1.1. Basic Information About the Company

Table of contents

1.General information

1.1. Basic information about the Company

1.2. Business activities of the Company

1.3. Management Board and Supervisory Board members

2.Basic of preparation, presentation currency and roundings applied

2.1. Basis of preparation of the condensed financial statements

2.2. Accounting policies

2.3. Application of International Financial Reporting Standards

2.4. Presentation currency and roundings applied

2.5. Period of the Company’s activities

2.6. Approval of financial statements

3.Financial statements of Apator S.A.

3.1. Statement of financial position

3.2. Statement of comprehensive income

3.3. Statement of changes in equity

3.4. Statement of cash flows

4.Use of estimates and judgements

5.Seasonality of operations

6.Notes to the financial statements

6.1. Operating segments

6.2. Property, plant and equipment

6.3. Other financial assets

6.4. Inventories

6.5. Trade receivables and other receivables

6.6. Loans granted

6.7. Share capital

6.8. Other capital

6.9. Loans and borrowings

6.10. Provisions

6.11. Income tax

6.12. Finance income and expenses

6.13. Explanatory notes to the statement of cash flows

6.14. Related parties

6.15. Contingent liabilities and other items not included in the statement of financial position

6.16. Personnel structure

6.17. Changes in accounting policies

6.18. Subsequent events

7.Signatures

1. General information
2. Basic information about the Company

Apator S.A. is seatedin Toruńul. Gdańska 4a/C4. It was established by the employees of liquidated state-owned entity PomorskieZakładyAparaturyElektrycznejApatorin Toruń. Itwas registered in the District Court in Toruń, V Commercial Department on 14 January 1993 under the number RHB 1364. On 24 October 2001 the Company was registered in the District Court in Toruń, VII Commercial Department of the National Court Register under the number 0000056456. The Companyoperatesin Poland under the regulations of Commercial Companies Code.

1.2.Business activities of the Company

According to the Company’s articles of association the Company is primarily involved in manufacturing of switchgear and control equipment for electricity as well as sale of metering devices and systems. The Company’s sharesare quoted on the basic market classified as electric machines sector of the Warsaw Stock Exchange.

1.3.Management Board and Supervisory Board members

Management Board

• AndrzejSzostak – President of the Management Board (from 25 June 2013)
• JanuszNiedźwiecki – President of the Management Board (until 24 June 2013)
• Tomasz Habryka – Member of the Management Board
• Jerzy Kuś – Member of the Management Board

Supervisory Board

• JanuszNiedźwiecki – Chairman of the Supervisory Board (from 25 June 2013)
• MariuszLewicki – Deputy Chairman of the Supervisory Board
• JanuszMarzygliński – Member of the Supervisory Board (Chairman of the Supervisory Board until 24 June 2013)
• DanutaGuzowska – Member of the Supervisory Board
• Krzysztof Kwiatkowski – Member of the Supervisory Board
• MarcinMurawski – Member of the Supervisory Board (from 25 June 2013)
• RyszardWojnowski – Member of the Supervisory Board (until 24 June 2013)
• ErykKarski – Member of the Supervisory Board (until 24June 2013)

1. Basic of preparation, presentation currency and roundings applied
2. Basis of preparation of the condensed financial statements

The condensed interim financial statements of Apator S.A. as at and for the period ended 30 June 2013 have been prepared in accordance with International Financial Reporting Standards (IAS 34 “Interim Financial Reporting”)adopted by the European Union. These condensed interim financial statements do not include all the information required for complete set of financial statements and should be read together with the financial statements of Apator S.A. as at and for the year ended31 December 2012.

The condensed interim financial statements of Apator S.A. cover the first half of the year 2013 and include comparative information for the year 2012 and the first half of the year 2012. The statement of comprehensive income includes information for the period from 1 April to 30 June 2013 and from 1 January to 30 June 2013. Moreover, the financial information for the year ended 31 December 2012is also presented in these financial statements.

2.2.Accounting policies

The condensed financial statements have been prepared on the historical cost basis, except for the valuation of certain non-current assets (investment property) and financial instruments (derivatives), which are measured at fair value. The accounting policiesapplied in the condensed financial statements are the same as those appliedin the financial statements as at and for the year ended31 December 2012, except for changes described in note 6.18.

2.3.Application of International Financial Reporting Standards

FIRST TIME ADOPTION

The following standards, amendments to standards and interpretations (adopted or being in the process of adoption by the European Union) are effective as at 1 January 2013:

– Amendments to IFRS 7 “Financial instruments: disclosures – offsetting financial assets and financial liabilities” – effective date for annual periods beginning as at 1 January 2013 or later;

– IFRS 13 “Fair value measurement” - effective date for annual periods beginning as at 1 January 2013 or later;

– Amendments to IAS 1 „Presentation of financial statements: presentation of items of other comprehensive income” - effective date for annual periods beginning as at 1 July 2012 or later;

– Amendments to IAS 12 “Income taxes – deferred tax: recovery of underlying assets” - effective date for annual periods beginning as at 1 January 2013 or later;

– Amendments to IAS 19 issued in year 2011 „Employee benefits” - effective date for annual periods beginning as at 1 January 2013 or later.

