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TRAKCJA - TILTRA CAPITAL GROUP CONSOLIDATED SEMI-ANNUAL REPORT FOR THE PERIOD OF 6 MONTHS ENDED ON 30 JUNE 2011

TRAKCJA - TILTRA CAPITAL GROUP Consolidated semi-annual report for the period of 6 months ended on 30 June 2011 (data in PLN 000s, unless stated otherwise)

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CONTENTS OF THE CONSOLIDATED SEMI-ANNUAL REPORT

I. Selected financial data of the Trakcja - Tiltra Capital Group

II. Condensed semi-annual financial statements of the Trakcja - Tiltra Capital Group

III. Condensed semi-annual financial statements of Trakcja - Tiltra S.A.

IV. The Management Board’s report on the activity of the Trakcja - Tiltra Capital Group

V. The Management Board’s representations on the adopted accounting principles and selection of the entity qualified to audit financial statements reviewing the consolidated financial statements

VI. The auditor’s report on the audit of the condensed semi-annual financial statements of the Trakcja - Tiltra Capital Group

VII. The auditor’s report on the audit of the condensed financial statements of Trakcja - Tiltra S.A.

TRAKCJA - TILTRA CAPITAL GROUP Consolidated semi-annual report for the period of 6 months ended on 30 June 2011 Financial highlights (data in PLN 000s, unless stated otherwise)

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FINANCIAL HIGHLIGHTS OF THE CAPITAL GROUP

The average PLN/EUR exchange rates in the period covered by the consolidated financial statements:

Period ended

Average

exchange rate

in the period *

Minimum

exchange rate in

the period

Maximum

exchange rate in

the period

Exchange rate on

the last day of the

period

30.06.2011 r. 3,9537 3,8403 4,0800 3,9866

31.12.2010 r. 4,0044 3,8356 4,1770 3,9603

30.06.2010 r. 4,0042 3,8356 4,1770 4,1458

* The average of the exchange rates binding as at the last day of each month in a given reporting period.

Main consolidated balance sheet line items converted into euro:

PLN 000s EUR 000s PLN 000s EUR 000s

Non-current assets 1 069 440 268 259 214 589 54 185

Current assets 961 702 241 234 539 776 136 297

Total assets 2 031 142 509 493 754 365 190 482

Equity 689 778 173 024 404 192 102 061

Long-term liabilities 521 643 130 849 52 004 13 131

Short-term liabilities 819 721 205 620 298 169 75 290

Total liabilities and equity 2 031 142 509 493 754 365 190 482

30.06.2011 31.12.2010

The FX rate set by the National Bank of Poland on the last day of a given reporting period has been accepted for the purpose of converting data in the consolidated balance sheet.

Main line items of the consolidated profit and loss account converted into euro:


Revenues on sales 668 296 169 031 150 419 37 565

Own expenses of sales (621 818) (157 275) (117 782) (29 415)

Gross sales profit (loss) 46 478 11 756 32 637 8 150

Operating profit (loss) 26 305 6 653 20 183 5 040

Gross profit (loss) 16 645 4 210 20 704 5 171

Net profit (loss) on continued activity 13 853 3 504 16 450 4 108

Net profit (loss) on discontinued activity - - - -

Net profit (loss) of the period 13 853 3 504 16 450 4 108

Period of six months

ended


ended

30.06.2011 30.06.2010

The consolidated profit and loss account data were converted according to the average euro exchange rate calculated as the arithmetic mean of the exchange rates set by the National Bank of Poland as at the last day of each month in a given reporting period.

Main line items of the consolidated cash flow statement converted into euro:

GRUPA KAPITAŁOWA TRAKCJA - TILTRA Skonsolidowany raport półroczny za okres 6 miesięcy zakończony 30 czerwca 2010 roku Wybrane dane finansowe (dane w tys. zł, jeżeli nie zaznaczono inaczej)

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Cash flow on operating activity (292 328) (73 938) (56 510) (14 113)

Cash flow on investing activity (53 174) (13 449) (19 527) (4 877)

Cash flow on financial activity 178 270 45 089 (8 718) (2 177)

Total net cash flow (167 232) (42 298) (84 755) (21 167)


ended


ended

30.06.2011 30.06.2010

The consolidated cash flow statement data were converted according to the average euro exchange rate calculated as the arithmetic mean of the exchange rates set by the National Bank of Poland as at the last day of each month in a given reporting period.


Cash at the beginning of the period 206 351 52 105 185 621 45 183

Cash at the end of the period 39 119 9 813 100 866 24 330

30.06.2011 30.06.2010

To convert the above consolidated cash flow statement data, the following was assumed:

- the FX rate set by the National Bank of Poland as at the last day of a given reporting period – for the line item “Cash at the end of the period”;

- the FX rate set by the National Bank of Poland as at the last day of the reporting period preceding a given reporting period – for the line item “Cash at the beginning of the period”; As at the last day of the financial year ended 31 December 2009, the FX rate was 4.1082 PLN/EUR.

TRAKCJA - TILTRA CAPITAL GROUP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD OF 6 MONTHS ENDED ON 30 JUNE 2011 PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS

TRAKCJA - TILTRA CAPITAL GROUP Condensed consolidated financial statements for the period of 6 months ended on 30 June 2011

(data in PLN 000s, unless stated otherwise)

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APPROVAL OF THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Management Board of Trakcja - Tiltra S.A. has approved the condensed consolidated financial statements of the Trakcja – Tiltra Capital Group for the period from 1 January 2011 to 30 June 2011.

The condensed consolidated financial statements for the period from 1 January 2011 to 30 June 2011 have been drawn up according to the International Financial Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”) and applicable to interim reporting as approved by the European Union (IAS 34 “Interim Financial Reporting”).

In these condensed consolidated financial statements, information is presented in the following order:

1. Consolidated profit and loss account for the period from 1 January 2011 to 30 June 2011, showing a net profit of PLN 13,853 thousand.

2. Consolidated statement of comprehensive income for the period from 1 January 2011 to 30 June 2011, showing the comprehensive income of PLN 9,194 thousand.

3. Consolidated balance sheet drawn up as at 30 June 2011, showing assets and liabilities of PLN 2,031,142 thousand.

4. Consolidated cash flow statement for the period from 1 January 2011 to 30 June 2011, showing a decrease in the balance of net cash by the amount of PLN 167,232 thousand.

5. Statement of changes in consolidated equity for the period from 1 January 2011 to 30 June 2011, showing an increase to consolidated equity by the amount of PLN 285,586 thousand.

6. Condensed notes and explanations.

The condensed consolidated financial statements have been prepared in thousands of Polish zloty, except for the line items explicitly indicating otherwise.

Some of the financial and operating data included in these condensed consolidated financial statements have been rounded. For this reason, in some of the tables presented in the statements, the sum of amounts in a column or row may differ slightly from the total amount stated for that column or row.

Maciej Radziwiłł Tadeusz Bogdan

CEO Deputy CEO

Tadeusz Kałdonek Tadeusz Kozaczyński

Deputy CEO Deputy CEO

Dariusz Mańkowski

Deputy CEO

Warsaw, 31 August 2011



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CONTENTS

CONSOLIDATED PROFIT AND LOSS ACCOUNT ___________________________________________ 5

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME _______________________________ 6

CONSOLIDATED BALANCE SHEET ______________________________________________________ 7

CONSOLIDATED CASH FLOW STATEMENT _______________________________________________ 8

STATEMENT OF CHANGES IN CONSOLIDATED EQUITY ____________________________________ 9

CONDENSED NOTES AND EXPLANATIONS ______________________________________________ 10

1. General information ____________________________________________________________ 10

2. Composition of the Group and changes in the Group’s structure in the period covered by the consolidated financial statements ________________________________________________ 10

3. Information on the purchase of the Tiltra Group AB and the AB Kauno Tiltai Groups _____ 13

4. Composition of the Parent Company’s Management Board ___________________________ 14

5. Composition of the Parent Company’s Supervisory Board ___________________________ 14

6. Approval of the consolidated financial statements __________________________________ 15

7. Basis for drawing up the consolidated financial statements __________________________ 15

8. Statement of compliance________________________________________________________ 15

9. Significant values based on professional judgment and estimates _____________________ 15

10. Accounting principles and changes during the half year _____________________________ 16

11. New standards and interpretations _______________________________________________ 20

12. Information on operational and geographic segments _______________________________ 23

13. Revenues on sales and own expenses of sales _____________________________________ 26

14. Other operating income_________________________________________________________ 27

15. Financial expenses ____________________________________________________________ 27

16. Income tax ___________________________________________________________________ 27

17. Property, plant and equipment ___________________________________________________ 28

18. Consolidation goodwill _________________________________________________________ 28

19. Investment property ____________________________________________________________ 29

20. Prepayments, accruals and deferred income _______________________________________ 30

21. Inventory _____________________________________________________________________ 30

22. Trade receivables and other receivables___________________________________________ 31

23. Cash and cash equivalent _______________________________________________________ 31

24. Construction contracts _________________________________________________________ 32

25. Issue of shares and changes in equity ____________________________________________ 32

26. Non-controlling shares _________________________________________________________ 33

27. Interest-bearing bank credits and loans ___________________________________________ 34

28. Bonds _______________________________________________________________________ 36

29. Trade liabilities and other liabilities _______________________________________________ 36

30. Contingent items and other off-balance sheet items _________________________________ 37

31. Events occuring after the end of the reporting period ________________________________ 38

32. Cyclicity, seasonality of activity __________________________________________________ 39



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33. Information on issues, redemption and repayment of debt and capital securities ________ 39

34. Information on dividends paid or declared _________________________________________ 39

35. Material litigation and disputes __________________________________________________ 39

36. Information on related entities ___________________________________________________ 40



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CONSOLIDATED PROFIT AND LOSS ACCOUNT

Note 1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Continued activity

Revenues on sales 13 668 296 150 419

Own expenses of sales 13 (621 818) (117 782)

Gross sales profit (loss) 46 478 32 637

Costs of sales, marketing and distribution (2 047) (1 051)

Overhead costs (27 790) (11 432)

Other operating income 14 10 835 994

Other operating costs (1 171) (965)

Operating profit (loss) 26 305 20 183

Financial income 3 202 4 336

Financial expenses 15 (11 104) (2 732)

Acquisition costs 3 (1 270) -

Share in the result of an associated entity (488) (1 083)

Gross profit (loss) 16 645 20 704

Income tax 16 (2 792) (4 254)

Net profit (loss) on continued activity 13 853 16 450

Discontinued activity

Net profit (loss) on discontinued activity for the period - -

Net profit (loss) of the period 13 853 16 450

Attributed to:

Shareholders of the parent company 13 055 16 450

Non-controlling shareholders 798 -



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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010 Unaudited Unaudited


Other comprehensive income: - -

FX differences from converting foreign entities (4 659)

Other net comprehensive income (4 659) -

COMPREHENSIVE INCOME FOR THE PERIOD 9 194 16 450

Attributed to:

Shareholders of the parent company 8 424 16 450

Non-controlling shareholders 770 -



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CONSOLIDATED BALANCE SHEET

ASSETS Note 30.06.2011 31.12.2010

Unaudited Audited

Non-current assets 1 069 440 214 589

Property, plant and equipment 17 328 589 95 114

Intangible assets 59 208 54 675

Consolidation goodwill 3,18 582 198 2 873

Investment property 19 11 930 3 666

Investments in associates 37 679 35 427

Financial assets 9 665 1 182

Long-term receivables 10 388 -

Deferred income tax assets 25 682 19 634

Prepayments and accruals 20 4 101 2 018

Current assets 961 702 539 776

Inventory 21 209 953 109 221

Trade receivables and other receivables 22 520 701 111 933

Income tax receivables 4 313 -


Financial derivatives 471

Cash and cash equivalent 23 39 119 234 309

Prepayments and accruals 20 13 594 5 013

Construction contracts 24 164 926 46 665

TOTAL ASSETS 2 031 142 754 365

LIABILITIES AND EQUITY

Equity (assigned to the shareholders of the parent company) 25 667 871 404 051

Base capital 23 211 16 011

Share sale surplus over their nominal value 435 368 185 812

Revaluation reserve capital 2 339 2 339

Other reserve capital 199 370 160 476

FX differences from converting foreign entities (4 659) -

Retained financial result 12 242 39 413

Non-controlling capitals 26 21 907 141

Total equity 689 778 404 192

Long-term liabilities 27 521 643 52 004

Interest-bearing bank credits and loans 28 168 604 28 791

Reserves 3 256 1 008

Employee benefit liabilities 15 359 7 724

Deferred income tax reserve 30 074 14 463

Bonds 29 294 061 -

Other liabilities 10 289 18

Short-term liabilities 819 721 298 169

Trade liabilities and other liabilities 30 447 379 156 435


Reserves 4 893 11 924


Income tax liabilities - 1 714

Accruals and deferred income 20 241 304


Advances collected towards apartments 5 980 2 365

TOTAL LIABILITIES AND EQUITY 2 031 142 754 365



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CONSOLIDATED CASH FLOW STATEMENT

Note 1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Cash flow on operating activity


Net profit (loss) on discontinued activity - -

Adjustments by the items: (308 973) (77 214)

Depreciation 12 541 5 242

FX differences (121) 501

Net interest and dividends 9 127 437

Profit / loss on investing activity (8 329) 111

Profit (loss) from shares in entities valued using the equity method 488 1 083

Change in the balance of receivables (202 146) (5 553)

Change in the balance of inventory (43 455) (20 775)

Change in the balance of liabilities 53 458 (27 710)

Change in the balance of prepayments, deferred income, accruals and

advance payments (1 223) (5 988)

Change in the balance of reserves (9 532) (2 283)

Change in the balance of construction contracts (112 817) (14 920)

Movement in financial derivatives 428 (4 003)

Income tax paid (4 551) (3 356)

Other adjustments (2 228) -

Conversion FX differences (613) -

Net cash flow on operating activity (292 328) (56 510)

Cash flow on investing activity

Sales (purchase) of intangible assets and tangible non-current assets 3 104 (3 921)

- purchase (9 984) (4 156)

- sale 13 088 235

Sales (purchase) of ownership interests and shares (119 660) -

- purchase (119 660) -

- sale - -

Financial assets 60 060 (15 606)

- sold or returned 60 381 (57 000)

- purchased (321) 41 394

Loans 2 573 -

- repaid 2 573 -

- granted - -

Interest gained 749 -

Net cash flow on investing activity (53 174) (19 527)

Cash flow on financial activity

Proceeds on drawing credits and loans 211 250 -

Repayment of credits and loans (12 473) (7 149)

Interest paid (9 120) (1 030)

Liability payments for financial lease agreements (11 429) (523)

Other 42 (16)

Net cash flow on financing activity 178 270 (8 718)

Total net cash flow (167 232) (84 755)

Net FX differences

Cash at the beginning of the period 206 351 185 621

Cash at the end of the period: 39 119 100 866



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STATEMENT OF CHANGES IN CONSOLIDATED EQUITY

Unaudited Base capital

Surplus

from the share

sale surplus

over their

nominal value

Capital

from

revaluation

reserve

Other

reserve

capital

FX differences

from

converting

foreign entities

Retained

financial result Total

Non-controlling

capital Total equity

As at 1 January 2011 16 011 185 812 2 339 160 476 - 39 413 404 051 141 404 192

Corrections of mistakes - - - - - - - - -

Changes to accounting principles - - - - - - - - -

As at 1 January 2011

after corrections16 011 185 812 2 339 160 476 - 39 413 404 051 141 404 192

Total income for the period - - - - (4 659) 13 055 8 396 798 9 194

Distribution of profit - - - 38 509 - (38 509) - - -

Issue of shares 7 200 249 556 - - - - 256 756 - 256 756

Purchase of non-controlling shares - - - - - - - 20 968 20 968

Other - - - 385 - (1 717) (1 332) - (1 332)

As at 30 June 2011 23 211 435 368 2 339 199 370 (4 659) 12 242 667 871 21 907 689 778

Unaudited, converted

As at 1 January 2010 16 011 185 812 2 637 84 736 - 80 219 369 415 7 483 376 898

Corrections of mistakes - - - - - - - - -

Changes to accounting principles - - - - - - - - -


after corrections16 011 185 812 2 637 84 736 - 80 219 369 415 7 483 376 898

Comprehensive income for the

period- - - - 16 440 16 440 16 440

Distribution of profit - - - (237) - 237 - - -

Purchase of non-controlling shares - - - - - 2 350 2 350 (4 315) (1 965)

Other - - (18) - - - (18) (3 168) (3 186)

As at 30 June 2010 16 011 185 812 2 619 84 499 - 99 246 388 187 - 388 187

Equity falling to shareholders of the parent company



The condensed notes and explanations found on pages 10-42 constitute an integral part of these condensed consolidated financial statements.

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CONDENSED NOTES AND EXPLANATIONS

1. General information

The condensed consolidated financial statements cover the period of 6 months ended on 30 June 2011 and include comparative data for the period of 6 months ended on 30 June 2010 and as at 31 December 2010.

The Trakcja - Tiltra Capital Group (the “Group”; “GK T-T”) consists of the parent company Trakcja - Tiltra S.A. (the “Parent Company”, the “Company”, “Trakcja – Tiltra”) and its subsidiaries, companies under common control and associated companies (see Note 2).

The parent company Trakcja - Tiltra S.A. in its present form was established on 30 November 2004 as a result of acquisition of the holding company Trakcja Polska S.A. by Przedsiębiorstwo Kolejowych Robót Elektryfikacyjnych S.A. (Railway Electrification Works Company, “PKRE S.A.”). The Company’s business name was then Trakcja Polska S.A. and was changed by Resolution no. 2 adopted by an Extraordinary Shareholder Meeting on 22 November 2007. The change was confirmed by the entry in the National Court Register made on 10 December 2007. The Company’s previous business name was Trakcja Polska – PKRE S.A. The parent company operates on the basis of the articles of association prepared in the form of a notary deed on 26 January 1995 (Rep. A No. 863/95), as amended. On 22 June 2011, the Regional Court for the capital city of Warsaw in Warsaw, 13

th Economic Division of

the National Court Register, registered the change of the Company’s business name from Trakcja Polska S.A. to Trakcja - Tiltra S.A. The above change was registered pursuant to Resolution no. 3 adopted by the Extraordinary Shareholder Meeting on 15 June 2011.

On 29 January 2002, the Company was entered in the National Court Register in the Regional Court in Warsaw at the 12

th Business Division under file number KRS 0000084266. Trakcja – Tiltra S.A. was

assigned the statistical number REGON 010952900, the taxpayer identification no. NIP 525-000-24-39 and code PKD 4212Z. The Company’s seat is located in Warsaw at ul. Złota 59, 18

th floor.

The duration of the parent company and the other entities comprising the Group is indefinite.

The Company’s line of business as stated in its articles of association includes specialized construction and installation work for electrification of railway and tramway lines, i.e.:

work on foundations and networks,

installation of overhead contact substations and section cabins,

installation of high and low voltage aerial and cable lines,

installation of power supply and local control cables,

production (of high, medium and low voltage switching stations, overhead contact system accessories and local control devices),

specialized equipment services (excavators, rail and car cranes, drill setters, piling rigs),

construction work connected with construction of civil and marine engineering facilities,

specialized construction work,

construction work associated with erecting buildings.

2. Composition of the Group and changes in the Group’s structure in the period covered by the consolidated financial statements

As a result of expanding the activity of the Trakcja Polska Group conducted to date by purchasing shares and ownership interests by the Parent company Trakcja Polska S.A., the Company business name was changed from Trakcja Polska S.A. to Trakcja – Tiltra S.A., which also caused the name of the Capital Group to change from the Trakcja Polska Capital Group to the Trakcja – Tiltra Capital Group.

The Group is composed of the parent company Trakcja - Tiltra S.A. and the subsidiary entities:




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100% 100% 82.35% 40.68% 100% 96.84% Przedsiębiorstwo Robót Kolejowych

i Inżynieryjnych S.A. PRK 7 Nieruchomości

Sp. z o.o. TORPROJEKT

Sp. z o.o. Eco-Wind

Construction S.A. 0.48%

- engineering works -construction works - developer activity - design - production and distribution - track works of electricity

50% 77% 100% Bahn Technik Wrocław Sp. z o.o. 22% 1%

85,85% - track and welding works

100%

100% 100%

100%

100%

75% 99.5%

100%

94,93%

75,1% 100%

50,54%

100%

100%

100%

25%

94.62% PD LAMBDAR

Sp. z o.o. PDM Białystok S.A.

AB Kauno Tiltai

UAB Kelda

UAB Verksioniu karjeras

UAB Taurakelis

production of construction materials utilities infrastructure railways, airports, water ports, construction of roads, bridges, tunnels

AB Kauno Tiltai TUB konsorciumas Tiltra

UAB Kedainiu automobiliu keliai

UAB Pletros investicijos

AB Kauno Tiltai Lenkijos skyrius

- construction of roads

Tiltra Group AB

- construction of roads, bridges - road maintenance - production of construction - materials

- holding company

Silentio Investments Sp. z o.o.

PT Kruszywa Sp. z o.o.

Brux Sp. z o.o.

Dalba Sp. z o.o.

TRAKCJA - TILTRA S.A.

- production of station equipment and subassemblies - track and construction works -traction system and electric works

AB Kauno Tiltai TUB konsorciumas Tiltra Lenkijos skyrius

P.E.U.I.M. Sp. z o.o.

Poldim Mosty Sp. z o.o.

Poldim S.A.

NRR Grupa POLDIM Sp. z o.o.

Poldim Mielec Sp. z o.o.

Poldim Dębica S.A.




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Trakcja – Tiltra S.A. is the parent company and prepares consolidated financial statements of the Trakcja - Tiltra Capital Group.

Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A. (“PRKiI”), seated in Wrocław, is a subsidiary PRKiI S.A. and does not draw up consolidated financial statements.

Bahn Technik Wrocław Sp. z o.o. (“Bahn Technik”), seated in Wrocław, is a company under common control with the Parent Company and is consolidated at the level of the Trakcja – Tiltra Group.

PRK 7 Nieruchomości Sp. z o.o. (“PRK 7 Nieruchomości”), seated in Warsaw, is a subsidiary company.

TORPROJEKT Sp. z o.o. (“TORPROJEKT”), seated in Warsaw, is a subsidiary.

Eco-Wind Construction S.A. (“EWC”), seated in Warsaw, is an associated company with respect to the Parent Company.

Tiltra Group AB, seated in Vilnius, is a subsidiary of the Parent Company Trakcja - Tiltra S.A. and, at the same time, the parent company in the Tiltra Group AB Capital Group.

The Tiltra Group AB Capital Group comprises the following entities:

Silentio Investments Sp. z o.o. – a subsidiary, seated in Warsaw;

Poldim S.A. – a subsidiary of Silentio Investments Sp. z o.o., seated in Tarnów, is the parent company in the Poldim Group and does not draw consolidated financial statements; that group is consolidated at the level of the Tiltra Group AB Group. In addition, the Poldim Group comprises the following entities:

– NRR Grupa POLDIM Sp. z o.o. – a subsidiary, seated in Mikołajowice;

– Poldim Mielec Sp. z o.o. – a subsidiary, seated in Mielec;

– Poldim Dębica Sp. z o.o. – a subsidiary, seated in Dębica;

– Poldim Mosty Sp. z o.o. – a subsidiary, seated in Katowice;

– PD LAMBDAR Sp. z o.o. – an associated company, seated in Łódź.

AB Kauno Tiltai, seated in Kaunas, is a subsidiary of the Parent Company Trakcja - Tiltra S.A. and, at the same time, the parent company in the AB Kauno Tiltai Capital Group.

The AB Kauno Tiltai Capital Group comprises the following entities:

UAB Kelda – a subsidiary, seated in Vievis;

UAB Taurakelis – a subsidiary, seated in Tauragé;

UAB Kedainiu Automobiliu Keliai– a subsidiary, seated in Kédainiai;

TUB Konsorciumas Tiltra – a subsidiary, seated in Kaunas;

UAB Pletros investicijos– a subsidiary, seated in Vilnius;

AB Kauno Tiltai Lenkijos skyrius – a subsidiary, seated in Vilnius;

P.E.U.I.M. Sp. z o.o. – a subsidiary, seated in Białystok, is the parent company in the P.E.U.I.M. Group and does not draw consolidated financial statements; that group is consolidated at the level of the AB Kauno Tiltai Group. Furthermore, the P.E.U.I.M. Group comprises the following entities:

– Brux Sp. z o.o. – a subsidiary, seated in Białystok;

– Dalba Sp. z o.o. – a subsidiary, seated in Białystok;

– PT Kruszywa Sp. z o.o. – a subsidiary, seated in Katowice;

– Tiltra PDM Białystok S.A. – a subsidiary, seated in Białystok.

In the presented period, the composition of the Capital Group increased as a result of the purchase of shares and ownership interests in companies belonging to the Tiltra Group AB and AB Kauno Tiltai Groups. At present, the Tiltra Group AB Group and the AB Kauno Tiltai Group conduct activity in the sector of road and bridge construction. Details of the above transaction are described in Note 3.

