gazeta.plbi.gazeta.pl/im/4/20536/m20536034.pdf · agora group semi-annual report for the six month...

AGORA GROUP SEMI-ANNUAL REPORT

for the six month period ended 30 June 2016

Warsaw, August 12, 2016

SEMI-ANNUAL REPORT INCLUDES:

1. Management Discussion and Analysis for the first half of 2016 to the financial statements.

2. Independent Auditors’ Report on review of condensed semi-annual consolidated financial statements for

six month period ended 30 June 2016.

3. Condensed semi-annual consolidated financial statements as at 30 June 2016 and for six month period

ended thereon.

4. Condensed interim consolidated financial statements as at 30 June 2016 and for three and six month period

ended thereon.

5. Independent Auditors’ Report on review of condensed semi-annual unconsolidated financial statements for

six month period ended 30 June 2016.

6. Condensed semi-annual unconsolidated financial statements as at 30 June 2016 and for six month period

ended thereon.

7. Condensed interim unconsolidated financial statements as at 30 June 2016 and for three and six month

period ended thereon.

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AGORA GROUP

Management

Discussion and

Analysis for

the first half of 2016

to the financial

statements

August 12, 2016


AGORA GROUP

Management Discussion and Analysis for the first half of 2016 to the financial statements

translation only

TABLE OF CONTENTS

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) OF THE GROUP’S RESULTS FOR THE FIRST HALF OF 2016 ......... 4

I. IMPORTANT EVENTS AND FACTORS WHICH INFLUENCE THE FINANCIALS OF THE GROUP ..................................... 4

II. EXTERNAL AND INTERNAL FACTORS IMPORTANT FOR THE DEVELOPMENT OF THE GROUP ................................. 6 1. EXTERNAL FACTORS ............................................................................................................................................... 6 1.1 Advertising market [3] ........................................................................................................................................ 6 1.2 Copy sales of dailies [4] ...................................................................................................................................... 7 1.3 Cinema admissions [10] ...................................................................................................................................... 7

2. INTERNAL FACTORS ................................................................................................................................................ 8 2.1. Revenue ............................................................................................................................................................. 8 2.2. Operating cost ................................................................................................................................................. 10

3. PROSPECTS ........................................................................................................................................................... 11 3.1. Revenue ........................................................................................................................................................... 11

3.1.1. Advertising market[3] .......................................................................................................................... 11 3.1.2 Copy sales ............................................................................................................................................. 11 3.1.3. Ticket sales ........................................................................................................................................... 11

3.2 Operating cost .................................................................................................................................................. 12 3.2.1 Costs of external services...................................................................................................................... 12 3.2.2 Staff cost ............................................................................................................................................... 12 3.2.3 Promotion and marketing cost ............................................................................................................. 12 3.2.4 Cost of raw materials and energy ......................................................................................................... 12

III. FINANCIAL RESULTS .............................................................................................................................................. 13 1. THE AGORA GROUP .............................................................................................................................................. 13 2. PROFIT AND LOSS ACCOUNT OF THE AGORA GROUP .......................................................................................... 13 2.1. Financial results presented according to major segments of the Agora Group for the first half of 2016 [1] . 14 2.2. Finance cost, net .............................................................................................................................................. 15

3. BALANCE SHEET OF THE AGORA GROUP ............................................................................................................. 15 3.1. Non-current assets .......................................................................................................................................... 15 3.2. Current assets .................................................................................................................................................. 15 3.3. Non-current liabilities and provisions .............................................................................................................. 16 3.4. Current liabilities and provisions ..................................................................................................................... 16

4. CASH FLOW STATEMENT OF THE AGORA GROUP ............................................................................................... 16 4.1. Operating activities .......................................................................................................................................... 17 4.2. Investment activities........................................................................................................................................ 17 4.3. Financing activities .......................................................................................................................................... 17

5. SELECTED FINANCIAL RATIOS [5] ......................................................................................................................... 18

IV. OPERATING REVIEW - MAJOR SEGMENTS OF THE AGORA GROUP ..................................................................... 19 IV.A. PRESS [1] .......................................................................................................................................................... 19 1. REVENUE .............................................................................................................................................................. 20 1.1. Copy sales ........................................................................................................................................................ 20

1.1.1. Copy sales and readership of Gazeta Wyborcza [4] ............................................................................. 20 1.1.2. Copy sales of Agora’s magazines ......................................................................................................... 20

