INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS
for the I half of 2018 (for the period from 1 January 2018 till 30 June 2018)
Lublin, the 1st October 201 8 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
INDEX
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ...... 3 CONDENSED CONSOLIDATED INTERIM REPORT ON FINANCIAL SITUATION …………….5 INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT ...... 5 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY……………7 ADDITIONAL EXPLANATORY NOTES ...... 7 1. GENERAL INFORMATION ...... 7 4. DECLARATION OF CONFORMITY ...... 13 5. MEASUREMENT CURRENCY AND THE CURRENCY OF FINANCIAL STATEMENTS .. 13 6. VOLUNTARY CHANGE IN THE ACCOUNTING PRINCIPLES ...... 13 7. CHANGES IN ACCOUNTING ESTIMATES, ERROR CORRECTION ...... 15 8. TRANSLATION OF ITEMS STATED IN FOREIGN CURRENCIES ...... 15 9. SEGMENT INFORMATION ...... 16 10. REVENUE AND COSTS ...... 19 10.1. SALES REVENUE ...... 19 10.2. COSTS BY TYPE ...... 19 10.3. COSTS OF EMPLOYEE BENEFITS ...... 20 10.4. OTHER OPERATIONAL REVENUE ...... 20 10.5. OTHER OPERATIONAL COSTS ...... 21 10.6. NET FINANCIAL REVENUES AND COSTS ...... 21 11. IMPAIRMENT ALLOWANCES OF ASSETS – RECOGNITION AND REVERSAL ...... 22 12. EXPLANATIONS TO SELECTED ITEMS OF THE CONSOLIDATED STATEMENT ON FINANCIAL POSITION ...... 22 12.1. INVENTORIES ...... 22 12.2. TRADE AND OTHER RECEIVABLES ...... 22 12.3. PROVISIONS...... 24 12.4. FINANCIAL LIABILITIES ...... 24 12.5. TRADE AND OTHER LIABILITIES...... 25 13. CONTINGENT ITEMS AND OTHER OFF-BALANCE-SHEET ITEMS ...... 26 14. INFORMATION ON TRANSACTIONS WITH RELATED ENTITIES ...... 26 15. INCOME TAX AND DEFERRED INCOME TAX ...... 28 16. SEASONAL SALES VARIATIONS AND THE CYCLIC NATURE OF ACTIVITY ...... 28 17. INFORMATION REGARDING THE ISSUE, REDEMPTION AND REIMBURSEMENT OF NON-EQUITY AND EQUITY SECURITIES ...... 29 18. PROFIT PER SHARE ...... 30 19. INFORMATION ON PAID-OFF (OR DECLARED) DIVIDENDS ...... 32 20. FINANCIAL DERIVATIVES ...... 32 21. FINANCIAL RISK MANAGEMENT ...... 32 22. EVENTS AFTER BALANCE SHEET DAY ...... 32 23. ADDITIONAL INFORMATION ...... 33
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the period of 6 months ended the 30 June 2018 (in thousand PLN)
01.01.2018- 01.01.2017- 01.04.2018- 01.04.2017- 30.06.2018 30.06.2017 30.06.2018 30.06.2017 Note unaudited unaudited unaudited unaudited Continued operations
Revenue from sale of goods 10.1 43 362 92 603 18 875 38 095 Revenue from sale of products and 10.1 materials 31 801 48 483 12 778 30 711 Sale revenue 75 163 141 086 31 653 68 806
Costs of finished goods 10.2 (41 694) (74 705) (26 490) (33 092) Value of sold products and materials i materiałów 10.2 (28 300) (39 326) (13 279) (26 382) Own cost of sales (69 994) (114 031) (39 769) (59 474) Gross sales profit (loss) 5 169 27 055 (8 116) 9 332 Costs of sales 10.2 (8 818) (13 844) (5 092) (8 905) General administrative costs 10.2 (14 383) (13 667) (7 360) (7 081) Other operating revenues 10.4 1 502 2 255 657 1 181 Other operating costs 10.5 (4 151) (2 548) (3 257) (1 744) Financial income 10.6 227 3 178 207 2 124 Financial costs 10.6 (7 532) (3 980) (3 084) (1 444) Gross profit (loss) (27 986) (1 551) (26 045) (6 537) Income tax 15 3 799 (350) 3 598 796 Profit (loss) from continued operations (24 187) (1 901) (22 447) (5 741)
Net profit (loss) for the period (24 187) (1 901) (22 447) (5 741) Other totral income: valuation of financial derivatives (hedging policy) - 3 916 - 3 916 Other total net income - 3 916 - 3 916
TOTAL INCOME OF THE PERIOD (24 187) 2 015 (22 447) (1 825) Net profit (loss) attributable to - Shares not giving control (1 551) (1 456) (1 286) (1 690) -Shareholders of the parent company (22 636) (445) (21 161) (4 051) Total income attributable to - Shares not giving control (1 551) (1 456) (1 286) (1 690) -Shareholders of the parent company (22 636) 3 471 (21 161) (135)
Net profit (loss) per share in PLN attributable to shareholders of the parent company
– basic from profit for the period (0,38) (0,01) (0,36) (0,07) –basic from continued operations for the period (0,38) (0,01) (0,36) (0,07)
– diluted from profit for the period (0,38) (0,01) (0,36) (0,07) – diluted from continued operations for the period (0,38) (0,01) (0,36) (0,07) Lublin, 1 October 2018
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
CONDENSED CONSOLIDATED INTERIM REPORT ON FINANCIAL SITUATION As at the 30th June 2018 (in thousand PLN) 30.06.2018 31.12.2017 ASSETS unaudited Fixed assets 149 513 146 180 Tangible fixed assets 98 201 97 123 Investment properties 11 192 11 192 Goodwill 4 105 4 349 Other intangible assets 14 696 16 019 Long-term investments 298 - Long-term receivables 12.2 16 686 16 960 Shares 36 36 Diferred tax assets 15 4 299 501 Current assets 332 636 249 425 Inventories 12.1 210 765 182 262 Short-term investments 760 759 Trade and other receivables 12.2 117 481 63 856 Cash and cash equivalents 3 630 2 548
Assets available for sale 189 39
TOTAL ASSETS 482 338 395 644
LIABILITIES Equity attributable to shareholders of the parent company 85 991 108 627
Share capital 59 180 59 180 Share premium 64 998 64 998 Other capital (144) (144) Retained profits (38 043) (15 407) Equity attributable to minority shareh olders (2 894) (1 343)
Total equity 83 097 107 284
Long-term liabilities 41 970 44 116 Credits and loans 12.4 24 622 26 630 Non-current provision 12.3 750 750 Trade and other liabilities 12.5 7 414 8 260 Other financial liabilities 12.4 9 184 8 475 Short-term liabilities 357 271 244 244 Credits and loans 12.4 230 472 115 563 Trade and other liabilities 12.5 112 602 117 807 Other financial liabilities 12.4 2 782 2 833 Current provision 12.3 4 906 3 495 Employee benefit liabilities 12.5 2 960 2 416 Accruals 12.5 3 549 2 129 Total liabilities 399 241 288 360
TOTAL LIABILITIES 482 338 395 644
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the period of 6 months ended the 30 June 2018 (in thousands of PLN)
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Operating cash flow Net profit / (loss) (27 986) (1 551) Corrections in the items: (70 132) (67 541) Depreciation 5 602 4 959 Net interest and dividends 3 021 2 520 Profit / loss on foreign exchange differences 2 198 (667) (Profit) / loss on investment activities 155 (31) Increase / decrease in receivables (53 351) (24 741) Increase / decrease in inventories (28 503) (22 503) Increase / (decrease) in liabilities (635) (31 444) Increase / (decrease) in accruals - 725 Increase / decrease in provisions 1 411 405 Income tax paid - (3) Other (30) 3 239 Net operating cash flow (98 118) (69 092) Investment activities cash flow Sale of tangible fixed assets and intangible assets 185 49 Acquisition of tangible fixed assets and intangible (3 073) (716) assets Sale of financial assets - 1 147 Acquisition of financial assets - (1) Repayment of granted loans - 400 Loans granted - (1 650) Other (69) (14 169)
Net investment activities cash flow (2 957) (14 940)
Financial activities cash flow Inflows from the issue of shares - 13 691 Repayment of financial lease liabilities (2 084) (1 209) Inflows from loans and bank credits 134 889 55 495 Repayment of loans / bank credits (27 626) (11 681) Interests paid (2 995) (2 517) Other (27) 697
Net financial activities cash flow 10 2 157 54 476 Cash at the beginning of the period- Ursus - 1 645 Wschód Sp. z o.o. Change in cash and cash equivalents 1 082 (27 911) Net exchange differences - (4) Cash at the beginning of the period 2 548 29 746 Cash at the end of the period, including 3 630 1 831
Lublin, 1 October 2018
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the period of 6 months ended the 30 June 2018 (in thousands of PLN)