The highest level parent company is the Spanish company COMSA S.A., which prepares consolidated

financial statements including also the data of the Trakcja - Tiltra Capital Group.




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3. Information on the purchase of the Tiltra Group AB and the AB Kauno Tiltai Groups

3.1. Dates and percentage of the purchased shares and ownership interests with voting rights

On 19 April 2011, pursuant to a share sale agreement concluded between the Company as Buyer and AB Invalda, UAB NDX Energija and Mr. Jonas Pilkauskas, Mr. Mindaugas Aniulis, Mr. Nerijus Eidukevičius, Mr. Romas Matiukas, Ms. Vaida Balčiūnienė, Ms. Irena Angelė Černevičiūtė as Sellers 1, and pursuant to a share sale agreement concluded on 19 April 2011 between the Company as Buyer and Mr. Jonas Pilkauskas, Mr. Romanas Aniulis, Mr. Vidmantas Drizga, Mr. Nerijus Eidukevičius, Mr. Romas Matiukas as Sellers 2, the Company purchased:

150,000 shares of Tiltra Group AB, seated in Vilnius, of a par value of LTL 1 each, with a total par value of LTL 150,000, representing 100% of the company’s share capital and giving the right to 100% of votes at the company’s shareholder meetings,

148,981 shares of AB Kauno Tiltai, seated in Kaunas, of a par value of LTL 130 each, with a total par value of LTL 19,367,530, representing 96.84% of the company’s share capital and giving the right to 96.84% of votes at the company’s shareholder meetings,

and 22 ownership interests in Silentio Investments Sp. z o.o., seated in Warsaw, of a par value of PLN 50 each, with a total par value of PLN 1,100, representing 22% of the company’s share capital and giving the right to 22% of votes at the company’s partner meetings. After the above transaction and the transaction of purchasing shares of the Tiltra Group AB, the Company holds directly and through the Tiltra Group AB and AB Kauno Tiltai 100 interests in Silentio Investments Sp. z o.o., of a par value of PLN 50 each, with the total par value of PLN 5,000, representing 100% of the share capital and giving the right to 100% of votes at the company’s partner meeting.

Before performing the above transactions, the Company owned no shares of Tiltra Group AB, no shares of AB Kauno Tiltai or ownership interests in Silentio Investements Sp. z o.o. The Company treats the investment in the purchased assets as a long-term capital investment.

3.2. Description of the Capital Groups whose shares and ownership interests were purchased

Tiltra is a regional group dealing with building infrastructure on the Polish and Lithuanian markets. The Group specializes in construction and rebuilding of roads, bridges, tunnels, railway lines, ports and utilities infrastructure. In the territory of Poland, two lower-level Groups conduct activity – Poldim, seated in Tarnów, and P.E.U.I.M., seated in Białystok. In Lithuania, the AB Kauno Tiltai, which is the largest group in the sector of road and bridge construction in that country, operates also under the Tiltra brand. AB Kauno Tilta controls the following road-building companies: UAB Kelda, UAB Taurakelis, UAB Kedainiu Automobiliu Keliai, TUB konsorciumas Tiltra, UAB Pletros investicijos, UAB Kauno Tiltai Lenkijos skyrius and the P.E.U.I.M. (Przedsiębiorstwo Eksploatacji Ulic i Mostów) Group. The P.E.U.I.M. Group’s activity is connected with construction and maintenance of road network in the territory of Poland.

3.3. Major reasons for purchasing shares and ownership interests

Merging the operations of the two groups (i.e. Trakcja and Tiltra) will make it possible to create one of the leading entities of the segment of the road building and railway construction market in Poland. The Trakcja Polska Group and the Tiltra Group to date have similar strategies, assuming diversification of activities through entering new segments of the construction market. The support from Comsa S.A., the main shareholder of Trakcja - Tiltra S.A., should contribute to expansion to new markets of Central and Eastern Europe. The merged entities will strengthen their competitiveness, giving them an improved negotiating position with contractors and subcontractors. What is also planned is to develop new activity areas, including concessions, construction services for the energy sector and further strengthening of the presence in the sector of tramway infrastructure construction.

3.4. Purchase price and a preliminary goodwill calculation

The overall price for the purchased assets was PLN 707,228 thousand.

A preliminary settlement of the transaction of purchasing the shares and ownership interests is temporary because of the still unfinished process of valuation of all the acquired assets and liabilities to their fair values. The goodwill was tentatively estimated on the basis of net assets of the acquired entities in their book values. In the presented financial statements, the goodwill amounted to PLN 579,325 thousand. The final settlement of the above transaction and the final goodwill calculation will be done within one year from the purchase date.




14

Preliminary goodwill calculation:

30.06.2011

Purchase price in fair value 707 228

Net assets in book value falling to the Group 127 903

Net surplus of the purchase price over the acquired assets 579 325

Value of acquired assets and liabilities

31.03.2011

Assets

Non-current assets 350 930

Current assets 354 590

Liabilities and equity

Long-term liabilities 147 000

Short-term liabilities 335 803

3.5. Fair value of the payment made as at the date of purchasing shares and ownership interests

The fair value of the total payment was determined by deducting an account receivable from the Company to the Sellers with the account receivable for the issue of the Company’s series G shares, the issue of bonds, with the surplus amount of PLN 152,000 thousand handed over in cash.

On 19 April, the Company issued:

148,608 unsecured series A bearer bonds, having no form of a document, with a par value of PLN 1,000 each, with the total par value of PLN 148,608 thousand,

148,608 unsecured series B bearer bonds, having no form of a document, with a par value of PLN 1,000 each, with the total par value of PLN 148,608 thousand.

The issue price per one series A and B bond equals its nominal value. Interest is payable on interest payment dates falling on 30 June and 31 December each year from the issue date until the maturity date of series A and B as well as on the maturity date of series A and B bonds.

On 19 April 2011, the Company issued 72,000,000 series A subscription warrants, each of which gave the holder the right to subscribe for 1 bearer series G share of the Company. The subscription warrants were offered to the Sellers. On 19 April 2011, the Sellers acquired all the subscription warrants offered them and on 19 April 2011 exercised the rights from these warrants, subscribing altogether for 72,000,000 series G shares of the Company in the Company’s share capital, increased pursuant to Resolution No. 3 of the Extraordinary Shareholder Meeting of the Company of 19 January 2011. The price from the share subscription date was PLN 3.63 per share.

4. Composition of the Parent Company’s Management Board

The Company’s Management Board on 30 June 2011was composed of the following persons:

Maciej Radziwiłł CEO;

Tadeusz Bogdan Deputy CEO;

Tadeusz Kałdonek Deputy CEO;

Tadeusz Kozaczyński Deputy CEO;

Dariusz Mańkowski Deputy CEO.

No changes in the composition of the Group’s Parent Entity’s Management Board occurred from 1 January 2011 to 30 June 2011.

No changes in the composition of the Management Board occurred after the balance sheet date.

5. Composition of the Parent Company’s Supervisory Board

The Company’s Supervisory Board on 30 June 2011 was composed of the following persons:

Jorge Miarnau Montserrat Chairman;




15

Miquel Llevat Vallespinosa Deputy Chairman;

Rodrigo Pomar Lòpez Supervisory Board member;

Tomasz Szyszko Supervisory Board member;

Paweł Maciej Ziółek Supervisory Board Member.

No changes in the composition of the Group’s Parent Company’s Supervisory Board occurred from 1 January 2011 to 30 June 2011.

No changes in the composition of the Supervisory Board occurred after the balance sheet date.

6. Approval of the consolidated financial statements

These financial statements were approved for publication by the Management Board on 31 August 2011.

7. Basis for drawing up the consolidated financial statements

The consolidated financial statements have been drawn up pursuant to the historical cost principle, except for derivative instruments and financial assets available for sale, which are carried at fair value. The balance sheet value of captured collaterals of assets and liabilities is adjusted by the changes to the fair value, which may be attributed to the risk against which the assets and liabilities are collateralized.

The condensed consolidated financial statements are presented in Polish zlotys (“PLN”) and all the amounts, unless stated otherwise, are expressed in PLN thousand.

These consolidated financial statements have been prepared on the going concern basis. As at the date of approving these consolidated financial statements, there are no circumstances indicating a threat to the Company’s continued operations.

8. Statement of compliance

These condensed consolidated financial statements have been drawn up according to the International Financial Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”) and applicable to interim reporting as approved by the European Union (IAS 34 “Interim Financial Reporting”).

The condensed consolidated financial statements do not include all the information and disclosures required for the annual financial statements and they should be read jointly with the Group’s consolidated financial statements for the year ended on 31 December 2010.

8.1. Measurement currency and currency of the financial statements

Polish zloty (PLN) is the measurement currency for the Group and the presentation currency of the condensed consolidated financial statements.

9. Significant values based on professional judgment and estimates

9.1. Professional judgment

If a transaction is not covered by any standard or interpretation, the Management Board, guided by its subjective judgment, shall determine and apply an accounting policy to ensure that financial statements include relevant and reliable information and: – present the Group’s property and financial situation, financial result and cash flows in a clear and reliable manner, – reflect the economic contents of the transaction, – are objective, – are prepared in accordance with the conservative valuation principle, – are complete in all material aspects.

The subjective judgment made as at 30 June 2011 concerns contingent liabilities. Details are presented in Note 30. In addition, in June 2009, the Group, together with a related entity (a subsidiary of the main shareholder of the Parent Company), purchased shares of an entity whose line of business is production and distribution of electricity. As at the balance sheet date, the total share of the Group and the related entity in the acquired entity’s share capital was 50%, with the Parent Company’s share amounting to 40.68%. Bearing in mind all the circumstances of the concluded transaction, and in particular provisions of the acquired entity’s Articles of Association, the Management Board concluded that the Group does not control that entity and




16

neither does it have common control over it jointly with a related entity or any other third party. Therefore the shares in that entity have been regarded as shares in associates and consolidated using the equity method.

9.2. Uncertainty of estimates

To prepare the condensed consolidated financial statements, the Parent Company’s Management Board had to make some estimates because many information items included in the statements cannot be valued precisely. The Management Board verifies the assumed estimates based on changes of factors taken into consideration while making those estimates, new information or previous experience. Therefore the estimates made as at 30 June 2011 may be changed in the future.

Valuation of reserves

Employee benefit reserves were estimated on the basis of actuarial methods.

Reserves for correction work

Reserves for correction work have been estimated based on the knowledge of managers of individual construction projects (contracts) about the necessity or probable necessity to provide additional work for the principal in order to meet the terms of the warranty.

Deferred income tax asset component

The Group identifies a component of deferred tax assets based on the assumption that tax profit will be recorded in the future, which will allow the Group to use the component. Deterioration of tax results in the future may render this assumption unjustified.

Fair value of financial instruments

The fair value of financial instruments, for which no active markets exists, is measured by using adequate valuation techniques. The Group uses professional judgment when selecting such adequate methods and assumptions.

Capturing revenues

In order to preserve a relatively constant margin in all the reporting periods of the contract’s term, the Group uses the “cost plus” method of determining revenues. Revenues on the performance of construction and installation services covered by an unfinished agreement are calculated as the costs actually incurred plus the margin assumed on the entire contract. The Group performs analysis on a regular basis and, where necessary, it revises the margins assumed for particular contracts. The level of revenues on sales in the case of contracts concluded in a foreign currency depends on changes in the FX rate.

Depreciation rates

The level of depreciation rates is determined on the basis of expected economic life of components of tangible non-current assets and intangible assets. Every year, the Group revises the assumed periods of economic life, based on its current estimates.

10. Accounting principles and changes during the half year

These condensed consolidated financial statements have been drawn up in accordance with the International Financial Reporting Standards, which are applicable to annual periods beginning from 1 January 2011 as adopted by the European Union.

The presentation of the statements is based on IAS 34 “Interim Financial Reporting”, with application of the same principles to the current and comparative periods and adjustment of the comparative period to the changes of accounting and presentation principles adopted in the statements for the current period.

The accounting principles (policy) applied to draw up these condensed consolidated financial statements for 1H 2011 are consistent with those used to draw up the consolidated financial statements for the financial year ended 31 December 2010, except for the changes described below.




17

10.1. Selected accounting principles

A detailed description of the accounting principles adopted by the Group is presented in its consolidated financial statements for the financial year ended 31 December 2010, published on 19 March 2011.

Conversion of items denominated in foreign currency

Polish zloty (PLN) is the functional and presentation currency of the Group.

Transactions denominated in foreign currencies are converted by the companies belonging to the Group into their functional currencies using the exchange rate binding on the transaction execution date.

As at the balance sheet date, cash assets and liabilities denominated in foreign currencies are converted using the appropriate average exchange rate for a given currency set by the National Bank of Poland and binding at the end of the reporting period. The FX gains and losses resulting from this conversion are appropriately captured in the line item entitled financial income (costs).

Non-pecuniary assets and liabilities carried at historic cost expressed in a foreign currency are shown at the historic rate on the transaction date. Non-pecuniary assets and liabilities carried at fair value expressed in a foreign currency are converted at the exchange rate on the revaluation date to fair value.

The following exchange rates were adopted for the needs of the balance sheet valuation:

30.06.2011

PLN/USD 2,7517

PLN/EUR 3,9866

PLN/LTL 1,1546

Exchange rate binding on the last day of the period

30.06.2011

PLN/LTL 1,1470

The average exchange rate calculated as the arithmetic

mean of exchange rates binding as at the last day of

each month in the given period

As at the balance sheet date, the financial statements of foreign entities are converted into the Polish currency as follows:

relevant balance sheet line items at the average exchange rate set by the National Bank of Poland as at the balance sheet date, except for the item entitled equity, which is converted into the Polish currency at the historic rate from the date of acquiring control over the foreign entity;

the relevant items of the profit and loss account and the statement of total income – at the FX rate being the arithmetic mean of the average monthly FX rates set by the National Bank of Poland for the period covered by the financial statements;

the relevant items of the cash flow statement (investment and financial activity) – at the FX rate being the arithmetic mean of the average monthly FX rates set by the National Bank of Poland for the period covered by the financial statements. The FX gains and losses resulting from this conversion are captured in the line item of the cash flow statement entitled “Other FX gains and losses resulting from conversion”.

The FX gains and losses resulting from such conversion are captured directly in equity as a separate component, i.e. FX gains and losses from converting foreign entities.

FX differences on cash line items of receivables and liabilities (granted and received long-term loans) in relation to foreign entities belonging to the Capital Group are captured in other comprehensive income.

When a foreign entity is sold, the accumulated FX differences posted to equity, referring to the foreign entity, are transferred from equity to the profit and loss account (as adjustment resulting from reclassification) at the moment of capturing profit or loss from selling the entity.

Road construction services

In connection with the purchase of shares and ownership interests in subsidiaries belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups, the Group’s activity was extended to road and bridge construction services.

Revenues from an unfinished long-term service performed to a significant extent by the balance sheet date are measured as at the balance sheet date in proportion to the progress in the service performance, if the income amount may be credibly determined. The progress of performance is measured by the share of




18

costs incurred from the date of contract conclusion to the date of determination of income in estimated total cost of performing the service, or the percentage of work expenditure incurred out of the total number of work expenditures.

The progress of work determined in the foregoing manner is used to calculate the relationship between the actual revenues and the revenues following from the content of the concluded agreement. The difference between so determined (accrued) value of sales and the value invoiced to service recipients is posted under construction contracts respectively on the assets side if the difference is positive, or on the liabilities side if the difference is negative.

When the progress level of an unfinished service cannot be credibly determined for the balance sheet date, then revenues are determined in the amount of costs incurred in a given reporting period, but in no case higher than the costs which are probable to be covered by the buyer in the future.

When it is probable that the total costs of performing the contract will exceed the total contracted revenues, the projected loss is immediately posted as cost of the period in which it is disclosed.

The cost of generating an unfinished service includes the costs incurred from the date of concluding a contract till the balance sheet date. The production costs incurred prior to conclusion of the contract, but related to its performance, are posted as assets if it is probable that these costs are covered in the future by revenues from the buyer. They are then captured as costs of rendering an unfinished construction service.

Revenues on sales of construction and installation services also cover the amounts resulting from valuation of foreign exchange transactions hedging long-term construction contracts concluded in foreign currencies.

The Company performs some long-term contracts based on consortium agreements as a consortium leader. The Group recognizes revenues on some construction contracts performed in the amount falling to the Group.

Earnings per share

Earnings per share for each period are calculated by dividing the net profit allocated to shareholders of the Parent Company for the given period by the weighted average number of shares in the given reporting period. Diluted earnings per share for each period are calculated by dividing the net profit allocated to shareholders of the Parent Company for the given period by the sum of weighted average number of ordinary shares in the given reporting period and all potential diluting shares.

Shares are included in the weighted average number of shares starting from the date when the payment for them becomes due (which normally corresponds to their issue date). Ordinary shares issued as partial payment made within a merger of entities are taken into account when determining the weighted average number of shares starting from the merger date. Ordinary shares which may be issued if certain conditions are satisfied (contingently issuable shares) are treated as outstanding and are included the calculation of earnings per one share but only beginning from the date of satisfaction of all the necessary conditions. Contingently returnable ordinary shares in a year are not treated as outstanding and are excluded from the calculation of main earnings per share as long as these shares are subject to potential recall.

Consolidation rules

The condensed consolidated financial statements include the condensed financial statements of Trakcja – Tiltra S.A. and condensed financial statements of the subsidiaries drawn up as at 30 June 2011.

Subsidiaries are consolidated in the period from the date the Group took control over them and they cease to be consolidated on the date the control ceases. If control over a subsidiary is lost, the consolidated financial statements will reflect the results for the part of the year covered by the statements in which the Group had such control.

Financial statements of subsidiaries are prepared for the same reporting period as the Parent Company’s financial statements. Condensed consolidated financial statements are drawn up using coherent accounting principles followed by the Group for transactions and economic events of a similar nature.

All of the Group’s entities, with the exception of Bahn Technik Sp. z o.o., Eco - Wind Construction S.A., TORPROJEKT Sp. z o.o., subsidiaries in the Poldim Group and subsidiaries in the P.E.U.I.M. Group, keep their accounting ledgers in accordance with the International Accounting Standards. Bahn Technik Sp. z o.o., Eco - Wind Construction S.A., TORPROJEKT Sp. z o.o., subsidiaries in the Poldim Group and subsidiaries in the P.E.U.I.M. Group, keep their accounting ledgers in accordance with the Polish Accounting Standards (“PAS”) defined by the Accounting Act of 29 September 1994 (the “Act”), as amended, and regulations issued on the basis of this act. The financial statements are subsequently transformed and adjusted to the accounting principles in force in the Trakcja - Tiltra Group.




19

The Tiltra Group AB Group and AB Kauno Tiltai Group and subsidiaries belonging to them are consolidated using the full method and the associated company with the lower-level parent company of Tiltra Group AB is consolidated using the equity method.

All of the balances and transactions between Group entities, including unrealized profits resulting from intra-Group transactions, have been ignored in full. Unrealized losses are ignored, unless they are a proof of impairment.

Non-controlling shares are that part of the financial result and net assets which does not belong to the Group. Non-controlling shares are presented as a separate line item in the consolidated profit and loss account, the consolidated statement of total income and equity of the consolidated balance sheet, separately from the equity assigned to shareholders of the parent company. In the case of purchasing non-controlling shares, the difference between the purchase price and the balance sheet value of the non-controlling shares is captured in capitals.

10.2. Changes resulting from amendments to IFRS

The following new or amended standards and interpretations issued by the International Accounting Standards Board or the International Financial Reporting Interpretations Committee have been applied for the first time in these financial statements:

Amended IFRS 1 First adoption of International Financial Reporting Standards

Amendment to IAS 24 Related Party Disclosures, published on 4 November 2009

Amendment to IAS 32 Financial Instruments: Presentation

Amendments to various standards resulting from the annual review of International Financial Reporting Standards (Annual Improvements).

Amendment to the interpretation of IFRIC 14 Voluntary Prepaid Contributions under a Minimum Funding Requirement

Interpretation of IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

Their application did not impact the Group’s performance and financial standing; it only resulted in changes to the applied accounting principles or, possibly, extension of the scope of necessary disclosures or changes to the applied terminology.

The key consequences of applying the new regulations:


The amended IFRS1 was published on 28 January 2010 and applies to annual periods beginning on 1 July 2010 or afterwards. The amended standard includes regulations concerning limited exemption from comparative disclosures based on IFRS 7.

The amended IFRS 1 has no influence on the Group’s financial statements.

Amendment to IAS 24 Related Party Disclosures, published on 4 November 2009.

The amendment to IAS 24 was published on 4 November 2009 and applies to annual periods beginning as of 1 January 2011 or afterwards. The amendments include simplification of the definition of a related party and introduction of simplifications in disclosures of transactions with entities owned by the State Treasury.

The amendment to IAS 24 has no influence on the Group’s financial statements.

Amendment to IAS 32 Financial Instruments: Presentation

On 8 October 2009, an amendment was published concerning regulation of classification of subscription rights denominated in foreign currencies. Previously, those rights as derivates were presented under financial liabilities. After the amendment, if certain conditions are satisfied, those rights are captured as a component of equity, regardless of the currency in which they are denominated. The amendment to IAS 32 applies to annual reports beginning from 1 February 2010 or afterwards.

The amendment to IAS 32 has no influence on the Group’s financial statements.


On 6 May 2010, further amendments to seven standards were published as a result of proposed draft changes to the International Financial Reporting Standards published in August 2009. They apply to mainly the annual periods beginning on 1 January 2011 or afterwards (depending on the standard).

The Group applies the amended standards with regard to the introduced amendments as of 1 January 2011, unless some other period of their coming into force has been envisaged.

The application of the amended standards has no influence on the Group’s financial statements.




20

Amendment to the interpretation of IFRIC 14 Voluntary Prepaid Contributions under a Minimum Funding Requirement

The amendment was published on 26 November 2009 and applies to annual periods beginning after 1 January 2011 or afterwards. The change of the interpretation will apply to cases where an entity is subject to minimum funding requirements in connection with operating employee benefit plans and makes prepaid contributions in order to satisfy these requirements.

The changed interpretation has no influence on the Group’s financial statements.


Interpretation IFRIC 19 was published on 26 November 2009 and applies to annual periods beginning after 1 July 2010 or afterwards. The interpretation includes guidelines for capturing transactions of extinguishing financial liabilities with equity instruments.

The changed interpretation has no influence on the Group’s financial statements.

10.3. Changes introduced by the Group

In the analyzed period, the Group did not make any presentation adjustments.

11. New standards and interpretations

In these condensed consolidated financial statements, the Group decided not to apply in advance any published standards or interpretations before their effective date.

The following standards and interpretations have been issued by the International Accounting Standards Board or the International Financial Reporting Interpretations Committee but have not come into force as at the balance sheet date:

IFRS 9 Financial Instruments

The new standard was published on 12 November 2009 and is the first step taken by the International Accounting Standards Board to replace IAS 39 Financial Instruments: Recognition and Measurement. The new standard will come into force on 1 January 2013.

The Group will apply the new standard starting from 1 January 2013.

As at the date of drawing up these financial statements, it is not possible to estimate reliably the impact of adopting the new standard.

Amendments to IFRS 7 Disclosures – Transfer of Financial Assets

Amendments to IFRS 7 were published on 7 October 2010 and apply to annual periods beginning on 1 July 2011 or afterwards. The objective of the amendments to the standard is to allow users of financial statements to improve their understanding of transfer transactions of financial assets (for example, securitisations), including understanding the possible effects of any risks that may remain with the entity that transferred the assets. The amendments also require additional disclosures if assets of a significant value are transferred around the end of a reporting period.

The Group will apply the amended IFRS 7 starting from 1 January 2012.


Amendments to IFRS 1 Severe Hyperinflation and Removal of Fixed Dates

Amendments to IFRS 1 were published on 20 December 2010 and apply to annual periods beginning on 1 July 2011 or afterwards. The amendments replace references to a fixed transition date of “1 January 2004” with “the date of transition to IFRS” so that entities would not have to restate transactions that occurred before the date of transition to IFRS. In addition, the amendment proposes guidance on how an entity should resume presenting financial statements in accordance with IFRS after a period of severe hyperinflation making it impossible for the entity to comply fully with IFRS.

The Group will apply the amended IFRS 1 starting from 1 January 2012.

The amended IFRS 1 will have no influence on the Group’s financial statements.

Amendment to IAS 12 Deferred Tax: Recovery of Underlying Assets

The amendment to IAS 12 was published on 20 December 2010 and applies to annual periods beginning as of 1 January 2012 or afterwards. The amendment specifies in detail, among other things, the way of assessing assets and reserves on account of deferred tax assess measured using the fair value model




21

defined in IAS 40 Investment Property. When the amended standard comes into force, this will cause withdrawal of interpretation SIC-21 Income Taxes—Recovery of Revalued Non-Depreciable Assets.

