33,35%

35





Share of particular quarters in total sales of capital group of Apator (%)

2011 19,96% 22,34% 27,02% 30,69%

2012 24,44% 22,01% 28,29% 25,26%

6.1.3 The analysis of revenues on sales on foreign markets earned in the period of four quarters and in the fourth quarter of 2012

In the period of the fourth quarter in 2012 capital group of Apator earned the revenues on export at the level of 61 440 000 PLN but the revenues on export reached the value of 240 780 000 PLN cumulatively in 2012. In relation to the same period of the previous year it is the increase by 24%. Share of export in revenues on sales in total was 36% in 2012. The following domestic entities in capital group of Apator perform sales on foreign markets:

Apator SA – switchgear and electronic electricity meters,

Apator Metrix SA – gas meters,

Apator Powogaz SA – water meters and heat meters.

FAP Pafal SA – inductive electricity meters Geographical structure of export is presented in the table below.

Description

Fourth quarter 2012

(000’PLN)

Structure fourth

quarter 2012

Fourth quarter

2011 (000’PLN)



European Union 28 365 46,17% 31 749 55,09% -3 384 89,34%

Other countries 33 075 53,83% 25 880 44,91% 7 195 127,80%

Total export 61 440 100,00% 57 629 100,00% 3 811 106,61%

Description

Four quarters 2012

(000’ PLN)

Structure four

quarters 2012

Four quarters

2011 (000’PLN)



European Union 135 471 56,26% 111 740 57,68% 23 731 121,24%

Other countries 105 309 43,74% 81 978 42,32% 23 331 128,46%

Total export 240 780 100,00% 193 718 100,00% 47 062 124,29%

In the fourth quarter in 2012 significant increase of export to other countries took place, mainly due to performance of the sales contract to Ethiopia in this period. However, cumulatively in whole 2012, export increased by 21% in relation to 2011. The bar chart below shows the main countries where capital group of Apator exported its goods and services in 2011 and 2012.

36





Export of Apator's group according to the countries with sales performance in 2012 of value > 2,5 m PLN

854

3 6

38

391

3 2

03

5 0

25

5 7

73

4 9

58

3 3

84

4 0

14

2 4

40

2 4

22

8 2

90

9 3

07

3 4

64

16 4

76

18 4

54

24 6

96

41 8

10

2 5

19

2 7

02

3 0

26

3 2

72

3 7

71

3 7

73

4 3

48

4 6

67

5 9

22

6 4

42

6 9

81

8 9

74

10 5

52

12 3

24

18 0

82

24 5

49

42 5

10

53 1

91

0

4 000

8 000

12 000

16 000

20 000

24 000

28 000

32 000

36 000

40 000

44 000

48 000

52 000

56 000

Russ

ia

Denm

ark

Germ

any

Czech

Rep

ublic

Turkey

Hun

gary

Ukra

ine

Aust

ria

Ethio

pia

Belgiu

m

Belaru

s

Spain

Egypt

Bulg

aria

Rom

ania

Bra

sil

Georg

ia

Portugal

2011 2012

The capital group of Apator increased its export in 2012 in relation to 2011.

Denmark – increase by 17 814 000 PLN, achieved due to sales by Apator Metrix SA of gas meters with new construction of a counter that allows to read out the greater number of metering parameters,

Russia – increase by 11 381 000 PLN, achieved by higher export of water meters, heat meters, gas meters, and switchgear,

Turkey – increase by 8 860 000 PLN achieved by higher export of electronic cost allocators and gas meters and huge volume of switchgear,

Germany – increase by 6 095 000 PLN achieved by higher export of gas meters and inductive and electronic electricity meters

6.1.4 Analysis of consolidated statement of total income Prior making the analysis of the values below it is important to familiarize with point 10 of the statement on page 42 concerning the influence of the activity of Newind sp. z o.o. on the sales level and profitability of capital group of Apator. Statement on total income for the period of the fourth quarter in 2012 and 2011 is as follows:

Description

Fourth quarter 2012

Fourth quarter 2011

Change Dynamics

Revenues on sales 168 632 164 819 3 813 102,31%

Manufacturing costs of products, goods and materials sold 122 572 117 825 4 747 104,03%

Gross profit on sales 46 060 46 994 -934 98,01%

Selling costs 10 387 7 929 2 458 131,00%

Overheads 21 386 19 689 1 697 108,62%

Profit on sales 14 287 19 376 -5 089 73,74%

Result on other operation 760 742 18 102,43%

Share in profit (loses) of entities consolidated by equity method 906 177 729 511,86%

37





Description

Fourth quarter 2012

Fourth quarter 2011

Change Dynamics

Profit on operation 15 953 18 972 -3 019 84,09%

Result on financial operation -1 090 -3 193 2 103 34,14%

Control over subsidiary 0 0 0 0,00%

Profit/ loss before tax 14 863 15 779 -916 94,19%

Current income tax -2 304 -5 314 3 010 56,64%

Deferred income tax 849 1 764 -915 48,13%

Net profit 13 408 12 229 1 179 109,64%

In the fourth quarter in spite of increase of sales, net profitability decreased resulting of: - increase of share of manufacturing costs of products and goods in their sales from 71% to 73%

while: - share of manufacturing costs of products in revenues on their sales decreased from 72,28% to

70,37% - share of sales of goods in revenues on their slaes increased from 46,17% to 89,77% (activity of

Newind sp. z o.o.), - share of sales costs and overheads in revenues on sales in total (by 1% each), - decrease of the result on other operating activityare of sales costs, mainly due to revaluation by

2 382 000 PLN of the value of property that belongs to Apator Powogaz SA located in Pniewy, not used in business activity.

The report on total income for the period of four quarters in 2012 and 2011 is as follows:

Description

Four quarters 2012

Four quarters 2011

Change Dynamics

Revenues on sales 667 482 537 019 130 463 124,29%

Manufacturing costs of products, goods and materials sold 482 543 371 688 110 855 129,82%

Gross profit on sales 184 939 165 331 19 608 111,86%

Selling costs 31 128 30 445 683 102,24%

Overheads 76 137 66 008 10 129 115,35%

Profit on sales 77 674 68 878 8 796 112,77%

Result on other operation 20 377 3 841 16 536 530,51%

Share in profit (loses) of entities consolidated by equity method 2 236 364 1 872 614,29%

Profit on operation 100 287 71 760 28 527 139,75%

Result on financial operation -6 022 -7 393 1 371 81,46%

Control over subsidiary 0 0 0 0,00%

Profit/ loss before tax 94 265 64 367 29 898 146,45%

Current income tax -16 816 -13 233 -3 583 -27,08%

Deferred income tax 20 450 382 20 068 5353,40%

Net profit 97 899 51 516 46 383 190,04%

The following factors had the influence on net profit in 2012 in relation to 2011:

calculated asset of deferred income tax assets in amount of 20 m PLN

increase of revenues on sales by 130 463 000 PLN, at simultaneous increase of manufacturing costs of products, goods and materials sold by 110 855 000 PLN,

high value result on other operation resulting of sales and liquidation of tangible fixed assets and intangibles (sale of property),

high Eur exchange rate (all export is settled in Eur),

negative result from financial operation in amount of 6 022 00 PLN resulting from:

38





o negative result on exchange rate differences in amount of 5 107 000 PLN, o interest on loans and borrowings in amount of 2 985 000 PLN.