Equity attributable to dominant entity’s shareholders Equity attributable to Share Share Other Retained minority Total capital premium capital profits Total shareholders equity
As of 1 January 2017 54 180 57 498 (4 374) 24 274 131 578 5 052 136 630 Corrections of previous years - - - (1 148) (1 148) - (1 148) As of 1 January 2017 (after adjustment) 54 180 57 498 (4 374) 23 126 130 430 5 052 135 482
Total income, including: - - 3 916 (445) 3 471 (1 456) 2 015 - profit or (loss) of - - - (445) (445) (1 456) (1 901) the current period -other total income - - 3 916 - 3 916 - 3 916 Share premium - 7 500 - - 7 500 - 7 500 Issue of shares 5 000 - - - 5 000 - 5 000
As of 30 June 2017 59 180 64 998 (458) 22 681 146 401 3 596 149 997
As of 1 January 2018 59 180 64 998 (144) (15 407) 108 627 (1 343) 107 284
Total income, including: - - - (22 636) (22 636) (1 551) (24 187) - profit or (loss) of - - - (22 636) (22 636) (1 551) (24 187) the current period - other total income ------
As of 30 June 2018 59 180 64 998 (144) (38 043) 85 991 (2 894) 83 097 Lublin, 1 October 2018
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
ADDITIONAL EXPLANATORY NOTES
1. General information
The interim condensed consolidated financial statement of the Capital Group URSUS („Group”) includes the financial data of the parent company URSUS S.A and its subsidiaries URSUS BUS S.A. in Lublin and URSUS Dystrybucja Sp. z o.o. in Lublin. The consolidated statement of the Group covers the period ended the 30th June 2018 and includes comparative data for the the period ended the 30 June 2017 roku for the dla condensed consolidated statement of comprehensive income, the condensed consolidated cash flow statement and the condensed consolidated statement of changes in equity and as at the 31 December 2017 for the condensed consolidated statement of financial position.
The parent company is registered in the Register of Entreprenuers of the National Court Register kept by the District Court, VI Commercial Division of the National Court Register, under the KRS number 13785. The Company was given the statistical REGON number 510481080 and tax identification number (NIP): 739-23-88-088. The duration of parent company as well as of entities comprising the Group is indefinite.
The main activity of the parent Company is production of machinery for agriculture and forestry.
2. Composition of the Group
The Group consists of the parent company URSUS S.A., its three subsidiaries and two associates:
URSUS BUS production of Full Lublin direct 77,3 77,3 1. S.A. buses consolidation
URSUS sales of Full Dystrybucja Lublin agricultural tractors direct 95,9 95,9 2. consolidation Sp. z o.o. and machinery sales of No Ursus Sp. o.o. Lublin agricultural tractors direct 100,0 100,0 3. consolidation and machinery No AIU+ Sp. z o.o. Lublin R&D direct 24,0 24,0 4. consolidation
Nowe Technologie indirect No Lublin R&D 15,5 15,5 5. Przemysłowe ** consolidation Sp. z o.o. **) Share of Ursus BUS S.A. in Nowe Technologie Przemysłowe Sp. z o.o. is 20%, share of Ursus S.A. in Nowe Technologie Przemysłowe Sp. z o.o. through Ursus BUS S.A. is accordingly 77,3% x 20% = 15,5%
URSUS BUS S.A.
The company URSUS BUS S.A. with the seat in Lublin was established on 24.04.2015.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Its shareholders are the Issuer who acquired 60% of shares and AMZ Kutno sp. z o.o. which acquired 40% of shares. The Company has an unlimited period of operation, its main business activity will be sales production and sales of buses and trolleybuses.
According to the resolution of the General Meeting of the Company URSUS BUS S.A. dated 14.06.2016, the share capital of the Company was increased from 100.000 PLN to 12.627.500 PLN by issue of 12.527.500 shares of the nominal value 1 PLN per share. All newly created shares was acquired by the previous shareholders of the: URSUS S.A. and AMZ Kutno S.A. for the non-cash contributions and partial cash contributions, in a proportionate manner.
On the 21 December 2016 the General Meeting of the Company URSUS BUS S.A adopted a resolution on increasing the Company’s share capital by 1.000.000 PLN. i.e. to the amount of 13.627.500 PLN by issue of shares of the nominal value 1 PLN per share. All the above- mentioned shares were acquired by the previous shareholdres of the Company.
On the 14 December 2017 the General Meeting of the Company URSUS BUS S.A adopted a resolution on inceasing the Company’s share capital by 5.000.000 PLN. i.e. to the amount of 18.627.500 PLN by issue of shares of the nominal value 1 PLN per share. All the above- mentioned shares were acquired through private subscription addressed to URSUS S.A. and they were paid up in full with cash.
On the 5th February 2018 the company Invest-Mot sp. z o.o. purchased 29% of shares of the company URSUS BUS S.A. held by AMZ Kutno S.A.
On the 17 April 2018 the court registered a share capital increase of URSUS BUS S.A. by the amount of 5.372.000 PLN, i.e. to the amount of 24.000.000 zł, effected under resolution of the Extraordinary General Meeting of the Company dated 14.12.2017. The share capital of the Company was increased by issue of shares of the nominal value 1 PLN per share. All the above- mentioned shares were acquired through private subscription addressed to URSUS S.A. and they were paid up in full with cash.
As of the date of publication of this report, the Issuer holds 77,3%, and INVEST- MOT sp. z o.o.– 22,7% shares of the company URSUS BUS S.A.
Establishment of the company URSUS BUS S.A. results from implementation of the strategy of the Issuer’s Management Board aiming to increase the activity of the brand URSUS on the market of buses, trolleybuses and electric buses. Acquirement of a renowned sector partner will speed up growth of share of URSUS brand vehicles in the market segment. Buses, trolleybuses and electric buses manufactured by URSUS BUS S.A. responds to increasing demand for innovative and ecological means of transport.
URSUS Dystrybucja sp. z o.o.
The company URSUS Dystrybucja sp. z o.o. with the seat in Lublin was established by transformation on the 11 December 2017 of the company LZM3 sp. z o.o. with the seat in Lublin.
On the 6th November 2017 a merger of two subsidiaries of the Issuer – the company URSUS Zachód sp. z o.o. with the seat in Koszalin and the company URSUS Wschód sp. z o.o. with the seat in Lublin with the company LZM3 sp. z o.o. with the seat in Lublin took place, by transferring all assets of these companies in exchange for shares of the company LZM3 sp. z o.o., which were issued to the shareholders of the companies being acquired. As a consequence the company URSUS S.A., as the shareholder of these companies, became shareholder of the LZM3 sp. z o.o.
On the 11 December 2017 the Extraordinary General Meeting LZM3 sp. z o.o. adopted a resolution on increase of the Company's share capital from 8.900.100 PLN to 16.900.100 PLN. URSUS S.A. acquired 80.000 new shares in the company LZM3 sp. z o.o., which were fully covered in cash in the amount of 8.000.000 PLN. On the same day the Extraordinary General Meeting LZM3 sp. z o.o. adopted a resolution on change of the company’s name to URSUS Dystrybucja sp. z o.o. The above-mentioned changese were registered in the the National Court Register on the 8th January 2018.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
On the 14 May 2018 the Extraordinary General Meeting URSUS Dystrybucja sp. z o.o. appointed a four-person composition of the Manegement Board of a new, joint term of office, as well as it changed the Articles of Association by establishing th Supervisory Board, with simulatenous appointment of its members. The Company has an unlimited period of operation, and its share capital amounts to 16.900.100 PLN.