The Group will apply the amended IAS 12 starting from 1 January 2012.


IFRS 10 Consolidated Financial Statements

The new standard was published on 12 May 2011 and is to replace interpretation SIC-12 Consolidation – Special Purpose Entities and some requirements of IAS 27 Consolidated and Separate Financial Statements. The standard defines control as a factor which determines whether an entity is to be covered by consolidated financial statements and also includes guidelines for determining whether an entity controls another entity or not.



IFRS 11 Joint Arrangements

The new standard was published on 12 May 2011 and is to replace interpretation SIC-13 Jointly Controlled Entities – Non-monetary Contributions by Venturers and IAS 31 Interests in Joint Ventures. The standard emphasizes rights and obligations resulting from a joint arrangement regardless of its legal form and eliminates a reporting inconsistency by defining a method of recognizing shares in jointly controlled entities.

The Group will apply the new standard starting from 1 January 2013 and will change the consolidation method presently applied to Bahn Technik Wrocław Sp. z o.o. into the equity method.


IFRS 12 Disclosures of Interests in Other Entities

The new standard was published on 12 May 2011 and includes requirements for disclosing information on relations between entities.



IFRS 13 Fair Value Measurement

The new standard was published on 12 May 2011 and is intended to facilitate application of fair value measurements by reducing the complexity of solutions and increasing consistency in applying the fair value measurement rules. The standard clearly defines the purpose of such measurement and defines fair value more precisely.



IAS 27 Separate Financial Statements

The new standard was published on 12 May 2011 and follows for the most part from moving some requirements of the present IAS 27 to the new IFRS 10 and IFRS 11. The standard includes requirements regarding presentation and disclosures of investments in associates, subsidiaries and joint ventures in separate financial statements. The standard will supersede the present IAS 27 Consolidated and Separate Financial Statements.



IAS 28 Investments in Associates and Joint Ventures

The new standard was published on 12 May 2011 and concerns settlement of investment in associates. It also specifies requirements for applying the equity method to investments in associates and joint ventures. The standard will supersede the present IAS 28 Investments in Associates.



Amendments to IAS 19 Employee Benefits




22

The amendments to IAS 19 were published on 16 June 2011 and apply to annual periods beginning as of 1 January 2013 or afterwards. The amendments eliminate the possibility of deferred recognition of gains and losses known as the “corridor approach”. In addition, the amendments improve presentation of changes to the balance sheet following from employee benefit plans and necessary estimates presented in other comprehensive income and they also extend the scope of the associated required disclosures.


As at the date of drawing up these financial statements, it is not possible to estimate reliably the impact of applying the amended standard.

Amendments to IAS 1 Presentation of Items of Other Comprehensive Income

The amendments to IAS 1 were published on 16 June 2011 and apply to annual periods beginning as of 1 July 2012 or afterwards. The amendments concern grouping together items of other comprehensive income

that may be reclassified to the profit and loss account. The amendments also confirm the possibility of

presenting items of other comprehensive income and items of the profit and loss account either as a single statement or as two separate statements.


As at the date of drawing up these financial statements, it is not possible to estimate reliably the impact of applying the amended standard.

IFRS in the form approved by the EU are not substantially different from regulations adopted by the International Accounting Standards Board (“IASB”), except for the following standards, interpretations and amendments to them, which as at the date of approving these financial statements for publication have not been adopted for application by the EU:

IFRS 9 Financial Instruments, published on 12 November 2009 (as later amended),

Amendments to IFRS 7 Disclosures – Transfer of Financial Assets, published on 7 October 2010,

Amendments to IFRS 1 Severe Hyperinflation and Removal of Fixed Dates, published on 20 December 2010,

Amendment to IAS 12 Deferred Tax: Recovery of Underlying Assets, published on 20 December 2010,

IFRS 10 Consolidated Financial Statements, published on 12 May 2011,

IFRS 11 Joint Arrangements, published on 12 May 2011,

IFRS 12 Disclosure of Interests in Other Entities, published on 12 May 2011,

IFRS 13 Fair Value Measurement, published on 12 May 2011,

IFRS 27 Separate Financial Statements, published on 12 May 2011,

IFRS 28 Investments in Associates and Joint Ventures, published on 12 May 2011,

Amendments to IAS 19 Employee Benefits, published on 16 June 2011,

Amendments to IAS 1 Presentation of Items of Other Comprehensive Income, published on 16 June 2011.




23

12. Information on operational and geographic segments

Description of these segments can be found in the Group’s annual consolidated financial statements. In the presented financial statement, the Group expanded its activity to cover road construction segment in connection with the purchase of shares and ownership interests in subsidiaries belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups, conducting activity in Poland and abroad. Operational segments

Unaudited Railway

segment

Road

segment

Other

segments Total

Discontinued

activity Exclusions All activity

Revenues

Sales to external clients 295 798 367 683 4 815 668 296 - - 668 296

Sales between segments 12 460 - 232 12 692 - (12 692) -

Total revenues of the segment 308 258 5 047 680 988 - (12 692) 668 296

Results

Depreciation 5 626 6 705 209 12 540 - - 12 540

Share in the result of an associated entity - (488) (488) - - (488)

Gross profit (loss) of the segment 54 192 16 855 (344) 70 703 - (54 058) 16 645

Unaudited

Railway

segment

Road

segment

Other

segments

Total Discontinued


Revenues

Sales to external clients 142 080 - 8 339 150 419 - - 150 419

Sales between segments 7 780 - 25 7 805 - (7 805) -

Total revenues of the segment 149 860 - 8 364 158 224 - (7 805) 150 419

Results

Depreciation 5 214 - 28 5 242 - - 5 242

Share in the result of an associated entity - - (1 083) (1 083) - - (1 083)

Gross profit (loss) of the segment 18 830 - 901 19 731 - 973 20 704

For the period from 1 January 2011 to 30 June 2011 Continued activity





24

Unaudited

Railway

segment

Road

segment

Other

segments

Total Discontinued


Segment assets 851 975 859 509 136 397 1 847 881 - (786 696) 1 061 185

Segment liabilities 374 992 526 171 61 907 963 070 - (143 349) 819 721

Others disclosures

Share in the result of an associated entity - - 37 679 37 679 - - 37 679

Capital expenditures 4 086 5 744 155 9 985 - - 9 985

Audited

Railway

segment

Road

segment

Other

segments

Total Discontinued


Segment assets 763 748 - 69 483 833 231 - (142 341) 690 890

Segment liabilities 322 725 - 47 629 370 354 - (72 841) 297 513

Others disclosures

Share in the result of an affiliated entity - - 35 427 35 427 - - 35 427

Capital expenditures 7 616 - 375 7 991 - - 7 991

As at 30 June 2001 Continued activity

As at 31 December 2010 Continued activity




25

Geographic segments

In connection with the purchase of shares and ownership interests in companies operating abroad, the Group’s activity has been extended to the Lithuanian market.

Basic data for geographic segments have been presented below.

Unaudited

Poland Foreign

countries Total

Discontinued


Revenues

Sales to external clients 569 995 98 301 668 296 - - 668 296

Sales between segments 12 692 12 692 - (12 692) -

Total revenues of the segment 582 687 98 301 680 988 - (12 692) 668 296

Unaudited

Poland Foreign

countries Total

Discontinued


Revenues

Sales to external clients 150 419 - 150 419 - - 150 419

Sales between segments 7 805 - 7 805 - (7 805) - Total revenues of the segment 158 224 - 158 224 - (7 805) 150 419

As at 30 June 2011

Unaudited

Poland Foreign

countries Other Total

Discontinued


Segment assets 1 511 403 336 478 - 1 847 881 - (786 696) 1 061 185

Segment liabilities 804 406 158 664 - 963 070 - (143 349) 819 721

As at 31 December 2010

Audited

Poland Foreign

countries Other Total

Discontinued


Segment assets 833 231 - - 833 231 - (142 341) 690 890

Segment liabilities 370 354 - - 370 354 - (72 841) 297 513

Continued activity

Continued activity






26

In connection with the purchase of shares and ownership interests in companies belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups, operating abroad, the Group’s activity has been extended to a new segment of road construction. It is the segment of engineering works and construction and installation works in the road construction sector. That segment, because of a different type of products and services, a different manufacturing process and a different group of clients, has been singled out as a separate operational segment of the Group.

13. Revenues on sales and own expenses of sales

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Revenues on sales

Revenues from sales of construction services 561 305 141 181

Revenues on sales of merchandise and materials 75 248 127

Revenues on sales of other products and services 31 743 9 111 Total 668 296 150 419

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Revenues on sales

Construction contracts 561 305 148 063

Profit (loss) on currency hedges on contracts - 1 440

Other sales 106 991 916 Total 668 296 150 419

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Own expenses of sales


Other sales 103 596 1 414 Total 621 818 117 782

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Sales margin Unaudited Unaudited


Result on currency hedges of contracts - 1 440

Other sales 3 395 (498) Total 46 478 32 637




27

14. Other operating income

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Dissolved reserves, including: 933 369

- for pension and disability benefits 224 369

- for jubilee awards 709 -

Other, including: 9 902 625

- fines and penalties received 1 354 136

- dissolution of revaluation charges 15 153

- refunded cost of dispute procedures 115 -

- inventory surplus from stocktaking 7 1

- profit on the sale of non-financial non-current assets 8 210 -

- remitted liabilities - 138

- other 201 197

Total 10 835 994

15. Financial expenses

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010 Unaudited Unaudited

Financial expenses on account of interest 10 053 1 145

- on credits and loans 4 530 981

- on liabilities 999 93

- on bonds 4 105 -

- other 419 71

Other financial costs 1 051 1 587

Total 11 104 2 732

16. Income tax

30.06.2011 30.06.2010

Current income tax Unaudited Unaudited

267 1 873

(311) -

2 836 2 381

2 792 4 254

Deferred tax: - related to arising and reversing temporary differences

Total

- current income tax liabilities

- corrections of income tax liabilities

carried forward

A part of income tax was determined according to the rate of 19% for the corporate income tax base for legal persons operating in the territory of Poland. For foreign companies belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups, the tax rate in the period from 1 April to 30 June 2011 was 15%.




28

17. Property, plant and equipment

30.06.2011 31.12.2010

Unaudited Audited

309 539 92 559

and buildings, premises and civil and marine engineering

facilities

135 391 35 958

72 300 41 110

15 250 1 883

19 050 2 555

328 589 95 114

- technical plant and machinery

- means of transportation

- other fixed assets

Fixed assets under construction

Total

13 608

Property, plant and equipment, including:

- land (including the right of usufruct to land)

86 598

The following table presents important changes in the area of property, plant and equipment which occurred in 1H 2011:

Period of six months ended 30 June

2011

Unaudited

Land,

buildings

and

constructi

ons

Machines

and

equipment

Means of

transportati

on

Other fixed

assets

Fixed assets

under

construction

Total

Net book value

at the beginning of the period13 608 35 962 41 110 1 880 2 555 95 115

Increases - purchase 128 2 685 1 675 1 126 6 168 11 782

Subsidiaries consolidated by the full

method:74 401 106 230 30 926 13 572 10 485 235 614

Sale (-) (520) (5) (226) (1) - (752)

Depreciation (-) (915) (5 743) (4 157) (1 134) - (11 949)

FX differences from converting foreign

entities(476) (704) (202) (86) (29) (1 497)

Other 372 (3 034) 3 174 (107) (129) 276

Net book value

at the end of the period86 598 135 391 72 300 15 250 19 050 328 589

As at 30 June 2011

Gross cost or value from valuation 113 067 240 601 131 410 31 763 19 257 536 098

Depreciation (26 469) (105 210) (59 110) (16 513) (207) (207 509)

Net book value 86 598 135 391 72 300 15 250 19 050 328 589

18. Consolidation goodwill

Consolidation goodwill, by companies:

30.06.2011 31.12.2010

Unaudited Audited

Balance sheet value of consolidation goodwill, by companies

Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A. 2 051 2 051

TORPROJEKT Sp. z o.o. 822 822

Tiltra Group AB and AB Kauno Tiltai Capital Groups 579 325 -

Total 582 198 2 873




29

Change to consolidation goodwill in the period:

1.01.2011 -

30.06.2011

1.01.2010 -

31.12.2010

Unaudited Audited

Consolidation goodwill at the beginning of the period 2 873 2 051

Increase of consolidation goodwill as a result of the purchase of

TORPROJEKT Sp. z o.o.- 822

Increase of consolidation goodwill as a result of the purchase of the Tiltra Group AB

and AB Kauno Tiltai Capital Groups579 325 -

Total balance sheet value at the end of the period 582 198 2 873

Detailed information on goodwill resulting in connection with the purchase of shares and ownership interests in companies belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups is presented in Note 3 of these condensed notes and explanations.

19. Investment property

Unaudited Audited

Balance at the beginning of the period (by type) – gross value: 4 785 4 785

- land 4 258 4 258

- buildings, premises and civil and marine engineering facilities 527 527

Land

Balance at the beginning of the period 4 258 4 258

Increase (by virtue of the following) 8 293 -

- subsidiaries consolidated by the full method 8 293 -

Reduction (on account of) -29 -

- other -29 -

Balance at the end of the period 12 522 4 258

Buildings, premises and civil and marine engineering facilities

Balance at the beginning of the period 527 527

Balance at the end of the period 527 527

Balance at the end of the period (by type) – gross value 13 049 4 785

- land 12 522 4 258


Balance at the beginning of the period (by type) - depreciation: 1 119 1 119

- land 592 592


Land



Buildings, premises and civil and marine engineering facilities


Increase (on account of) 6 13

- depreciation in the period 6 13

Reduction (on account of) -6 -13

- other decreases -6 -13


Balance at the end of the period (by type) – depreciation 1 119 1 119

- land 592 592


Balance at the end of the period (by type) – net value: 11 930 3 666

- land 11 930 3 666

- buildings, premises and civil and marine engineering facilities - -

1.01.2011 -

30.06.2011

1.01.2010 -

31.12.2010




30

20. Prepayments, accruals and deferred income

30.06.2011 31.12.2010

Unaudited Audited

Insurance and insurance guarantees 11 492 5 293

Other prepayments, accruals and deferred income 6 203 1 738

Total 17 695 7 031

Structure of prepayments, accruals and deferred income

30.06.2011 31.12.2010

Unaudited Audited

Long-term 4 101 2 018

Short-term 13 594 5 013

Total 17 695 7 031

21. Inventory

30.06.2011 31.12.2010

Unaudited Audited

Materials 112 576 40 526

Semi-finished products and products in progress 65 333 51 093

Finished products 3 785 4 111

Merchandise 11 381 11 382

Inventory earmarked for selling back 18 533 4 079

Total gross inventory 211 608 111 191

Revaluation charges for inventory -1 655 -1 970

Materials 110 921 38 557

Semi-finished products and products in progress 65 333 51 093

Finished products 3 785 4 111

Merchandise 11 381 11 381

Inventory earmarked for selling back 18 533 4 079

TOTAL 209 953 109 221




31

22. Trade receivables and other receivables

Trade receivables and other receivables

30.06.2011 31.12.2010

Unaudited Audited

488 138 111 744

- -

488 138 111 744

including:

- receivables from affiliated entities 3 1

Budget receivables 22 786 303

Other receivables from third parties 17 079 1 259

Total gross trade receivables and other receivables 528 003 113 306

Revaluation charges for receivables (7 302) (1 373)

Total 520 701 111 933

Gross trade receivables before discounting

Discount of receivables

Total gross trade receivables before discounting

23. Cash and cash equivalent

30.06.2011 31.12.2010

Unaudited Audited

Cash on hand 288 78

Cash in bank accounts 29 702 4 618

Other cash - investments 9 129 229 613Total 39 119 234 309




32

24. Construction contracts

30.06.2011 31.12.2010

Unaudited Audited

Revenues recognized in the profit and loss account in the period 561 305 447 235

Costs recognized in the profit and loss account in the period (518 222) (382 733) Sales margin on projects being performed 43 083 64 502

30.06.2010 31.12.2010

Unaudited Audited

Surplus of invoiced revenues over revenues resulting from the degree of

advancement6 744 7 860

Surplus of revenues resulting from the degree of advancement over

invoiced revenues152 802 31 676

Advances provided on account of contracts being performed 12 123 14 989

Advances received on account of contracts being performed 59 938 84 515

Reserve for anticipated losses on contracts 5 018 22

Capturing in the balance sheet:

among current assetsConstruction contracts 164 925 46 665

among short-term liabilitiesConstruction contracts 71 700 92 397

25. Issue of shares and changes in equity

On 19 April 2011, the Company issued 72,000,000 series A subscription warrants, each of which gave the holder the right to subscribe for 1 bearer series G share of the Company. The subscription warrants were offered to the Sellers (the Sellers are presented in Note 3.1 of the condensed notes and explanations). On 19 April 2011, the Sellers acquired all the subscription warrants offered them and on 19 April 2011 exercised the rights from these warrants, subscribing altogether for 72,000,000 series G shares of the Company in the Company’s share capital, increased pursuant to Resolution No. 3 of the Extraordinary Shareholder Meeting of the Company of 19 January 2011. The share subscription price from the subscription date was PLN 3.63 per share.

Base capital

30.06.2011 31.12.2010

Par value

PLN 0.1

Par value

PLN 0.1

Series A common shares 1 599 480 1 599 480

Series B common shares - -

Series C common shares 83 180 870 83 180 870

Series D common shares 19 516 280 19 516 280

Series E common shares 25 808 850 25 808 850

Series F common shares 30 000 000 30 000 000

Series G common shares 72 000 000 -

Total 232 105 480 160 105 480

In connection with the issue of series G shares, there was a share sale surplus over their nominal value in the amount of PLN 254,160 thousand, which was reduced by the share issue costs of PLN 4,604 thousand.




33

26. Non-controlling shares

1.01.2011 -

30.06.2011

1.01.2010 -

31.12.2010

Unaudited Audited

Balance at the beginning of the period 141 7 483

Increases, including: 21 766 141

- purchase of non-controlling shares 20 968 -

- share in the financial result 798 18

- other - 123

Decreases, including: - 7 483

- other - 7 483

Balance at the end of the period 21 907 141




34

27. Interest-bearing bank credits and loans

The credits and loans drawn by the Parent Company and its subsidiaries are presented in the table below:

Company name

Name of the bank or the financing entity Currency

Credit amount in PLN Loan type

Agreement date

Repayment date Interest rate

Loan amount to

be repaid by 30 June 2011 in PLN 000s

Trakcja - Tiltra S.A.

ALIOR Bank S.A. PLN 60 000 Other 31.03.2011 30.03.2012

WIBOR O/N+1.35% 40 000


Bank PEKAO SA PLN 55 000

Investment loan 28.11.2007 30.11.2012

WIBOR 1M +1.6% 15 583

PRKiI S.A. BRE Bank S.A. PLN 10 000 Other

22 March 2000 and annex no. 24 of 7 Feb 2011 21.10.2011

WIBOR O/N+1.4% 2 821

PRKiI S.A. ALIOR Bank S.A. PLN 20 000 Other 31.03.2011 30.03.2012

WIBOR O/N+1.35% 13 000

PRKiI S.A. NORDEA Bank S.A. EUR 23 577

Investment loan 09.02.2009 07.02.2014

EURIBOR 1M+2.5% 18 087

PRKiI S.A. NORDEA Bank S.A. EUR 2 240

Investment loan 06.07.2009 31.07.2014

EURIBOR 1M+2.5% 809

Bahn Technik Sp. z o.o.

Kredyt Bank SA PLN 500 Other

13 July 1999 and Annex no. 19 of 30 May 2011 29.05.2012

WIBOR O/N+3.5% -

Bahn Technik Sp. z o.o.

Leonhard Weiss International GmbH EUR 398 Loan 30.11.2009 30.11.2012 3.00% 200

PRK 7 Nieruchomości Sp. z o.o.

BOŚ Bank S.A. PLN 30 875 Other 22.06.2010 22.02.2012

WIBOR O/N+1.4% 23 652

Tiltra Group AB Capital Group

Raiffeisen Bank Polska S.A. PLN 29 027 Other 14.07.2010 31.03.2014

WIBOR 1M+2.5% 29 027


Raiffeisen Bank Polska S.A. PLN 4 025

Investment loan 09.12.2009 31.08.2016 WIBOR 1M+2% 4 025


Bank Pekao S.A. PLN 3 102 Other 20.06.2007 21.07.2012

WIBOR 1M +1.60% 345


Bank Pekao S.A. PLN 4 979 Other 27.07.2006 22.07.2012

WIBOR 1M + +1.2% 4 977


ING Bank Śląski S.A. PLN 17 924 Other 27.11.2009 31.08.2011

WIBOR 1M+2.0% 10 321


Deutsche Bank PBC S.A. PLN 2 987 Other 04.02.2008 12.09.2011

WIBOR 1M+1.50% 904


ING Bank Śląski S.A. PLN 1 869

Investment loan 18.02.2011 31.08.2018

WIBOR 1M+1.7% 1 869


Kredyt Bank S.A. PLN 103

Investment loan 15.12.2008 31.12.2011

WIBOR 1M+2.5% 103


Bank Millennium S.A. PLN 9 953 Other 23.03.2006 11.07.2011

WIBOR 1M+1.35% 9 712


Bank Millennium S.A. PLN 29 873 Other 14.06.2006 11.07.2011

WIBOR 1M+1.35% 29 872



WIBOR 1M+1.2% 8 027



WIBOR 1M+1.2% 4 979

Tiltra Group AB Capital Group PKO BP SA PLN 15 932 Other 09.05.2008 08.06.2014

WIBOR 1M+1.2% 15 729


Raiffeisen Bank Polska S.A. PLN 19 086

Investment loan 06.10.2010 30.09.2015

WIBOR 1M+2.5% 19 086


Raiffeisen Bank Polska S.A. PLN 29 873 Other 16.02.2011 29.06.2012

WIBOR 1M+1.2% 29 873


Bank Millennium S.A. PLN 14 937 factoring 23.03.2007 22.03.2011

WIBOR 1M+2.7% 9 327




35


ING Bank Śląski S.A. PLN 423

Investment loan 18.02.2011 30.03.2012

WIBOR 1M+1.7% 423


Other business partners PLN 634 Other 13.07.2010 31.12.2012 0,00% 634


ING Bank Śląski S.A. PLN 1 245

Investment loan 13.09.2010 30.09.2015

WIBOR 1M+2.2% 1 245

AB Kauno tiltai Capital Group

Nordea Bank Polska S.A. PLN 4 395

Investment loan 30.10.2006 31.10.2013

WIBOR 1M+1.75% 4 395



Investment loan 03.01.2008 31.12.2014 WIBOR 1M+1.7% 4 870


Raiffeisen Bank Polska S.A. PLN 8 413 Other 22.04.2011 02.01.2012 WIBOR 1M+1.4% 8 413


Nordea Bank Polska S.A. PLN 2 987 Other 08.12.2006 18.07.2011 WIBOR 1M+1.5% 1 825



Investment loan 19.12.2007 19.12.2014

WIBOR 1M+1.75% 6 378





AB Kauno tiltai Capital Group PKO BP S.A. PLN 1 992 Other 25.11.2009 28.02.2012 WIBOR 1M+1.4% 306

AB Kauno tiltai Capital Group Nordea-Dnb EUR 18 990 Other 30.03.2006 01.04.2015

EURIBOR 3M+2.4% 18 989


EURIBOR 3M+2.4% 9 137


EURIBOR 3M+2.4% 44 275

AB Kauno tiltai Capital Group VMI LTL 2 697 Tax loan 15.07.2009 25.10.2011 3,65% 2 699

TOTAL 401 623

Interest-bearing long-term credits and loans:

30.06.2011 31.12.2010

Unaudited Audited

Bank loans 146 436 27 274

Financial leasing liabilities 22 168 1 517

Total 168 604 28 791

Interest-bearing short-term credits and loans:

30.06.2011 31.12.2010

Unaudited Audited

Bank loans 255 187 26 374

Financial leasing liabilities 21 530 1 185

Total 276 717 27 559

Subsidiaries in the Capital Group did not satisfy the lending condition of maintaining the general debt level ratio at the level indicated in the agreement. The failure to satisfy the condition is temporary and results, among other things, from seasonality of the activity in the industry and higher financial needs connected with this fact. The management boards of the subsidiaries which infringed the lending condition have taken actions to decrease the ratio to the level required in the loan agreement.

Derivative instruments

In the reporting periods covered by the statements, the Group did not apply hedge accounting, therefore all derivative instruments are classified as financial assets measured at fair value by the profit and loss account. As at the end of the reporting period, the Group did not have any agreements with embedded derivatives fulfilling the requirements of being separated from the main contracts.

As at the end of the reporting period and during the reporting period, the Group concluded exclusively forward and futures contracts denominated in EUR. These contracts hedged revenues on sales. The Group did not conclude derivative contracts for speculation purposes.




