KOPEX : Consolidated half-year report of the KOPEX Group for the period January 1st 2017− June 30th 2017

KATOWICE, SEPTEMBER 29TH 2017

1. CONSOLIDATED FINANCIAL HIGHLIGHTS…………………………………………………………………………………………………………………….. 3

2. SEPARATE FINANCIAL HIGHLIGHTS…………………………………………………………………………………………………………………………… 4

5

1. INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS OF THE KOPEX 6

2. INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE KOPEX GROUP………………………………. 7

3. INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE KOPEX GROUP………………………………………. 8

4. INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY OF THE KOPEX GROUP………………………………………. 10

5. INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS OF THE KOPEX GROUP……...………………………………………… 11

8. GENERAL INFORMATION……………………………………………………………………………………………………………….................................... 12

9. SIGNIFICANT ACCOUNTING POLICIES………………………………………………………………………………......................................................... 14

9.1 BASIS OF PREPARATION………………………………………………………………………………............................................................................... 14

9.2 ACCOUNTING POLICIES………………………………………………………………………………................................................................................ 14

9.3 CHANGES IN ESTIMATES………………………………………………………………………………............................................................................... 15

9.4 SEASONALITY OR CYCLICALITY OF THE KOPEX GROUP'S OPERATIONS........................................................................................................... 15

10. DISCONTINUEDOPEOPERATIONS………………………………………………………………………………………...……………………………………. 15

11. OPERATING SEGMENTS…………………………………………………………………………………………...………………......................................... 16

12. EXPLANATORY NOTES TO SELECTED ITEMS OF INCOME AND EXPENSES..................................................................................................... 18

1. EXPLANATORY NOTES TO SELECTED ITEMS OF THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE KOPEX 20

   GROUP........................................................................................................................................................................................................................

2. CHANGES IN CONTINGENT LIABILITIES AND ASSETS PLEDGED 22

15. CLAIMS AND DISPUTES............................................................................................................................................................................................ 22

16. MATURITY OF FINANCIAL RECEIVABLES AND LIABILITIES AT THE KOPEX............................................................................................ 24

17. FAIR VALUE…………………………………………………………………………………………………………………..................................................... 25

18. EVENTS AFTER THE REPORTING DATE…............................................................................................................................................................ 25

19. RELATED-PARTY TRANSACTIONS…………………………………......................................................................................................................... 26

20. REPRESENTATION BY THE MANAGEMENT BOARD OF KOPEX S.A.………….................................................................................................. 27

1. INTERIM CONDENSED SEPARATE STATEMENT OF PROFIT OR LOSS OF KOPEX 29

2. INTERIM CONDENSED SEPARATE STATEMENT OF COMPREHENSIVE INCOME OF KOPEX 30

3. INTERIM CONDENSED SEPARATE STATEMENT OF FINANCIAL POSITION OF KOPEX 31

4. INTERIM CONDENSED SEPARATE STATEMENT OF CHANGES IN EQUITY OF KOPEX 33

5. INTERIM CONDENSED SEPARATE STATEMENT OF CASH FLOWS OF KOPEX S.A.……………………………………………………………….. 34

26. GENERAL INFORMATION……………....................................................................................................................................................................... 35

27. SIGNIFICANT ACCOUNTING POLICIES……………..........................................................................................................................................……. 36

36

27.1 BASIS OF PREPARATION……………………………….………………………………………………………………………………………………......…………………

27.2 ACCOUNTING POLICIES…………………………………......……………………………………………………………………………………………………. 36

27.3 CHANGES IN 37

ESTIMATES……………………………….………………………………………………………………………………………………......………………………

27.4 RECONCILIATION OF COMPARATIVE DATA............................................................................................................................................................ 37

27.5 SEASONALITY OR CYCLICALITY OF KOPEX S.A.'S OPERATIONS........................................ 38

28. OPERATING SEGMENTS…………………………………………………………………………………………...………………........................................... 38

40

1. EXPLANATORY NOTES TO SELECTED ITEMS OF INCOME AND EXPENSES..................................................................................................................................................................................................................