The bar chart below shows the profit on sales achieved in four quarters cumulatively in 2003-2012

Profit on sales in capital group of Apator in the period 2003 - 2012

18 246

30 210

43 841 42 719

48 996 48 304

77 674

41 034

48 213

68 878

166%

145%

97%

96% 117%

102%

99%

143%

113%

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

The bar chart below shows net profit and EBITDA for four quarters cumulatively since 2003 till 2012.

EBITDA and net result of capital group of Apator in the period 2003 - 2012 (000'PLN) *)

11 368

45 55737 645 34 673

23 05731 305

51 392 51 516

97 899

70 459

118 568

88 535

60 042

102 91655 623

56 61954 20954 844

22 20534 958

21%

27%

19% 19% 20%

15%

18%18%16% 18%

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0%

5%

10%

15%

20%

25%

30%

EBITDA Net profit EBITDA margin

*) EBITDA with single events.

6.1.5 Foreign trade balance

Data regarding foreign trade for quarters cumulatively in 2012 in capital group of Apator are presented below:

Description

USD quoted in EUR quoted in Other currencies

quoted in Total currencies

000’PLN 000’PLN 000’PLN 000’PLN

Import 54 819 77 653 12 515 144 987

39





Description

USD quoted in EUR quoted in Other currencies

quoted in Total currencies

000’PLN 000’PLN 000’PLN 000’PLN

Export 10 265 213 196 17 319 240 780

Foreign trade balance of four quarters in 2012 -44 554 135 543 4 804 95 793

7. Hedge transactions of capital group of Apator

The capital group of Apator at 31st December 2012 had hedge transactions against exchange rate risk

concluded in 2011 and 2012 of total nominal 11.900 000 Eur at Eur weighted average exchange rate equal 4,35 PLN. The entities of capital group of Apator perform the hedging against currency exchange rate by transaction of forward type exclusively. Transactions hedge the currency exposure of entities of capital group of Apator for the period 2013 – 2014. The hedge nominal amounts are allocated for particular years; - 2013 – 8.900 000 Eur at weighted average exchange rate 4, 28 PLN per 1 Eur, - 2014 – 3.000 000 Eur at weighted average exchange rate 4, 55 PLN per 1 Eur. In capital group of Apator, currency transactions are concluded according to the hedge policy against currency risk. Therefore, hedge transactions are constant element of business activity of capital group of Apator and they have the cover in currency exposure. The entities in capital group of Apator conclude hedge transactions against currency risk aiming at hedging of the part of currency inflow in EUR concerning export. (share of export in revenues on sales of capital group of Apator is 36% for the period I-IV quarters in 2012). Further to the above future planned payments due to sales are not included in the statement on financial position and in the result of the companies while hedge instruments without hedge accounting are evaluated to fair value resulted in financial result and potential accounting mismatch. In order to eliminate it the companies in capital group of Apator took the decision to implement hedge accounting since 1

st July 2011.

According to IAS 39, if the hedging of the cash flow is effective then the effective part of the evaluation of hedge instruments regarding re-evaluation of the currency is presented in equity. On 31

st December 2012 evaluation of hedge instruments showed positive value of 916 000 PLN.

The outstanding part of evaluation related to hedging instrument is included in financial result. The effect of introduction of hedging accounting has been presented in tables concerning of total income statement and financial position statement. The influence of transactions on current result Taking into account, the positive performance of hedging in I-IV quarters in 2012 in amount of 166 000 PLN, positive hedge evaluation made at the 31.12.2012 and adjustment to evaluation made at 31

st December

2011, on the result of four quarters in 2012 had the influence the positive amount in value of 1 954 000 PLN.

Four quarters in 2012

Capital group of Apator 000’ PLN

Reversing entry of negative evaluation of hedge transactions dated the 31st December

2011 1 266

Positive evaluation of hedge transactions dated the 31st December 2012 522

Positive result of the performance of hedge transactions for four quarters in 2012 166

Positive influence of hedge transactions on the result of four quarters in 2012 1 954

The table shows the settlement of hedge transactions of capital group of Apator in I-IV quarters in 2012:

Influence of hedging transactions for four quarters in 2012 TOTAL

Influence on financial revenues 1 548

The influence of hedging transactions for four quarters in 2012 1 409

Evaluation of hedging transactions 139

Influence on financial costs -406

40





Influence of hedging transactions for four quarters in 2012 TOTAL

Result of hedging transactions for four quarters in 2012 1 243

Evaluation of hedging transactions -1 649

Influence on the result 1 954

8. Ratios of capital group of Apator

Ratios Formula Four quarters

2012 Four quarters

2011

PROFITABILITY RATIOS:

Gross profit margin on sales Gross profit on sales/Net revenues on sales of products, goods and materials 27,7% 30,8%

Profit margin on sales Profit on sales/Net revenues on sales of products, goods and materials 11,6%*) 12,8%

Net profit margin Net profit/ Net revenues on sales of products, goods and materials 14,7% 9,6%

FLUIDITY RATIOS:

Quick fluidity ratio (Current assets - Inventories) Short-term liabilities 1,13 1,05

DEBT RATIOS:

Debt rate Liabilities/ Assets 44,7% 49,3%

* the influence of Newind sp. z o.o., more information in point 10 on page 42

9. Changes in structure – mergers, takeover etc

The effects of changes in structure of the entity in the I-IV quarters in 2012 including the merger of entities, takeover or sale of entities of the capital group of the issuer, long-term investments, division, restructuring and discontinued operation: 1. In the first quarter of 2012 incereased the shares of Apator Powogaz SA in Apator TELEMETRIA Sp. z

o.o. because in March 2012 the purchase contract with Arkadiusz Oporski coowner of Apator Telemetria Sp. z o.o. was concluded for the purchase of 108 shares of Apator Telemetria Sp. zo.o. for the amount of 1.000.000,08 PLN.It increased the shares of Apator Powogaz SA in Apator Telemetria Sp. z o.o. from 50,8% to 61,6%.

2. On 5th September 2012 subsidiary - Apator Metrix SA with headquarters in Tczew and National Industry

Group Ltd. with headquarters in Guernsey concluded purchase contract of 4 m shares (50%) in George Wilson Industries Ltd. (GWi) with headquarters in Coventry, United Kingdom (more information in point 5.4).

Except the above mentioned events, there were no mergers, takeover or sale of entities of capital group of Apator, division, discontinued operation or long-term investments in entities of capital group of Apator in the I-IV quarters in 2012.

10. Concise description of significant achievements or failures of the issuer including the list of the most important events in four quarters of 2012

Significant achievements and failures in four quarters of 2012:

Achievements: 1. The commencement of business activity in the area of Pomeranian Special Economic Zone, 2. Sale of property in Toruń, 3. Increase of sales on domestic and foreign markets in spite of economic slow down. Failures: 1. Not satisfactory level of profitability of Newind Sp. z o.o., that has the influence on decrease of

profitabiltiy of capital group of Apator (12% of sales of capital group of Apator have been generated by Newind sp. z o.o.).

41





The table below shows the results of business activity of capital group of Apator after the activity of Newind sp. z o.o. was excluded.