36

28. Bonds

On 19 April 2011, the Company issued the following bonds: 148,608 of unsecured series A bearer bonds, having no form of a document; 148,608 of unsecured series B bearer bonds, having no form of a document.

The issue price per one series A and B bond equals its nominal value.

Interest is payable on interest payment dates falling on 30 June and 31 December each year from the issue date until the maturity date of series A and B as well as on the maturity date of series A and B bonds.

Bond series Issue date Maturity datePar value of one bond

(000s of PLN)

Par value of bond series

(000s of PLN)A 19.04.2011 12.12.2013 1 000 148 608

B 19.04.2011 12.12.2014 1 000 148 608

As at 30 June 2011, liabilities on account of bond issue were PLN 294,061 thousand.

The fair value of the bonds issued by the Company on the issue date was PLN 293,868 thousand.

29. Trade liabilities and other liabilities

30.06.2011 31.12.2010

Unaudited Audited

Trade liabilities before discounting 400 463 140 825

Discount of liabilities - -

Total net trade liabilities after discounting 400 463 140 825

including:

- liabilities from related entities - -

Budget liabilities 18 672 13 320

Salary liabilities 9 149 1 879

Other liabilities – to third parties 19 095 411

Other liabilities – to related entities

Total trade liabilities and other liabilities 447 379 156 435

30.06.2011 31.12.2010

Unaudited Audited

Trade liabilities before discounting 400 463 140 825

With maturity up to 12 months 399 187 138 744

With maturity over 12 months 1 276 2 081

Total net trade liabilities after discounting 400 463 140 825




37

30. Contingent items and other off-balance sheet items

30.06.2011 31.12.2010

Unaudited Audited

Contingent receivables

From related entities on account of: 61 327 50 632

Guarantees and sureties received 59 996 45 005

Bills of exchange received as collateral 1 331 5 627

From other entities on account of: 71 278 38 162

Guarantees and sureties received 51 059 32 569

Bills of exchange received as collateral 14 754 5 593

Other 5 465 -Total contingent receivables 132 605 88 794

Contingent liabilities

From related entities on account of: 1 583 45 788

Guarantees and sureties given 1 083 45 005

Own promissory notes 500 783

Capped mortgages 30 000

From other entities on account of: 1 992 407 983 391

Guarantees and sureties given 634 267 438 038

Own promissory notes 566 332 351 733

Capped mortgages 366 257 24 424

Ordinary mortgages - 34 727

Assignment of receivables 256 090 -

Assignments of rights under insurance policies 117 436 79 846

Security deposits 299 10 008

Other liabilities 51 726 44 615Total contingent liabilities 1 993 990 1 029 179

Contingent receivables on account of granted sureties and guarantees covered guarantees issued by banks, insurance companies or other entities in favor of the companies of the Group and bills of exchange issued or guaranteed by partners and subcontractors, constituting security of the Group’s claims against the investor resulting from the construction contracts being performed.

Contingent liabilities on account of granted sureties and guarantees include primarily guarantees issued by banks and insurance companies in favor of the investor and bills of exchange issued by the Group companies, constituting security of the investor’s claims against the Group resulting from the construction contracts being performed. On account of the guarantees, banks and insurance companies are entitled to recourse claims against the Group companies.

The increase of contingent receivables and liabilities resulted for the most part from the purchase of shares and ownership interests in subsidiaries belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups.

The growth in contingent receivables (received sureties and guarantees) in 1H 2011 resulted from the fact of issuing new bank guarantees concerning construction contracts, both new ones and those being performed.

Contingent liabilities as at 30 June 2011 increased by PLN 964,811 thousand in relation to the balance as at 31 December 2010. The increase of contingent liabilities in 1H 2011 followed mainly from an increase in liabilities on account of granted sureties and guarantees in connection with establishing securities for new guarantees for construction contracts on which the Company began work as well as granting assignment of receivables and assignment from a construction risk policy as collateral for working capital loans. Capped mortgages increased as a result of establishing loan collateral.

Tax settlements and other areas of activity subject to regulations (e.g. matters related to customs or foreign currencies) may be audited by the administrative authorities authorized to impose high fines and sanctions. Lack of reference to the established legal regulations in Poland results in ambiguities and inconsistencies in the prevailing law. Frequent differences of opinion regarding legal interpretation of tax provisions, both within state authorities and between state authorities and companies, result in the emergence of areas of uncertainty and conflict. These phenomena mean that the tax risk in Poland is higher than the risk usually appearing in countries with a more developed fiscal system. Tax settlements may be audited for a period of five years, starting from the end of the year in which the tax was paid. As a result of conducted audits,




38

additional tax liabilities may be added to the Group’s previous tax settlements. The Group believes that adequate reserves were established for the identified and measurable tax risk as at the end of 1H 2011.

31. Events occurring after the end of the reporting period

Between the balance sheet date and the date of preparing these condensed consolidated financial statements, i.e. 31 August 2011, the following material events took place:

Contracts for construction services:

On 4 July 2011, Trakcja – Tiltra S.A., seated in Warsaw, ul. Złota 59, concluded a subcontracting agreement with Bombardier Transportation (ZWUS) Polska Sp. z o.o. in connection with construction works performed by the Company and concerning the agreement to perform construction works for modernization of line no. 9 on segment from 236,920 km to 287,000 km, included in the area of the Local Control Center, seated in Malbork, within the Project: No. POIiŚ 7.1-1.3 “Modernization of railway line E 65/CE 65 on segment Warsaw – Gdynia – Area of LCC Iława, LCC Malbork”. The net value of the agreement is: PLN 75,460,000.00.

On 13 July 2011, a subsidiary of Trakcja – Tiltra S.A., Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A., seated in Wrocław, concluded a subcontracting agreement for construction works with Romuald Ryszewski conducting individual economic activity under the name FHU “ELTOR” Romuald Ryszewski, in connection with an agreement concluded by PRKiI as a Consortium Partner with PKP PLK S.A. for basic construction line work on segment Wrocław – Grabiszyn – Skokowa and Żmigród – boundary of the Lower Silesia Region within project: POIiŚ 7.1 – 4 “Modernization of railway line E59 on section Wrocław – Poznań, stage II – segment Wrocław – boundary of the Lower Silesia Region. The net value of the agreement is: PLN 42,746,641.34.

On 27 July 2011, a subsidiary of AB Kauno Tiltai, seated in Kaunas, as a consortium leader, concluded with the Vinius City Office an agreement on industrial construction work connected with construction of a node of a trans-European network – Stage II of the western ring road for the city of Vilnius. The net value of the agreement is: PLN 162,044,451.64.

On 29 July 2011, Trakcja – Tiltra S.A.and its subsidiary Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A. concluded significant agreements with Poldim S.A. and its subsidiary Poldim Mosty Sp. z o.o. for comprehensive performance of a set of industrial works (road works) for the task of modernization of line no. 9 on segment from 236,920 km to 275,920 km, included in the area of the Local Control Center, seated in Malbork, within the Project: No. POIiŚ 7.1-7.3 “Modernization of railway line E 65/CE 65 on segment Warsaw – Gdynia – Area of LCC Iława, LCC Malbork”. The net value of the agreement is: PLN 46,330,350.19.

On 2 August 2011, Trakcja - Tiltra S.A. concluded an important subcontracting agreement with Krakowskie Zakłady Automatyki S.A. in connection with performance of construction works concerning the agreement: “Design and completion of the station Łódź Widzew and part of the route Łódź Fabryczna – Łódź Widzew from 2,250 km to 7,200 km with railway traffic control and telecommunications devices for the entire segment Łódź Fabryczna – Łódź Widzew and modernization of the ring line Łódź Widzew – Łódź Chojny – Łódź Kaliska”. The net value of the agreement is: PLN 33,650,000.00.

On 8 August 2011, Trakcja – Tiltra S.A. informed that turnover of Poldim S.A., seated in Tarnów, a subsidiary of Trakcja – Tiltra S.A., with Orlen Asfalt Sp. z o.o., seated in Płock, pursuant to a trade agreement for the purchase of asphalt exceded the material value, i.e. PLN 65,115,095.00. The order of the highest value from that period was the order from 4 August 2011 roku; the total net value of the order amounts to PLN 212,550.00.

On 17 August 2011, Trakcja - Tiltra S.A. concluded an important subcontracting agreement with TORPOL Sp. z o.o. in connection with the Company’s performance of public procurement agreement entitled: “Design and completion of construction works on railway line Kraków – Medyka – state border on segment Podłęże – Bochnia at 16,000 km – 39,000 km, within the project “Modernization of railway line E 30/C-E30, section Kraków – Rzeszów, stage III”. The net value of the agreement is: PLN 290,287,460.00.

On 22 August 2011, Trakcja – Tiltra S.A. informed that turnover of Poldim S.A., seated in Tarnów, a subsidiary of Trakcja – Tiltra S.A., from the moment of taking over control over it, with Generalna




39

Dyrekcja Dróg Krajowych i Autostrad (GDDKiA) Branch in Łódź, seated in Łódź, pursuant to the Agreement concluded between Poldim as the Consortium Leader and GDDKiA O/Łódź on 18 June 2010 (the “Agreement”) concerning the construction of A1 Highway on segment: boundary of Kujawskie-Pomorskie / Łódzkie voivodeships to node Stryków from 230+817 km to 295+850 km – Task II Segment 2 Section 1 from 245+800 km to 261+000 km, node Sójki – node Kotliska, exceeded the material value. The total net value of turnover from the date of taking over control until 22 August 2011 amounted to PLN 52,547,646.24. Pursuant to the Agreement, Poldim as the Leader of the Consortium, composed of: Poldim S.A., seated in Tarnów, the Consortium Leader, Bögl a Krýsl k.s., seated in Prague – Consortium Partner, Bogl a Krysl Polska Sp. z o.o., seated in Cieszyn – Consortium Partner, undertook to perform works of the construction of A1 Highway on segment: boundary of Kujawskie-Pomorskie / Łódzkie voivodeships to node Stryków from 230+817 km to 295+850 km – Task II Segment 2 Section 1 from 245+800 km to 261+000 km, node Sójki – node Kotliska. The net value of the agreement is PLN 444,414,206.45.

32. Cyclicity, seasonality of activity

Group sales generate the lowest figures in the first quarter of a year on account of unfavorable weather conditions and on account of a smaller quantity of tenders being finalized in the previous period and a smaller number of favorable contracts being resolved.

33. Information on issues, redemption and repayment of debt and capital securities

In the presented period, the Group issued bonds: 148,608 unsecured bearer bonds of series A, having no form of a document, with a par value of

PLN 1,000 each, with the total par value of PLN 148,608 thousand; 148,608 unsecured bearer bonds of series B, having no form of a document, with a par value of

PLN 1,000 each, with the total par value of PLN 148,608 thousand.

The issue price per one series A and B bond equals its nominal value. Interest is payable on interest payment dates falling on 30 June and 31 December each year from the issue date until the maturity date of series A and B bonds as well as on the maturity date of series A and B bonds.

On 19 April 2011, the Company issued 72,000,000 series A subscription warrants, each of which gave the holder the right to subscribe for 1 series G bearer share of the Company. The subscription warrants were offered to the Sellers. On 19 April 2011, the Sellers acquired all the subscription warrants offered them and on 19 April 2011 exercised the rights from these warrants, subscribing altogether for 72,000,000 series G shares of the Company in the Company’s share capital, increased pursuant to Resolution No. 3 of the Extraordinary Shareholder Meeting of the Company of 19 January 2011. The share subscription price from the subscription date was PLN 3.63 per share.

As of 1 January till 30 June 2011, the Group did not issue, redeem or repay any debt or capital securities.

34. Information on dividends paid or declared

In 1H 2011, no dividend payment was made by Trakcja - Tiltra S.A. An Ordinary Shareholder Meeting of Trakcja - Tiltra S.A. held on 28 June 2011 adopted a resolution to allocate the entire result for 2011 to reserve capital.

35. Material litigation and disputes

Information on material litigation and disputes has been presented in the Report on the activity of the Trakcja - Tiltra Capital Group for the period of 6 months ended on 30 June 2011, in item 4.4.




40

36. Information on related entities

Transactions within the Group were concluded on market terms and conditions. These transactions have been excluded from the condensed consolidated financial statements. The total amounts of the transactions concluded with related entities in the period covered by the condensed consolidated financial statements and in the comparative period are presented below.

Related entities

Period

Sales

to related entities

Purchases

from related

entities

Interest

income

Costs

on account

of interest

Financial income

on FX differences

and other

Financial expenses

on FX differences

and other

Shareholders of the parent company:

1.01.11-30.06.11 2 - - - - -

1.01.10-30.06.10 3 62 - - - 33

1.01.11-30.06.11 2 - - - - -

1.01.10-30.06.10 3 62 - - - 33Total

COMSA SA

Information on the receivables from and liabilities to related entities as at the balance sheet date and the end of the comparative period is presented below.

Related entities

Balance sheet date

Receivables

from related

entities

Liabilities towards

related entities

Loans

granted Loans received

Shareholders of the parent company:

30.06.11 4 - - -

31.12.10 1 - - -

30.06.11 4 - - -

31.12.10 1 - - -

COMSA SA

Total




41

Prepared by:

Elżbieta Okuła

Chief Accountant The Management Board:


CEO Deputy CEO



Dariusz Mańkowski

Deputy CEO



CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD OF 6 MONTHS ENDED ON 30 JUNE 2011

PREPARED IN COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS


Condensed financial statements for the period of 6 months ended on 30 June 2011


2

APPROVAL OF THE CONDENSED FINANCIAL STATEMENTS

The Management Board of Trakcja - Tiltra S.A. has approved the condensed financial statements of Trakcja

– Tiltra S.A. for the period from 1 January 2011 to 30 June 2011.

The condensed financial statements for the period from 1 January 2011 to 30 June 2011 have been drawn up according to the International Financial Reporting Standards (“IFRS”), issued by the International

Accounting Standards Board (“IASB”) and applicable to interim reporting as approved by the European Union (IAS 34 “Interim Financial Reporting”).

In these condensed financial statements, information is presented in the following order:

1. Profit and loss account for the period from 1 January 2011 to 30 June 2011, showing a net profit of PLN 44,640 thousand.

2. Statement of comprehensive income for the period from 1 January 2011 to 30 June 2011, showing

comprehensive income of PLN 44,640 thousand.

3. Balance sheet drawn up as at 30 June 2011, showing assets and liabilities of PLN 1,225,093 thousand.

4. Cash flow account for the period from 1 January 2011 to 30 June 2011, showing a decrease in the

balance of net cash by the amount of PLN 122,797 thousand.

5. Statement of changes in equity for the period from 1 January 2011 to 30 June 2011, showing an increase to equity of PLN 301,232 thousand.

6. Condensed notes and explanations.

The condensed financial statements have been prepared in thousands of Polish zloty, except for the line items explicitly indicating otherwise.

Some of the financial and operating data included in these condensed financial statements have been rounded. For this reason, in some of the tables presented in the statements, the sum of amounts in a column or row may differ slightly from the total amount stated for that column or row.


CEO Deputy CEO



Dariusz Mańkowski

Deputy CEO





3

CONTENTS

PROFIT AND LOSS ACCOUNT _____________________________________________________________ 4

STATEMENT OF COMPREHENSIVE INCOME_________________________________________________ 5

BALANCE SHEET _________________________________________________________________________ 6

CASH FLOW STATEMENT _________________________________________________________________ 7

STATEMENT OF CHANGES IN EQUITY ______________________________________________________ 8

CONDENSED NOTES AND EXPLANATIONS _________________________________________________ 9

1. General information __________________________________________________________________ 9

2. Accounting principles and changes during the half year __________________________________ 9

3. Information on the Company’s financial standing and its financial results achieved within

1H 2011____________________________________________________________________________ 11

4. Information on purchase of shares and ownership interests in subsidiaries________________ 13

5. Revenues on sales and own expenses of sales _________________________________________ 14

6. Investments in subordinated entities __________________________________________________ 14

7. Construction contracts ______________________________________________________________ 15

8. Issue of shares and changes in equity _________________________________________________ 15

9. Bonds _____________________________________________________________________________ 16

10. Contingent items and other off-balance sheet items _____________________________________ 17

11. Transactions with related entities _____________________________________________________ 18




4

PROFIT AND LOSS ACCOUNT

Note 1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Continued activity

Revenues on sales 5 221 095 73 660

Own expenses of sales 5 (218 337) (64 361)

Gross sales profit (loss) 2 758 9 299

Costs of sales, marketing and distribution (436) (403)

Overhead costs (9 111) (7 509)

Other operating income 701 1 031

Other operating costs (437) (435)

Operating profit (loss) (6 525) 1 983

Financial income 3 55 806 2 382

Financial expenses (5 533) (1 645)

Acquisition costs 4 (1 270) -

Gross profit (loss) 42 478 2 720

Income tax 2 162 (545)


Discontinued activity

Net profit (loss) on discontinued activity for the period - -





5

STATEMENT OF COMPREHENSIVE INCOME

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited


Other net comperehensive income - -

COMPREHENSIVE INCOME FOR THE PERIOD 44 640 2 175




6

BALANCE SHEET

ASSETS Note 30.06.2011 31.12.2010

Unaudited Audited

Non-current assets 932 389 218 771

Property, plant and equipment 35 999 32 785

Investment property 3 666 3 666

Intangible assets 55 043 54 577

Investments in subordinated entities 6 783 916 76 891

Investments in associates 35 475 35 475

Financial assets 206 906

Deferred income tax assets 14 501 12 453

Long-term prepayments and accruals 3 583 2 018

Current assets 292 704 368 036

Inventory 43 539 28 708

Trade receivables and other receivables 190 919 116 197


Cash and cash equivalent 9 510 132 307

Prepayments and accruals 4 741 2 240


TOTAL ASSETS 1 225 093 586 807

LIABILITIES AND EQUITY

Equity 8 622 574 321 342

Base capital 23 211 16 011

Share sale surplus over their nominal value 435 368 185 812

Revaluation reserve capital 12 689 12 853

Other reserve capital 106 666 62 927

Retained financial result 44 640 43 739

Long-term liabilities 324 349 33 912


Reserves 788 1 008


Deferred income tax reserve 16 017 16 170

Bonds 9 294 061 -

Short-term liabilities 278 170 231 553

Trade liabilities and other liabilities 149 006 132 101


Reserves 2 543 10 382


Accruals and deferred income 67 4


TOTAL LIABILITIES AND EQUITY 1 225 093 586 807




7

CASH FLOW STATEMENT

1.01.2011-

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Cash flow on operating activity


Net profit (loss) on discontinued activity

Adjustments by the items: (154 768) (35 252)

Depreciation 2 572 2 190

FX differences 138 283

Net interest and dividends (49 591) (8)

Profit / loss on investing activity (278) 128

Change in the balance of receivables (74 524) 11 345

Change in the balance of inventory (14 831) (14 656)

Change in the balance of liabilities 11 965 (15 537)

Change in the balance of prepayments, deferred income, accruals and

advance payments (4 072) (1 454)

Change in the balance of reserves (8 058) (1 219)

Change in the balance of construction contracts (18 089) (12 322)

Movement in financial derivatives - (4 002)

Income tax paid - -

Other adjustments - -

Net cash flow on operating activity (112 290) (32 532)

Cash flow on investing activity

Sales (purchase) of intangible assets and tangible non-current assets (1 613) (2 457)

- purchase (1 663) (2 519)

- sale 50 62

Sales (purchase) of ownership interests and shares (152 000) -

- purchase of a subsidiary 4 (152 000) -

- purchase of an associated entity - -

Loans (200) 2 000

- repaid - 2 000

- granted (200) -


- sold or returned 3 32 581 2 894

- dividends received 3 54 620

- purchased - -

Interest gained 19 83

Net cash flow on investing activity (66 593) 2 520

Cash flow on financial activity

Net proceeds on issuing shares - -

Net proceeds on issuing bonds - -

Proceeds on drawing credits and loans 3 67 015 -

Repayment of credits and loans (5 500) (5 500)

Interest paid (4 798) (660)

Liability payments for financial lease agreements (631) (326)

Net cash flow on financing activity 56 086 (6 486)

Total net cash flow (122 797) (36 498)

Net FX differences - -

Cash at the beginning of the period 132 307 80 272

Cash at the end of the period 9 510 43 774




8

STATEMENT OF CHANGES IN EQUITY

Unaudited Base capital

Share sale

surplus over their

nominal value

Revaluation

reserve capital

Other reserve

capital

Retained financial

result Total equity

As at 1 January 2011 16 011 185 812 12 853 62 927 43 739 321 342

Corrections of mistakes - - - - - -

Changes to accounting principles - - - - - -


after corrections16 011 185 812 12 853 62 927 43 739 321 342

Total income for the period - - - - 44 640 44 640

Issue of shares 7 200 249 556 - - - 256 756

Distribution of profit - - - 43 739 (43 739) -

Other - - (164) - - (164)

As at 30 June 2011 23 211 435 368 12 689 106 666 44 640 622 574

Unaudited

As at 1 January 2010 16 011 185 812 14 377 26 440 43 864 286 504

Corrections of mistakes - - - - - -

Changes to accounting principles - - - - - -


after corrections16 011 185 812 14 377 26 440 43 864 286 504

Total income for the period - - - - 2 175 2 175

Dividend payment - - - - - -

Share issue costs - - - - - -

Distribution of profit - - - - - -

Other - - (474) - - (474)

As at 30 June 2010 16 011 185 812 13 903 26 440 46 039 288 205




The condensed notes and explanations found on pages 9-20 constitute an integral part of these condensed financial statements.

9

CONDENSED NOTES AND EXPLANATIONS

1. General information

Trakcja - Tiltra S.A. (the “Company”) in its present form was established on 30 November 2004 as a result

of acquisition of the holding company Trakcja Polska S.A. by Przedsiębiorstwo Kolejowych Robót Elektryfikacyjnych S.A. ([Railway Electrification Works Company], “PKRE S.A.”). The Company’s business name was then Trakcja Polska S.A. and was changed by Resolution no. 2 adopted by an Extraordinary

Shareholder Meeting on 22 November 2007. The change was confirmed by the entry in the National Court Register made on 10 December 2007. The Company’s previous business name was Trakcja Pols ka – PKRE S.A. The parent company operates on the basis of the articles of association prepared in the form of

a notary deed on 26 January 1995 (Rep. A No. 863/95), as amended. On 22 June 2011, the Regional Court for the capital city of Warsaw in Warsaw, 13

th Economic Division of

the National Court Register, registered the change of the Company’s business name from Trakcja Polska S.A. to Trakcja - Tiltra S.A. The above change was registered pursuant to Resolution no. 3 adopted by the Extraordinary Shareholder Meeting on 15 June 2011.

The Company’s seat is located in Warsaw at ul. Złota 59, 18th

floor.

The interim financial statements cover the period of 6 months ended on 30 June 2011 and include comparative data for the period of 6 months ended on 30 June 2010 and as at 31 December 2010.

These financial statements were approved for publication by the Management Board on 31 August 2011. The financial statements are part of the condensed consolidated semi-annual report, which also includes the condensed consolidated report of the Trakcja - Tiltra Group (the “Group”), where the Company is a

parent company.

The composition of the Trakcja – Tiltra Capital Group and other general information on the Company has been presented in note no. 2 of the notes explanations included in the Group’s condensed consolidated

financial statements for the period of 6 months ended on 30 June 2011.

The highest level parent company for the Trakcja – Tiltra Capital Group is the Spanish company COMSA S.A., which prepares consolidated financial statements where data of the Trakcja - Tiltra Capital Group are

consolidated.

2. Accounting principles and changes during the half year

Professional judgment

If a transaction is not covered by any standard or interpretation, the Management Board, guided by its subjective judgment, shall determine and apply an accounting policy to ensure that financial statements include relevant and reliable information and:

– present the Company’s property and financial situation, the financial result and cash flows in a clear and reliable manner, – reflect the economic contents of the transaction,

– are objective, – are prepared in accordance with the conservative valuation principle, – are complete in all material aspects.

The subjective judgment made as at 30 June 2011 concerns reserves for claims and court cases as well as contingent liabilities.

Uncertainty of estimates

To prepare the financial statements, the Management Board had to make some estimates because many information items included in the statements cannot be valued precisely. The Management Board verifies the assumed estimates based on changes of factors taken into consideration while making those estimates, new

information or previous experience. Therefore the estimates made as at 30 June 2011 may be changed in the future.

Basic assumptions

The financial statements have been drawn up pursuant to the historical cost principle, except for derivative instruments and financial assets available for sale, which are carried at fair value. The balance sheet value





10

of captured collaterals of assets and liabilities is adjusted by the changes to the fair value, which may be attributed to the risk against which the assets and liabilities are collateralized.

The financial statements are presented in Polish zlotys (“PLN”) and all the amounts, unless stated

otherwise, are expressed in PLN thousand.

