Management Board Report on the activity of the JSW S.A. Capital Group for 2012

3.11. Pro forma financial information

Presented below is pro forma financial information encompassing the consolidated statement of comprehensive income of the JSW S.A. Capital Group and the KK Zabrze S.A. Capital Group, WZK Victoria and PEC. These data were prepared in accordance with the accounting policy adopted by the Group and described in the Consolidated Financial Statements of the Jastrzębska Spółka Węglowa S.A. Capital Group for the financial year ended 31 December 2012. The consolidated pro forma statement of comprehensive income was not subject to the obligation of audit and is only attached for the purpose of presenting the Group’s hypothetical results if the KK Zabrze S.A. Group, WZK Victoria and PEC were part of the Group as at 1 January 2011.

The pro forma financial information was prepared for illustration purposes only and by definition presents merely a hypothetical situation.

The following table presents the Group’s consolidated pro forma statement of comprehensive income for 2011. This statement does not take into account the consequences of valuation of the employee share ownership plan in the amount of PLN 293 million which was a non-recurring event not affecting the Group’s cash flows.

  2011
(restated data)
Unadjusted financial information Pro forma adjustments Pro forma infor-mation
Group(1) KK  Zabrze Group(2) WZK Victoria(3) PEC(3) Other adjust-ments(5) Group
Sales revenues 9,376.8 756.3 811.6 160 (517.5) 10,587.2
Cost of products, materials and merchandise sold (5,967.1) (655.4) (699.8) (143.5) 527.4 (6,938.4)
Gross sales profit 3,409.7 100.9 111.8 16.5 9.9 3,648.8
Cost of sales (272.2) (16.7) (11.6) - - (300.5)
Administrative costs (508.9) (17.5) (17.1) (9.0) - (552.5)
Other income 49.4 1.9 0.5 1.3 - 53.1
Revenues on account of disputed property tax on underground mine workings 359.7 - - - - 359.7
Other costs (48.8) (1.2) (0.7) (1.6) - (52.3)
Other net gains/losses 12.6 (0.2) 2.3 0.7 - 15.4
Operating profit 3,001.5 67.2 85.2 7.9 9.9 3,171.7
Financial income 118.1 0.9 0.2 0.6 - 119.8
Financial costs (152.7) (5.8) (4.9) (0.1) - (163.5)
Share in profits of affiliates 1.1 - - -   1.1
Pre-tax profit 2,968.0 62.3 80.5 8.4 9.9 3,129.1
Income tax (589.0) (11.8) (15.4) (2.2) (1.9) (620.3)
Net profit 2,379.0 50.5 65.1 6.2 1.8 2,508.8
Other comprehensive income:            
Actuarial profit/(loss) 24.1 - (0.3) (0.2) - 23.6
Deferred tax (4.6) - 0.1 - - (4.5)
Total other comprehensive income 19.5 - (0.2) (0.2) - 19.1
Total comprehensive income 2,398.5 50.5 64.9 1.6 1.8 2,527.9
Net profit attributable to:            
- shareholders of the Parent Company 2,360.1 - - - - 2,471.6
- non-controlling stakes 18.9 - - - - 37.2
Comprehensive income attributable to:            
- shareholders of the Parent Company 2,379.6 - - - - 2,490.8
- non-controlling stakes 18.9 - - - - 37.1
Basic/diluted profit per share attributable to shareholders of the Parent Company (in PLN per share) (4) 20.84 - - - - 21.24
Net return on sales 25.4% 6.7% 8.0% 3.9% - 23.7%

(1) The Group's financial data are based on the consolidated financial statements without taking into account the effects of valuation of the employee share ownership plan.
(2) The KK Zabrze Group's financial data are based on the Interim Consolidated Financial Statements of KK Zabrze for H1 2011.
(3) The financial data of WZK Victoria and PEC are based on their annual pro forma financial statements.
(4) Other adjustments present elimination of revenues and costs resulting from transactions between the Group and the acquired companies.
  - In the period from 1 January to 30 June 2011, the KK Zabrze Group purchased coal worth PLN 299.7 million from the Group. In addition, the costs were adjusted by PLN 10.9 million on account of realization of unrealized profit captured in inventories in the previous period with the relevant adjustment of deferred tax in the amount of PLN 2.1 million.
  - In the period from 1 January to 31 December 2011, WZK Victoria purchased coal and fine coke worth PLN 185.8 million from the Group. In addition, the costs were adjusted by PLN 1.0 million on account of elimination of the change of balance of unrealized profit captured in inventories with the relevant adjustment of deferred tax in the amount of PLN 0.2 million.
  - In the period from 1 January to 31 December 2011, PEC purchased heat worth PLN 31.7 million from the Group and charged the Group with the amount of PLN 0.3 million, mostly for providing access to the heating grid.
(5) The weighted average number of shares calculated for the purposes of calculation of basic/diluted pro forma profit per share is 116,380,389, including 6,404,110 shares which were issued under the KK Zabrze transaction.

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