The main business activity of the company URSUS Dystrybucja sp. z o.o. is sale of agricultural tractors and machines URSUS, together with spare parts and consumables. Besides, the company provides services related to warranty and servicing repairs. As of the date of publication of this report, the shareholders of Ursus Dystrybucja sp. z o.o. are URSUS S.A., holding 95,925% shares, Karol Nowe (2,064% shares), Marzena Nowe (1,981% shares), Edyta Lewandowska (0,027% shares) and Michał Wiśniewski (0,003% shares).
URSUS sp. z o.o. The company Ursus sp. z o.o. with the seat in Lublin was established on 18.02.2016 by the company URSUS S.A., which holds 100% of its shares. On 05.04.2016 the company was registered in the Register of Entrepreneurs of the National Court Register under the no. 0000610381. The main business activity of the company is bulk sale of machinery for agriculture and forestry. The Company has an unlimited period of operation, and its share capital amounts to 5.000,00 PLN.
AIU+ sp. z o.o.
On the 2nd January 2017 the company AIU+ sp. z o.o. with the seat in Lublin was established. The company URSUS S.A. acquired 24% of the shares in the newly established entity. On 24.03.2017 the company was registered in the National Court Register, under no. KRS 00000669664. The business profile of the company are financial and advisory services, research and development works. The Company has an unlimited period of operation, and its share capital amounts to 5.000,00 PLN.
Nowe Technologie Przemysłowe sp. z o.o.
On the 9th September 2016 the company became shareholder of the newly established company Nowe Technologie Przemysłowe sp. z o.o. with the seat in Lublin, in which it acquired 20% shares. Its other shareholders are: the Lublin Catholic University of John Paul II, the Lublin University of Technology, MPK-Lublin sp. z o.o. and the company XDISC S.A.
On 26.09.2016 the company was registered in the National Court Register, under no. KRS 0000637959. The business profile of the company Nowe Technologie Przemysłowe sp. z o.o. are research and development works. The Company has an unlimited period of operation, and its share capital amounts to 150.000,00 PLN.
As at 30 June 2018 the sahare in the total number of votes held by Ursus S.A. in the subsidiaries is equal to the share of Ursus S.A. in the share capital of the subsidiaries. Additionally, the subsidiary URSUS BUS S.A. holds 20% in the associate Nowe Technologie Przemysłowe Sp. z o.o.
In the first half of 2018 there was no loss of control over the subsidiaries. The entities URSUS sp. z o.o., AIU+ sp. z o.o. and Nowe Technologie Przemysłowe sp. z o.o. are not consolidated due to immateriality of their financial data.
URSUS S.A. share capital as of 30.06.2018. Company's share capital amounted to 59,180,000 ordinary bearer shares with a nominal value of PLN 1.00 each.
According to the knowledge of the Company, as of 30.06.2018, shareholders holding at least 5% of the total number of votes are the following entities:
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Number of % of share Number of % of total votes Shareholder* Shares capital votes number
POL-MOT HOLDING S.A. with its related 23 684 996 40,02% 23 684 996 40,02% companies**
PB ELIN sp. z o.o. 3 350 000 5,66% 3 350 000 5,66% Others 32 145 004 54,32% 32 145 004 54,32% Total 59 180 000 100,00% 59 180 000 100,00%
* Shareholders’ structure demonstrated on the basis of notices from the shareholders ** together with REO sp. z o.o. Inwestycje S.K.A., POL-MOT AUTO S.A. and Invest- Mot sp. z o.o. On the 17 th September 2018 the Court registered the increase of the share capital of the parent company was registered from 59.180.000 to the amount of 64.600.000 i.e. by the amount of 8.900.000 (eight million nine hundred thousand) PLN by issue of 5.420.000 of ordinary S series bearer shares of nominal value of 2,5 PLN per share, within a private subscription adopted by the Extraordinary General Meeting of URSUS S.A. on 31 August 2018.
According to the knowledge of the Company, as of the date of publication of this report, shareholders holding at least 5% of the total number of votes are the following entities:
Number of % of share Number of % of total votes Shareholder* Shares capital votes number
POL-MOT HOLDING S.A. with its related 26 984 996 41,77% 26 984 996 41,77% companies**
PB ELIN sp. z o.o. 3 350 000 5,19% 3 350 000 5,19% Others 34 265 004 53,04% 34 265 004 53,04% Total 64 600 000 100 % 64 600 000 100 %
* Shareholders’ structure demonstrated on the basis of notices from the shareholders ** together with REO sp. z o.o. Inwestycje S.K.A., POL-MOT AUTO S.A., Prologus sp. z o.o. and Invest- Mot sp. z o.o.
Composition of the Management Board of the parent company URSUS S.A.
The Composition of the Management Board of the parent company URSUS S.A. as of the 30 June 2018 and as at the date of publication of this report was the following:
1. Karol Zarajczyk - President of the Management Board 2. Monika Kośko - Deputy President of the Management Board 3. Michał Nidzgorski - Deputy President of the Management Board 4. Zoran Radosavljević - Member of the Management Board 5. Marcin Matusewicz - Member of the Management Board
On the 17 April 2018 Mr Pan Jan Wielgus and Mr Marek Włodarczyk resigned from their positions of Members of the Management Board of URSUS S.A., with effect from the 17 April 2018. As of the 30 June 2018 and as at the date of publication of this report the Company’s proxy is: 1. Agnieszka Wiśniewska – Chief Accountant, Deputy Financial Director.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Composition of the Supervisory Board of the parent company URSUS S.A.
The Composition of the Supervisory Board of the parent company URSUS S.A. as of the 30 June 2018 and as at the date of publication of this report was the following:
1. Andrzej Zarajczyk - Chairman of the Supervisory Board 2. Henryk Goryszewski - Deputy Chairman of the Supervisory Board 3. Zbigniew Janas - Member of the Supervisory Board 4. Zbigniew Nita - Member of the Supervisory Board 5. Michał Szwonder - Member of the Supervisory Board 6. Stanisław Służałek - Member of the Supervisory Board 7. Janusz Polewczyk - Member of the Supervisory Board
On the 28 June 2018 the Ordinary General Meeting of URSUS S.A. with the resolution no. 27/2018 appointed Mr Janusz Polewczyk as Member of the Supervisory Board.
Composition of the Management Board of the subsidiary URSUS BUS S.A.
As of 30 June 2018:
1. Karol Zarajczyk – President of the Management Board 2. Jan Wielgus – Deputy President of the Management Board 3. Paweł Dadej – Member of the Management Board 4. Wojciech Pyzio – Member of the Management Board 5. Filip Walczak – Member of the Management Board
On the 1st February 2018 the Supervisory Board of the Company decided to appoint as from the 1st February 2018 Mr. Jan Wielgus as the Vice-President of the Management Board of URSUS BUS S.A. and Mr. Paweł Dadej as the Member of the Management Board of URSUS BUS S.A.
On the 8 February 2018 Mr Zygmunt Fabisiak resigned from the position of a Member of the Supervisory Board.
On the 19 June 2018 with effect from the 20 June 2018 the Supervisory Board of URSUS BUS S.A. appointed Mr Karol Zarajczyk as President of the Management Board.
Composition of the Supervisory Board of URSUS BUS S.A.
As of 30 June 2018:
1. Marek Pol – Chairman of the Supervisory Board 2. Andrzej Zarajczyk – Deputy Chairman of the Supervisory Board 3. Michał Szwonder – Member of the Supervisory Board.