The financial statements have been prepared on the going concern basis. As at the date of approving these financial statements, there are no circumstances indicating a threat to the Company’s continued operations.

The condensed interim financial statements do not include all the information and disclosures required for the annual financial statements and they should be read jointly with the Company’s financial statements for the year ended on 31 December 2010.

Polish zloty (PLN) is the measurement currency for the Company and the presentation currency of the condensed financial statements.

Accounting principles

These interim financial statements have been drawn up in accordance with the International Financial Reporting Standards, which are applicable to annual periods beginning from 1 January 2011 as adopted by the European Union.

The presentation of the statements is based on IAS 34 “Interim Financial Reporting”, with application o f the same principles to the current and comparative periods and adjustment of the comparative period to the changes of accounting and presentation principles adopted in the statements for the current period.

A detailed description of the accounting principles adopted by the Company is presented in its financial statements for the financial year ended 31 December 2010 published on 19 March 2011.

Effect of applying new accounting standards and changes in accounting policies

The accounting principles (policy) applied to draw up these condensed financial statements for 1H 2011 are consistent with those used to draw up the financial statements for the financial year ended 31 December 2010, except for the changes described below. The same principles were used for the current period and

for the comparative period, unless a standard or an interpretation assumed exclusively prospective application.

Changes resulting from amendments to IFRS

The following new or amended standards and interpretations issued by the International Accounting Standards Board or the International Financial Reporting Interpretations Committee have been applied for the first time in these financial statements:



Amendment to IAS 32 Financial Instruments: presentation

Amendments to various standards resulting from the annual review of International Financial Reporting Standards (Annual Improvements)

Amendment to the interpretation of IFRIC 14 Voluntary Prepaid Contributions under a Minimum

Funding Requirement


Their application did not impact the Company’s performance and financial standing; it only resulted in changes to the applied accounting principles or, possibly, extension of the scope of necessary disclosures or changes to the applied terminology.

The key consequences of applying the new regulations:


The amended IFRS 1 was published on 28 January 2010 and applies to annual periods beginning on 1 July 2010 or afterwards. The amended standard includes regulations concerning limited exemption from

comparative disclosures based on IFRS 7.

The amended IFRS 1 has no influence on the Company’s financial statements.


The amendment to IAS 24 was published on 4 November 2009 and applies to annual periods beginning on 1 January 2011 or afterwards. The amendments include simplification of the definition of a related party and introduction of simplifications in disclosures of transactions with entities owned by the State Treasury.





11

The amendment to IAS 24 has no influence on the Company’s financial statements.

Amendment to IAS 32 Financial Instruments: presentation

On 8 October 2009, an amendment was published concerning regulation of classification of subscription rights denominated in foreign currencies. Previously, those rights as derivates were presented under financial liabilities. After the amendment, if certain conditions are satisfied, those rights are captured as a

component of equity, regardless of the currency in which they are denominated. The amendment to IAS 32 applies to annual reports beginning from 1 February 2010 or afterwards.

The amendment to IAS 32 has no influence on the Company’s financial statements.


On 6 May 2010, further amendments to seven standards were published as a result of proposed draft

changes to the International Financial Reporting Standards published in August 2009. They apply mainly to the annual periods beginning on 1 January 2011 or afterwards (depending on the standard).

The Company applies the amended standards with regard to the introduced amendments as of 1 January

2011, unless some other period of their coming into force has been envisaged.

The application of the amended standards has no influence on the Company’s financial statements.

Amendment to the interpretation of IFRIC 14 Voluntary Prepaid Contributions under a Minimum

Funding Requirement

The amendment was published on 26 November 2009 and applies to annual periods beginning after 1 January 2011 or afterwards. The change of the interpretation will apply to cases where an entity is subject to minimum funding requirements in connection with operating employee benefit plans and makes prepaid

contributions in order to satisfy these requirements.

The changed interpretation has no influence on the Company’s financial statements.


Interpretation IFRIC 19 was published on 26 November 2009 and applies to annual periods beginning after

1 July 2010 or afterwards. The interpretation includes guidelines for capturing transactions of extinguishing financial liabilities with equity instruments.

The changed interpretation has no influence on the Company’s financial statements.

New standards and interpretations

In these condensed interim financial statements, the Company decided not to apply in advance any published standards or interpretations before their effective date.

The major consequences of the application of new regulations for the Company were described in the condensed consolidated financial statements of the Capital Group in Note 9, because the potential effects for the Company are similar to those for the Group. Furthermore, in the above statements the

implementation status of these regulations in the European Union is given.

Voluntary changes introduced by the Company

The Company has not made any changes to the accounting policy.

3. Information on the Company’s financial standing and its financial results achieved within 1H 2011

In 1H 2011, Trakcja - Tiltra Polska S.A. achieved PLN 221,095 thousand of sales revenues, which increased by 200% over last year. Own expenses of sales for the period of 6 months of 2011 amounted to PLN 218,337 thousand, increasing by 239% against the comparative period. The gross sales profit was PLN 2,758 thousand and was lower by PLN 6,541 thousand over the previous period, which represents a decrease by 70%.

The operating result for 1H 2011 was negative, reaching PLN 6,525 thousand. The result was lower by PLN 8,508 thousand, compared to the similar period last year.

The Company’s financial revenues for the period from 1 January to 30 June 2011 amounted to PLN 55,806 thousand, showing an increase by PLN 53,424 thousand over the comparative period. This was mainly due to receipt of dividend from a subsidiary in the amount of PLN 54,619 thousand. Financial costs in 1H 2011 increased by PLN 3,887 thousand, amounting to PLN 5,532 thousand. The increase was caused by the payout of interest on the bonds issued by the Company.





12

The Company presented acquisition costs of PLN 1,270 thousand as a separate item in the profit and loss account. These costs were connected with the transaction of purchasing shares in subsidiaries belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups. Detailed information is presented in Note 4 of the Condensed notes and explanations.

In the discussed period, the Company achieved gross profit of PLN 42,478 thousand, which was higher by PLN 39,758 thousand over the similar period of the previous year, when it reached the level of PLN 2,720 thousand.

The income tax for 1H 2011 was PLN - 2,162 thousand, and resulted entirely from a change in deferred tax. The Company in the analyzed period did not pay corporate income tax. The Company’s net profit for the

period of 6 months of 2011 amounted to PLN 44,640 thousand and was higher by PLN 42,465 thousand than the result achieved in 1H 2010. In 1H 2011, net profit margin reached the level of 20% and rose by 17 p.p. over 1H 2010.

The total assets as at 30 June 2011 were PLN 1,225,093 thousand and were higher by PLN 638,286 thousand than the total assets as at the end of 2010.

As of 30 June 2011, the non-current assets were PLN 932,389 thousand, increasing by PLN 713,618 thousand in relation to the annual balance sheet sum as at 31 December 2010, which is an increase of

326%. That increase resulted for the most part from the purchase of shares in subsidiaries belonging to the Tiltra Group AB and AB Kauno Tiltai Capital Groups. On 19 April 2011, the Company purchased 150,000 shares of Tiltra Group AB, seated in Vilnius, representing 100% of the share capital and 100% of the votes

at the company’s shareholder meeting, 148,981 shares of AB Kauno Tiltai, seated in Kaunas, representing 96,84% of the capital, and 22 ownership interests in Silentio Investments Sp. z o.o., seated in Warsaw, representing 22% of the share capital and 22% of votes at the company’s partner meeting. After the above

transaction and the transaction of purchasing shares of the Tiltra Group AB, the Company holds directly and through the Tiltra Group AB and AB Kauno Tiltai 100 ownership interests in Silentio Investments Sp. z o.o., representing 100% of the share capital and 100% of votes at the company’s partner meeting.

Furthermore, there was also an increase in property, plant and equipment as well as deferred income tax assets. The increase in property, plant and equipment resulted from the purchase of asset components. Current assets decreased by 20% compared as at 31 December 2010, reaching the level of PLN 292,704 thousand. The decrease resulted mainly from the decrease of the balance of cash by the amount of PLN 122,797 thousand. This was for the most part due to expenditure on the purchase of shares and ownership interests in subsidiaries and settling liabilities to business partners on an ongoing basis as well as the purchase of reserves for contracts being performed. The decrease of financial assets resulted mostly from sales of participation units worth PLN 22,780 thousand and release of a bank guarantee deposit of PLN 9,573 thousand because of payment of advances for consortium members. The decrease was partly offset with growth of reserves and trade receivables as well as the other receivables . As of 30 June 2011, the reserves were PLN 43,539 thousand, increasing by PLN 14,831 thousand in relation to the balance as at 31 December 2010. The Company applies an optimization policy regarding prices of purchased materials and in connection with this purchases inventory necessary for contracts being performed and those whose performance is beginning. As at the balance sheet date, trade receivables and other receivables were PLN 190,919 thousand and increased by PLN 74,722 thousand as compared to the end of last year in connection with issuing many invoices for construction and installation works of recipients in 2Q 2011. The Company granted a loan of PLN 200 thousand to the subsidiary TORPROJEKT Sp. z o.o.

The Company’s equity as of 30 June 2011 were PLN 622,574 thousand, increasing by PLN 301,232 thousand in relation to the balance as at 31 December 2010. This was due to the issue of shares, resulting in an increase in share sale surplus over their nominal value by PLN 249,556 thousand; the surplus amounted to PLN 435,368 thousand as at 30 June 2011. Other reserve capital was PLN 106,666 thousand as at the balance sheet date, increasing by PLN 43,739 thousand.

Long-term liabilities as of 30 June 2011 were PLN 324,349 thousand and increased by PLN 290,437 thousand in relation to the balance as at 31 December 2010. The increase was caused by the Company issuing A and B series bonds, maturing in December 2013 and 2014.

Short-term liabilities increased by PLN 46,617 thousand as compared to the standing at the end of last year. The increase resulted mainly from a growth of trade liabilities and the other liabilities as well as loan and credit liabilities. The Company took out a loan of PLN 40,000 thousand in Alior Bank S.A. and received loans from the subsidiaries PRKiI S.A. and AB Kauno Tiltai in the total amount of PLN 27,242 thousand. Trade liabilities and the other liabilities reached the level of PLN 149,006 thousand as at 30 June 2011 and increased by PLN 16,905 thousand in comparison with the balance as at 31 December 2010. Interest bearing credit and loans were PLN 79,907 thousand as at the balance sheet date ended 30 June 2011and increased by PLN 68,209 thousand in relation to the balance as at the end of last year. Among short -term liabilities, the greatest decrease was that in construction contracts. As at 30 June 2011, they were PLN 43,113 thousand and were lower by PLN 31,203 thousand. This was caused by settlement of an advance payment received from an investor on account of contracts being performed.





13

4. Information on purchase of shares and ownership interests in subsidiaries

4.1 Dates and percentage of the purchased shares with voting rights

On 19 April 2011, pursuant to a share sale agreement concluded between the Company as Buyer and AB Invalda, UAB NDX Energija and Mr. Jonas Pilkauskas, Mr. Mindaugas Aniulis, Mr. Nerijus Eidukevičius, Mr.

Romas Matiukas, Ms. Vaida Balčiūnienė, Ms. Irena Angelė Černevičiūtė as Sellers 1, and pursuant to a share sale agreement concluded on 19 April 2011 between the Company as Buyer and Mr. Jonas Pilkauskas, Mr. Romanas Aniulis, Mr. Vidmantas Drizga, Mr. Nerijus Eidukevičius, Mr. Romas Matiukas as

Sellers 2, the Company purchased: 150,000 shares of Tiltra Group AB, seated in Vilnius, of a par value of LTL 1 each, with a total par

value of LTL 150,000, representing 100% of the company’s share capital and giving the right to 100% of votes at the company’s shareholder meetings,

148,981 shares of AB Kauno Tiltai, seated in Kaunas, of a par value of LTL 130 each, with a total

par value of LTL 19,367,530, representing 96.84% of the company’s share capital and giving the

right to 96.84% of votes at the company’s shareholder meetings, and 22 ownership interests in Silentio Investments Sp. z o.o., seated in Warsaw, of a par value of

PLN 50 each, with a total par value of PLN 1,100, representing 22% of the company’s share capital and giving the right to 22% of votes at the company’s partner meetings. After the above transaction

and the transaction of purchasing shares of the Tiltra Group AB, the Company holds directly and through the Tiltra Group AB and AB Kauno Tiltai 100 interests in Silentio Investments Sp. z o.o., of a par value of PLN 50 each, with the total par value of PLN 5,000, representing 100% of the share

capital and 100% of votes at the company’s partner meeting.

Before performing the above transactions, the Company owned no shares of Tiltra Group AB, no shares of AB Kauno Tiltai or ownership interests in Silentio Investements Sp. z o.o. The Company treats the

investment in the purchased assets as a long-term capital investment.

4.2 Description of capital groups whose shares and ownership interests were purchased

Tiltra is a regional group dealing with building infrastructure on the Polish and Lithuanian markets. The

Group specializes in construction and rebuilding of roads, bridges, tunnels, railway lines, ports and utilities infrastructure. In the territory of Poland, two lower-level Groups conduct activity – Poldim, seated in Tarnów, and P.E.U.I.M., seated in Białystok. In Lithuania, the AB Kauno Tiltai, which is the largest group in the

sector of road and bridge construction in that country, operates also under the Tiltra brand. AB Kauno Tilta controls the following road-building companies: UAB Kelda, UAB Taurakelis, UAB Kedainiu Automobiliu Keliai, TUB konsorciumas Tiltra, UAB Pletros investicijos, UAB Kauno Tiltai Lenkijos skyrius and

the P.E.U.I.M. (Przedsiębiorstwo Eksploatacji Ulic i Mostów) Group. The P.E.U.I.M. Group’s activity is connected with construction and maintenance of road network in the territory of Poland.

4.3 Major reasons for purchasing shares and ownership interests

Merging the operations of the two groups (i.e. Trakcja and Tiltra) will make it possible to create one of the leading entities of the segment of the road building and railway construction market in Poland. The Trakcja Polska Group and the Tiltra Group to date have similar strategies, assuming diversification of activities

through entering new segments of the construction market. The support from Comsa S.A., the main shareholder of Trakcja - Tiltra S.A., should contribute to expansion to new markets of Central and Eastern Europe. The merged entities will strengthen their competitiveness, giving them an improved negotiating

position with contractors and subcontractors. What is also planned is to develop new activity areas, including concessions, construction services for the energy sector and further strengthening of the presence in the sector of tramway infrastructure construction.

4.4 Fair value of the payment made as at the date of purchasing shares and ownership interests

The fair value of the total payment was determined by deducting an account receivable from the Company to the Sellers with the account receivable for the issue of the Company’s series G shares, the issue of

bonds, with the surplus amount of PLN 152,000 thousand handed over in cash.

On 19 April, the Company issued: 148,608 unsecured series A bearer bonds, having no form of a document, with a par value of PLN

1,000 each, with the total par value of PLN 148,608 thousand, 148,608 unsecured series B bearer bonds, having no form of a document, with a par value of PLN

1,000 each, with the total par value of PLN 148,608 thousand.





14

The issue price per one series A and B bond equals its nominal value. Interest is payable on interest payment dates falling on 30 June and 31 December each year from the issue date until the maturity date of series A and B as well as on the maturity date of series A and B bonds.

On 19 April 2011, the Company issued 72,000,000 series A subscription warrants, each of which gave the holder the right to subscribe for 1 series G bearer share of the Company. The subscription warrants were offered to the Sellers. On 19 April 2011, the Sellers acquired all the subscription warrants offered them and

on 19 April 2011 exercised the rights from these warrants, subscribing altogether for 72,000,000 series G shares of the Company in the Company’s share capital, increased pursuant to Resolution No. 3 of the Extraordinary Shareholder Meeting of the Company of 19 January 2011. The share subscription price from

the subscription date was PLN 3.63 per share.

5. Revenues on sales and own expenses of sales

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Revenues on sales

Revenues from sales of construction services 210 227 73 132

Revenues on sales of merchandise and materials 9 075 68

Revenues on sales of other products and services 1 793 460

Total 221 095 73 660

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Revenues on sales


Profit (loss) on currency hedges on contracts - 1 440

Other sales 10 868 528

Total 221 095 73 660

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Unaudited Unaudited

Own expenses of sales


Other sales 11 525 924

Total 218 337 64 361

1.01.2011 -

30.06.2011

1.01.2010 -

30.06.2010

Sales margin Unaudited Unaudited


Result on currency hedges of contracts - 1 440

Other sales (657) (396)

Total 2 758 9 299

6. Investments in subordinated entities

The Company owns:

shares and ownership interests of the total value of PLN 707,228 thousand in companies belonging

to the Tiltra Group AB and AB Kauno Tiltai capital groups, with their parent companies seated in Vilnius and Kaunas respectively, representing a 100% stake in the share capital of Tiltra Group AB and a 96.84% stake in the share capital of AB Kauno Tiltai. In addition, the Company holds directly

and through the Tiltra Group AB and AB Kauno Tiltai 100 interests in Silentio Investments Sp. z





15

o.o., representing 100% of the share capital and 100% of votes at the company’s partner meeting. Detailed information on the acquisition of shares and ownership interests in the above Capital Groups is presented in Note 4 of the Condensed notes and explanations;

shares worth PLN 52,305 thousand in Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A., seated in Wrocław, giving a 100% stake in the company’s share capital;

ownership interests worth PLN 23,186 thousand in PRK 7 Nieruchomości Sp. z o.o., seated in Warsaw, giving a 100% stake in the company’s equity capital;

ownership interests worth PLN 1,400 thousand in TORPROJEKT Sp. z o.o., seated in Warsaw,

giving a 82.35% stake in the company’s equity capital.

7. Construction contracts

30.06.2011 31.12.2010

Unaudited Audited

Cumulative revenues recognized in the profit and loss account 210 227 286 137

Cumulative costs recognized in the profit and loss account (206 812) (269 656)

Gross profit/(loss) 3 415 16 481

30.06.2010 31.12.2010

Unaudited Audited

Surplus of income invoiced over revenues

by degree of advancement2 601 1 293

Surplus of income by degree of advancement

over invoiced revenues29 124 25 703

Advances provided on account of contracts being performed 13 911 30 447

Advances received on account of contracts being performed 40 169 73 001

Reserve for anticipated losses on contracts 343 22

Capturing in the balance sheet:

among current assets


among short-term liabilities


8. Issue of shares and changes in equity

On 19 April 2011, the Company issued 72,000,000 series A subscription warrants, each of which gave the holder the right to subscribe for 1 series G bearer share of the Company. The subscription warrants were

offered to the Sellers (the Sellers are presented in Note 4.1 of the condensed notes and explanations). On 19 April 2011, the Sellers acquired all the subscription warrants offered them and on 19 April 2011 exercised the rights from these warrants, subscribing altogether for 72,000,000 series G shares of the

Company in the Company’s share capital, increased pursuant to Resolution No. 3 of the Extraordinary Shareholder Meeting of the Company of 19 January 2011. The share subscription price from the subscription date was PLN 3.63 per share.





16

Base capital

30.06.2011 31.12.2010

Par value

PLN 0.1

Par value

PLN 0.1

Series A common shares 1 599 480 1 599 480

Series B common shares - -

Series C common shares 83 180 870 83 180 870

Series D common shares 19 516 280 19 516 280

Series E common shares 25 808 850 25 808 850

Series F common shares 30 000 000 30 000 000

Series G common shares 72 000 000 -

Total 232 105 480 160 105 480 In connection with the issue of series G shares, there was a share sale surplus over their nominal value in

the amount of PLN 254,160 thousand, which was reduced by the share issue costs of PLN 4,604 thousand.

9. Bonds

On 19 April 2011, the Company issued the following bonds: 148,608 of unsecured series A bearer bonds, having no form of a document; 148,608 of unsecured series B bearer bonds, having no form of a document.

The issue price per one series A and B bond equals its nominal value.

Interest is payable on interest payment dates falling on 30 June and 31 December each year from the issue

date until the maturity date of series A and B as well as on the maturity date of series A and B bonds.

Bond series Issue date Maturity datePar value of one bond

(000s of PLN)

Par value of bond series

(000s of PLN)A 19.04.2011 12.12.2013 1 000 148 608

B 19.04.2011 12.12.2014 1 000 148 608

As at 30 June 2011, liabilities on account of bond issue were PLN 294,061 thousand.

The fair value of the bonds issued by the Company on the issue date was PLN 293,868 thousand.





17

10. Contingent items and other off-balance sheet items

30.06.2011 31.12.2010

Unaudited Audited

Contingent receivables

From related entities on account of: 82 169 22 169Guarantees and sureties received 80 838 20 838Bills of exchange received as collateral 1 331 1 331

From other entities on account of: 41 019 38 162Guarantees and sureties received 33 609 32 569Bills of exchange received as collateral 7 410 5 593

Total contingent receivables 123 188 60 331

Contingent liabilities

From related entities on account of: 74 312 24 950Guarantees and sureties given 44 312 24 167Own promissory notes - 783Mortgages 30 000 -

From other entities on account of: 708 601 502 538Guarantees and sureties given 307 254 265 949Own promissory notes 237 352 176 018Mortgages 90 000 9 000Assignments of rights under insurance policies 73 696 41 563Security deposits 299 10 008

Total contingent liabilities 782 913 527 488

Contingent receivables on account of granted sureties and guarantees include guarantees issued by banks, insurance companies or other entities in favor of the Company and bills of exchange issued or guaranteed

by partners and subcontractors, constituting security for the Company’s claims against the investor resulting from the construction contracts being performed.

Contingent liabilities on account of granted sureties and guarantees include primarily guarantees issued by

banks and insurance companies in favor of the investor and bills of exchange issued by the Company, constituting security for the investor’s claims against the Company resulting from the construction contracts being performed. On account of the guarantees banks and insurance companies are entitled to recourse

claims against the Company.

The growth in contingent receivables (on account of granted sureties and guarantees) in 1H 2011 resulted from the fact of issuing new bank guarantees concerning construction contracts, both beginning and being

performed.

Contingent liabilities as at 30 June 2011 increased by PLN 255,425 thousand in relation to the balance as at 31 December 2010. The increase of contingent liabilities in 1H 2011 followed mainly from the fact of

establishing securities for new guarantees for construction contracts on which the Company began work as well as an increase in the value of own promissory notes securing timely payments, removal of defects and proper performance of the works. The value of the contingent liability on account of mortgages worth PLN

90,000 thousand pertains to security for the repayment of the loan drawn by the Company at Alior Bank S.A. The mortgage was established on the assets of the Company and its subsidiary, PRKiI S.A.

Tax settlements and other areas of activity subject to regulations (e.g. matters related to customs or foreign

currencies) may be audited by the administrative authorities authorized to impose high fines and sanctions. Lack of reference to the established legal regulations in Poland results in ambiguities and inconsistencies in the prevailing law. Frequent differences of opinion regarding legal interpretation of tax provisions, both

within state authorities and between state authorities and companies, result in the emergence of areas of uncertainty and conflict. These phenomena mean that the tax risk in Poland is higher than the risk usually appearing in countries with a more developed fiscal system. Tax settlements may be audited for a period of

five years, starting from the end of the year in which the tax was paid. As a result of conducted audits, additional tax liabilities may be added to the Company’s previous tax settlements. The Company believes that as at 30 June 2011 adequate reserves were established for the identified and measurable tax risk.





18

11. Transactions with related entities

Transactions with related entities were concluded on market terms and conditions. Information on the receivables from and liabilities to related entities as at the balance sheet date and the end of the comparative period is presented below.

Related entities

Period

Sales

to related entities

Purchases

from related

entities

Revenues

on account of

interest

Costs

on account of

interest

Financial

income

on FX losses

and others

Financial

expenses

on FX losses and

other

Shareholders:

1.01.11-30.06.11

1.01.10-30.06.10 3 62 - - - 33

1.01.11-30.06.11 3 499 35 627 - 130 54 659 -

1.01.10-30.06.10 549 3 076 - - 69 14

1.01.11-30.06.11 12 433 13 451 19 - - -

1.01.10-30.06.10 7 800 8 763 83 - - -

1.01.11-30.06.11 - 639 - - - -

1.01.10-30.06.10 - - - - - -

1.01.11-30.06.11 26 217 3 - - -

1.01.10-30.06.10 - - - - - -

1.01.11-30.06.11 38 - 138

1.01.10-30.06.10 - - - - - -

1.01.11-30.06.11 15 958 49 934 22 168 54 659 138

1.01.10-30.06.10 8 352 11 901 83 - 69 47

AB Kauno Tiltai

Total

TORPROJEKT Sp. z o.o.

COMSA S.A.

Trakcja - Tiltra Group companies:

Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A.


Bahn Technik Wrocław Sp. z o.o.





19

The total amounts of the transactions concluded with related entities in the period covered by the condensed financial statements and in the comparative period are presented below.