Description

Fourth quarter 2012

(Newind excluded)

Fourth quarter 2011

(Newind excluded)

Dynamics Fourth quarter

2012 (entire group)

Fourth quarter 2011

(entire group) Dynamics

Revenues on sales 148 466 149 575 99,3% 168 632 164 819 102,3%

Manufacturing costs of products,goods and materials sold 104 046 101 078 102,9% 122 572 117 825 104,0%

Gross profit on sales 44 420 45 491 97,6% 46 060 46 994 98,0%

Profit on sales 13 938 18 769 74,3% 14 287 19 376 73,7%

Profit on operating activity 15 768 18 371 85,8% 15 953 18 972 84,1%

Profit/loss before tax 14 572 15 003 97,1% 14 863 15 779 94,2%

Net profit 13 092 11 281 116,1% 13 408 12 229 109,6%

Profit margin on sales 9,39% 12,55% 8,47% 11,76%

Net profit margin 8,82% 7,54% 7,95% 7,42%

Description

Four quarters 2012

(Newind excluded)

Four quarters 2011

(Newind excluded)

Dynamics Four quarters

2012 (entire group)

Four quarters 2011

(entire group) Dynamics

Revenues on sales 588 973 514 442 114,5% 667 482 537 019 124,3%

Manufacturing costs of products,goods and materials sold 408 942 351 242 116,4% 482 543 371 688 129,8%

Gross profit on sales 180 031 163 200 110,3% 184 939 165 331 111,9%

Profit on sales 76 329 68 164 112,0% 77 674 68 878 112,8%

Profit on operating activity 98 904 71 029 139,2% 100 287 71 760 139,8%

Profit/loss before tax 93 279 63 865 146,1% 94 265 64 367 146,4%

Net profit 97 189 51 203 189,8% 97 899 51 516 190,0%

Profit margin on sales 12,96% 13,25% 11,64% 12,83%

Net profit margin 16,50% 9,95% 14,67% 9,59%

Territorial structure of sales of capital group of Apator with Newind sp. z o.o. exluded in the fourth quarter is shown in the table below.

Description (Newind excluded) Fourth

quarter 2012 (000’PLN)


Fourth quarter 2011

(000’PLN)


2011

Change Dynamics

Domestic sales 87 026 60,30% 91 946 61,14% -4 920 94,65%

Export 61 440 39,70% 57 629 38,86% 3 811 106,61%

Total revenues 148 466 100,00% 149 575 100,00% -1 109 99,26%

42





Description (entire group)

Fourth quarter

2012 (000’PLN)


Fourth quarter 2011

(000’PLN)

Structure fourth

quarter 2011

Change Dynamics

Domestic sales 107 192 63,57% 107 190 65,03% 2 100,00%

Export 61 440 36,43% 57 629 34,97% 3 811 106,61%

Total revenues 168 632 100,00% 164 819 100,00% 3 813 102,31%

Teritorial structure of sales of capital group of Apator with Newind sp. z o.o. excluded in four quarters shows the table below.

Description (Newind excluded)

Four quarters

2012 (000’PLN)

Structure four

quarters 2012

Four quarters

2011 (000’PLN)

Structure four

quarters 2011

Change Dynamics

Domestic sales 348 193 59,12% 320 724 62,34% 27 469 108,56%

Export 240 780 40,88% 193 718 37,66% 47 062 124,29%

Total revenues 588 973 100% 514 442 100% 74 531 114,49%

Other events that occurred in four quarters of 2012:

1. On the 23rd

January 2012, Extraordinary General Shareholders Meeting adopted the resolution on Programme for gratuitous acquisition of 2 m own shares for their redemption without remuneration.

2. On the 23rd

January 2012 the Supervisory Board made appointment of KPMG spółka z ograniczoną odpowiedzialnością sp.k. to review and audit of financial individual and consolidated statements for 2012 – 2013.

3. On the 3rd

April 2012 Apator SA acquired gratuitously from subsidiary Apator Mining Sp. z o.o. 2 million own bearer shares of nominal value of 0,10 PLN each. Transaction was made over the counter transaction. At the same time the Executive Board announces that the programme for gratuitous acquisition of own shares for their redemption and reduction of share capital was performed based on adopted resolution no 7/I/2012 of Extraordinary General Shareholders Meeting of Apator SA dated the 23

rd January 2012.

4. On the 15th June 2012 Consortium with a leader - Comarch SA, and subsidiary Apator Rector Sp. z o. o.

the participant concluded significant contract with Tauron Dystrybucja SA for the supply and implementation of IT system for the Management of Network Property in Tauron Dystrybucja SA and rendering services for the system. Total net value of the contract is 78, 9 m PLN. Estimated value of the revenues from that amount for Apator Rector Sp. z o. o. due to the performance of the contract is the net value of 39, 3 m PLN.

5. On the 18th June 2012 Supervisory Board of Apator SA announces that President of Executive Board of

Apator SA – Janusz Niedźwiecki had submitted the statement in writing about the intention not to candidate to the Executive Board of Apator SA for the following tenure. Current tenure of the Executive Board ends on the day of Ordinary General Shareholders Meeting of Apator SA to be held on 24

th June

2013. The Supervisory Board suggested to current President of Executive Board to be the member of the Supervisory Board after its tenure of President of the Executive Board is completed.

6. On the 18th June 2012 Ordinary General Shareholders Meeting adopted resolution on the value of

dividend for 2011 of the amount of 24.830.271,00 PLN from the profit for 2011 , it is gross value of 0,75

Description (entire group)

Four quarters

2012 (000’PLN)

Structure four

quarters 2012

Four quarters

2011 (000’PLN)

Structure four

quarters 2011

Change Dynamics

Domestic sales 426 702 63,93% 343 301 63,93% 83 401 124,29%

Export 240 780 36,07% 193 718 36,07% 47 062 124,29%

Total revenues 667 482 100,00% 537 019 100,00% 130 463 124,29%

43





PLN per share. The payment will be made on the 23rd July 2012 for shareholders holding the shares on the 6

th July 2012.

7. On the 18th June 2012 Ordinary General Shareholders Meeting adopted resolution on redemption of

2.000.000 own bearer shares of Apator SA and reduction of equity.

8. On the 29th June 2012 the Executive Board of Apator SA announced that Apator SA paid to Bank Handlowy w Warszawie SA the last instalment due to long-term loan taken on the 17

th April 2008 for the

purchase of shares of Apator Powogaz SA with headquarters in Poznań. The last instalment of the bank loan was 11 m PLN, the value of bank loan: 45 m PLN.

9. On the 29th June 2012, Apator SA and the group of insurance companies PZU SA/STU Ergo Hestia SA

concluded insurance contracts according to comprehensive property insurance and legal liability programme of entities in capital group of Apator. The contracts were concluded for the period of two years with two separate settlement periods: since the 1

st July 2012 till the 30

th June 2013 and since the

1st July 2013 till the 30

th June 2014. Moreover, Apator SA under motor vehicle insurance for all the

entities in capital group of Apator concluded insurance contract with TUiR Warta SA for the period since the 1

st July 2012 till the 30

th June 2013 and under voyage insurance, it concluded the contract with PZU

SA for the period since the 1st July 2011 till the 30

th June 2013. The second settlement period 2012/2013

is being continued for all the entities in capial group of Apator. Apator SA continues the liability insurance of the members of the management at Chartis Europe SA, Branch Office in Poland (main policy) and in ACE European Group Ltd. Sp. z o. o., Branch Office in Poland (second layer policy).