On the 19 March 2018 the Extraordinary General Meeting of URSUS BUS S.A. with the appointed Mr Karol Zarajczyk as Member of the Supervisory Board. On the 19 June 2018 Mr Karol Zarajczyk resigned from the position of a Member of the Supervisory Board of URSUS BUS S.A.
Composition of the Management Board of the subsidiary URSUS Dystrybucja sp. z o.o.
As of 30 June 2018: 1. Mariusz Lewandowski – President of the Management Board 2. Karol Nowe – Deputy President of the Management Board
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
3. Marzena Nowe – Member of the Management Board 4. Rafał Turowski – Member of the Management Board
On the 14 May 2018 the Extraordinary General Meeting of Shareholders of URSUS Dystrybucja sp. z o.o. appointed a four-person composition of the Management Board of a new, joint term of office, as well it made changes in the Statute of the Company, consisting in establishing in the Company a Supervisory Board, with appointment of its members.
On the 11 September 2018 the Supervisory Board of the Company decided to discharge Mr Karol Nowe from his function of the Deputy President pf the Management Board with effect from the 11 September 2018.
Composition of the Supervisory Board of URSUS Dystrybucja sp. z o.o.
As of 30 June 2018: 1. Karol Zarajczyk - Chairman of the Supervisory Board 2. Marek Włodarczyk - Member of the Supervisory Board 3. Marcin Matusewicz - Member of the Supervisory Board
Composition of the Management Board of the subsidiary Ursus sp. z o.o.
As of 30 June 2018: 1. Karol Zarajczyk - President of the Management Board
Composition of the Management Board of the associate AIU+ sp. z o.o.
As of 30 June 2018: 1. Marcin Gołębiewski - President of the Management Board
3. The basis for the preparation of the intermin condensed consolidated financial statement
The consolidated financial statement was prepared according to the historical cost principle, except for investment properties, financial derivatives and financial assets. The carrying amount of of recognised hedged assets and liabilities is adjusted for fair value changes which may be attributed to the risk against which such assets and liabilities are hedged.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All transactions, balances, revenues and expenses between associates, covered by consolidation are subject to full consolidation elimination.
The Capital Group in the I half of 2018 recorded a net loss in the amount of 24 million PLN with consolidated sales revenues in the amount of 75 million PLN against 141 million PLN in the corresponding period of the previous year, and presented negative consolidated operating flows in the amount of 98 million PLN. As at the 30 JUne 2018 the Group indicates the excess of short-term liabilities over current assets in the amount of 24.7 million PLN mainly due to the increase of financial liabilities towards banks by the amount of 115 million PLN. The negative working capital of the Group in the period after the balance day and before the date of publication of the interim consolidated financial statement was covered by issue of new shares of the Company (of which in the note 22), within which 5.420.000 shares at the price of 2,5 PLN per
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
share were acquired, which resulted in increase of the capital of the Group by the amount of 13.5 million PLN, while the issue was fully paid in cash. Besides, in the reporting period the Group repaid its debt under credits and loans in the total amount of 27.6 million PLN and additional 34 million PLN on the 17th September 2018. However, at the balance date the debt of the Group under credits and loans is 255 million PLN. The Company’s Management Board, among others in connection with a low execution of deliveries to Tanzania in the I half of 2018 (delay of deliveries) expects that in the II half of 2018 the Group shall improve its financial results, in particular after completion of deliveries of several buses within the won contracts, which shall allow to lower the level of short-term debt to be repaid mostly within March of 2019. Moreover, the Group has prepared financial projections, according to which in a long period the current difficult liquidity position of the Group shall significantly improve.
Taking into account the above-described reasoning, the interim condensed consolidated financial statement of the Capital Group Ursus was prepared on the going concern assumption by the company in the foreseeable future. At of the date of preparing this financial statement, there exist no circumstances other than the omes mentioned above indicating threat to the continuation the business by the Group.
4. Declaration of conformity
The interim condensed consolidated financial statement of the Capital Group covers theperiod of 6 months ended the 30 June 2018 and it was prepared in accordance with IAS 34 Interim Financial Reporting, which was approved by the European Union.
The interim condensed consolidated financial statement does not include all information which are disclosed in the annual consolidated financial statement prepared in accordance with the International Financial Reporting Standards.
5. Measurement currency and the currency of financial statements
The interim condensed consolidated financial statement is presented in Polish zlotys ("PLN") and all values, unless indicated otherwise, are expressed in thousands of PLN.
6. Voluntary change in the accounting principles
The accounting policies applied to draw up these interim condensed financial statements are consistent with those applied for the annual consolidated financial statement for 2017, except for the changes resulting from implementation of the new IFRS15 and IFRS 9, which did not have a material impact on the financial reporting of the Group.
The detailed description of the accounting policies adopted by the Capital Group URSUS was presented in the annual consolidated financial statement for 2017. The Group decided not to apply any standard, interpretation or change which was published but has not entered into force so far.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
The standards and interpretations which have been issued but are not effective yet because they have not been approved by the European Union or have been approved by the European Union, but have not been applied by the Group, have been presented in the financial statement for 2017. From 1 January 2018 the Group applied IFRS 15 Revenue from contracts with customers. IFRS 15 replaces the previously existing guidance on the accounting for revenues, included in IAS 18 Revenue ands IAS 11 Construction Contracts (not applicable to the Company’s statements) and in the related interpretations. According to IAS 15, the Group recognises the revenue when it satisfies the obligation to fulfil a specific performance, i.e. to transfer to the custemer of control over goods ar services being subject to such obligation (once at a specified point in time or in a period of time) in the amount representing the value of remuneration that is expected for such goods or services. In particular, obbligations to fulfil contractual performance are identified and transaction prices to the identified obligations are set. In the implementation of IFRS 15 the Group applied the modified retrospective method, i.e. the combined effect of the first application of IFRS 15 was determined only with reference to the contracts which have not been completed as at the 1 January 2018. The impact of the application of IFRS 15 on the items of the interim condensed consolidated statement in the I half of 2018 in comparison with IAS 11, IAS 18, together with the related interpretations, was irrelevant. From 1 January 2018 the Group applied IFRS 9. This standard replaces IAS 39 Financial instruments: Recognition and Measurement. It changes the areas of classification valuation financial of financial assets, determining the impairment of value of financial assets and (optionally) hedge accounting policy. The Group implemented certain changes in the Group’s accounting policy related to: • classification of financial assets, • impairment of value of financial assets. The Group decided to continue to apply hedge accounting principles specified in IAS 39, when applied (as at the date of publication of this report, the Group did not apply hedging accounting). Classification of financial assets On the basis of the analysis carried out at the and of 2017, the Group identified business models and conducted SPPI tests for financial assets and on their basis the Group classified financial assets accordingly to: • Financial assets evaluated according to fair value by financial result, • Financial assets evaluated according to fair value by other comprehensive income, • Financial assets evaluated at amortized cost. Financial assets evaluated according to fair value by financial result include derivatives that do not qualify for hedge accounting and hedged items which are evaluated according to the principles of hedge accounting. Financial assets evaluated according to fair value by other comprehensive income include long-term shares. Financial assets evaluated at amortized cost include: • Cash and cash equivalents • Receivables, including trade receivables • Granted loans • Bank deposits.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Impairment of value of financial assets The Group identified the following classes of financial instruments, for which according to IFRS 9 estimated the impact of expected credit losses on the financial statement: • Trade receivables • Granted loans • Bank deposits, cash The Group applies this standard retrospectively with reference to all financial assets outstanding as at the 1 January 2018, without correction of the comparable data. The Group did not identify any significant impact of introduction of IFRS 9 on the statement of financial situation and the equity, including effects of application of IFRS 9 for impairment. The Group analyzed the credit risk with use of a simple model and does not expect any change of the amount of impairment allowance, therefore it does not affect the equity.
7. Changes in accounting estimates, error correction
Information concerning particularly significant areas subject to estimates and judgments which have an impact on the interim consolidated financial statements has not changed in comparison with the information presented in the annual financial statements for the year 2017. In the I half of 2018 there were no unusual events of the type or frequency which affected the assets, liabilities, equity, net result or cash flow. In the I half of 2018 no corrections of errors of previous periods were made.