Related entitiesBalance sheet date

Receivables

from related

entities

Liabilities towards

related entities Loans granted

Loans

received

Shareholders:

30.06.11 4 - - -

31.12.10 1 - - -

30.06.11 1 430 36 619 - 9 885

31.12.10 1 298 26 428 - -

30.06.11 27 509 - 700 -

31.12.10 28 591 2 700 -

30.06.11 - 790 - -

31.12.10 - 29 - -

30.06.11 5 54 200 -

31.12.10 4 75 - -

30.06.11 77 - - 17 357

31.12.10 - - - -

30.06.11 29 025 37 463 900 27 242

31.12.10 29 894 26 534 700 -



AB Kauno Tiltai

Total

COMSA S.A.

Trakcja - Tiltra Group companies:

Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych S.A.






20

Prepared by:

Elżbieta Okuła

Chief Accountant

The Management Board:


CEO Deputy CEO



Dariusz Mańkowski

Deputy CEO


CAPITAL GROUP TRAKCJA - TILTRA THE MANAGEMENT BOARD’S REPORT ON THE ACTIVITY OF THE TRAKCJA – TILTRA CAPITAL GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2011

TRAKCJA - TILTRA CAPITAL GROUP Consolidated Semi-Annual Report for the Six-Month Period Ended 30 June 2011 The Management Board’s report on the activity of the Trakcja - Tiltra Capital Group for the Six-Month Period Ended 30 June 2011

2

This Report on the activity of the Trakcja - Tiltra Capital Group (the "Group" or "Capital Group") in the first half-year 2011 has been prepared in accordance with § 90 of the Regulation of the Minister of Finance of 19 February 2009 on the current and periodic disclosures to be made by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state (Journal of Laws of 2009 No. 33 item 259), as amended.


3

TABLE OF CONTENTS

1. Business Activities of Trakcja - Tiltra Capital Group ....................................................................... 4

1.1 Products and services .............................................................................................................................. 5

1.2 Important contracts for construction services .................................................................................. 6

2. Current and Forecast Financial Standing of the Trakcja - Tiltra Capital Group ........................ 8

2.1 Selected financial data ............................................................................................................................. 8

2.1.1 Profit and loss account review ................................................................................................................... 8

2.1.2 Balance sheet review .................................................................................................................................. 9

2.1.3 Cash flow statement review ...................................................................................................................... 10

2.1.4 Profitability ratios review ........................................................................................................................... 11

2.2 Events after the balance sheet date .................................................................................................... 11

2.3 Evaluation of financial resources management .............................................................................. 12

2.3.1 Liquidity ratios ............................................................................................................................................. 12

2.3.2 Financing structure ratios.......................................................................................................................... 13

2.3.3 Loans ........................................................................................................................................................... 13

2.3.4 Hedging transactions ................................................................................................................................. 14

2.4 Management Board's opinion on the previously published financial forecast for the Trakcja - Tiltra Group ............................................................................................................................................. 15

2.5 Description of factors essential for the Capital Group's development ..................................... 15

2.6 Capital Group’s strategy and development ...................................................................................... 16

2.7 Risk Factors .............................................................................................................................................. 17

3. GROUP'S STRUCTURE .......................................................................................................................... 17

3.1 Capital Group ............................................................................................................................................ 17

3.2 Information about the major companies within the Capital Group ............................................. 19

3.3 Management Board and Supervisory Board of the parent company ......................................... 20

3.3.1 Management Board ................................................................................................................................... 20

3.3.2 Supervisory Board ..................................................................................................................................... 20

3.3.3 Shares in Trakcja – Tiltra SA held by managing and supervising persons ....................................... 20

3.4 Changes in the Capital Group and their effects............................................................................... 21

3.5 Employment in the Capital Group ....................................................................................................... 22

4. OTHER INFORMATION ........................................................................................................................... 22

4.1 Shareholders ............................................................................................................................................. 22

4.2 Transactions with related parties ........................................................................................................ 22

4.3 Information about loan sureties or guarantees granted by the issuer or by its subsidiary . 23

4.4 Important court and disputable cases................................................................................................ 23


4

1. Business Activities of Trakcja - Tiltra Capital Group

The Group, consisting of Trakcja - Tiltra SA ("Trakcja - Tiltra", "Company”, "Parent Company"), Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych SA ("PRKiI SA", "PRKiI"), Bahn Technik Wrocław Sp. Z o.o. ("Bahn Technik"), PRK 7 Nieruchomości Sp. z o.o. ("PRK 7 Nieruchomości"), Eco - Wind Construction SA ("EWC"), TORPROJEKT Sp. z o.o. ("Torprojekt"), AB Kauno Tiltai, Poldim SA ("Poldim") and P.E.U.I.M. Sp. z o.o., is one of the leading entities on the Polish and Lithuanian market of rail and road infrastructure construction.

The Group’s key activity in the scope of rail infrastructure construction is the organisation and completion of construction and installation works necessary for the comprehensive construction and modernisation of railway and tram lines. We carry out earthwork for the modernisation and construction of track beds and the reconstruction of engineering facilities (passes, bridges, viaducts, etc.) and also the works related to surface construction or replacement (railway track bed). We also provide comprehensive services involving the construction of electrical traction supply systems and the construction and modernisation of the traction network. An important part of our offer includes the capacity construction both for railway infrastructure purposes (traction substation buildings, switch towers, railway crossing cabins, railway stations, train buildings and other) and general construction (housing and offices). Our services also include the construction of power systems and remote control systems. For sixty years the companies within our Capital Group have been implementing complete power installations of medium and lately high voltage, both in new and modernised and also renovated railway power facilities.

We have modernised several thousand kilometres of railway lines and provided power to over 10,000 kilometres of railway lines. We have also constructed and modernised over 450 traction substations and 380 track section cabins. Our Group is currently participating in the modernisation of railway lines to harmonize Polish railway infrastructure with the integrated communication system introduced by the European Union countries.

Owing to over 60 years of market experience, we managed to develop high quality work order completion systems, which are highly appreciated by our Partners, because they allow for the safety of the future use of the infrastructure that is built or renovated by us to be maintained and also for the devices manufactured by our Group to be applied.

In the road construction sector, the Group specialises in constructing and reconstructing roads, motorways, bridges, overpasses and airports. Since the beginning of its activities, i.e. since 1949, Kauno Tiltai, a company within the Group, has constructed over 100 bridges and overpasses and has been responsible for constructing and reconstructing many roads in the territory of Lithuania.

The companies also have modern asphalt, concrete, reinforced concrete, emulsion, modified bitumen production facilities and mines.

Knowing how important the quality of the products manufactured by our Group is, we care for our products to comply with the required quality standards. The foregoing is demonstrated by numerous certificates granted to our Group, and in particular, by the following: the "Certificate of systems and products approved and used by PKP" and the "Certificate approving application by PKP" issued by the Railway Scientific and Technical Centre [Centrum Naukowo-Techniczne Kolejnictwa, CNTK], and also by the certificates issued by the Electrotechnical Institute [Instytut Elektrotechniki].

Our long-term market practice allowed us to develop techniques for managing projects, which provided us with ability to complete our projects within the agreed schedules and simultaneously maintain the required quality and meet special requirements of the investors.

Many projects implemented by our Group are financed, in particular, with funds granted by European Union and Polish government. Their implementation requires the European procedures to be strictly complied with, which also has an effect on the quality of the services provided and products manufactured by our Group.


5

1.1 Products and services

The scope of our activities includes the following services:

Comprehensive modernisation of railway lines

The modernisation of the railway lines includes:

Development and agreement of concepts for all industries, preparation of the project construction documentation, detailed design documentation, obtaining of all permits and permissions and also the preparation of the as-built documentation,

Replacement of railway track substructure and superstructure using the mechanised substructure and track machinery, including the construction of drainage systems,

Disassembly of the traction network, including the removal of old foundations and the construction of a new traction network with the use of modern methods for positioning foundations by applying the piling method and using trains for stream replacement of the network,

Renovation or complete reconstruction of civil engineering facilities, culverts, bridges and overpasses,

Construction of power supply systems for railway lines,

Comprehensive modernisation of railway crossings (crossings of roads with railway lines),

Reconstruction of the railway traffic control system,

Preparation of construction sites,

Construction of complete buildings or their parts,

Execution of construction installations, civil engineering works for tracks and roads,

Construction of overhead and underground power distribution lines,

Construction of railway and tram electric traction network and hydraulic engineering.

Moreover, where necessary, we cooperate with specialized companies mainly in the area of tasks related to the protection of railway traffic and telecommunications.

Under the auxiliary activities, the Company manufactures various types of industrial devices used for modernising railway infrastructure, in particular, the following: 15 kV conventional and container switchgears, 3 kV, 1.5 kV, 1 kV and 0.8 kV DC switchgears, control system cabinets, local and remote control devices and isolating switches drives, steel structures for assembling substations and providing power supply, selected equipment of the traction network.

Construction of buildings

Construction of buildings by the Trakcja - Tiltra Group includes the construction of the following: Multifamily residential complexes,

Public utility buildings,

Industrial facilities.

Real estate development activities The scope of activities of PRK 7 Nieruchomości Sp. z o.o., which a company within the Trakcja - Tiltra Group, includes:

Construction,

Servicing of real estate on its own account,

Leasing of real estate on its own account.

PRK 7 Nieruchomości Sp. z o.o. develops apartment complexes and houses on land previously purchased from Trakcja Tiltra SA (formerly PRK-7 SA). The company implements development projects in cooperation with the General Contractor. This function has so far been performed by Trakcja - Tiltra SA (formerly PRK-7 SA).


6

Road infrastructure construction Road infrastructure construction includes:

Roads - construction and reconstruction of motorways, roads, streets, squares and car parks; services related to maintenance of roads during winter and summer,

Bridges - construction and reconstruction of bridges, overpasses and flyovers,

Tunnels - construction and reconstruction of tunnels,

Airports - construction and reconstruction of airport runways and landing strips, aircraft parking areas and also special purpose areas.

Other areas of activities Other areas of activities include:

Construction of landing piers - construction and reconstruction of ports and harbours and other landing structures,

Engineering infrastructure - construction of water supply systems, sewerage systems, water installation systems and water treatment installations; road and street lighting systems and also installation and repair services of traffic lights,

Construction of sport facilities,

Production of construction materials: asphalt concrete, bituminous emulsions, including also polymer modified bituminous emulsions, concrete, reinforced concrete products; extraction and processing of construction materials.

1.2 Important contracts for construction services

Key contracts for construction services concluded by the companies within the Trakcja - Tiltra Group in the first half-year 2011:

Contract conclusion

date Contract currency

Contract value [in PLN ‘000] Investor Contract subject

2011-02-11 PLN 13 433 PKP PLK SA

Modernisation of the railway line Warsaw - Łódź, Phase II, Lot C - Other Works. Design and Implementation of the Collision-Free Junction on the National Road No. 72 Rawa Mazowiecka - Lodz with the Railroad Tracks No. 1 Warsaw - Central - Katowice in Rogów under the Project No. POIiŚ 7.1 - 24.3.

2011-05-24 PLN 657 333 PKP PLK SA

Basic linear construction works on the section Wroclaw – Grabiszyn – Skokowa and Żmigród – border of the Lower Silesian Voivodeship within the project POIiŚ (OPIE) 7.1 - 4 "Modernization of the railway line E 59, on the section Wroclaw - Poznan, Phase II - section Wroclaw - border of the Lower Silesian Voivodeship."

2011-05-27 PLN 868 894 PKP PLK SA

Construction works for the No. 9 line modernization on the section from km 236.920 to km 287.700, covered by the Local Control Centers, with its registered office in Malbork, area, within the Project: No. POIiŚ (OPIE) 7.1-1.3 "Modernization of the railway line E 65/CE 65 on the section Warsaw – Gdynia – LCS Ilawa, LCS Malbork"


7

2011-06-15 LTL 34 058

Lithuanian Road Administration

under the Ministry of

Communications

Reconstruction of the national roads of national importance. No.144 Jonava)- Kėdainiai– Šeduva section from 50,20 to 52,40 km. (Kėdainių r.) No. 145 Kėdainiai – Šėta – Ukmergė section from 0,10 to 10,50 km (Kėdainių r.), No. 129 Antakalnis – Jieznas – Alytus – Merkinė section from 26,45 to 26,70 km (Prienų r.), No. 182 Marijampolė - Liudvinavas - Krosna section from 7.98 to 13.98 km and repair of the bridge over the Šešupė river kilometer 1.21 of that road (Marijampolės sav.)

2011-06-30 PLN 238 883 PKP PLK SA

Design and performance of a reconstruction of the Łódź Widzew railway station and a part of the Łódź Fabryczna – Łódź Widzew route at km 2,250–7,200 along with railway traffic control and telecommunication devices for the whole Łódź Fabryczna – Łódź Widzew route and modernisation of the detour route of Łódź Widzew – Łódź Chojny – Łódź Kaliska as part of the POIiS Project 7.1-24.2 “Modernisation of the Warszawa – Łódź railway line, phase II, lot B – section Łódź Widzew – Łódź Fabryczna with the Łódź Fabryczna station and construction of the underground part of the Łódź Fabryczna station for departures and arrivals of trains and passenger service”

2011-07-27 PLN 162 044 City Council of

Vilnius

Construction works related to construction of Trans-European Network Junction – 2nd stage of the western bypass of Vilnius


8

2. Current and Forecast Financial Standing of the Trakcja - Tiltra Capital Group

2.1 Selected financial data

An increase in the revenues, costs, balance sheet total and in the individual items of the balance sheet and also changes in the financial ratios in the first half-year 2011 result from the acquisition of the Capital Group of Tiltra Group AB and AB Kauno Tiltai which was completed on 19 April 2011. The acquisition is discussed in more detail in the summary of the consolidated financial statements of the Trakcja - Tiltra Capital Group (Note No. 3).

2.1.1 Profit and loss account review

In the first half-year 2011, Trakcja - Tiltra Group obtained revenues in the amount of PLN 668,296,000, which increased by 344% in comparison with the analogous period of the preceding year. In the first half-year 2011, the cost of goods sold increased by 428% and was PLN 621,818,000. The gross profit margin on sales in the period under consideration amounted to 7.0%, while in the analogous period of 2010 it reached the value of 21.7%. The Group’s gross profit from sales for the 6-month period of 2011 was PLN 46,478,000. The operating profit amounted to PLN 26,305,000 and was higher by 30%, i.e. by the amount of PLN 6,122,000, in comparison with the analogous period of the preceding year, in which it was PLN 20,183,000. In the first half-year 2011, the Group generated the financial revenues in the amount of PLN 3,202,000, which were lower by 26% in comparison with the analogous period of the preceding year. This decrease was caused mainly by the decrease in revenues on account of interest on bank deposits and foreign exchange differences. The financial expenses in the said period increased over four times, mainly due to the financial costs related to the interest on bonds paid in the amount of PLN 4,105,000 and the increase in the interest on loans up to PLN 4,530,000 caused by the acquisition of the Tiltra Group. In the period under consideration the Group recorded gross profit in the amount of PLN 16,645,000, which was lower by PLN 4,059,000, i.e. by 20% in relation to the first half-year 2010. This decrease was mainly caused by the considerable increase in the financial expenses. The net profit of the Group for the first half-year 2011 was PLN 13,853,000 and was lower by PLN 2,597,000 in relation to the profit for the first half-year 2010. In the first half-year 2011, the net profit margin reached the level of 2.1% while in the first half-year 2010 it was 10.9%.

CONSOLIDATED PROFIT AND LOSS ACCOUNT 30.06.2011 30.06.2010 Change Change %

Revenues from sales 668 296 150 419 517 877 344%

Cost of goods sold (621 818) (117 782) (504 036) 428%

46 478 32 637 13 841 42%

Cost of sales, marketing and distribution (2 047) (1 051) (996) 95%

General and administrative costs (27 790) (11 432) (16 358) 143%

Other operating revenues 10 835 994 9 841 990%

Other operating costs (1 171) (965) (206) 21%

26 305 20 183 6 122 30%

Financial revenues 3 202 4 336 (1 134) -26%

Financial costs (11 104) (2 732) (8 372) 306%

Acquisition costs (1 270) - (1 270) -

Profit of affiliates (488) (1 083) 595 -55%

16 645 20 704 (4 059) -20%

Income tax (2 792) (4 254) 1 462 -34%

13 853 16 450 (2 597) -16%

Discontinued activities - -

Net profit (loss) from discontinued operations - - - -

13 853 16 450 (2 597) -16%

Attributable to:

Shareholders of parent entity 13 055 16 450 (3 395) -21%

Non-controlling shareholders 798 - 798 -

Gross profit (loss) on sales

Operating profit (loss)

Gross profit (loss)

Net profit (loss) from continued operations

Net profit for financial year


9

2.1.2 Balance sheet review

The main items of the Trakcja - Tiltra Group's consolidated balance sheet as of 30 June 2011 in comparison to the data as of 31 December 2010 have been presented in the table below.

As of 30 June 2011, the balance sheet total of the Trakcja - Tiltra Group was PLN 2,031,142,000 and was greater by PLN 1,276,777,000 in comparison to the end of 2010, which constitutes an increase by 169%.

30.06.2011 31.12.2010 Change Change %

1 069 440 214 589 854 851 398%

Tangible fixed assets 328 589 95 114 233 475 245%

Intangible assets 59 208 54 675 4 533 8%

Goodwill upon consolidation 582 198 2 873 579 325 20164%

Investment real property 11 930 3 666 8 264 225%

Investments in affiliates 37 679 35 427 2 252 -

Financial assets 9 665 1 182 8 483 718%

Long-term receivables 10 388 - 10 388 -

Assets by virtue of deferred tax 25 682 19 634 6 048 31%

Prepayments 4 101 2 018 2 083 103%

961 702 539 776 421 926 78%

Inventories 209 953 109 221 100 732 92%

Receivables by virtue of supplies and services

and other receivables520 701 111 933 408 768 365%

Income tax receivables 4 313 - 4 313 -

Financial assets 8 625 32 635 (24 010) -74%

Derivative financial instruments 471 - 471 -

Cash and equivalent 39 119 234 309 (195 190) -83%

Prepayments 13 594 5 013 8 581 171%

Construction contracts 164 926 46 665 118 261 253%

2 031 142 754 365 1 276 777 169%

ASSETS

Fixed assets

Current assets

TOTAL ASSETS

30.06.2011 31.12.2010 Change Change %

667 871 404 051 263 820 65%

Share capital 23 211 16 011 7 200 45%

Share premium account 435 368 185 812 249 556 134%

Revaluation reserve 2 339 2 339 - 0%

Other reserve capitals 199 370 160 476 38 894 24%

FX differences from conversion (4 659) - (4 659) -

Retained earnings 12 242 39 413 (27 171) -69%

21 907 141 21 766 15437%

689 778 404 192 285 586 71%

1 341 364 350 173 991 191 283%

521 643 52 004 469 639 903%

Interest bearing bank credits and loans 168 604 28 791 139 813 486%

Reserves 3 256 1 008 2 248 223%

Liabilities by virtue of employee benefits 15 359 7 724 7 635 99%

Reserve by virtue of deterred tax 30 074 14 463 15 611 108%

Bonds 294 061 - 294 061 -

Other liabilities 10 289 18 10 271 57061%

819 721 298 169 521 552 175%

Liabilities by virtue of supplies and services and

other liabilities447 379 156 435 290 944 186%

Interest bearing bank credits and loans 276 717 27 559 249 158 904%

Reserves 4 893 11 924 (7 031) -59%

Liabilities by virtue of employee benefits 12 811 5 471 7 340 134%

Income tax liabilities - 1 714 (1 714) -100%

Prepayments 241 304 (63) -21%

Construction contracts 71 700 92 397 (20 697) -22%

Advances received towards flats 5 980 2 365 3 615 153%

2 031 142 754 365 1 276 777 169%

EQUITY AND LIABILITIES

Equity (attributable to shareholders of parent entity)

Non-controlling shares

Total equity

Total liabilities

Long-term liabilities

Short-term liabilities

TOTAL EQUITY AND LIABILITIES


10

Fixed assets increased nearly five times and reached the value of PLN 1,069,440,000. The greatest increase among the fixed assets concerned goodwill upon consolidation, which increased by PLN 579,325,000 as a result of acquisition of the Capital Group of Tiltra Group AB and AB Kauno Tiltai. In the period under consideration, tangible fixed assets increased by 245% in comparison with the status as of the end of 2010, reaching the value of PLN 328,589,000.

As of 30 June 2011, the current assets were PLN 961,702,000 and increased by PLN 421,926,000 in comparison with their level as of 31 December 2010. The current assets increased by 78% in comparison to their level as of the end of the preceding year. This increase is, above all, a result of an increase in the value of short-term receivables by the amount of PLN 408,768,000 and an increase in the value of construction contracts by the amount of PLN 118,261,000. In the first half-year 2011, the value of equity increased by PLN 263,820.000 in relation to the level of 31 December 2010 and reached the level of PLN 667,871,000. This was caused by issue of shares as part of transactions of acquisition of shares of Tiltra Group AB and AB Kauno Tiltai. Long-term liabilities as of 30 June 2011 reached the value of PLN 521,643,000 and increased by the amount of PLN 469,639,000 in comparison with the status as at the end of 2010. This increase is above all a result of issue of bonds for the purpose of financing acquisition of the Capital Group of Tiltra Group AB and AB Kauno. Long-term debt on account of this increased by PLN 294,061,000. The value of long-term interest-bearing loans and credits increased by PLN 139,813,000 and reached the level of PLN 168,604,000. As of 30 June 2011, the short-term liabilities reached the value of PLN 819,721,000 and increased by PLN 521,552,000, i.e. by 175% in comparison with the status as at the end of the preceding year. This increase was above all a result of increase in the status of trade receivables by PLN 290,944,000 and increase in short-term bank loans and credits to the level of PLN 276,717,000.

2.1.3 Cash flow statement review

The main items of the Trakcja - Tiltra Group’s consolidated cash flow statement for periods ended 30 June 2011 and 30 June 2010 have been presented in the table below.

In the first half-year 2011, the net cash flows from operating activities were negative and amounted to PLN 292,328,000. They decreased in comparison to the analogous period of the preceding year by PLN 235,818,000. The decrease in the net cash flows from operating activities resulted mainly from an increase in the short-term receivables by PLN 196,593,000 and an increase in the construction contracts by PLN 97,897,000. In the first half-year 2011, the net cash flows from investment activities were negative and amounted to PLN 53,174,000 and in the comparable period of 2010 the negative net cash flows from investment activities were PLN 19,527,000. The decrease in the net cash flows from investment activities in the first half-year 2011 resulted from the purchase of shares related to the acquisition of the Capital Group of Tiltra Group AB and AB Kauno Tiltai. The net cash flows from financial activities in the first half-year 2011 were positive and amounted to PLN 178,269,000. They increased as compared to their level as of the end of the first-half 2010 by PLN 186,988,000. The foregoing was caused by an increase in the loans by PLN 211,250,000. At the beginning of 2011, the Group had cash in the total amount of PLN 206,351,000 and at the end of the first half-year 2011 its cash balance was PLN 39,119,000. The total net cash flows were negative and amounted to PLN 167,232,000.

CONSOLIDATED CASH FLOW ACCOUNT 30.06.2011 30.06.2010

Cash at start of period 206 351 185 621

Net cash flows from operating activities (292 328) (56 510)

Net cash flows from investment activities (53 174) (19 527)

Net cash flows from financial activities 178 270 (8 718)

Total net cash flows (167 232) (84 755)

Cash at end of period: 39 119 100 866


11

2.1.4 Profitability ratios review

In the first half-year 2011, the majority of the Trakcja - Tiltra Group's profitability ratios presented below deteriorated as compared to the profitability ratios as of the end of the first half-year 2010. The gross profit margin on sales decreased to 7.0% as compared to 21.7% in the analogous period of the preceding year. The operating profit, including depreciation and amortisation, increased by PLN 13,421,000 and was PLN 38,846,000. The EBITDA margin decreased by 11.1 pp and was 5.8%. The operating margin decreased by 9.5 pp and was 3.9%. The net profit margin in the said period was 2.1% and was lower by 8.8 pp than the margin generated in the comparable period. The return on equity (ROE) decreased by 3.8 pp as compared to the comparable period and amounted to 4.9%. The return on assets (ROA) was 1.9% and decreased in comparison to the comparable period by 3.7 pp.

2.2 Events after the balance sheet date

Between the balance sheet date and the date of preparing this Report on the Activities of the Issuer Capital Group, i.e. 31 August 2011, the following material events occurred:

Construction works contracts:

On 4 July 2011, Trakcja – Tiltra SA with its registered office in Warsaw at u. Złota 59 and Bombardier Transportation (ZWUS) Polska Sp. z o.o. concluded a subcontracting agreement in relation to the performance by the Company of the construction works regarding the agreement for construction works for the No. 9 line modernisation on the section from km 236.920 to km 287.700 covered by the area of the Local Control Centre with its registered office in Malbork, within the Project: No. POIiŚ (OPIE) 7.1-1.3 "Modernisation of the railway line E 65/CE 65 on the section Warsaw – Gdynia – LCS Iława, LCS Malbork". Net value of the contract: PLN 75,460,000.00.