10. On the 5th July 2012, Apator SA concluded the final sales contract of perpetual usufruct of land, buildings

and constructions being the separate object of property located in Toruń at Żółkiewskiego 21/29. The sales price of the property is 36.072 000 PLN, including 2 m PLN due to performance of road investment by the Seller. The contract was concluded with Galeria Copernicus Toruń 2 sp. z o. o. with headquarters in Warsaw.

11. On the 16th July 2012 Apator SA received the court proceedings in writing of District Court in Toruń.

Based on it the reduction of share capital of Apator SA was registered on the 12th July 2012 from the

amount of 3.510.702, 80 PLN till the amount of 3.310.702, 80 PLN, the reduction of the capital was made by redemption of 2.000.000 bearer shares of Apator SA, acquired gratuitous from the subsidiary Apator Mining sp. z o.o.

12. Since the 9th August 2012, the decision of District Court in Wrocław, Newind Grupa Apator sp. z o.o.

operates under the name Newind sp. z o.o.

13. On the 5th September 2012, the subsidiary- Apator Metrix SA with headquarters in Tczew and National

Industry Group Ltd. With headquarters in Guernsey concluded purchase contract of 4 million shares (50%) in George Wilson Industries Ltd. (GWi) with headquarters in Coventry (United Kingdom).

14. On 23rd

October 2012 the executive Board of Apator SA announced on the payment of advance payment towaqrds expected dividend from the profit fotr 2012 in total amount of 13242 811,20 PLN that is the gross value of 0,40 PLN per share.

15. On 23rd

October 2012 the Supervisory Board of Apator SA appointed Mr Andrzej Szostak for the candidate for the President of Apator SA for the following tenure 2013-2015.

11. Events that occurred after the 31st December 2012 that is after the day of the concise quarterly financial statement is published

1. On 11th January 2013, 20.362 registered shares, preferred to voting in relation 1:4 were converted to

ordinary bearer shares (not preferred). In result of the conversion the number of votes was reduced from 56.430.504 to 56.369.418.

2. On 21st January 2013 roku FAP Pafal SA purchased 181.210 registered shares of FAP Pafal SA from

Apator SA of nimonal value of 3,61 PLN each, the remuneration for the shareholder of Apator SA was in amount of 27,00 PLN per share that gives total amount of 4.892.670 PLN. FAP Pafal SA bought back the above mentioned shares in order to redeem them and reduce share capital.

44





3. On 24th January 2013 Warsaw Stock Exchange in Warsaw announced new list of responsible

companies (RESPECT Index). The index includes 20 companies, Apator SA is listed in index for the fifth time.

12. Forecast of financial results for 2012

The Executive Board of Apator SA on the 23rd

February 2012 announced about consolidated forecast of financial results that covered the following items:

consolidated revenues on sales in total in amount of 580 m PLN,

consolidated net profit in the range: 70 m PLN - 75 m PLN. The forecast of consolidated financial results for 2012 covers total results of operation both per shareholders of parent entity and non controlling interest. On the 22

nd August 2012 Executive Board of Apator SA announced about the first adjustment of the forecast

of consolidated financial results that covered the following items:


consolidated net profit in the range: 90 m PLN - 95 m PLN. The increased forecast of consolidated net profit was the result of calculation of asset for deferred income tax in amount of 20 m PLN due to possible tax relief to be used. The Executive Board of Apator SA on the 14

th November 2012 announced about the second adjustment of

consolidated financial results. Adjusted forecast covers the following items:


consolidated net profit in amount of 98 m PLN. The forecast of financial results was adjusted mainly due to:

high value of sales performed by all the entities of capital group of Apator,

intensive operation of Newind sp. z o. IT market – revenues of that entity in 2012 will be double in relation to planned values.

The Executive Board of Apator SA emphasized that:

Newind Sp. z o.o. runs its business activity on IT market for nearly two years,

current activity of that Company is of low profitability due to the performance of the contracts concerning big participation of the hardware in orders.

Other assumptions of adjusted forecast cover: - running business by Apator SA in Pomeranian Special Economic Zone (commencement of calculation of tax relief since the 1

st June 2012),

- calculation of the asset for deferred income tax due to possibility to make use of tax relief that is planned to be in amount of 22 m PLN at the end of 2012, - other operating revenues due to the sales of property in Toruń: 16 m PLN, - high share of export in revenues on sales in total, - assumed Eur exchange rate at mean annual level 1 Eur = 4,18 PLN, - value of hedge transactions and application of hedge policy for currency exposure of capital group of Apator, - composition of capital group of Apator includes the following entities: Apator SA, FAP Pafal SA, Apator Mining sp. z o. o., Apator Control sp. z o. o., Apator Elektro SA, Apator GmbH, Grupa Apator Powogaz (Apator Powogaz SA, Apator Telemetria sp. z o. o., Apator Metroteks sp z o. o., Apator Metra s.r.o., Teplovodomer SA), Apator Rector sp. z o.o. with Newind sp. z o. o. and Apator Metrix SA with GWi Ltd. (GWi since September 2012). Making the adjustment of the forecast, the Executive Board of Apator SA assessed that incorporation of GWi Ltd. into capital group of Apator has not significant influence on the forecast of consolidated financial results of the current year. Adjusted forecast of financial results for 2012 includes total net profit on activity of capital goup of Apator for both shareholders of the parent entity and non controlling interest. The Executive Board of parent entity monitors the performance of the forecast of consolidated financial results of the capital group based on monthly and quarterly statements.

45





The performance of the forecast of consolidated financial results after four quarters in 2012 is as follows for 2012;

Description Original forecast

for 2012

First adjustment of the forecast for

2012

Second adjustment of the forecast for

2012

Performance in four quarters

2012

% performance in relation to

the second adjustment of

the forecast

Consolidated revenues on sales of products,goods and materials

580 000 580 000 670 000 667 482 99,6%

Consolidated net profit * 70 000 – 75 000 90 000 – 95 000 98 000 97 899 99,9%

*consolidated net profit includes entire profit of capital group of Apator SA (including non-controlling interest)

13. The forecast of financial results for 2013

The forecast of financial results for 2013 is as follows:

consolidated revenues on sales in total in the range 700 m PLN – 730 m PLN

total consolidated net profit in the range 68 m PLN – 71 m PLN

consolidated net profit per shareholders of parent entity in the range 63 m PLN – 66 m PLN During preparation of the above forecast the following was taken into account:

high value of sales performed by all the entities in capital group of Apator,

intensive activity of Newind sp. z o. o. on IT market,

running operation of Apator SA in Pomeranian Special Economic Zone,

high share of export in revenues on sales in total,

exchange rate of Eur assumed at average annual level of 4,10 PLN,

value of hedging transactions and their influence on financial result of capital group of Apator,

make-up of capital group of Apator includes the following entities: Apator SA, FAP Pafal SA, Apator Mining sp. z o. o., Apator Control sp. z o. o., Apator Elektro SA, Apator GmbH, group of Apator Powogaz (Apator Powogaz SA, Apator Telemetria sp. z o. o., Apator Metroteks sp. z o. o., Apator Metra s. r. o., Teplovodomer SA), Apator Rector sp. z o. o. with Newind sp. z o. o. and Apator Metrix SA with GWi Ltd.