8. Translation of items stated in foreign currencies
Transactions denominated in currencies other than the Polish zloty are translated into Polish zloty by using the exchange rate prevailing on the day of the transaction or the exchange rate specified for a specific „forward ” transaction.
At the end of each reporting period, the Group measures the assets and liabilities denominated in currencies other than the Polish zloty are translated into Polish zloty at the average exchange rate set for a given currency by the National Bank of Poland prevailing at the end of the reporting period.
Foreign exchange differences arising from such translation are recognized accordingly in the position of:
- sales revenues; if they relate to trade receivables, - own cost of sale; if they relate to trade liabilities, - other operational revenue/costs, if they relate to receivables or liabilities due to sales/ purchase of tangible fixed assets or intangible assets, - financial revenues (costs) in case of other assets or liabilities.
Non-monetary items recognized at historical cost in a foreign currency are recognized at the historical exchange rate of the transaction date.
Non-monetary assets and liabilities recognized at fair value expressed in a foreign currency are translated using the exchange rate prevailing at the date at the date of measurement to fair value.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
The exchange rates applied to translate the positions denominated in foreign currencies are:
Exchange rate applicable on the last day of the period 30.06.2018 31.12.2017 30.06.2017 USD 3,7440 3,4813 3,7062 EUR 4,3616 4,1709 4,2265
9. Segment information
According to IFRS 8 results of the operating segments are based on the internal reports regularly reviewed by the Manegement Board of the parent company (the main decision-making body in the Capital Group). the Manegement Board of the parent company analyzes results of the operating segments at the level of the profit (loss) from operating activity. Measurement of the operating segments’ results used in the management calculations is consistent with the accounting policies applied in preparation of the financial statemens, except for the following areas:
• Impairment of Assets – in measuring segment result, write-offs for impairment, including the equity, are excluded.
The sales revenues recognised in the profit and loss account do not differ from the revenues presented within operating segments, except for consolidation exclusions concerning transactions between segments.
The main products manufactured by the production divisions of the parent Company are the following:
• Dobre Miasto – agricultural machinery (trailers, manure spreaders), front loaders TUR with equipment, • Opalenica – feeding wagons, • Lublin – agricultural tractors, round balers.
Geographical areas
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Income from sales of goods and materials Domestic (Poland) 52 269 61 973 Foreign, including: 22 894 79 112 the European Union 20 737 25 848 outside the European Union 2 157 53 264
Total 75 163 141 086
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Operating segments
01.01.2018-30.06.2018 Total unaudited Continued Division operation Exclusions operation Division of Division of of production in production in production Ursus Ursus Dobre Miasto Opalenica in Lublin Dystrybucja BUS Total Income Sales to external customers, including 13 197 7 586 40 957 31 480 3 667 96 887 (21 724) 75 163 Sales between segments ------Total income of the segment 13 197 7 586 40 957 31 480 3 667 96 887 (21 724) 75 163
Costs Own costs of sales to external customers (10 904) (7 281) (39 663) (27 895) (3 950) (89 693) 19 699 (69 994) Own costs of sales between segments ------Total segment costs (10 904) (7 281) (39 663) (27 895) (3 950) (89 693) 19 699 (69 994)
Result Segment profit (loss) 2 293 305 1 294 3 585 (283) 7 194 (2 025) 5 169 Costs of sale (398) (183) (7 700) - (537) (8 818) - (8 818) Costs of general management (1 420) (439) (7 622) (3 046) (2 495) (15 022) 638 (14 384) Other operating income/costs 360 (321) 303 (325) (1 963) (1 946) (703) (2 649) Operational profit (loss) of segment 835 (638) (13 725) 214 (5 278) (18 592) (2 090) (20 681) Revenue due to interests - - - - - 23 - 23 Costs due to interests - - - - - (3 396) - (3 396) Other net financial revenues/costs - - - - - (3 932) - (3 932) Profit (loss) before taxation 835 (638) (13 725) 214 (5 278) (25 897) (2 090) (27 986) Income tax - - - - - 3 404 395 3 799 Profit (loss) net for financial year 835 (638) (13 725) 214 (5 278) (22 493) (1 694) (24 187) Total profit attributable to minority shareholders ------(1 551) parent company's shareholders ------01.01.2018-30.06.2018 Total unaudited Continued operation Exclusions operation Division Division of Division of of production in production in production Ursus Ursus Dobre Miasto Opalenica in Lublin Dystrybucja BUS Total Assets and liabilities Liabilities of segment 72 701 10 039 158 698 76 959 162 478 480 875 (101 173) 379 702 Unallocated liabilities - - - - - 102 636 - 102 636 Total assets 72 701 10 039 158 698 76 959 162 478 583 511 (101 173) 482 338
Liabilities of segment ------Unallocated liabilities - - - - - 461 503 (62 262) 399 241 Equity - - - - - 122 007 (38 911) 83 097 Total liabilities and equity - - - - - 583 511 (101 173) 482 338
Other information concerning segment Total investment expenditure: Tangible fixed assets 341 - 4 652 916 69 5 978 - 5 978 Intangible assets - - 801 - 801 - 801
Amortization of tangible fixed assets 843 261 2 025 211 882 4 222 - 4 222 Amortization of intangible assets 222 - 821 2 335 1 380 - 1 380 - - - Other expenditures: ------reserve for warranty repairs - - - - - 1 210 - 1 210
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Operating segments
01.01.2017-30.06.2017 Total unaudited Division Continued operation Exclusions operation Division of Division of of production in production in production Ursus Ursus Ursus Dobre Miasto Opalenica in Lublin Zachód BUS Wschód Razem Income Sales to external customers, including 28 209 11 250 114 926 20 316 134 18 034 192 869 (51 783) 141 086 Sales between segments ------Total income of the segment 28 209 11 250 114 926 20 316 134 18 034 192 869 (51 783) 141 086
Costs Own costs of sales to external customers (26 504) (9 142) (90 745) (18 532) (121) (16 523) (161 567) 47 536 (114 031) Own costs of sales between segments ------Total segment costs (26 504) (9 142) (90 745) (18 532) (121) (16 523) (161 567) 47 536 (114 031)
Segment profit (loss) 1 705 2 108 24 181 1 784 13 1 511 31 302 (4 247) 27 055 Costs of sale (2 137) (401) (10 821) - (485) - (13 844) - (13 844) Costs of general management (1 806) (946) (5 849) (1 797) (1 813) (1 456) (13 667) - (13 667) Other operating income/costs 263 38 468 54 (970) (147) (294) 1 (293)
Operational profit (loss) of segment (1 976) 799 7 980 41 (3 255) (92) 3 497 (4 246) (749)
Revenue due to interests - - - 13 - - 239 (7) 232 Costs due to interests - - - (33) (122) - (2 144) 7 (2 137) Other net financial revenues/costs - - - (20) (557) - 1 103 - 1 103 Profit (loss) before taxation - - - 1 (3 934) (92) 2 695 (4 246) (1 551) Income tax - - - - 610 - (388) 38 (350) Profit (loss) net for financial year - - - 1 (3 324) (92) 2 307 (4 208) (1 901)
Total profit attributable to minority shareholders ------(1 456) parent company's shareholders ------(445)
01.01.2017-30.06.2017 Total unaudited Continued operation Exclusions operation Division Division of Division of of production in production in production Ursus Ursus Ursus Dobre Miasto Opalenica in Lublin Zachód BUS Wschód Total Assets and liabilities Liabilities of segment 42 207 9 080 119 876 45 419 39 201 55 423 311 206 - 311 206 Unallocated liabilities ------155 682 Total assets 42 207 9 080 119 876 45 419 39 201 55 423 311 206 - 466 888 Liabilities of segment - Unallocated liabilities ------316 891 Equity ------149 997 Total liabilities and equity ------466 888
Other information concerning segment Total investment expenditure: Tangible fixed assets 80 10 9 737 11 39 67 9 944 - 9 944 Intangible assets - - 222 - - - 222 - 222
Amortization of tangible fixed assets 949 241 1 889 28 8 254 3 369 - 3 369 Amortization of intangible assets 212 8 776 1 1 335 1 333 - 1 333 ------Other expenditures: ------reserve for warranty repairs - - 300 - - - - - 300
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
10. Revenue and costs
10.1. Sales revenue
Sales revenue
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 Revenue from sale of products unaudited unaudited Revenue from sale 46 592 88 125