On 13 July 2011, a subsidiary of Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych SA in Wrocław concluded with Romuald Ryszewski, a sole trader operating under the name of FHU “ELTOR” Romuald Ryszewski, a subcontracting agreement for construction works related to the agreement concluded by PRKiI as the Consortium Partner with PKP PLK SA with regard to the basic linear construction works on the section Wroclaw – Grabiszyn – Skokowa and Żmigród – border of the Lower Silesian Province within the project POIiŚ (OPIE) 7.1 - 4 Modernization of the railway line E 59, on the section Wrocław - Poznań, Phase II - section Wrocław - border of the Lower Silesian Province. Net value of the contract: PLN 42,746,641.34.

On 27 July 2011, AB Kauno Tiltai with its registered office in Kaunas, as a consortium leader, concluded with the City Council of Vilnius an agreement for specialist construction works involving the construction of Trans-European Network Junction - II stage of the western bypass of Vilnius. Net value of the contract: PLN 162,044,451.64.

6 months

ended 30.06.11

6 months

ended 30.06.10

Gross sales profit margin 7,0% 21,7%

EBITDA 38 846 25 425

EBITDA profit margin 5,8% 16,9%

Operating profit margin 3,9% 13,4%

Net profit margin 2,1% 10,9%

Annual return on equity (ROE) 4,9% 8,7%

Annual return on assets (ROA) 1,9% 5,6%

PROFITABILITY RATIOS

The above ratios have been calculated in accordance w ith the follow ing formulas:

Gross sales profit margin = Gross profit on sales / revenues on sales

EBITDA = operating profit + depreciation and amortisation

EBITDA profit margin = (operating profit + depreciation and amortisation) / revenues on sales

Operating profit margin = operating profit / revenues on sales

Net profit margin = net profit / revenues on sales

Annual return on equity (ROE) = tw o times net profit attributable to shareholders of parent entity / average equity attributable to

shareholders of a parent entity in a 6-month period

Annual return on assets (ROA) = tw o times net profit attributable to shareholders of parent entity / average assets in a 6-month

period


12

On 29 July 2011, Trakcja – Tiltra and its subsidiary Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych SA concluded important agreements with Poldim SA and its subsidiary Poldim Mosty Sp. z o.o. for comprehensive implementation of specialist works (road works) related to No. 9 line modernisation task, on the section from km 236.920 to km 287.700, covered by the Local Control Center with its registered office in Malbork area, within the Project: POIiŚ (OPIE) 7.1-7.3 "Modernization of the railway line E 65/CE 65 on the section Warsaw – Gdynia – LCS Iława, LCS Malbork". Net value of the contract: PLN 46,330,350.19.

On 2 August 2011, Trakcja - Tiltra SA concluded a significant subcontracting agreement with Krakowskie Zakłady Automatyki SA in relation to the construction works under the agreement: “Design and performance of the Łódź Widzew railway station and a part of the Łódź Fabryczna – Łódź Widzew route at km 2,250–7,200 along with railway traffic control and telecommunication devices for the whole Łódź Fabryczna – Łódź Widzew route and modernisation of the detour route of Łódź Widzew – Łódź Chojny – Łódź Kaliska” . Net value of the contract: PLN 33,650,000.00.

On 8 August 2011, Trakcja – Tiltra SA provided information that its subsidiary Poldim SA with its registered office in Tarnów informed that its turnover with Orlen Asfalt Sp. z o.o. with its registered office in Płock under the asphalt selling agreement exceeded the significant value, i.e. PLN 65,115,095.00. The highest net value order in that period was PLN 212,550,000 (order dated 4 August 2011).

On 17 August 2011, Trakcja – Tiltra SA and TORPOL Sp. z o.o. concluded a significant subcontracting agreement in connection with the performance by the Company of a public contract entitled: "Design and performance of construction works on the railway line Krakow - Medyka - state border on the section Podłęże - Bochnia, km 16.000 - 39.000 of the Project "Modernization of the railway line E 30/C-E30, section Krakow - Rzeszow, phase 3”. Net value of the contract: PLN 290,287,460.00.

On 22 August 2011, Trakcja – Tiltra SA informed that the turnover of its subsidiary Poldim SA with its registered office in Tarnów (since the Company has taken control over it) with Generalna Dyrekcja Dróg Krajowych i Autostrad (GDDKiA), Branch in Łódź, with its registered office in Łódź, under the agreement concluded between Poldim as a consortium leader and GDDKiA O/Łódź on 18 June 2010 ("Agreement") related to the construction of the A1 Motorway on the section border of the Kujawsko–Pomorskie Province and Łódzkie Province to the Stryków junction from km 230+817 to km 295+850 – Task II Section 2 Subsection 1 from km 245+800 to km 261+000, Sójka junction – Kotliska junction, exceeded a significant value. The total net turnover from the day of taking over the control to 22 August 2011 was PLN 52,547,646.24. Under the agreement Poldim acting as a consortium leader of the consortium composed of: POLDIM Spółka Akcyjna with its registered office in Tarnów – Consortium Leader, Bögl a Krýsl k.s. with its registered office in Prague – Consortium Partner, Bogl a Krysl Polska Sp. z o.o. with its registered office in Cieszyn – Consortium Partner, shall perform the works involving construction of the A1 Motorway on the section border of Kujawsko – Pomorskie Province/Łódzkie Province to Stryków junction from km 230+817 to km 295+850 - Task II, Section 2, Subsection 1 from km 245+800 to km 261+000, Sójka junction – Kotliska junction. Net value of the contract is PLN 444,414,206.45.

2.3 Evaluation of financial resources management

At the end of the first half-year 2011, Trakcja - Tiltra Group had PLN 39,119,000 in cash and at the same time its total financial debt (loans and leasing) was PLN 445,321,000. The Group maintains a safe level of both external financing and financial liquidity.

2.3.1 Liquidity ratios

The Trakcja - Tiltra Group's working capital as of 30 June 2011 amounted to PLN 141,981,000 and was by PLN 93,880,000 lower than its working capital as of the end of the first half-year 2010. All the liquidity ratios presented in the table below as of 30 June 2011 decreased due to the acquisition of the Capital Group of Tiltra Group AB and AB Kauno Tiltai on 19 April 2011. As of the end of the first half-year 2011, the current ratio was 1.17 and decreased by 1.81 pp in comparison to its level in the analogous period of the preceding year. The quick ratio was 0.70 and decreased by 1.31 pp, as compared to the quick ratio as of the end of the first half-year 2010. The cash ratio demonstrates that the Group would be able to repay immediately 5% of its short-term liabilities.


13

2.3.2 Financing structure ratios

The equity to assets ratio decreased during the 6-month period ended 30 June 2011 to 0.33, as compared to 0.54 as of the end of the preceding year. The equity to fixed assets ratio also decreased from 1.88 as of the end of 2010 to 0.62 as of 30 June 2011. In the first half-year 2011, the total debt ratio increased from 0.46 as of the end of 2010 to 0.67 as of the end of the first half-year 2011. The debt to equity ratio also increased from 0.87 as of the end of 2010 to 2.04 in the first half-year 2011.

2.3.3 Loans

Incurred loans have been presented in the table below:

30.06.2011 30.06.2010

Working capital 141 981 235 861

Current ratio 1,17 2,98

Quick ratio 0,70 2,01

Cash ratio 0,05 1,10

LIQUIDITY RATIOS

Pow yższe w skaźniki zostały w yliczone w edług

następujących w zorów :

Kapitał pracujący = aktyw a obrotow e - zobow iązania krótkoterminow e

Wskaźnik płynności bieżącej = aktyw a obrotow e / zobow iązania krótkoterminow e

Wskaźnik płynności szybkiej = ( aktyw a obrotow e - zapasy - rozliczenia międzyokresow e - kontrakty budow lane z

aktyw ów ) / zobow iązania krótkoterminow e

Wskaźnik natychmiastow ej płynności = (środki pieniężne i ich ekw iw alenty + pochodne instrumenty f inansow e z

aktyw ów i pasyw ów ) / zobow iązania krótkoterminow e

30.10.2011 31.12.2010

Equity to assets ratio 0,33 0,54

Equity to non-current assets ratio 0,62 1,88

Debt ratio 0,67 0,46

Debt to equity ratio 2,04 0,87

FINANCING STRUCTURE RATIOS

Pow yższe w skaźniki zostały w yliczone w edług

następujących w zorów :

Wskaźnik zadłużenia całkow itego = (aktyw a ogółem - kapitał w łasny przypisany akcjonariuszom jednostki dominującej )

/ aktyw a ogółem

Wskaźnik zadłużenia kapitałów w łasnych = (aktyw a ogółem - kapitał w łasny przypisany akcjonariuszom jednostki

dominującej ) / kapitał w łasny przypisany akcjonariuszom jednostki dominującej

Pokrycie majątku kapitałem w łasnym = kapitał w łasny przypisany akcjonariuszom jednostki dominującej / aktyw a ogółem

Pokrycie majątku trw ałego kapitałem w łasnym = kapitał w łasny przypisany akcjonariuszom jednostki dominującej /

aktyw a trw ałe

Name of entityName of bank

or financing entityCurrency

Amount of loan

in PLN '000Type of credit

Agreement

dateMaturity Interest

Outstanding loan

amount

as at 30.06.2011

in PLN '000

Trakcja - Tiltra S.A. ALIOR Bank S.A. PLN 60 000 Other 31.03.2011 30.03.2012 WIBOR O/N+1,35% 40 000

Trakcja - Tiltra S.A. PEKAO SA PLN 55 000 Investment loan 28.11.2007 30.11.2012 WIBOR 1M+1,6% 15 583

PRKiI S.A. BRE Bank S.A. PLN 10 000 Other

22.03.2000 and

annex

no 24 of

07.02.2011

21.10.2011 WIBOR O/N+1,4% 2 821

PRKiI S.A. ALIOR Bank S.A. PLN 20 000 Other 31.03.2011 30.03.2012 WIBOR O/N+1,35% 13 000

PRKiI S.A. NORDEA Bank S.A. EUR 23 577 Investment loan 09.02.2009 07.02.2014 EURIBOR 1M+2.5% 18 087

PRKiI S.A. NORDEA Bank S.A. EUR 2 240 Investment loan 06.07.2009 31.07.2014 EURIBOR 1M+2.5% 809

Bahn Technik

Sp. z o.o.Kredyt Bank S.A. PLN 500 Other

13.07.1999 and

annex no 19 of

30.05.2011

29.05.2012 WIBOR O/N+3,5% -


14

2.3.4 Hedging transactions

The Group’s activities are remarkably exposed to the fluctuations in foreign currency exchange rates, in particular, to the fluctuations in the Polish zloty against the euro. Some contracts include agreements whose values are expressed in euro. The majority of expenses incurred in relation to the implementation of those contracts have no correlation with the foreign exchange rate of this currency. In order to mitigate that risk, the Group adopted a hedging policy against the current exchange risk involving the entering into currency forward or futures contracts. The Company hedges against the current exchange risk immediately after getting to know that it has been awarded a tender. As of 30 June 2011, the Group did not apply the hedge accounting, because of the postponements to the schedules of construction works and the delays in

Name of entityName of bank

or financing entityCurrency

Amount of loan

in PLN '000Type of credit

Agreement

dateMaturity Interest

Outstanding loan

amount

as at 30.06.2011

in PLN '000

Bahn Technik

Sp. z o.o.

Leonhard Weiss International

GmbH EUR 398 Borrow ing 30.11.2009 30.11.2012 3,00% 200

PRK 7

Nieruchomości Sp.

z o.o.

BOŚ Bank S.A. PLN 30 875 Other 22.06.2010 22.02.2012 WIBOR O/N+1,4% 23 652

Tiltra Group AB

capital groupRaiffeisen Bank Polska S.A. PLN 29 027 Other 14.07.2010 31-03-2014 WIBOR 1M+2,5% 29 027

Tiltra Group AB

capital groupRaiffeisen Bank Polska S.A. PLN 4 025 Investment loan 09.12.2009 31,08,2016 WIBOR 1M+2% 4 025

Tiltra Group AB

capital groupBank Pekao S.A. PLN 3 102 Other 20.06.2007 21,07,2012 WIBOR 1M+1,60% 345

Tiltra Group AB

capital groupBank Pekao S.A. PLN 4 979 Other 27.07.2006 22.07.2012 WIBOR 1M +1,2% 4 977

Tiltra Group AB

capital groupING Bank Śląski S.A. PLN 17 924 Other 27.11.2009 31.08.2011 WIBOR 1M+2,0% 10 321

Tiltra Group AB

capital groupDeutsche Bank PBC S.A. PLN 2 987 Other 04.02.2008 12.09.2011 WIBOR 1M+1,50% 904

Tiltra Group AB

capital groupING Bank Śląski S.A. PLN 1 869 Investment loan 18.02.2011 31.08.2018 WIBOR 1M+1,7% 1 869

Tiltra Group AB

capital groupKredyt Bank S.A. PLN 103 Investment loan 15.12.2008 31.12.2011 WIBOR 1M+2,5% 103

Tiltra Group AB

capital groupBank Millennium S.A. PLN 9 953 Other 23.03.2006 11.07.2011 WIBOR 1M+1,35% 9 712

Tiltra Group AB

capital groupBank Millennium S.A. PLN 29 873 Other 14.06.2006 11.07.2011 WIBOR 1M+1,35% 29 872

Tiltra Group AB


Tiltra Group AB


Tiltra Group AB

capital groupPKO BP S.A. PLN 15 932 Other 09.05.2008 08.06.2014 WIBOR 1M+1,2% 15 729

Tiltra Group AB

capital groupRaiffeisen Bank Polska S.A. PLN 19 086 Investment loan 06.10.2010 30.09.2015 WIBOR 1M+2,5% 19 086

Tiltra Group AB

capital groupRaiffeisen Bank Polska S.A. PLN 29 873 Other 16.02.2011 29.06.2012 WIBOR 1M+1,2% 29 873

Tiltra Group AB

capital groupBank Millennium S.A. PLN 14 937 factoring 23.03.2007 22.03.2011 WIBOR 1M+2,7% 9 327

AB Kauno tiltai

capital groupNordea Bank Polska S.A. PLN 4 395 Investment loan 30.10.2006 31.10.2013 WIBOR 1M+1,75% 4 395

AB Kauno tiltai


AB Kauno tiltai

capital groupNordea Bank Polska S.A. PLN 2 987 Other 13.08.2007 10.08.2012 WIBOR 1M+1,7% 2 987

AB Kauno tiltai


AB Kauno tiltai


AB Kauno tiltai

capital groupRaiffeisen Bank Polska S.A. PLN 8 413 Other 22.04.2011 02.01.2012 WIBOR 1M+1,4% 8 413

AB Kauno tiltai


Tiltra Group AB

capital groupING Bank Śląski S.A. PLN 423 Investment loan 18.02.2011 30.03.2012 WIBOR 1M+1,7% 423

Tiltra Group AB

capital groupOther contracting parties PLN 634 Other 13.07.2010 31.12.2012 0,00% 634

Tiltra Group AB

capital groupING Bank Śląski S.A. PLN 1 245 Investment loan 13.09.2010 30.09.2015 WIBOR 1M+2,2% 1 245

AB Kauno tiltai

capital groupPKO BP S.A. PLN 1 992 Other 25.11.2009 28.02.2012 WIBOR 1M+1,4% 306

AB Kauno tiltai

capital groupNordea-Dnb EUR 18 990 Other 30.03.2006 01.04.2015 EURIBOR 3M+2.4% 18 989

AB Kauno tiltai


AB Kauno tiltai


AB Kauno tiltai

capital groupVMI LTL 2 697 Tax loan 15.07.2009 25.10.2011 3,65% 2 699

TOTAL 401 623


15

payments by the customers. Fluctuations at the currency market superimposed on the shifts in the customers payments realized in Euro, may cause both negative and positive effect related directly to the financial result of the Group. Profits and losses established at the settlement date are shown in the profit and loss account as an element of incomes on sale (losses reduce the incomes on sale).

2.4 Management Board's opinion on the previously published financial forecast for the Trakcja - Tiltra Group

The Trakcja - Tiltra Group did not publish any financial forecast for 2011.

2.5 Description of factors essential for the Capital Group's development

The key factors which, in the Management Board's opinion, currently have or in the nearest future will have impact on the Group's activities, have been presented below. The information about important proceedings and disputes pending against the companies within the Group and also about the penalties imposed on them has been provided in section 4.4 of this report. The most important factors affecting in an essential way the financial performance of our Capital Group include the following:

The ability to win new construction contracts, which on account of the profile of our Group's activities is determined by the level of expenditures on rail and tram infrastructure in Poland.

The accuracy of estimating the costs of implemented projects as it exerts direct impact on decisions regarding the strategy of participating in tenders, the valuation of contracts for tenders and as a result the margins generated on the contracts. The accuracy of estimating cost budgets for contracts is related, in turn, to the methodological and external factors, such as changes in prices of materials and services rendered by subcontractors.

The fluctuations of foreign currency exchange rates, in particular, the rate of Polish zloty in relation to euro. Our Group follows the hedging policy against changes in the foreign exchange rates and enters into currency forward or futures contracts. Our Group could not, however, apply the hedge accounting, because of the postponements to the schedules of construction works and the delays in payments made by customers. Taking the foregoing into account, the fluctuations on the currency market together with the delays in the payments made by customers in euro may have either a negative or positive effect charged directly to the financial profit or loss of the Capital Group.

The Central Bank’s monetary policy reflected in the changes in interest rates. For the purpose of financing planned acquisitions, our Group may apply for bank loans and therefore it may incur financial expenses determined by the level of interest rates.

The timeliness in repayment of liabilities by our customers. A failure to do so by our customers may lead to the deterioration in our financial liquidity.

Potential acquisitions of business entities may have both positive effects on and threats to the financial profit or loss of our Capital Group.

Moreover, in the future, the financial performance of the Group may be affected by changes in the legal regulations designating the scope of the Group's activities, including tax regulations and any provisions related to other encumbrances of a public and legal nature, and also any regulations referring to the following:

The organisation of EURO 2012, in particular the performance and potential amendment to the Act on the Preparation of the Final Playoffs of the UEFA Euro 2012 European Championship in Football of 7 September 2007 (Journal of Laws of 21 September 2007),

The procedure for awarding public procurements, in particular, the amendment to the Act on the Public Procurement Law,

The public-private partnership, in particular, the Act on Public-Private Partnership (Journal of Laws of 6 September 2005),

The financing of railway infrastructure,

The environmental protection in the scope of implementation of individual projects, in particular, the Act on the Environmental Protection Law,

The renewable energy, in particular, the Act on the Energy Law of 10 April 1997 (Journal of Laws, 06.89.625),


16

The property development activities of PRK 7 Nieruchomości Sp. z o.o., the regulations governing buying and selling real properties, in particular the Civil Code, Act on the Real Estate Management of 21 August 1997 (Journal of Laws, 04.261.263), Act on the Acquisition of Real Estate by Foreigners of 24 March 1920 (Journal of Laws, 04.167.1758), Act on the Ownership of Premises of 24 June 1994 (Journal of Laws, 00.80.903) and the regulations referring to zoning and building.

2.6 Capital Group’s strategy and development

Due to the diversification of the Group's activities resulting from the merger with the Tiltra Group, we managed to reduce significantly the risk of our operations and simultaneously maintain the Group's rate of growth. After the merger, the Trakcja - Tiltra Group has a chance to become a main player on the infrastructure construction market in Central Europe. A significant increase in the scale of operation will allow for the position of our Group to be strengthened in relations with our suppliers and subcontractors and also with our customers. The foregoing is expected to provide for a significant and permanent decrease in costs of the Group's business activities. The most important elements of the Trakcja - Tiltra Capital Group's strategy include the following: maintaining the leading position in the sector of construction and installation services for railway transport in Poland, strengthening the Group's position on the Polish road construction market, maintaining the leading position on the road construction market in Lithuania and also diversification of our Group's revenue sources.

Maintenance of the leading position in the sector of construction and installation services for the railway transport in Poland

Our strategy assumes expansion through organic growth in the sector. We strive to significantly increase our production capacity by increasing the headcount of specialised technical staff and by boosting our productivity through better organisation of works. In addition, we plan to expand the scope of our works carried out internally by introducing the companies within our Group that provide road construction services to the works on the Polish railway and tram network. This will strengthen our position as a consortium completing large contracts and also improve the utilisation of production capacity of those companies.

Strengthening of the Group's position on the Polish road construction market We plan development in this sector through the geographical development of revenues sources of the Group's companies that provide road construction services. These companies have so far been focusing on local markets (the eastern part of Poland) and therefore have not been fully benefiting from their development potential. In addition, we expect to boost our productivity through better organisation of road works. Maintenance of the leading position on the road construction market in Lithuania Our strategy assumes expansion through organic growth in the sector. We strive to increase our production capacity by selective increasing the headcount of specialised technical staff and by boosting our productivity through better organisation of works.

Diversification of revenue sources Upon the restructuring of the newly established Group, we plan to keep on diversifying its revenues for the purpose of making it more and more independent of its key customers and also for the purpose of maintaining the Group's rate of growth. We will achieve this by increasing revenues from growth sectors as well as more stable revenues. In order to achieve the foregoing, we plan to generate revenues from maintenance of infrastructure and licences for its utilisation both in Poland and Lithuania. In addition, we would like to start operating on the Polish construction market for the energy sector. Benefiting from the strong position of AB Kauno Tiltai on the Lithuanian road construction market, we plan to expand our operations in other Baltic states.


17

2.7 Risk Factors

The factors that may significantly deteriorate the financial standing of our Group within at least the next half-year include the following:

Risk of growing competition,

Risk of being dependant on key customers,

Risk of potential loss of subcontractors and potential rise in prices of services rendered by subcontractors,

Risk associated with the lack of qualified employees,

Currency risk,

Risk associated with the volatility of prices for materials,

Risk associated with the joint and several liability of members of construction consortiums and with the liability for subcontractors,

Risk of underestimating the costs of projects,

Risk of completing the construction contracts,

Risk associated with the conditions and procedures for awarding tenders,

Risk of growing portfolio of overdue receivables,

Liquidity risk,

Risk of implementing the strategy.

The factors other than specified above, which may result in the prices for shares in Trakcja – Tiltra SA being subject to fluctuations, include the following:

Change in the creditworthiness of the Trakcja - Tiltra Group,

Change in the indebtedness of the Trakcja - Tiltra Group,

Sale or acquisition of assets by the Trakcja - Tiltra Group,

Significant changes in the shareholdership of the Trakcja - Tiltra Group,

Changes in capital market analysts' forecasts and recommendations related to the Trakcja - Tiltra

Group, its competitors, partners and business sectors, in which it operates.

3. GROUP'S STRUCTURE

3.1 Capital Group

As of 30 June 2011, the Group's capital structure was as follows:

TRAKCJA - TILTRA CAPITAL GROUP Consolidated Semi-Annual Report for the Six-Month Period Ended 30 June 2011 Report on the Operations of the Trakcja - Tiltra Capital Group for the Six-Month Period Ended 30 June 2011

18

100% 100% 82,35% 40,68% 100% 96,84%

Przedsiębiorstwo Robót Kolejowych

i Inżynieryjnych S.A.

PRK 7 Nieruchomości

Sp. z o.o.

TORPROJEKT

Sp. z o.o.

Eco-Wind

Construction S.A.

0,48%

- electrification

- track structure and substructure - real-estate development - project documentation - development of w ind farms

- engineering structures

50% 77% 100%

Bahn Technik Wrocław Sp. z o.o.22% 1%

85,85%

- rail bonding and welding100%

100% 100%

100%

100%

75% 99,5%

100%

94,93%

75,1% 100%

50,54%

100%

100%

100%

25%

94,62%

PD LAMBDAR

Sp. z o.o.

PDM Białystok S.A.

- construction of roads

AB Kauno Tiltai TUB konsorciumas

Tiltra Lenkijos skyrius

P.E.U.I.M. Sp. z o.o.

Brux Sp. z o.o.

Dalba Sp. z o.o.

PT Kruszywa

Sp. z o.o.

UAB Kedainiu

automobiliu keliai

UAB Pletros

investicijos

Poldim Mosty

Sp. z o.o.


- production of substation equipment and components

- power engineering

- electrification

Poldim S.A.

NRR Grupa

POLDIM Sp. z o.o.

Poldim Mielec

Sp. z o.o.

Poldim Dębica S.A.

Tiltra Group AB

- construction of roads, bridges

- maintenance of the roads

- production of construction

materials

- holding entity

Silentio Investments

Sp. z o.o.

AB Kauno Tiltai

UAB Kelda

UAB Verksioniu

karjeras

UAB Taurakelis

production of construction materials

water ports, utilities infrastructure,

tunnels, railways, airports,

construction of roads, bridges,

AB Kauno Tiltai TUB konsorciumas

Tiltra

AB Kauno Tiltai Lenkijos skyrius


19

In the period from the balance sheet date to the publication of this report, no changes occurred in the capital structure of the Trakcja – Tiltra Group.