14. Shareholders

14.1. Share capital at 31st

December 2012

The basis for calculations at 31st December 2012 is share capital in value of 3.310.702, 80 PLN that consists

of 33.107.028 shares with nominal value of 0, 10 PLN each, that are divided in the following:

Shares and votes Number of shares

Structure of shares

% Number of votes

Structure of votes

%

Registered shares 7 774 492 23,48% 31 097 968 55,11%

Bearer shares 25 332 536 76,52% 25 332 536 44,89%

Total shares 33 107 028 100,00% 56 430 504 100,00%

Each bearer share gives the right to single vote but registered shares are preferred ones. One registered share gives the right to four votes at general shareholders meeting.

14.2. Share capital at 11th

January 2013

In result of conversion of 20.362 registered shares to ordinary bearer shares on 11th January 2013 the

number of votes was reduced from 56.430.504 to 56.369.418. Therefore, the basis for calculations at 11th

January 2013 is share capital of 3.310.702,80 PLN that consists of 33.107.028 shares of nominal value of 0,10 PLN each and it is divided into:

46





Shares and votes Number of shares

Structure of shares

% Number of votes

Structure of votes

%

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

Bearer shares 25 352 898 76,58% 25 332 536 44,98%

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

14.3. Important shareholders

The important shareholders are ones who hold indirectly or directly through their subsidiaries at least 5% of total number of votes at General Shareholders Meeting of Apator SA on the day of submission of quarterly statement. They should present the number of shares being in possession of entities, percentage share in share capital, number of votes resulting of percentage share in total number of votes at the General Shareholders Meeting and changes in the structure of the ownership of significant packages of shares of Apator SA in the period since the submission of the previous statement.

Description

14th

November 2012 21st February 2013 Change

shares votes shares

(%) votes (%) shares votes

shares (%)

votes (%) purchase sale

Apator Mining sp. z o.o. 3 600 000 3 600 000 10,87% 6,38% 3 600 000 3 600 000 10,87% 6,39% - -

Mariusz Lewicki 2 035 000 5 527 007 6,15% 9,80% 2 037 000 5 531 007 6,15% 9,81% 2 000 -

Tadeusz Sosgórnik 1 900 503 4 879 809 5,74% 8,65% 1 900 503 4 879 809 5,74% 8,66% - -

Danuta Guzowska 1 520 279 4 382 921 4,59% 7,77% 1 520 279 4 382 921 4,59% 7,78% - -

Zbigniew Jaworski 1 327 307 3 609 851 4,01% 6,40% 1 333 869 3 616 413 4,03% 6,42% 6 562 -

Janusz Marzygliński 1 047 657 3 501 933 3,16% 6,21% 1 047 657 3 501 933 3,16% 6,21% - -

AVIVA OFE 2 905 628 2 905 628 8,78% 5,15% 2 905 628 2 905 628 8,78% 5,15% - -

Total 14 336 374 28 409 149 43,30% 50,36% 14 344 936 28 417 711 43,33% 50,41% 8 562 0

The above table shows the number of shares being in posession of important shareholders and their spouses.

14.4. The posession and changes in ownership structure of the persons in management and supervisory body

The table below shows the number of shares of Apator SA being in possession by the persons in management (and spouses) or entitlements to them at the day of submission of quarterly statement with the amendments to the possession of shares included in the period since the submission of the previous statement, separately for each person:

Description

14th


shares votes shares


shares (%)


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

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

Janina Karaszewska-Zandrowicz 434 500 1 424 500 1,31% 2,52% 434 500 1 424 500 1,31% 2,52% - -

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

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

Total 871 317 3 159 735 2,63% 5,59% 871 317 3 159 735 2,63% 5,59% 0 0

The table below shows the number of shares being in possession of the persons of supervisory body (and spouses) on the day of submission of quarterly statement with the amendments to the possession of shares

47





included in the period since the submission of the previous statement, separately to each person:

Description

14th


shares votes shares


shares (%)


Danuta Guzowska 1 520 279 4 382 921 4,59% 7,77% 1 520 279 4 382 921 4,59% 7,78% - -

Ryszard Wojnowski 889 334 895 334 2,69% 1,58% 854 334 854 334 2,58% 1,52% - 35 000

Janusz Marzygliński 1 047 657 3 501 933 3,16% 6,21% 1 047 657 3 501 933 3,16% 6,21% - -

Eryk Karski 0 0 0,00% 0,00% 0 0 0,00% 0,00% - -

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

Total 5 492 270 14 303 195 16,59% 25,36% 5 459 270 14 270 195 16,49% 25,32% 2 000 35 000

15. Proceedings before the court, arbitration court or public authority

Proceedings before the court (including two or more) regarding the commitments or receivables of Apator SA or its subsidiaries, taken at arbitration court or public authority regarding the issuer and subsidiaries are not 10% of equities of the issuer.

Moreover:

- The Regional Prosecutor’s Office in Warsaw took preparatory proceedings concerning the suspicion of real data in 2008-2009 to be concealed in current and regular reports regarding the purchase of forwards, call and put options in 2008-2009. Proceedings were taken in result of the notification placed by a shareholder. Due to the fact that the Company did not have any information on proceedings, the Company on the 21

st

August 2012 requested the Regional Prosecutor’s Office to submit the information on proceedings. On the 3

rd September 2012, Apator SA received the letter advising that the proceedings were stopped due to lack of

features of criminal act on the 20th January 2011 based on Criminal Proceeding Code art.17 § 1 point 2.

- On the 11

th October, Apator SA received from Polish Financial Supervision Authority the information on

commencement of administrative proceedings to punish the Company with administrative penalty due to suspicion of the violation by Apator SA the provisions of art. 56 of the Act on public offer and conditions of introduction of financial instruments to organized trading system and public companies. On the 17

th April

2012 Polish Financial Supervision Authority punished Apator SA with administrative penalty of 150 000 PLN for non fulfilment of the obligation of announcement to the public and Polish Financial Supervision Authority and WSE with statutory notice period it is without delay but not later than within 24 hours after the event has occurred. Confidential information regarded conclusion by the company and its subsidiaries in 2008-2009 currency hedge transactions bringing the risk of considerable loss or significant increase of it in the scope of term of conclusions that exceeded planned inflows in foreign currency and could have significant influence of individual or consolidated financial result of the issuer. Apator SA does not agree with the verdict of Polish Financial Supervision Authority in whole. Apator SA has made the appeal and it has been waiting for the next decision of Polish Financial Supervision Authority. - In result of control carried out by Income Tax Control Office in Bydgoszcz in 2012 it was stated that the aim of transactions on derivative financial instruments concluded by the Company had not been to hedge its revenues.Therefore, it was recognized that the Company increased the revenues and tax costs and in result of it the tax liabilities were defined in amount of 1.245 000 PLN plus the interest for the delay. In view of the above the Company still does not agree with the decision received and it apeal to Administration Court. The seat of Administration Court for the above case was fixed to be held on 27

th February 2013.

16. Transactions with related entities

In the period of 2012, Apator SA or other subsidiary did not conclude any transactions with related entities that would be concluded on the terms other than market conditions.