1.2. Advertising sales [3] ......................................................................................................................................... 20 1.2.1. Advertising sales of Gazety Wyborcza ................................................................................................. 20 1.2.2. Advertising sales of Metrocafe.pl [3],[4] ............................................................................................. 21 1.2.3. Advertising sales of Agora’s magazines ............................................................................................... 21

2. COST ..................................................................................................................................................................... 21 3. NEW INITIATIVES .................................................................................................................................................. 22

IV.B. MOVIES AND BOOKS [1] .................................................................................................................................... 23 1. REVENUE [3] ......................................................................................................................................................... 24 2. COST ..................................................................................................................................................................... 25 3. NEW INITIATIVES .................................................................................................................................................. 25


AGORA GROUP


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IV.C. OUTDOOR (AMS GROUP) .................................................................................................................................. 26 1. REVENUE [8] ......................................................................................................................................................... 26 2. COST ..................................................................................................................................................................... 27 3. NEW INITIATIVES .................................................................................................................................................. 27

IV.D. INTERNET [1], [6] ............................................................................................................................................... 28 1. REVENUE .............................................................................................................................................................. 28 2. COST ..................................................................................................................................................................... 29 3. Important information on internet activities ....................................................................................................... 29 4. NEW INITIATIVES .................................................................................................................................................. 29

IV.E. RADIO ................................................................................................................................................................ 31 1. REVENUE [3] ......................................................................................................................................................... 31 2. COST ..................................................................................................................................................................... 31 3. AUDIENCE SHARES [9] .......................................................................................................................................... 32 4. NEW INITIATIVES .................................................................................................................................................. 32

IV.F. PRINT [1] ............................................................................................................................................................ 33 1. REVENUE .............................................................................................................................................................. 33 2. COST ..................................................................................................................................................................... 33 NOTES....................................................................................................................................................................... 34

V. ADDITIONAL INFORMATION .................................................................................................................................. 37 V.A. INFORMATION CONCERNING SIGNIFICANT CONTRACT ................................................................................... 37 V.B. IMPORTANT EVENTS ......................................................................................................................................... 37 V.C. CHANGES IN CAPITAL AFFILIATIONS OF THE ISSUER WITH OTHER ENTITIES ................................................... 39 V.D. ADDITIONAL INFORMATION ............................................................................................................................. 42 1. Description of the Group...................................................................................................................................... 42 2. Changes in ownership of shares or other rights to shares (options) by Management Board members since the

date of publication of the last quarterly report ................................................................................................. 42 3. Changes in ownership of shares or other rights to shares (options) by Supervisory Board Members since the

date of publication of the last quarterly report ................................................................................................. 42 4. Shareholders entitled to exercise over 5% of total voting rights at the General Meeting of Agora S.A., either

directly or through affiliates, as of the date of publication of the report for the first half of 2016. .................. 43 5. Other information ................................................................................................................................................ 45 6. The description of basic hazards and risk connected with the upcoming months of the current financial year 45

VI. MANAGEMENT BOARD’S REPRESENTATIONS ...................................................................................................... 49 1. Representation concerning accounting policies .................................................................................................. 49 2. Representation concerning election of the Company’s auditor for the Review of the condensed semi-annual

financial statements ........................................................................................................................................... 49


AGORA GROUP


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AGORA GROUP

MANAGEMENT DISCUSSION AND ANALYSIS

(MD&A) OF THE GROUP’S RESULTS

FOR THE FIRST HALF OF 2016

REVENUE PLN 584.7 MILLION

NET LOSS PLN 11.1 MILLION

EBITDA PLN 50.9 MILLION

OPERATING CASH FLOW PLN 10.5 MILLION

Unless indicated otherwise, all data presented herein represent the period of January - June 2016, while comparisons

refer to the same period of 2015. All data sources are presented in part IV of this MD&A.