Foreign exchange differences related to trade receivables (3 230) 4 478
Total revenue from sale of products 43 362 92 603
01.01.2018- 01.01.2017- Revenue from sale of goods and 30.06.2018 30.06.2017 materials unaudited unaudited
Revenue from sale 31 801 48 483
Total revenue from sale of goods and materials 31 801 48 483
10.2. Costs by type
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Amortization of fixed assets and intangible assets 5 602 4 959 Costs of employee benefits 25 080 25 122 Use of materials and energy 51 783 61 595 Foreign services 17 342 10 150 Taxes and payments 2 040 2 212 Life and non-life insurances 402 281 Other costs, including 3 861 3 467 - write downs on inventory - -
- reversal of write-down of inventories (940) - - write downs on receivables 3 733 - - reversal of write-down of receivables (1 438) (548) - exchange rate differences on trade receivables (47) (173) - advertising costs 391 1 029 - costs of fairs and exhibitions 848 1 170 - other costs of operating activity 1 315 1 989 Total generic costs 106 110 107 786
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Change of state of products, production during the year and accruals (+/-) (41 215) (5 509) Cost of production of products for own needs (-) - (61) Value of sold goods and materials 28 300 39 326 Total costs of sold products, goods and materials, sale and costs of general management 93 195 141 542
Costs of production of sold products (+) 41 694 74 705 Value of sold goods and materials (+) 28 300 39 326 Costs of sales (+) 8 818 13 844 Costs of general management (+) 14 383 13 667 Total costs of sold products, goods and materials, sale and costs of general management 93 195 141 542
10.3. Costs of employee benefits
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Costs of remunerations (+) 20 512 20 185 Costs of social insurances and other 4 568 4 937 benefits (+)
Total costs of employee benefits 25 080 25 122
10.4. Other operational revenue
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Net profit from sale of non-financial 111 31 fixed assets Revenues from renting of investment 398 406 properties Received subsidies 855 985 Received penalties and compensations - 46 Revenues from the inkind contribution to a subsidiary URSUS BUS S.A. of - 600 receivables from renting of a part of investment properties Other 138 187
Total other operational income 1 502 2 255
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
10.5. Other operational costs
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Given donations 136 116 Penalties and compensations 2 162 1 167 Costs of court proceedings 202 31 Agents’ commissions - 307 Remuneration for promotional actions 130 101 Fleet rent 38 72 Environment protection (additional - 21 payment for 2016) Impaired pas due receivables 118 - Costs of liquidation of materials 533 - Other 832 733
Total of other operational costs 4 151 2 548
10.6. Net financial revenues and costs
01.01.2018- 01.01.2017- Financial revenues 30.06.2018 30.06.2017 unaudited unaudited Revenues from interests from: 23 232 -receivables 23 232 Profits on account of derivatives - 922 (valuation and result) Profits on account of foreign exchange - 2 014 differences Other 204 10 Financial revenues 227 3 178
01.01.2018- 01.01.2017- Financial costs 30.06.2018 30.06.2017 unaudited unaudited Costs due to interests: 3 396 2 138 - due to credits 2 676 1 627 - due to financial lease 258 209 - due to trade liabilities 323 131 - other 139 171 Commissions 1 950 1 784 Loss on account of foreign exchange 2 177 - differences Other 9 58 Financial costs 7 532 3 980
Net financial revenues and costs (7 305) (802)
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
11. Impairment allowances of assets – recognition and reversal
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited
Revaluation write-offs for tangible fixed assets (257) - Recognition of write-offs (257) - Reversal of write-offs - -
Revaluation write-offs for receivables (2 295) (216) Recognition of write-offs (3 733) - Reversal of write-offs 1 438 (216)
Revaluation write-offs for inventories 940 - Recognition of write-offs - - Reversal of write-offs 940 -
12. Explanations to selected items of the consolidated statement on financial position
12.1. Inventories
30.06.2018 unaudited 31.12.2017 Materials 96 241 82 275 Goods 44 713 53 302 Work in progress 61 174 28 416 Finished products 8 637 18 269
Total inventories 210 765 182 262
12.2. Trade and other receivables
30.06.2018 unaudited 31.12.2017
Receivables from related entities 138 90 trade receivables 138 90
Receivables from other entities 129 868 73 996 trade receivables 44 311 49 470
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
budget receivables due to other reasons 28 377 16 364 than current income tax advances for inventories 48 470 - receivables from sales of shares 3 349 3 349 (Bioenergia, OBR) other financial receivables 1 981 1 457
Accrued income, including: 3 380 3 356
- cost of subscriptions of newspapers 38 29 - insurance costs 340 286 - costs of R&D 377 216 - commission fees 478 344 - annual licence fees - 208 - fees to the Warsaw Stock Exchange 100 44 and National Depository of Securities
-other accruals 2 047 2 229 Gross receivables 130 006 74 086
Impairment of receivables (12 525) (10 230)
Total receivables (net) 117 481 63 856
Long-term receivables
30.06.2018 unaudited 31.12.2017
Receivables from related entities - -
Receivables from other entities 16 686 16 960 receivables from sales of shares 16 686 16 960 (Bioenergia, OBR)
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
12.3. Provisions
Provisions for Provisions 01.01.2018- Provisions litigation, for 30.06.2018 for warranty penalties, employee Other unaudited repairs damages, benefits provisions Total
At the beginning of the period 1 237 - 2 972 36 4 245 Creation - 1 452 - - 1 452 Reversal - - - - - Use (26) - (15) - (41) Discount development - - - - -
At the end of the period 1 211 1 452 2 957 36 5 656
Provisions for Provisions 01.01.2017- Provisions litigation, for 30.06.2017 for warranty penalties, employee Other unaudited repairs damages, benefits provisions Total
At the beginning of the period 327 - 2 998 62 389 Creation 300 - - 600 900 Use - - - - - Reversal - - - (24) (24) Discount development - - - - -
At the end of the period 627 - 2 998 638 4 263
12.4. Financial liabilities
30.06.2018 Long-term financial liabilities unaudited 31.12.2017 Total liabilities on account of finance lease and contracts of long-term lease 9 184 8 475 with purchase option Bank credits 7 240 8 801 Loans received 17 382 17 829 Total long-term credit, loan and 33 806 35 105 lease liabilities
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
30.06.2018 Short-term financial liabilities unaudited 31.12.2017 Total liabilities on account of finance lease and contracts of long-term lease 2 782 2 833 with purchase option Overdraft facilities 42 664 41 657 Bank credits 179 287 69 707 Loans received 8 521 4 199
Total short-term credit, loan and 233 254 118 396 lease liabilities
In the I half of 2018 here was no situation of failure to repay a credit, a loan or or breach of any material provisions of a loan or credit agreement, in relation to which no corrective measured were undertaken until the end of the reporting period.
12.5. Trade and other liabilities
30.06.2018 unaudited 31.12.2017
7 414 8 260 Other long-term liabilities Accrual of income 7 414 8 260
7 414 8 260 Total other long-term liabilities
30.06.2018 unaudited 31.12.2017
Liabilities due to supplies and 6 119 13 686 services towards related entities Liabilities due to supplies and services 6 119 8 002 Other financial liabilities - 5 684
Liabilities due to supplies and 112 992 108 667 services towards other entities Liabilities due to supplies and services 96 411 94 743 Liabilities due to remunerations 2 960 2 416 Budget commitments other than current 6 588 5 898 income tax Income tax liabilities - - Other financial liabilities 3 484 3 481 Accrual of income 3 549 2 129 Liabilities due to supplies and services and other short-term 119 111 122 353 liabilities
Liabilities due to supplies and 126 525 130 613 services and other liabilities
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Investment liabilities as at the 30 June 2018 amounted to 805 thousand PLN. Investment expenditures in the I half of 2018 were related mainly to implementation of the project „Development of innovative, universal construction of drive systems to agricultural tractors”.