48





Transactions of Apator SA and subsidiaries with related entities since January till December 2012 included transactions that are typical ones, concluded on market terms, and their nature is the result of current operating activity of Apator SA and subsidiaries. Transactions regard co-operation in the scope of:

post-paid electricity meters, printed circuit boards, – co-operation of Apator SA and FAP Pafal SA,

low voltage switchgear – co-operation of Apator SA and Apator Elektro SA,

heat meters – co-operation of Apator SA and Apator Powogaz SA,

water meters – co-operation of Apator Powogaz SA ,Tieplovodomer SA ,Apator Powogaz S.A. and in addition, Apator Telemetria sp. z. o. o.,

gas meters – co-operation of Apator Metrix SA and Apator GmbH

electricity meters – co-operation of Apator SA,Pafal SA with Apator GmbH

1) Apator SA cooperates with FAP Pafal SA - subsidiary with headquarters in Świdnica in the scope of manufacturing of post-paid electronic electricity meters. The basis for cooperation is the contract concluded between Apator SA and FAP Pafal SA on 1

st March 2005 (with later amendments). This

contract specifies general conditions of cooperation in the scope of deliveries of printed circuit boards and subassemblies by Apator SA to FAP Pafal SA. Deliveries are performed according to current orders, and prices are calculated according to market conditions. The contract was concluded for an unspecified period. Detail terms and conditions of the contract are similar to the ones generally used for such contracts.

2) On 4thJanuary 2010 Apator SA concluded the contract on cooperation with the subsidiary

FAP Pafal SA. The subject of cooperation is rendering of the following services by Apator SA:

sales of products of subsidiary - FAP Pafal SA,

post-sales services The co-operation contract was concluded for an unspecified period and its terms and conditions of the contract do not differ from terms and conditions of such type of transactions on the market. The target is that Apator SA to be the only manufacturer of electronic electricity meters.

3) On the 14

th December 2011, the subsidiary - Apator Powogaz SA with headquarters in Poznań and

associated entity - Teplovodmer SA with headquarters in Mytishchi (Russia) concluded the sales contract of water meters and heat meters by Apator Powogaz SA. Total net amount of the contract is 8, 5 m EUR that is 38, 8 m PLN. The performance of the contract took place in 2012. On 11

th January

2013 the following sales contract between Apator Powogaz SA and Teplovodomer SA was concluded.The subject of the contract is the sales of water meters and heat meters by APATOR Powogaz SA. Total net value of the contract is 10,5 m Eur that is 43 m PLN. The performance of the contract wil be in 2013.

4) On the 23rd

December 2010, Apator Metrix and Apator GmbH from Thuga AG with headquarters in Munich concluded the contract of the supply of bellow gas meters. Net value of the contract is 1.126 000 EUR that is net value (4.474 000 PLN). The contract was concluded for the period since the 1

st January

2011 till 31st December 2013.

5) On the 10th January 2012, Apator SA and associated entity – Apator Elektro with headquarters in

Moscow concluded the frame contract. The frame contract regards the sales of low voltage switchgear and parts for the assembly of equipment by Apator SA (. The net value of the frame contact is 3, 5 m EUR that is 15, 7 m PLN.

49

Consolidated quarterly statement of the capital group of Apator for four quarters of 2012 with included concise quarterly statement of Apator SA


Period included in the financial statement: 01.01.2011 – 30.09.2011 Reporting currency: Polish zloty (PLN)

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

6) On 31st August 2011 Apator SA and Apator Rector sp. z o. o concluded the contract with

EnergiaPro SA with headquarters in Wrocław. The contract concerns the supply of the system of AMI type and electronic ct and ctc electricity meters with remote transmission for the needs of EnergiaPro SA. Total net value of the contract is 7, 8 m PLN. The performance of the contract will be completed in 2013.

Mutual trading between entities of capital group of Apator of the value over 1 m PLN in four quarters of 2012 (000’PLN)

Apator SA -> FAP Pafal SA 14 826

FAP Pafal SA -> Apator SA 34 946

Total mutual trading between Apator SA and FAP Pafal SA 49 772

Apator Powogaz SA -> Teplovodomer SA 37 257

Teplovodomier SA -> Apator Powogaz SA 0

Total mutual trading between Apator Powogaz SA and Teplovodomier SA 37 257

FAP Pafal SA -> Apator GmbH 9 592

Apator GmbH -> FAP Pafal SA 214

Total mutual trading between FAP Pafal SA and Apator GmbH 9 806

Apator Metrix SA -> Apator GmbH 9 075

Apator GmbH -> Apator Metrix SA 414

Total mutual trading between Apator Metrix SA and Apator GmbH 9 489

Apator Telemetria sp. z o. o. -> Apator Powogaz SA 7 501

Apator Powogaz SA -> Apator Telemetria sp. z o. o. 270

Total mutual trading between Apator Telemetria sp. z o. o. and Apator Powogaz SA 7 771

Apator SA -> Apator Powogaz SA 6 636

Apator Powogaz SA -> Apator SA 92

Total mutual trading between Apator SA and Apator Powogaz SA 6 728

Apator SA -> Apator GmbH 6 205

Apator GmbH -> Apator SA 1 212

Total mutual trading between Apator SA and Apator GmbH 7 417

Apator SA -> Apator Elektro SA 5 192

Apator Elektro SA -> Apator SA 45

Total mutual trading between Apator SA and Apator Elektro SA 5 237

Apator Powogaz SA -> Apator Metroteks sp. z o. o. 2 736

Apator Metroteks sp. z o. o. -> Apator Powogaz SA 0

Total mutual trading between Apator Powogaz SA and Apator Metroteks sp. z o. o. 2 736

Apator Powogaz SA -> Apator Metra s.r.o. 568

Apator Metra s.r.o. -> Apator Powogaz SA 1 516

Total mutual trading between Apator Metrix SA and Apator Powogaz SA 2 084

17. Information concerning the issue, purchase and repayment of non-equity and equity securities

In the period of four quarters in 2012 Apator SA did not conduct and it is not anticipated in coming future the issue, buyout and repayment of any non-equity and equity securities by Apator SA. On the 23

rd January 2012 Extraordinary General Shareholders meeting adopted the resolution on the

programme for gratuitous acquisition of own shares for their redemption without remuneration and reduction of share capital. The objective of the Programme was gratuitous acquisition, outside regulated market from subsidiary - Apator Mining Sp. z o.o. of 2 m own bearer shares (5,70% of capital). On the 13

th April 2012 Apator SA acquired gratuitously 2 m own bearer shares marked with the code

PLAPATR00018 from subsidiary - Apator Mining Sp. z o. o... Transaction was made outside regulated market. The programme has been performed completely. The decision on redemption of the shares was made at Ordinary General Shareholders Meeting held on the 18

th June 2012. The shares

acquired according to the programme did not take part in voting and in profit distribution for 2011.

50





18. Dividend

Information concerning paid (or declared) dividend in total and per share and division of ordinary and preferred ones:

On the 18th June 2012 Ordinary General Shareholders Meeting adopted the resolution on payment of

dividend from the profit for 2011 in total amount of 24 830 271 PLN that is in gross amount of 0,75 PLN per share. Dividend was paid in full on the 23

rd July 2012. The right to dividend obtained

shareholders who held shares of Apator SA on the 6th July 2012. There were 33 107 028 shares

entitled to be paid including 7 774 492 registered shares of A series and 25 332 536 bearer shares of A, B and C series.