I. IMPORTANT EVENTS AND FACTORS WHICH INFLUENCE THE FINANCIALS OF THE

GROUP

� In the second quarter of 2016, the revenue of the Agora Group (“Group”) amounted to PLN 296.2 million and

increased by 1.2% yoy. The main reason behind that were high attendance in the Helios cinema network which

translated into higher by 19.5% yoy revenues from ticket sales which grew to PLN 31.2 million and higher by

23.1% yoy concession sales at the amount of PLN 12.8 million. Additionally, the sales of the game The Witcher 3:

Wild Hunt and its extensions contributed PLN 6.9 million in revenues. Total revenues of the Movies and Books

segment were however lower yoy, mainly as a result of the commercial success of the game The Witcher 3: Wild

Hunt that was recorded in the second quarter of 2015 and that brought the Agora Group PLN 14.9 million

revenues due to the publishing cooperation related to the game. The Press segment’s revenues decreased by

8.2% yoy mainly as a result of negative market trends. In the second quarter of 2016 the revenues in the other

operating segments of the Group increased. The sharpest increase – by 9.0% yoy, to PLN 43.5 million – was

recorded in the Internet segment. The total revenues of the Radio segment increased by 8.8% yoy and

amounted to PLN 29.6 million, whereas in the Outdoor segment sales grew by 8.0% yoy, to PLN 45.7 million.

Revenues in the Print segment amounted to PLN 41.6 million, showing an increase by 3.7% yoy.

� In the first half of 2016, the Group’s revenue amounted to PLN 584.7 million and increased by 1.6% yoy. The

increase in the Group’s revenues in the first half of 2016 resulted primarily from an increase in the inflows of the

Internet, Outdoor, Movies and Books as well as Radio segments, which counterbalanced the lower revenues

from Press and Print segments. It is worth noting that in the second quarter of 2015, the level of the Group’s

revenues was significantly affected by its cooperation with the producer of the game The Witcher 3: Wild Hunt,

which then brought the Group PLN 14.9 million in revenues. In the first half of 2016, the Group noted additional

revenues of PLN 7.1 million related to the sales of the game and its extensions. In the first half of 2016, total

revenues of the Movies and Books segment amounted to PLN 169.1 million and increased by 1.0% yoy. This

primarily results from high attendance at the Helios cinemas, which translated into an increase in the revenues

from both ticket sales, as well as concession sales and revenues from the sales of the game

The Witcher 3: Wild Hunt and its extensions. In the first half of 2016, the fastest increase in revenues was

recorded in the Radio segment – by 12.9% yoy, to PLN 55.0 million. Another segment characterised by high

revenue growth dynamics was the Internet segment. In the first half of 2016, the total revenues of the segment

amounted to PLN 79.8 million and increased by 11.3% yoy. Revenues of the Outdoor segment also increased

dynamically – by 9.9% yoy, amounting to PLN 81.4 million. The revenues of the Press segment decreased by

8.7% yoy. This decline resulted mainly from lower yoy advertising revenues in that segment. The revenues of

the Print segment amounted to PLN 80.6 million and decreased by 0.6% yoy.


AGORA GROUP


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� In the second quarter of 2016, the Group’s operating costs increased by 2.9% yoy and amounted to PLN 297.5

million. It was a result of the higher operating costs in the Print, Internet, Outdoor, Movies and Books, as well as

Radio segments. In the Print segment, the increase in operating costs was mainly due to higher yoy costs of

materials, production services and trasportation. In the Internet segment, the increase in operating costs up to

PLN 35.7 million was related mainly to the development of the advertising brokerage offer. The increase in

operating costs in the Outdoor segment by 4.8% yoy was mainly connected with an increase in staff cost and

costs of campaign execution. Higher yoy costs of the Movies and Books segment at the amount of PLN 76.5

million result from higher rental fees due to growing scale of cinema network as well as higher cost of film copy

purchase. The operating costs of this segment was also affected by the settlement with producer of the game

The Witcher 3: Wild Hunt in relation to the sales of the game and its extensions. The increase in operating costs

in the Radio segment up to the amount of PLN 24.3 million is mainly related to higher cost of air time purchase

in the third party radio stations due to the radio advertising brokerage activities as well as the higher costs of

marketing surveys recorded as external services. The Press segment noted reduction in the level of operating

costs mainly due to lower yoy staff cost.

In the first half of 2016, the Group’s operating costs increased by 2.4% yoy and amounted to PLN 583.0 million.

There were increases recorded in most of the Group’s operating segments. The highest increase in operating

costs – up by 15.1% yoy, to PLN 70.2 million – was visible in the Internet segment. This resulted mainly from

higher costs related to brokerage of advertising space of other Internet publishers, as well as higher yoy staff

cost. In the Print segment, the increase in operating costs was affected by higher costs of materials and

production services. The increase in operating costs in the Radio segment by 8.4% yoy was mainly due to a

higher cost of air time purchase in third party radio stations due to the brokerage activities and the cost of

cinema advertising services in the Helios cinemas since the beginning of 2015, as well as higher yoy staff costs.

