Consolidated statement of comprehensive income

The following table presents the items from the Capital Group's consolidated statement of comprehensive income recorded in 2012. These items and the resulting growth figures are quoted in accordance with the Consolidated Financial Statements of the Jastrzębska Spółka Węglowa S.A. Capital Group for the financial year ended 31 December 2012.

In 2011, JSW S.A. acquired the following subsidiaries: KK Zabrze, WZK Victoria and PEC. Due to the timing of the acquisition, the data in the consolidated statement of comprehensive income for the financial year ended 31 December 2011 do not include the figures from WZK Victoria or PEC, and KK Zabrze’s data are included only for the period from 1 July to 31 December 2011. However, the data for the current reporting period capture costs by type of these entities for the financial year ended 31 December 2012.

	2012	2011 (restated data)	Growth
Sales revenues	8,821.0	9,376.8	94.1%
Cost of products, materials and merchandise sold	(6,385.8)	(5,967.1)	107.0%
Gross sales profit	2,435.2	3,409.7	71.4%
Cost of sales	(361.9)	(272.2)	133.0%
Administrative costs	(662.5)	(508.9)	130.2%
Employee share ownership plan	-	(293.0)	-
Other income	53.5	49.4	108.3%
Disputed property tax on underground mine workings	(48.5)	359.7	(13.5)%
Other costs	(111.5)	(48.8)	228.5%
Other net profit	3.9	12.6	31.0%
Operating profit	1,308.2	2,708.5	48.3%
Financial income	119.8	118.1	101.4%
Financial costs	(153.1)	(152.7)	100.3%
Share in profits of affiliates	2.0	1.1	181.8%
Pre-tax profit	1,276.9	2,675.0	47.7%
Income tax	(288.8)	(589.0)	49.0%
Net profit	988.1	2,086.0	47.4%
Other comprehensive income
Actuarial profit/(loss)	(234.0)	24.1	(971.0)%
Income tax	44.4	(4.6)	(965.2)%
Total other comprehensive income	(189.6)	19.5	(972.3)%
Total comprehensive income	798.5	2,105.5	37.9%
Net profit attributable to:
- shareholders of the Parent Company	985.1	2,067.1	47.7%
- non-controlling stakes	3.0	18.9	15.9%
Comprehensive income attributable to:
- shareholders of the Parent Company	795.7	2,086.6	38.1%
- non-controlling stakes	2.8	18.9	14.8%
Earnings per share attributable to shareholders of the Parent Company (in PLN per share)	8.35	18.25	45.8%

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In 2012, total sales revenues were PLN 8,821.0 million and were PLN 555.8 million lower than last year's revenues, representing a 5.9% decrease. The decrease in unit prices of coking coal and coke had a significant impact on the above result, as is described in Item 2.2of Management Board Report on the activity of the JSW S.A. Capital Group. The structure of revenues on sales in 2012 was as follows: sales of coal (46.9%), sales of coke and coal derivatives (48.8%), other activity (4.3%).

In 2012, costs of products, materials and merchandise sold increased by PLN 418.7 million, i.e. 7.0%, compared to the previous year. The merger of WZK Victoria and KK Zabrze into the Group had a direct impact on the amount of these costs. In 2012, gross sales profit amounted to PLN 2,435.2 million and was 28.6% lower than in 2011.

In 2012, total cost of sales, comprised mainly of costs of transportation services, was PLN 361.9 million which represents a 33.0% increase compared to 2011. The increase in these costs is directly associated with the increase in the volume of coke sales in 2012.

Administrative costs encompassing costs associated with execution of management and administrative functions were PLN 662.5 million which represents a 30.2% growth as compared to 2011. The increase in these expenses is primarily the result of the Capital Group’s expansion in 2011 and merger of new subsidiaries: WZK Victoria and PEC. In addition, these expenses include KK Zabrze’s administrative costs for the whole year 2012, whereas administrative costs for 2011 were generated from the moment of entry of KK Zabrze into the Group, i.e. from mid-2011. Furthermore, revaluation charges were created in administrative costs for receivables due from FNsteel Oy A and Thermphos International B.V. in the total amount of PLN 13.1 million in connection with the bankruptcy of these companies. Personnel costs form the largest share in administrative costs. Decisions regarding employee compensation, training costs and travel expenses in 2012 significantly affected the amount of these expenses.

The Group’s other income in 2012 were PLN 53.5 million and remained at a similar level to that of 2011.
The “Disputed property tax on underground mine workings” item in 2012 amounted to PLN (48.5) million and resulted from recalculation of provisions. In 2011, revenues on the disputed property tax on underground mine workings recorded in the accounting ledgers in the amount of PLN 359.7 million, included receivables from municipalities by virtue of paid disputed property tax on underground mine workings in the amount of PLN 163.9 million and the dissolution of provisions for the disputed property tax on underground mine workings in the amount of PLN 195.8 million.

Other costs in the period under analysis increased by PLN 62.7 million. The increase in other costs results from, among other factors, an increase in interest costs by PLN 37.6 million, i.e. by 120.5%. Moreover, this item includes PLN 31.8 million on account of the judgment of 27 September 2012 concerning the court proceedings conducted in connection with the claim of ZARMEN Sp. z o.o., the leader of the “Concorde-Radlin II” Consortium, unrecognized by KK Zabrze, for payment for the performance of construction works agreement of 17 October 2006, as described in Item 4.9.3. of Management Board Report on the activity of the JSW S.A. Capital Group for 2012.

The effect of operating activity is a positive operating result of PLN 1,308.2, down by PLN 1,400.3 million, i.e. 51.7%, from 2011.

Financial income in 2012 was PLN 119.8 million, remaining at a similar level to that of 2011 (PLN 118.1 million). Its amount reflects interest earned on cash and cash equivalents (in 2012: PLN 115.1 million, in 2011: PLN 116.0 million). Similarly, financial costs in 2012 remained at a similar level to that of 2011, increasing only by 0.3%, i.e. PLN 0.4 million, to PLN 153.1 million. Interest expenses related to settlement of the discount on long-term provisions accounted for 80.5% of financial costs. As a result of the aforedescribed factors, pre-tax profit for 2012 amounted to PLN 1,276.9 million and was 52.3% lower than that generated in 2011.
Finally, after income tax, net profit for 2012 was PLN 988.1 million, down by 52.6% compared to the previous year.

In 2012, the Group decided to apply amendments to IAS 19 from 1 January 2012. In accordance with amendments to IAS 19, the Group recognized actuarial gains/losses on specific employee benefit liabilities (i.e. retirement and disability pension benefits, compensatory disability pensions, charge to the Company Social Benefit Fund for old age and disability pensioners, coal allowances for old age and disability pensioners) resulting from changes in actuarial assumptions in other comprehensive income (permanently outside the profit and loss account). These figures are not reclassified to profit or loss, but are recognized in retained earnings. Actuarial gains/losses are recognized as operating expenses in the statement of comprehensive income only in relation to provisions for jubilee awards. Due to the retrospective application of the amendments, the consolidated statement of comprehensive income for 2011 contains restated data. As a result of the recognition, in 2012, of actuarial losses in the amount of PLN 234.0 million and deferred tax in the amount of PLN 44.4 million, total comprehensive income amounted to PLN 798.5 million, i.e. PLN 1,307.0 million less than in 2011.