2. EXPLANATORY NOTES TO SELECTED ITEMS OF THE STATEMENT OF FINANCIAL POSITION OF KOPEX S.A............................................. 42

   43

3. CHANGES IN CONTINGENT LIABILITIES AND ASSETS PLEDGED AS SECURITY……………………………………………………………………………………………………………………………………………………………

32. CLAIMS AND DISPUTES………………………………………………………………………………………………………………………............................. 44

33. MATURITY OF FINANCIAL RECEIVABLES AND LIABILITIES AT KOPEX S.A.……………………………………………………………………………. 45

34. RELATED-PARTY TRANSACTIONS……………………………………………………………………………………………………………………………… 46

35. FAIR VALUE……………………………………………………………… 47

36. EVENTS AFTER THE REPORTING DATE……………………………………………………………………………………………………………………… 47

37. REPRESENTATION BY THE MANAGEMENT BOARD OF KOPEX S.A.…………………………………………………………………………………….. 48

1. CONSOLIDATED FINANCIAL HIGHLIGHTS

   PLN '000		EUR '000
   Jan 1- Jun 30 2017	Jan 1- Jun 30 2016	Jan 1- Jun 30 2017	Jan 1- Jun 30 2016
   CONTINUING OPERATIONS:
   Net revenue from sale of products, merchandise and material	445,843	427,090	104,968	97,498
   Operating profit/(loss)	57,609	-440,984	13,563	-100,670
   Profit/(loss) before tax	58,419	-472,851	13,754	-107,945
   Consolidated net profit/(loss) from continuing operations	44,600	-535,570	10,501	-122,262
   Total consolidated net profit/(loss)	41,839	-572,055	9,850	-130,591
   Net profit/(loss) attributable to owners of the parent	41,264	-572,494	9,715	-130,691
   Net cash from operating activities	74,622	19,964	17,569	4,557
   Net cash from investing activities	70,936	-34,438	16,701	-7,862
   Net cash from financing activities	-118,205	47,428	-27,830	10,827
   Total net cash flows	27,353	32,954	6,440	7,523
   Number of shares	74,056,038	74,056,038	74,056,038	74,056,038
   Earnings per ordinary share (PLN/EUR)	0.56	-7.73	0.13	-1.76

   PLN '000		EUR '000
   as at Jun 30 2017	as at Dec 31 2016	as at Jun 30 2017	as at Dec 31 2016
   Total non-current assets	373,346	470,979	88,335	106,460
   Total current assets	608,691	734,503	144,018	166,027
   Total assets	1,005,197	1,264,529	237,832	285,834
   Liabilities and provisions for liabilities	747,430	1,028,439	176,844	232,468
   Non-current liabilities	492,270	598,743	116,472	135,340
   Current liabilities	144,252	338,297	34,130	76,469
   Equity	245,525	202,428	58,092	45,757
   Share capital	74,333	74,333	17,587	16,802
   Number of shares	74,332,538	74,056,038	74,332,538	74,056,038
   Book value per share (PLN/EUR)	3.30	2.73	0.78	0.62

   The financial highlights were translated using the following exchange rates:

   • Items of assets and equity and liabilities were translated at the EUR/PLN mid rate quoted by the National Bank of Poland for the reporting date:

     - as at June 30th 2017: 4.2265

     - as at December 31st 2016: 4.4240

   • Items of the statement of profit or loss and the statement of cash flows were translated at a rate representing the arithmetic mean of EUR/PLN exchange rates as at the end of each month in the reporting period:

     - in H1 2017: 4.2474

     - in H1 2016: 4.3805

   • Maximum rates during the period:

     - in H1 2017: 4.3308

     - in H1 2016: 4.4405

   • Minimum rates during the period:

- in H1 2017: 4.1737

- in H1 2016: 4.2684