On the 23rd

October 2012 Executive Board of Apator SA made the decision on payment of interim dividend towards expected dividend from the profit for 2012 in total value of 13 242 811,20 PLN that is in gross amount of 0,40 PLN per share. For the payment of interim dividend towards expected dividend for financial year 2012 is entitled 33 107 028 registered shares of A series and bearer shares of A, B and C series. The rights to interim dividend towards expected dividend obtain the shareholders who will hold the shares of Apator SA on the 6

th December 2012 but the payment was made on the

13th December 2012.

The Executive Board of Apator SA declares that it will recommend General Shareholders Meetings the payment of second part of dividend from the profit for financial year 2012 in gross amount of 0,80 PLN per share that is the value in total 26,5 m PLN.

The total declared gross value of dividend is 1,20 PLN per share that is 39,7 m PLN.

Dividend per share of Apator SA

0,05 PLN

0,15 PLN

0,36 PLN

0,64 PLN

0,80 PLN

0,50 PLN

0,35 PLN

0,50 PLN

0,60 PLN

0,03 PLN

1,20 PLN

0,14 PLN

0,75 PLN

0,00 PLN

0,20 PLN

0,40 PLN

0,60 PLN

0,80 PLN

1,00 PLN

1,20 PLN

1,40 PLN

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 *)

*) declared value of dividend

19. Loans or borrowings guarantees, granting a guarantee

At the 31st December 2012 total value of loans or borrowings guarantees or granting a guarantee is

not equal at least 10% of equities of the issuer.

19.1. Loans and borrowings Loans and borrowings in entities of capital group of Apator at the 31

st December 2012 are as follows:

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Description

Loans and borrowings at 31.12.2012 (000’PLN)

Short-term Long-term TOTAL

APATOR S.A. 35 358 0 35 358

APATOR CONTROL SP. Z O.O. 0 0 0

APATOR GmbH*) 227 88 315

APATOR METRIX S.A. 5 905 8 000 13 905

APATOR MINING SP. Z O.O. 0 0 0

GRUPA APATOR POWOGAZ 1 570 4 887 6 457

including: APATOR POWOGAZ SA 1 222 4 887 6 109

FAP PAFAL S.A. 0 0 0

GRUPA APATOR RECTOR 0 0 0

including: APATOR RECTOR SP. Z O. O. 0 0 0

Total entities of capital group of Apator 42 833 12 887 55 720

Total capital group of Apator (consolidated data) 42 606 12 799 55 405

*) long-term and short-term borrowing granted by Apator SA eliminated in consolidation of results

19.2. Information on borrowings granted

On the 21st September 2007 contract of borrowing was concluded between Apator SA and

Apator GmbH. Under the contract concluded, Apator SA granted the borrowing to the subsidiary in the amount of 75 000 Eur. The borrowing is to be repaid by the 30

th June 2013.

On the 11th December 2008 the contract of second borrowing was concluded between Apator SA and

Apator GmbH. Under the contract concluded Apator SA granted the borrowing to subsidiary - Apator GmbH in the amount of 50 000 Eur. The borrowing is to be repaid by the 31

st May 2014.

At the 31st December 2012 the value of borrowings was 214 000 PLN due to short term borrowings

and 83 000 PLN due to long term borrowings. On the 5

th September 2012 Apator Metrix SA (on the day of acquisition of shares) granted the

borrowing to George Wilson Industries Ltd. (GWi Ltd.) in amount of 1,6 m GBP (8,5 m PLN according to the exchange rate of the National Bank of Poland dated 5.09.2012 of 5,34 PLN/1 GBP).

19.3. Contigent liabilities

Parent entity - Apator SA: On the 30

th December 2010 the shareholders of Apator Rector Sp. z o.o. that is Apator SA (70 %

shares) and 2 natural persons (30% shares) concluded the contract where according to it Apator Rector sp. z o. o. will maintain current ownership structure, for three following financial years (not shorter time than till to the 31

st December 2013). After that period Apator SA has got the right to

acquire other 30% shares (call option), but other shareholders have got the right to sell 30% shares (put option), to Apator SA.

Subsidiary - Apator Powogaz SA:

Price premium – purchase of shares in Apator Metroteks TOV:

Sellers of shares in APATOR Metroteks TOV have been granted extra contingent price premium depending on revenues on sales and net result to be achieved in the future by the company. On the 27

th February 2012 additional agreement to purchase contract of shares of APATOR METROTEKS

was finally settled. The value of extra charge to the shares was 10.000,00 EUR, of equivalent of 41.654,00 PLN. The amount has increased the value of shares possessed.

Price premium – purchase of shares in Apator Telemetria Sp. z o.o.:

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Sellers of shares in APATOR Telemetria Sp. z o.o. have been granted extra contingent price premium depending on net result by the Company in 2008-2011. On the 26

th March 2012 annex was

signed with the shareholders of APATOR TELEMETRIA Sp. z o.o, concerning final settlement of investment contract concluded on the 28

th January 2009. The Parties agreed in the annex final

settlement of investment contract. Total value of extra charges to shares was 350.000,00 PLN. The amount has increased the value of shares possessed.

20. Other information significant for the assessment of personnel, property, financial situations, financial result and their changes and information important for the assessment of the capacity of the issuer to perform its obligations.

Due to resign of current Janusz Niedźwiecki - President of Executive Board of Apator SA to candidate for the President in next tenure, on the 23

rd October 2012 Mr Andrzej Szostak was

nominated the candidate for the President of Executive Board of Apator SA by the decision of the Supervisory Board for the next tenure in 2013-2015.

Due to the retirement of Mr Zbigniew Baranowski up to date Production Director, on the 20th August

2012, Executive Board of Apator SA cancelled his independent proxy and nominated Mr Krzysztof Malec the proxy - new Production Director.

21. Factors that in opinion of the Executive Board of Apator SA will have the influence on results achieved by it in the perspective of at least one next quarter

Before any investment decision concerning shares is made, potential investors should consider the above risk factors and other information included in this statement. Every factor discussed below may have a substantial influence on the activity, financial position and perspectives of development of the Company and at the same time may substantially have the influence on the price of shares. Development and risk factors described below are not the only risks to which capital group of Apator is exposed. The issuer has presented only the risk factors considered as important ones. There are may be also other risk factors that according to the issuer are not important at the moment or those that have not been identified yet and which are able to cause the results mentioned above. Presenting the order of risk factors, the issuer was not guided neither by the probability of their occurrence nor the assessment of their magnitude. The development and risk factors presented below refer to both Apator SA and capital group of Apator.