13. Contingent items and other off-balance-sheet items
30.06.2018 Contingent liabilities unaudited 31.12.2017 Guarantee for credit repayment 202 469 82 203 Guarantee for lease repayment 6 000 6 000 Liabilities in respect of bank guarantees issued mainly as warranty of execution - - of sales contracts Liabilities in respect of bank guarantees issued mainly as warranty of execution 18 394 21 901 of sales contracts Other contingent liabilities 2 648 12 323 Other contingent liabilities 229 511 122 427
Information on the granted warranties is described in the point 15 of the Report on the Capital Group URSUS activity.
14. Information on transactions with related entities
01.01.2018-30.06.2018 unaudited Revenue from Revenue from sale of Revenue from sale to Revenue from sale of goods tangible and intangible related entities sale of products and materials assets to subsidiaries - - - to other related entities 55 34 -
Total revenue from sale 55 34 - to related entities
01.01.2018-30.06.2018 unaudited purchase of Purchase from related purchase of tangible purchase of goods and entities and intangible assets services materials from subsidiaries - - - from other related entities 3 495 1 194 62
Total purchase from 3 495 1 194 62 related entities
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
01.01.2017-30.06.2017 unaudited Revenue from Revenue from sale of Revenue from sale to Revenue from sale of goods tangible and intangible related entities sale of products and materials assets to subsidiaries - - - to other related entities (19) 22 -
Total revenue from sale to related entities (19) 22 -
01.01.2017-30.06.2017 unaudited purchase of Purchase from related purchase of tangible purchase of goods and entities and intangible assets services materials from subsidiaries - - - from other related entities 3 783 1 630 -
Total purchase from related entities 3 783 1 630 -
Amounts receivable 30.06.2018 from related entities unaudited 31.12.2017 from subsidiaries - - from other related entities 138 90 Total amounts receivable from related 138 90 entities
Amounts due to 30.06.2018 related entities unaudited 31.12.2017 to subsidiaries - - to other related entities 7 596 13 686
Total amounts due to 7 596 13 686 related entities
The terms of significant transactions concluded in the reporting period with related entities do not differ from customarily used in economic trade.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
15. Income tax and deferred income tax
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Current income tax - 304 Current income tax charge - 304 Deferred income tax (3 799) 46
related to creation and reversal of transitional differences (3 799) 46
Tax liability recognised in the profit and loss account (3 799) 350
Balance Balance at the at the 01.01.2018-30.06.2018 beginning Included end of unaudited of period in income Exclusions period Temporary differences concerning assets due to deferred tax: Reserves 958 (8) - 950 Revaluation of assets 1 855 616 - 2 471 Other liabilities 553 67 - 620 Reserve for bad debts 26 - - 26 Tax losses 4 220 291 - 4 511 Exchange rate differences - 687 - 687 Other (77) (73) 395 245 TOTAL 7 535 1 580 395 9 510 Temporary differences concerning reserve due to deferred tax: Tangible fixed assets 3 995 (53) - 3 942 Financial leasing 784 (351) - 433 Exchange rate differences 2 100 (1 827) - 273 Revaluation of investment property 689 - - 689 to fair value Other (534) 408 - (126) TOTAL 7 034 (1 823) - 5 211
Total assets (reserves) due to deferred tax 501 3 403 395 4 299
16. Seasonal sales variations and the cyclic nature of activity
Seasonality of sales of agricultural machinery largely corresponds to seasonal in agriculture that the sale of certain categories of machinery related to specific agricultural operations ahead of them in a few weeks. Sales of machinery and equipment for agricultural production takes place throughout the whole year, with the exception of the severe winter months and summer months of intensive field work. Since 2007 within the EU subsidies for farmers, there has been Polish version of the Rural Development Programme (PROW), which flattened seasonality trends in the
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
sector of agricultural machines. Since 2014 another programme PROW for the years 2014-2020 is effective. Within the implementation of the European Union’s common agricultural policy in years 2014-2020 Poland will have in total 42,4 billion EUR to be used, while the budget of PROW 2014-2020 is 13,6 billion EUR. The most important task of the Rural Development Programme 2014-2020, which is the basic financial instrument for the purposes of conducting structural and investment changes in rural areas, is now to increase the competitiveness and profitability of farms. In case of late implementation of subsequent stages of the programme, as well as in case of organizational or procedural difficulties in submission of applications, farms can not use opportunities of cofianincing their investments with subsidies. The Management Board is still monitoring the actual status of implementation of the programme PROW for the years 2014-2020, as well as the degree of use and availability of EU subsidies in voivodships. In case of delays in payments of EU subsidies from the programme, account should be taken of the risk of decrease in that time of the demand for agricultural machines and devices, what undoubtedly will have an impact on the Issuer’s financial results. The subsidiary URSUS BUS S.A. operates in the sector of manufacturing buses and its financial results arise out of the number of executed orders, which depend largely on the EU subsidies.
17. Information regarding the issue, redemption and reimbursement of non-equity and equity securities
Under the resolution of the 16th May 2017 the Management Board of the Company decided to increase the Company’s share capital from the amount 54.180.000 PLN to the amount 59.180.000 PLN. i.e. by the amount of 5.000.000 PLN, by the issue of 5.000.000 ordinary bearer shares of R series of the nominal value 1,00 PLN and the issue price 2,50 PLN per share, i.e. for the total issue price of 12.500.000 PLN. Both the value of the new issue and the issue price were decided by the Management Board in compliance with § 7 b sec. 5 of the Company’s Articles of Association.
According to the Resolution of the Management Board, the shares of the new issue (R series) shall be offered, in private subscription, to entities selected by the Management Board of the Company. Therefore the existing Shareholders’ pre- emptive rights to the R series shares were waived in their entirety, which took place with the consent of the Supervisory Board expressed in the resolution no. 220/2017 adopted on the 16th May 2017.
On the 16th May 2017 the private subscription of R series shares of the Company, issued by the Management Board under the Resolution of the Management Board of the 16th May 2017, concerning the above-mentioned increase of the share capital of the Company within the authorized capital, was carried out and completed.
The private subscription (including allocation of shares), as well as conclusion of the agreements on acquisition of shares, were carried out on the 16th May 2017. All issued shares, i.e. 5.000.000 shares, were included in the subscription and allocation. Within the private subscription, two entities were offered to acquire shares. The entities which acquired the R series shares are the companies POL-MOT Auto S.A. (KRS no. 396018) and Invest-Mot sp. z o.o. (KRS no. 15858). Both entities concluded with the Company agreements on acquisition of shares and paid the issue price of the shares, in the amount of 2,50 PLN per each R series shares. All issued shares, i.e. 5.000.000 shares, were included in the subscription and allocation.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
The value of the conducted private subscription, understood as the product of the number of R series shares covered by the offer and their issue price, is 12.500.000 PLN. According to the resolution of the Warsaw Stock Exchange’s Board dated 21 March 2018, 5.000.000 of R series ordinary bearer shares of URSUS S.A. of the nominal value 1,00 PLN per share were admitted to exchange trading on the main market.
On the 14 December 2017 the General Meeting of the Company URSUS BUS S.A adopted a resolution on inceasing the Company’s share capital by 5.000.000 PLN. i.e. to the amount of 18.627.500 PLN by issue of shares of the nominal value 1 PLN per share. All the above-mentioned shares were acquired through private subscription addressed to URSUS S.A. and they were paid up in full with cash.
On the 17 April 2018 the court registered a share capital increase of URSUS BUS S.A. by the amount of 5.372.000 PLN, i.e. to the amount of 24.000.000 zł, effected under resolution of the Extraordinary General Meeting of the Company dated 14.12.2017. The share capital of the Company was increased by issue of shares of the nominal value 1 PLN per share. All the above-mentioned shares were acquired through private subscription addressed to URSUS S.A. and they were paid up in full with cash.