3.2 Information about the major companies within the Capital Group

Entities subject to consolidation:

Przedsiębiorstwo Robót Kolejowych i Inżynieryjnych SA

PRKiI SA with its registered office in Wrocław is the only company in Poland that carries out both railway track works and electric traction works. The company's business activities include primarily:the preparation of land for construction works, the erection of complete buildings or their parts, the execution of construction infrastructures, the railway and road engineering, the execution of overhead and underground power supply lines, the execution of tram and railway electric traction works, the water engineering, the rental and operation of construction equipment as well as the finishing works.

PRKiI SA has modern, highly-specialized stock of machinery (for railway and construction purposes) consisting of equipment manufactured by reputable global companies, such as Caterpillar, Huddig and Orenstein & Koppel. The company cooperates with numerous specialized companies, which allows it to offer a comprehensive scope of services to its customers.


PRK 7 Nieruchomości runs a broadly defined real estate development business and has a track record of several successful investments, which include, among others: Lazurowe Osiedle residential project in Warsaw (stage I and II) and the project at ul. Oliwska in Warsaw. Currently, the company is implementing a project involving the construction of three multifamily buildings at ul. Pełczyńskiego in Warsaw.


Torprojekt Sp. z o.o. with its registered office in Warsaw was established in 2009. The company specialises in preparing comprehensive project documentation, including feasibility studies, concepts, basic designs, also construction designs, tender materials and detailed designs in the following areas: railway lines, stations, nodes, passenger stops and loading points, bridges, overpasses, railway traffic control devices, buildings and structures, including technology, etc.


Currently, PRKiI SA is a 50-percent shareholder in the share capital of Bahn Technik. The remaining 50 percent of shares is held by Leonhard Weiss GmbH & Co with its registered office in Göppingen (a company incorporated under the law of Germany).

The scope of business activities of Bahn Technik includes: the sale of Strail crossing surface offered by Gummiwerk Kraiburg Elastik GmbH, the thermite welding, the repair and renovation of turnouts, the renovation of railway and tramway crossings, the execution of pre-stressed, glued insulation joints, the sale of Railtech welding materials and the sale of Perker SR rail lubrication systems.

Bahn Technik provides its services both in Poland and abroad. The company is building its brand based on the appropriate GIK and UTK certificates, as a result of which its works meet the strictest requirements and standards of railway certificates.

Eco – Wind Construction SA

One of the leading wind farm developers in Poland. The company's business activities include comprehensive servicing of wind farm projects, starting from the land acquisition, through the planning, designing and financing of the project to the start-up and utilisation of the wind farms. In future, Eco-Wind Construction SA plans to manage the operations of wind farms in an efficient manner and to supervise and manage commercial aspects of the power production and sale.

AB Kauno Tiltai

AB Kauno Tiltai is the largest company in the road and bridge construction sector in the Baltic states. The company specialises in constructing and reconstructing of roads, bridges, tunnels, railway systems, airports, water ports, which is demonstrated by the fact that since the beginning of its activities, i.e. since 1949, AB Kauno Tiltai has constructed over 100 bridges and overpasses and has been responsible for constructing and reconstructing many roads in the territory of Lithuania.

Poldim SA

Poldim SA is one of the largest companies operating in the road construction sector in the southern part of Poland. It commenced its operations in 1952 in Tarnów. It builds roads, provides road maintenance services and manufactures construction products for road construction, including asphalt emulsion. Poldim supplies ca. 30% of the market demand for asphalt emulsion in Poland. The Poldim Group comprises five


20

companies providing services in the scope of road and bridge construction in the area of Tarnów, Dębica, Mikołajowice, Mielec and Katowice.

Przedsiębiorstwo Eksploatacji Ulic i Mostów Sp. z o.o.

P.E.U.I.M. is a company operating in the road construction sector in the northern and eastern part of Poland. The company was established in 1960 in Białystok. P.E.U.I.M. specialises in the following areas: construction of roads and pavements and installation of signalling, warning and road protecting equipment. In addition, the company produces bituminous substances, concrete and other building materials. The P.E.U.I.M. Group consists of the company installing engineering networks and cleaning devices and also of two other companies providing road construction services.

3.3 Management Board and Supervisory Board of the parent company

3.3.1 Management Board

As of 30 June 2011, the Company's Management Board consisted of the following persons:

Maciej Radziwiłł President of the Management Board,

Tadeusz Bogdan Vice President of the Management Board,

Tadeusz Kałdonek Vice President of the Management Board,

Tadeusz Kozaczyński Vice President of the Management Board,

Dariusz Mańkowski Vice President of the Board.

In the period from 1 January 2011 to 30 June 2011, there were no changes in the composition of the Management Board of the Group's parent company.

On 28 June 2011, due to the lapse of term of the Management Board and the expiry of mandates of its members, the Company's Supervisory Board appointed the Management Board members for a new term. The following persons were reappointed to the positions of members on the Company’s Management Board for a new term: Mr Maciej Radziwiłł – President of the Management Board, Mr Tadeusz Kozaczyński – Vice President of the Management Board, Mr Tadeusz Kałdonek – Vice President of the Management Board, Mr Dariusz Mańkowski – Vice President of the Management Board, Mr Tadeusz Bogdan – Vice President of the Management Board.

In the period from the balance sheet date to the publication of this report, no changes occurred in the composition of the parent company's Management Board.

3.3.2 Supervisory Board

As per 30 June 2011, the Supervisory Board of the mother company consisted of the following persons:

Jorge Miarnau Montserrat Chairman,

Miquel Llevat Vallespinosa Chairman Deputy,

Rodrigo Pomar Lòpez Member of the Supervisory Board,

Tomasz Szyszko Member of the Supervisory Board,

Paweł Maciej Ziółek Member of the Supervisory Board.

In the period from 1 January 2011 to 30 June 2011, there were no changes in the composition of the Supervisory Board of the Group's parent company.

In the period from the balance sheet date to the publication of this report, no changes occurred in the

composition of the Supervisory Board.

3.3.3 Shares in Trakcja – Tiltra SA held by managing and supervising persons

As of the publication of the report, the Issuer’s shares held by its managing and supervising persons were as follows:


21

From the publication of the last quarterly report, i.e. from 13 May 2011, no changes occurred in the number of the Company's shares held by its managing and supervising persons.

The remaining Members of the Management Board and Supervisory Board of the Company do not hold shares in entities being part of the Capital Group.

3.4 Changes in the Capital Group and their effects

On 19 April 2011, on the basis of an agreement on the sale of shares concluded between the Company as the purchaser and AB Invalda, UAB NDX Energija and Mr. Jonas Pilkauskas, Mr. Mindaugas Aniulis, Mr. Nerijus Eidukevičius, Mr. Romas Matiukas, Ms. Vaida Balčiūnienė, Ms. Irena Angelė Černevičiūtė as sellers 1, and on the basis of an agreement on the sale of shares concluded on 19 April 2011 between the Company as the buyer and Mr. Jonas Pilkauskas, Mr. Romanas Aniulis, Mr. Vidmantas Drizga, Mr. Nerijus Eidukevičius, Mr. Romas Matiukas as sellers 2, the Company acquired:

150 000 shares in Tiltra Group AB with its registered office in Vilnius, with the nominal value of 1 LTL each, with the total nominal value of 150 000 LTL, constituting 100% of the share capital and giving the right to 100% of votes at the general meeting of this company,

148 981 shares in AB Kauno Tiltai with its registered office in Kaunas, with the nominal value of 130 LTL each, with the total nominal value of 19 367 530 LTL, constituting 96.84% of the share capital and giving the right to 96.84% of votes at the general meeting of this company

and 22 stocks in Silentio Investments Sp. z o.o. with its registered office in Warsaw, with the nominal value of 50 PLN each, with the total nominal value of 1 100 PLN, constituting 22% of the share capital and giving the right to 22% of votes at the general meeting of shareholders of this company. After making the above transaction and the transaction of acquisition of shares in Tiltra Group AB, the company, directly and indirectly through Tiltra Group AB and AB Kauno Tiltai, owns 100 stocks in Silentio Investments Sp. z o.o., with the nominal value of 50 PLN each, with the total nominal value of 5 000 PLN, constituting 100% of the share capital and giving the right to 100% of votes at the general meeting of shareholders of this company.

Before making the above transactions, the Company did not own any shares in Tiltra Group AB, shares in AB Kauno Tiltai or stocks in Silentio Investments Sp. z o.o. The Company considers the investment into the acquired assets as a long-term capital investment.

Tiltra is a regional group whose activity consists in building infrastructure in the Polish and Lithuanian market. The group specialised in construction and reconstruction of roads, bridges, tunnels, railway lines, ports and functional infrastructure. In the territory of Poland, activity is conducted by two Groups of the lower rank – Poldim with its registered office in Tarnów and P.E.U.I.M. with its registered office in Białystok. In Lithuania, AB Kauno Tiltai Group also operates under the brand name of Tiltra; the group is the largest group operating in the sector of road transport and bridge construction in this country. AB Kauno Tiltai controls the following road construction companies: UAB Kelda, UAB Taurakelis, UAB Kedainiu Automobiliu Keliai, TUB konsorciumas Tiltra, UAB Pletros investicijos, UAB Kauno Tiltai Lenkijos skyrius and the P.E.U.I.M. Group (“Przedsiębiorstwo Eksploatacji Ulic i Mostów”). The P.E.U.I.M. Group conducts activity related to construction and maintenance of the road network in the territory of Poland.

The merger of activities of the two Groups (i.e. Trakcja and Tiltra) will enable the establishment of an entity which will become one of the leading entities in the road and railway construction market segment in Poland. Trakcja Polska Group and Tiltra Group have similar strategies according to which diversification of operations is to be achieved by entering into new segments of the construction market. Support of the major shareholder of Trakcja - Tiltra S.A., i.e. Comsa S.A., should contribute to expansion to new markets of the Eastern and Central Europe. The merged entities will strengthen their competitiveness and reinforce their negotiating position against their suppliers and subcontractors. A development of new business areas is also planned, in particular, in the area of concessions, construction services for power sector and also further strengthening of the presence in the tram infrastructure construction sector.

Imię i nazwisko Funkcja Liczba akcji% udział w strukturze

Akcjonariatu

Maciej Radziwiłł Prezes Zarządu 280 0,00%

Dariusz Mańkowski Wiceprezes Zarządu 450 500 0,19%

Tadeusz Kałdonek Wiceprezes Zarządu 2 550 960 1,10%


22

3.5 Employment in the Capital Group

4. OTHER INFORMATION

4.1 Shareholders

According to the Issuer's Management Board knowledge, status of shareholders holding directly or by the agency of subsidiaries at least 5% of the total number of votes at the General Meeting of Shareholder as of the publication of the Report is as follows:

Changes in the shareholdership since the publication of the last quarterly report:

COMSA SA, a company governed by Spanish law, with its registered office in Barcelona, on 30 June 2011 ceased to be a party to the agreement, which became effective on 19 April 2011 and whose subject matter was the delegation of powers to exercise voting rights, entered into between COMSA SA and (i) AB INVALDA with its registered office in Vilnius, Lithuania, (ii) UAB NDX ENERGIJA, with its registered office in Vilnius, Lithuania, (iii) Mr. Jonas Pilkauskas, (iv) Mr. Mindaugas Aniulis, (v) Mr. Nerijus Eidukevicius, (vi) Mr. Romas Matiukas, (vii) Mrs. Vaida Balčiūnienė, (viii) Ms. Irene Angel Černevičiūtė, (ix) Mr. Vidmantas Drizga and Mr. Romanas Aniulis.

Due to the expiry of the Agreement, COMSA S.A. is not entitled to exercise voting rights attached to 72,000,000 shares representing 31.02% of the share capital and representing 31.02% of the total number of votes at the General Meeting of Shareholders, held by the Transferors.

Before the expiry of the Agreement, COMSA S.A. and its subsidiary Comsa Emte Sp. z o.o., together with votes transferred under the Agreement, was entitled to exercise voting rights, attached in total to 153,145,510 shares, representing 65.98% of the share capital of the Company, entitling to 153,145,510 votes at the General Meeting of Shareholders, which accounted for 65.98% of the total number of votes.

Currently COMSA S.A. and its subsidiary Comsa Emte Sp. z o. o. have a total of 81,145,510 shares of the Company, representing 34.96% of the share capital of the Company. These shares entitle to exercise 81,145,510 of voting rights at the General Meeting of Shareholders of the Company, representing 34.96% of the total number of votes at the General Meeting of Shareholders.

4.2 Transactions with related parties

The information about the Group's transactions with its related parties has been presented in Note 36 to the enclosed summary of the consolidated financial statements.

Employment as of: 30.06.2011 31.12.2010

Trakcja Tiltra SA + Torprojekt + PRK7 Nieruchomości + EWC 568 541

PRKiI Group 563 531

Tiltra Group AB + Silentio Investments Sp. z o.o. 26 -

Poldim Group 1060 -

Kauno Tiltai Group 1104 -

PEUiM Group 400 -

In total 3721 1072

ShareholderNumber of

shares

% share in

share capital

Number of

votes

% share in

votes at GMS

COMSA SA* 81 145 510 34,96% 81 145 510 34,96%

ING 15 181 893 6,54% 15 181 893 6,54%

AB INVALDA 29 017 087 12,50% 29 017 087 12,50%

Jonas Pilkauskas,

Angele Cerneviciute,

Vaida Balciuniene

19 645 318 8,46% 19 645 318 8,46%

Other shareholders 87 115 672 37,54% 87 115 672 37,54%

Total number of shares 232 105 480 100,00% 232 105 480 100,00%


23

4.3 Information about loan sureties or guarantees granted by the issuer or by its subsidiary

Sureties, guarantees and other contingent liabilities have been presented in the table below:

The contingent liabilities from sureties and guarantees granted for the benefit of other entities include primarily guarantees issued by banks for the benefit of the contractors of the Group's companies for the purpose of securing their claims towards the Group's companies in relation to the implemented construction contracts (performance bonds, retention bonds). The banks are entitled to make recourse claims towards the Group's companies. Promissory notes are another form of securing the aforementioned bank guarantees.

The loan sureties granted by the Group's companies have been listed in the table below.

4.4 Important court and disputable cases

In the reporting period, the Company and its subsidiaries were not parties to any pending court proceedings, arbitration proceedings or any proceedings before any public administration authorities, whose value, individual or in total, exceeded 10 percent of the equity of Trakcja - Tiltra S.A., except for the following proceedings:

Case of shareholder Jacek Jurek 1.

A shareholder of the Company, Mr Jacek Jurek, brought an action against the Company demanding that resolutions no. 3, no. 4, no. 5 and no. 7 of the Extraordinary General Meeting of the Company of 19 January 2011 be declared invalid. On 4 April 2011, the Regional Court in Warsaw delivered the action to the Company. The Company sent to the court its reply to the claim. At present, the Company is waiting for further court decisions in this case.

Case of shareholder Jacek Jurek 2.

According to the information received by the Company, Mr. Jacek Jurek, brought an action against the Company demanding revocation of resolution no. 2 on changing the Articles of Association of the Company adopted by the Extraordinary General Meeting of the Company of 15 June 2011. At present, the Company is waiting for the statement of claim to be delivered by the Court.

OFF-BALANCE SHEET ITEMS 30.06.2011 31.12.2010

CONTINGENT LIABILITIES

From related entities due to: 31 583 45 788

Provided guarantees and sureties 1 083 45 005

Promissory notes 500 783

Capped mortgages 30 000 -

From other entities due to: 1 992 407 983 391

Provided guarantees and sureties 634 267 438 038

Promissory notes 566 332 351 733

Mortgages 366 257 59 151

Assignment of receivables 256 090 -Assignment of rights under insurance

policy 117 436 79 846

Security deposits 299 10 008

Other liabilities 51 726 44 615

Total contingent liabilities 2 023 990 1 029 179

Company granting

the loan surety

Entity granted the

surety

Total amount of

loans covered by

sureties wholly or in

part

Surety term

Financial terms on

which the sureties

are granted

Nature of

relationships

between Trakcją

Tiltra SA and the

entity granted the

loan

Trakcja Tiltra SA PRKiI S.A. 23 576 Until 07-02-2014 Free of charge Related party

Trakcja Tiltra SA PRKiI S.A. 20 000 Until 30-03-2012 Free of charge Related party

In total 43 576


24

Maciej Radziwiłł Tadeusz Kałdonek

President of the Management Board Vice President of the Management Board

Tadeusz Kozaczyński Dariusz Mańkowski

Vice President of the Management Board Vice President of the Management Board

Tadeusz Bogdan

Vice President of the Management Board



25

REPRESENTATIONS OF THE MANAGEMENT BOARD OF TRAKCJA - TILTRA SA

Pursuant to § 83 item 5 and § 90 item 1, pt. 4 and 5 of the Regulation of the Minister of Finance of 19 February 2009 on current and regular information published by issuers of securities and the conditions for accepting information required by the provisions of the law of a state which is not a Member State as being equivalent,

we represent that:

1) To the best of our knowledge, the semi-annual summary of the consolidated financial statements for the 6-month period ended 30 June 2011 and the comparable data and also the semi-annual summary of the financial statements for the 6-month period ended 30 June 2011 and the comparable data have been prepared in compliance with the accounting principles in force and reflect the assets and financial standing as well as the financial profit or loss of, respectively, the Trakcja - Tiltra Capital Group and Trakcja - Tiltra SA in a true, reliable and transparent manner, and the report on the operations of the Capital Group Trakcja - Tiltra presents a true picture of development, achievements and standing of the Company and the Capital Group, including the characteristics of elemental risks and threats;

2) The entity authorised to audit the financial statements, which examines the semi-annual summary of the financial statements and the semi-annual summary of the consolidated financial statements, was appointed in accordance with the provisions of law, and that this entity and certified auditors, who conducted the audit, fulfilled the conditions for issuing unbiased and independent audit reports, as required by the binding provisions of law and professional standards.

Maciej Radziwiłł Tadeusz Kałdonek

President of the Management Board Vice President of the Management Board

Tadeusz Kozaczyński Dariusz Mańkowski

Vice President of the Management Board Vice President of the Management Board

Tadeusz Bogdan

Vice President of the Management Board


This document is a translation.

The Polish original should be referred to in matters of interpretation.

THE TRAKCJA - TILTRA GROUP

where the holding company is


ul. Złota 59

00–120 Warszawa

Auditor’s Review Report

on the condensed consolidated financial statements prepared in accordance with

International Financial Reporting Standards

for the period from 1 January to 30 June 2011

This document is a translation. The Polish original should be referred to in matters of interpretation.

Independent Auditor’s Review Report

on the condensed consolidated financial statements

for the period from 1 January 2011 to 30 June 2011

for the Shareholders of Trakcja - Tiltra S.A. We have reviewed the accompanying condensed consolidated financial statements of the Trakcja – Tiltra Group, where the holding company is Trakcja – Tiltra S.A. (hereinafter referred to as “the Holding Company”) with its registered office in Warsaw, ul. Złota 59, consisting of: - the consolidated profit and loss account for the period from 1 January 2011

to 30 June 2011, showing a net profit of PLN 13 853 thousand;

- the consolidated statement of comprehensive income for the period from 1 January 2011 to 30 June 2011, showing total comprehensive income of PLN 9 194 thousand;

- the consolidated balance sheet prepared as at 30 June 2011, showing total assets and liabilities of PLN 2 031 142 thousand;

- the consolidated cash flow statement for the period from 1 January 2011 to 30 June 2011, showing a net cash decrease of PLN 167 232 thousand;

- the statement of changes in consolidated shareholders’ equity for the period from 1 January 2011 to 30 June 2011, showing an increase in shareholders’ equity of PLN 285 586 thousand;

- condensed notes to the financial statements. The Holding Company’s Management Board is responsible for the preparation of these condensed consolidated financial statements in accordance with International Accounting Standard 34 “Interim Financial Reporting”, which has been approved by the European Union, as well as with other binding regulations. Our responsibility was to perform a review of these financial statements. We performed the review in accordance with the provisions of the professional auditing standards issued by the Polish National Chamber of Certified Auditors. These standards require us to plan and perform the review to obtain moderate assurance that the financial statements are free of material misstatements. We conducted the review mainly by analyzing the data presented in the financial statements, examining the consolidation documentation and using information


provided by the management and employees in charge of the Holding Company’s finances and accounting. The scope and methodology of a review of condensed consolidated financial statements differ significantly from that of an audit based on which an opinion is issued on the truth and fairness of annual financial statements. Accordingly, we are unable to express such an opinion on the accompanying financial statements. Based on our review nothing has come to our attention that would prevent us from finding that the condensed consolidated financial statements of the Trakcja – Tiltra Group have been prepared, in all material respects, in accordance with the requirements of International Accounting Standard 34 “Interim Financial Reporting”, which has been approved by the European Union. Without expressing any qualifications to the condensed consolidated financial statements we draw your attention to the matter associated with the recognition of PLN 579 325 thousand in goodwill formed as a result of the 19 April 2011 acquisition of shares of the companies Tiltra Group AB, AB Kauno Tiltai and Silentio Investments Sp. z o.o. The effects of the merger were originally partially settled based on the carrying amounts of the assets, liabilities and contingent liabilities. According to the Holding Company’s Management, the final determination of the fair values of all of the identifiable assets, liabilities and contingent liabilities will take place within a year of the acquisition date. In view of the above, the goodwill and the value of certain assets and liabilities presented in the condensed consolidated financial statements may change. Detailed information on the acquisition of shares of the above mentioned companies has been presented in Note 3 to the condensed consolidated financial statements.


BDO Sp. z o.o. ul. Postępu 12

02-676 Warszawa Authorized Audit Company No.3355

Auditor in charge: Krzysztof Maksymik Certified Auditor No. 11380

On behalf of BDO Sp. z o.o.: André Helin, PhD Senior Partner & CEO Certified Auditor No. 90004


Trakcja – Tiltra S.A.

ul. Złota 59

00–120 Warszawa

Auditor’s Review Report

on the condensed financial statements prepared in accordance with

International Financial Reporting Standards

for the period from 1 January to 30 June 2011


Independent Auditor’s Review Report

on the condensed financial statements

for the period from 1 January 2011 to 30 June 2011

for the Shareholders of Trakcja – Tiltra S.A. We have reviewed the accompanying condensed financial statements of Trakcja – Tiltra S.A. with its registered office in Warsaw, ul. Złota 59 (hereinafter referred to as “the Company”), consisting of: - the profit and loss account for the period from 1 January 2011 to 30 June 2011,

showing a net profit of PLN 44 640 thousand;

- the statement of comprehensive income for the period from 1 January 2011 to 30 June 2011, showing total comprehensive income of PLN 44 640 thousand;

- the balance sheet prepared as at 30 June 2011, showing total assets and liabilities of PLN 1 225 093 thousand;

- the cash flow statement for the period from 1 January 2011 to 30 June 2011, showing a net cash decrease of PLN 122 797 thousand;

- the statement of changes in shareholders’ equity for the period from 1 January 2011 to 30 June 2011, showing an increase in shareholders’ equity of PLN 301 232 thousand;

- condensed notes to the financial statements. The Company’s Management Board is responsible for the preparation of these condensed financial statements in accordance with International Accounting Standard 34 “Interim Financial Reporting”, which has been approved by the European Union, as well as with other binding regulations. Our responsibility was to perform a review of these financial statements. We performed the review in accordance with the provisions of the professional auditing standards issued by the Polish National Chamber of Certified Auditors. These standards require us to plan and perform the review to obtain moderate assurance that the financial statements are free of material misstatements.


We conducted the review mainly by analyzing the data presented in the financial statements, examining the books of account and using information provided by the management and employees in charge of the Company’s finances and accounting. The scope and methodology of a review of condensed financial statements differ significantly from that of an audit based on which an opinion is issued on the truth and fairness of annual financial statements. Accordingly, we are unable to express such an opinion on the accompanying financial statements. Based on our review nothing has come to our attention that would prevent us from finding that the condensed financial statements have been prepared, in all material respects, in accordance with the requirements of International Accounting Standard 34 “Interim Financial Reporting”, which has been approved by the European Union. Warsaw, 31 August 2011

BDO Sp. z o.o. ul. Postępu 12

02-676 Warszawa Authorized Audit Company No.3355

Auditor in charge: Krzysztof Maksymik Certified Auditor No. 11380

On behalf of BDO Sp. z o.o.: André Helin, PhD Senior Partner & CEO Certified Auditor No. 90004

Documents

TRAKCJA - TILTRA CAPITAL GROUP CONSOLIDATED SEMI-ANNUAL ... finansowe/ENG... · TRAKCJA - TILTRA CAPITAL GROUP CONSOLIDATED SEMI-ANNUAL ... TILTRA CAPITAL GROUP Consolidated semi-annual