21.1. Zonal permit and location of the activity in Pomeranian Special Economic Zone Apator SA on the 28

th December 2010 received issued by Pomeranian Special Economic Zone with

headquarters in Sopot, Permission No.69/PSSE to run business activity on the area of Pomeranian Special Economic Zone in Ostaszewo in the Kujawy-Pomorze Province. The permission was granted to run manufacturing and commercial activities and service in the range of product manufactured and services made within the zone based on Statistical Classification of Economic Activites of Central Statatistical Office. In accordance with conditions specified in Permission, Apator SA is obliged to:

- to bear capital expenditure on the area of Pomeranian Special Economic Zone up to the 31st

December 2014 of the value exceeding 50 m PLN; - to employ at least 100 employees in the period up to the 31

st December 2014 and maintain

that level of employment till the 31st December 2015

- to complete a new investment till the 31st December 2014,

- running of business activity for the period not shorter than 5 years since the moment when the entire investment is completed

- observation of the Regulations of Pomeranian Special Economic Zone and other legal provisions concerning the operation of the Zone.

Apator SA selected the usage of tax relief due to new investment costs incurred. The value of the relief (sum of money available) for the Company is the product “intensity of help” (for Kujawy –Pomorze Province is to 50%) and the size of investment (minimum 50 m PLN –

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maximum 75 m PLN). The relief of CIT (Corporate Income Tax) is valid since the month when investment was incurred till the help money runs out. The sum of money to be used by Apator SA till 2020 is 25-37, 5 m PLN. It is relief of income tax of legal entities calculated from income earned on sale in the zone. Apator SA commenced its activity on the area of Pomeranian Special Economic Zone on the 1

st June 2012. The value of tax relief used was 1 354 000 PLN in 2012.

21.2. Sales of property

On the 5th July 2012, APATOR SA and Galeria Copernicus Toruń 2 Sp. z o.o. with the headquarters in

Warsaw concluded the final contract of the right of perpetual usufruct of land and buildings and structures being separate objects of property in Toruń, Żółkiewskiego 21/29. The sales price of property is 36.072 000 PLN, including 2.000 000 PLN due to performance by APATOR SA road investment on the area of property. Towards the price on the 21

st April 2011 the down-payment was

paid in amount of 7.000 000 PLN. The outstanding amount of 29.072 000 PLN was deposited on escrow account on the 22

nd April 2011. The schedule of payment on escrow account is the following:

11.036 000 PLN – payment after the contract is concluded and after the receipt protocol regarding property is transferred;

9.036 000 PLN – payment after the extracts from land and mortgage register are submitted that indicate the Buyer as the perpetual user of the property;

2.000 000 PLN – payment in parts (till the 31st October 2012) according to the schedule of

demolition of buildings and structures on the area of property;

5.000 000 PLN – payment after the final decision is submitted where it transfers in favour of the Buyer the permit for construction;

2.000 000 PLN – payment after submission of receipt protocol confirming the performance of the road investment on the area of property i.e. with the deadline the 28

th February 2013.

Till the day of preparation of hereby protocol all payments mentioned in the schedule were made to the account of the Company.

21.3. Crucial external and internal factors for the development of capital group of Apator External factors for the development - programme of replacement of traditional electricity meters by smart meters in Poland - replacement of traditional electricity meters by smart meters in Western Europe, · The Netherlands – gas and electricity · United Kingdom – gas and electricity · Germany – electricity · Italy – gas - increase of investments in low voltage network of energy holdings, - increase of expenditures on information technology (particularly the inventory system of objects in

the network) Internal factors of development - Strategy of activity consequently being performed based on two segments on the market,

The transfer of activity of Apator SA to modern company to the Pomeranian Special Economic Zone.

Strategy of electronic electricity meters being implemented in one place in capital group of Apator i.e. in Apator SA,

- Intensive research and development studies particularly regarding metering systems - Common marketing activity, logistics, purchasing etc. within capital group of APATOR, - Certification of products in accordance with MID – Directive of European Union, - Implementation of CRM system in capital group Apator (customer relationship management) - Automation of manufacturing of gas meters and electricity meters - Studies on strategy for 2014-2018 with direction of further development specified

22. Risks and threats

Among significant factors of risks and threats of capital group of Apator focuses on:

22.1. External risks and threats

- Economic situation in EU

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Currency risk related to the change of Eur exchange rate (export) and American dollar exchange rate (import)

- Consolidation in the Polish power engineering - The possibility of the entry of new players to metering market due to the replacement of traditional electricity meters to smart metering - Lack of engineering standards for smart metering in Poland Internal risks and threats

- Necessity of restructuring of employment in PAFAL SA after the transfer of the manufacturing of electronic electricity meters to Apator SA. The target is to focus the activity of Pafal SA on manufacturing of inductive electricity meters and rendering of services related to inductive electricity meters.

- End of three year tenure of Executive Board in June 2013 after General Shareholders Meeting held (change of the President of Executive Board).

Moreover, one should pay attention to the objectives and principles of financial risk management of Apator SA described in point 7.26 of annual individual financial statement for 2011 of Apator SA (Annual Report R-2011)

23. The prospects of development of capital group of Apator

The capital group of Apator is bound to obtain the leading position in Central and Eastern Europe in the scope of both the development and sales of metering equipment and systems and switchgear. The capital group of Apator aims at to become the beneficent of technological turning point that is expected due to intentions to introduce smart power grids in Europe. Smart metering will become the part of that initiative. According to Forst&Sullivan, smart meters market in Europe will increase six times till 2017 in relation to 2012 at average annual increase rate about 29%. The number 150 million smart meters are to be installed in Europe till 2020. Apator SA carefully monitors the introduction of smart power grids, standards and technical standards in this sector where the process is to be completed in 2012/2013. It is connected with the possibility to offer new products in switchgear sector (that may take the advantage of the development of smart power grids). The most important strategic initiatives that to be carried out by capital group of Apator in 2011 – 2013 are as follows: Geographical expansion The capital group of Apator focuses on the following key geographical markets: Central and Eastern Europe Countries and Russia, Commonwealth of Independent States, Germany, Austria, Benelux Countries, United Kingdom, Switzerland, Turkey. One of the most important areas for the development of the capital group of Apator is the region of Central and Eastern Europe. The strategic objective is also to achieve by the Company strong position of the Apator brand on the above mentioned markets. Technological development The capital group of Apator will concentrate on development of technology, products and services related to economical energy consumption, metering, work optimization in the network and modern switchgear. The Company is also interested in offering comprehensive services for industry and institutional consumers leading to economical consumption of energy and other utility services (advising, programmes, hardware, and software).The capital group of Apator will extend its offer by inventory services of property in the network for distribution companies. System development The capital group of Apator is going to maintain position of the leader on the Polish metering market. The company also wants to take part in the first big implementations of remote data read out and metering management systems abroad. The development of multi power systems will be accelerated by agreements, alliances, purchasing of technologies, licenses. Extension of customer database The capital grolup of Apator is going to offer current and new products and services for new groups of customers. Besides the industry and institutional customers, the Company will direct also its offer to electrical installation companies, integrators, housing associations and it has the intention to increase its share in sales to water and heat distribution companies (among other things due to new products and comprehensive offer with services included). The capital group of Apator will introduce new

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versions of advance electronic meters of increased accuracy and better possibilities of remote communication to the manufacturing. Apator co-operates in design of standards for smart metering in Poland. Other factors One of the strategic objectives is permanent improvement of quality and reliability of products that will be allowing at the increasing the share in requiring foreign markets (Western Europe). The capital group of Apator participates in larger and larger scale in alliances, consortiums and it will be more involved in initiatives to make popular the idea of smart metering and in the establishment of the Polish and European metering standards.