The adoption of the above standards and interpretations did not result in significant changes either in the Company’s accounting policies or in the presentation of the financial statements, except for IAS 19. Effects of changes in IAS 19 have been described in section 6.17.

STAndards and interpretations not yet adopted by the European Union

As of the publication date of these financial statements the following standards and interpretations are awaiting to be endorsed by the European Union:

- Amendments to IFRS 10, IFRS 12 and IAS 27 “Investment entities” - effective date for annual periods beginning as at 1 January 2015 or later;

- Amendments to IFRS 9 issued in 2009 and 2010 “Financial instruments” - effective date for annual periods beginning as at 1 January 2015 or later;

- Amendments to IFRS 9 “Financial instruments” and IFRS 7 “Financial instruments: disclosures” - effective date for annual periods beginning as at 1 January 2015 or later;

- Amendments to IAS 36 „Impairment of assets: recoverable amount disclosures for non-financial assets” - effective date for annual periods beginning as at 1 January 2014 or later;

- IFRIC 21 „Levies” - effective date for annual periods beginning as at 1 January 2014 or later;

- Amendments to IAS 39 “Financial instruments: recognition and measurement” - effective date for annual periods beginning as at 1 January 2014 or later.

The Management is currently evaluating consequences and impact of the new standards implementation on the financial statements. However, no significant impact is expected.

STANDARDS AND INTERPRETATIONS NOT APPLIED IN PREPARING THESE FINANCIAL STATEMENTS

As of the date of these financial statements there are standards and interpretations which were adopted by the European Union but are not yet effective:

– IFRS 10 “Consolidated financial statements” - effective date for annual periods beginning as at 1 January 2014 or later;

– IFRS 11 “Joint arrangements” - effective date for annual periods beginning as at 1 January 2014 or later;

– IFRS 12 “Disclosure of interests in other entities” - effective date for annual periods beginning as at 1 January 2014 or later;

– Amendments to IAS 27 issued in 2011 „Separate financial statements” - effective date for annual periods beginning as at 1 January 2014 or later;

– Amendments to IAS 28 issued in 2011 „Investments in associates and joint ventures” - effective date for annual periods beginning as at 1 January 2014 or later;

– Amendments to IAS 32 „Financial instruments: presentation – offsetting financial assets and financial liabilities” - effective date for annual periods beginning as at 1 January 2014 or later;

– Amendments to IFRS 10, IFRS 11 and IFRS 12 “Consolidated financial statements”, „Joint arrangements” and „Disclosure of interests In other entities: transition guidance” - effective date for annual periods beginning as at 1 January 2014 or later.

The Management is currently evaluating consequences and impact of the above new standards implementation on the financial statements. However, no significant impact is expected.

2.4.Presentation currency and roundings applied

The presentation currency of these condensed financial statements is Polish zloty (PLN), and all amounts are presented in thousands of Polish zloty (unless stated otherwise).

2.5.Period of the Company’s activities

Apator S.A. was established for an indefinite period.

The condensed financial statements were prepared under the assumption that the Company will continue to operate as a going concern for the foreseeable future, i.e. in a period of not less than 12 months after the end of the reporting period.

2.6.Approval of financial statements

These condensed financial statements were approved and signed by the Company’s Management Board on 22 August 2013.

1. Financial statements of Apator S.A.
2. Statement of financial position

* The restatement is presentedin note 17.

* The restatement is presented in note 17.

3.2.Statement of comprehensive income

* The restatement is presented in note 17.

* The restatement is presented in note 17.

3.3.Statement of changes in equity

3.4.Statement of cash flows

1. Use of estimates and judgements

Significant judgements and estimates made by the Management of Apator S.A. in applying accounting policies and the key sources of information used to determine the estimates are consistent with those applied in the complete set of annual financial statements of Apator S.A. as at and for the year ended31 December 2012, except for those described in note 17.

1. Seasonality of operations

Due to manufacturing of investment goods, the revenues of the Company are subject to seasonal fluctuations. Demand for the products of Apator S.A. is at it’s highest level in the third and fourth quarter of each year.

1. Notes to the financial statements
2. Operating segments

The Company has two key reportable segments within electric machines sector: metering and switchgear. The Company provides comprehensive services in the field of metering and reading of power utilities and provides the equipment to safe connection and disconnection of electrical circuits.

In presenting information on the basis of geography, Apator S.A. identified three areas of activity (which are not geographic segments):

• Home country – domestic sales;
• Export – sales outside the European Union;
• Union – sales to countries included in the European Union.

Geographical information

6.2.Property, plant and equipment

During the six-month period ended 30 June 2013 the most significant expenditure related to property, plant and equipment included investments in machinery and equipment.