As of the date of publication of thuis report, the Issuer holds 77,3%, and INVEST- MOT sp. z o.o.– 22,7% shares of the company URSUS BUS S.A.
18. Profit per share Basic earnings per share are computed by dividing net profit for the period attributable to holders of ordinary shares of the parent Company divided by the weighted average number of issued ordinary shares outstanding in such period.
The tables below contain the net consolidated profit and the number of shares used for the calculation of basic earnings per share:
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited
Net profit from continued operations (24 187) (1 901) Net profit from discontinued operations - - Net profit (24 187) (1 901)
Net profit attributable to holders of (24 187) (1 901) ordinary shares used to calculate diluted earnings per share
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Weighted average of issued ordinary shares applied to the basic calculation of 59 180 55 257 the profit per share (in thousand pcs) Diluting impact: Subscription rights - - Redeemable preference shares - -
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Adjusted weighted average number of ordinary shares applied to 59 180 55 257 calculation of diluted earnings per share
Basic earnings per share 01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Net profit (24 187) (1 901) Weighted average number of shares 59 180 55 257 Basic earnings per share (PLN/share) (0,41) (0,03)
Diluted profit per share 01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Net profit attributable to the shareholders used to calculate diluted (24 187) (1 901) earnings per share Adjusted weighted average number of ordinary shares used to calculate diluted 59 180 55 257 earnings per share (in thousand pcs) Diluted profit per share (PLN/share) (0,41) (0,03)
Basic profit per share from continued operations
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Net profit from continued operations (24 187) (1 901) Weighted average number of shares (in thousand pcs) 59 180 55 257 Basic earnings per share (PLN/share) (0,41) (0,03)
Diluted profit per share from continued operations
01.01.2018- 01.01.2017- 30.06.2018 30.06.2017 unaudited unaudited Net profit attributable to the shareholders used to calculate diluted (24 187) (1 901) earnings per share Adjusted weighted average number of ordinary shares used to calculate diluted 59 180 55 257 earnings per share (in thousand pcs) Diluted profit per share (PLN/share) (0,41) (0,03)
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
19. Information on paid-off (or declared) dividends
In 2018 the parent Company has not paid a dividend.
20. Financial derivatives As at 31 December 2017 and 30 June 2018 the Group did not hold any currency forward contracts to hedge future transactions. Other financial instruments were carried at fair value through profit and loss. At the end of the reporting period. i.e. 30 JUne 2018, the Group did not have agreements with embedded derivatives fulfilling the requirements of being separated from the main contracts. Other financial instruments of the Group include trade receivcables, granted loans, trade liabilities and received credits and loans. As at the 30 June 2018 the fair value of these financial instruments is approximately equal to their carrying value. In the I half of 2018, there were no changes in the economic situation or operating conditions for conducting business which would materially impact the fair value of the assets and financial liabilities of the Group. The Group has not made any changes in methods of establishing the fair market value of financial instruments or classification of financial assets as a result of changing the purpose or use of those assets.
21. Financial risk management Zasady zarządzania ryzykiem finansowym zostały przedstawione w ostatnim rocznym sprawozdaniu finansowym sporządzonym na dzień 31 grudnia 2017 r. i za rok obrotowy kończący się tego dnia. The Management Board of the parent company URSUS S.A., monitoring the exposure to the currency risk and estimating its impact on the financial result of the Group in 2016 decided to to use hedging instruments in USD and EUR in years 2016 and 2017. All hedging transactions are executed in accordance with the Financial Risk Management policy, within the Integrated Financial Risk Management System. As at June 30th 2018, the Group did not hold any hedging instruments.
22. Events after balance sheet day On the 21 July 2018 the Issuer concluded with the Agricultural Bank of Sudan, the state-owned bank with nearly 60 years of history specialized in financing projects related to agriculture, an agreement on establishment of strategic cooperation aiming at launching production of tractors and machinery URSUS in Sudan and creation in the Sudanese territory of a network of servicing centers. The concluded agreement is a preliminary document in which the Parties undertook to complete the negotiating process as soon as possible and conclude a relevant cooperation agreement. Thanks to the actions taken, URSUS S.A. shall gain possibility of entering the Sudanese market, which will be the next step in the international expansion of the Group.
On the 5 July 2018 the subsidiary URSUS BUS S.A. concluded with Zarząd Transportu Miejskiego w Lublinie S.A. a contract for delivery of 10 trolleybuses of the total value 21,7 million PLN.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
On the 31 August 2018 the Extraordinary General Meeting URSUS S.A. adopted: - the resolution on increasing the Company’s share capital by means of issuance of S series ordinary bearer shares, complete exclusion of the current shareholders from the right of subscription of S series shares and change of the Company’s Articles of Association - on applying for for admission and introduction of the shares of S series shares to public trading on the regulated market operated by the Warsaw Stock Exchange and dematerialization of S series shares. On the 31 August 2018 the parent company URSUS S.A. offered to POL-MOT Holding S.A. with the seat in Warsaw (the majority shareholder of the Issuer) acquisition of 800 000 of S series shares of the Company, to the company PROLOGUS sp. z o.o. with the seat in Warsaw (related company of Invest-Mot sp. z o.o.) acquisition of 880 000 of S series shares, to the company POL - MOT AUTO S.A. in Warsaw acquisition of 1 520 000 of S series shares and to INVEST – MOT sp. z o.o. in Warsaw acquisition of 100 000 of S series shares of the Issuer, all at the issue price of PLN 2,50 each share. With the above-mentioned entities oin the 31 August 2018 URSUS S.A. concluded agreements on acquisition of shares through a private subscription, under which the companies POL-MOT Holding S.A., PROLOGUS sp. z o.o., POL-MOT AUTO S.A. and Invest-Mot sp. z o.o. accepted the offer and acuired abov-mentione numbers of S sxeries shares issued URSUS S.A., of the nominal value 1,00 PLN per share, at the issue price of PLN 2,50 each share. On the 17th September 2018 the Issuer was informed about the decision of the District Court Lublin-Wschód in Lublin, with its seat in Świdnik, VI Commercial Department of the National Court Register dated the 17th September 2018 on registration of the increase of the Issuer’s share capital from the amount of 59.180.000 (PLN to the amount 64.600.000 PLN, i.e. by the amount of 5.420.000 through the issue of 5.420.000 (ordinary bearer shares of S series of the nominal value 1 PLN per share, by way of a private subscription adopted by the Extraordinary General Meeting URSUS S.A. on the 31st August 2018. On the 17 th September 2018 the subsidiary URSUS BUS S.A. made full repayment of the credit granted under the credit agreement concluded on the 28 August 2017 with Bank Ochrony Środowiska S.A. with the seat in Warsaw, as amended, in the total amount 33.054.830 PLN. One of collaterals on repayment of the credit agreement concluded by URSUS BUS S.A. with BOŚ S.A. was accession of the Issuer to debt of the subsidiary. The funds from the credit was used for execution of the contract of the subsidiary with ZTM in Lublin concluded on the 5th July 2017 on delivery of 15 articulated trolleybuses in the total gross amount 34.077.150 PLN, which has been fully executed.
23. Additional information
The Ordinary General Meeting URSUS S.A. with the resolution no. 9/2018 dated the 28 June 2018 approved the consolodated financial stetements of the Group for year 2017.
The interim condensed consolidated financial statement covers the period ended the 30 JUne 2018 and it is subject to review by the auditor. The the report on that review is enclosed to the statement.
This interim condensed consolidated financial statement was approved for publishing by the Management Board of the parent company URSUS S.A. on the 1 October 2018.
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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF THE CAPITAL GROUP URSUS for the I half of 2018
Lublin, 1 October 2018
Karol Monika Kośko Michał Zorean Marcin Zarajczyk Vice-President of Nidzgorski Radosavljević Matusewicz President of Management Vice-President of Member of Member of Management Board Management Management Board Management Board Board Board
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