5/2016 - Information on the decision undertaken by the Management Board of goodwill impairment and establishing the provision by the subsidiary

The Management Board of Trakcja PRKiI S.A. (the “Company”) hereby informs that on 3 March 2016, due to the performance of impairment test of goodwill assigned to the cash generating unit, which consists of the following subsidiaries: Przedsiębiorstwo Eksploatacji Ulic i Mostów Sp. z o.o., Dalba Sp. z o.o. and Przedsiębiorstwo Drogowo-Mostowe Białystok S.A., has decided to write-off the value of that asset in Trakcja Group’s consolidated balance sheet in the amount of PLN 12 302 thousand.

The goodwill presented in Trakcja Group’s consolidated balance sheet as at 30 September 2015 amounted to PLN 341 348 thousand.

In Management Board’s opinion reasons appeared that may impact the goodwill assigned to the mentioned cash generating unit therefore the Company’s Management Board decided to perform goodwill impairment test as at 31 December 2015.

Additionally, the Management Board of Trakcja PRKiI S.A. informs that it has been notified of the provision created by the subsidiary AB Kauno tiltai, which has an impact on the consolidated result of the Trakcja Group of 2015 amounting to PLN 27 800 thousand. The provision was created as on 31 December 2015 with regard to the litigation between the consortium, AB Kauno tiltai constitutes a part of, and the AB Lietuvos geležinkeliai, in which the AB Lietuvos geležinkeliai claim charging a contractual penalty due to a delay in performance of works.

The above events, i.e. recognition of goodwill impairment and creating a provision cause a decrease in the consolidated financial result for 2015 by an amount of PLN 40 102 thousand, and a decrease in the value of fixed assets presented in the consolidated balance sheet of Trakcja Group as on 31 December 2015 by an amount of PLN 12 302 thousand.

Final values of goodwill impairment and provision created depend on completing annual audit and shall be presented in consolidated financial statements of the Issuer’s Capital Group for 2015.

Legal grounds:

Article 56 paragraph 1 item 1 of the Act of 29 July 2005 for Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies (consolidated text: Journal of Laws of 2013, item 1382)