In the Outdoor segment, the increase in operating costs up to PLN 67.2 million results from higher costs of

campaign execution, as well as higher yoy staff cost. The growth in operating cost of Movies and Books segment

by 1.3% yoy to PLN 158.7 million is related to higher you cost of film copy purchase, expansion of Helios cinema

network and settlement with the producer of the game The Witcher 3: Wild Hunt. The Press segments recorded

a decrease in the operating cost mainly due to lower yoy staff cost and a reduction in other items of the

operating costs.

� In the second quarter of 2016, the Group’s EBITDA decreased to PLN 22.9 million, and in the first half of 2016 –

to PLN 50.9 million. In the second quarter of 2016, the Group recorded an operating loss at the EBIT level of PLN

1.3 million. Whereas in the first half of 2016, the Group recorded a positive operating result at the EBIT level of

PLN 1.7 million. In the second quarter of 2016, the net loss amounted to PLN 5.5 million and the net loss

attributable to the equity holders of the parent company amounted to PLN 5.1 million. In the first half of 2016,

the net loss amounted to PLN 11.1 million and the net loss attributable to the equity holders of the parent

company amounted to PLN 12.3 million.

� The purchase of 106 shares from the shareholders of GoldenLine Sp. z o.o. (“GoldenLine”) with its seat in

Warsaw for a total price of PLN 8.5 million had a significant impact on the Group’s net result in the first half of

2016. The details of the transactions are presented in note 12 to condensed semi-annual consolidated financial

statements of the Agora Group as of June 30, 2016. The total negative impact of the acquisition of the company

GoldenLine on the consolidated net result of the Agora Group in the first half of 2016 amounted to PLN 3.3

million.

� At the end of June 2016, the Group’s cash and short-term monetary assets amounted to PLN 103.6 million,

which comprised cash and cash equivalents in the amount of PLN 30.1 million and PLN 73.5 million invested in

short-term securities. Additionally, the Group held cash receivables of PLN 29.6 million deposited by AMS S.A. as

cash collateral securing the bank guarantees granted in relation to performance of the concession contract for

the construction and modernisation of bus/tram shelters in Warsaw (PLN 10.8 million of which is disclosed in

the balance sheet under long-term receivables).

� As at the end of June 2016, the Group’s debt amounted to PLN 119.3 million (including external debt of Helios

S.A. consisting of bank loans and finance lease liabilities in the amount of PLN 84.2 million).


AGORA GROUP


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II. EXTERNAL AND INTERNAL FACTORS IMPORTANT FOR THE DEVELOPMENT

OF THE GROUP

1. EXTERNAL FACTORS

1.1 Advertising market [3]

According to the Agora S.A. estimates (“Company”, “Agora”), based on public data sources, in the second quarter of

2016, total advertising spending in Poland amounted to ca PLN 2.2 billion and increased by 2.0% yoy.

Tab. 1

2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016

% change

yoy in ad

market

value

2.5% 5.0% 3.0% 6.5% 6.0% 6.0% 4.5% 3.0% 2.0%

In the second quarter of 2016 advertisers increased advertising expenditure in cinema, internet, outdoor and

television. They spent less in press and in radio. The data relating to the changes in the value of advertising

expenditure in particular media segments are presented in the table below:

Tab. 2

Total

advertising

expenditure

Television Internet Magazines Radio Outdoor Dailies Cinema

2.0% 0.5% 9.5% (6.5%) (1.0%) 5.5% (16.0%) 12.0%

The share of particular media segment in total advertising expenditure, in the second quarter of 2016, is presented

in the table below:

Tab. 3

Advertising

spendings, in

total


100.0% 50.5% 26.5% 6.0% 7.0% 6.5% 2.5% 1.0%

In the first half of 2016, total advertising spending in Poland amounted to ca PLN 3.99 billion and increased by 2.5%

yoy. At that time, advertisers limited their expenditure only in press. The growth of advertising expenditure was

visible in other advertising market segments. The data relating to the changes in the value of advertising expenditure

in particular media segments are presented in the table below:

Tab. 4

Total

advertising

expenditure


2.5% 1.5% 8.5% (7.5%) 3.5% 5.0% (17.0%) 11.5%


AGORA GROUP


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The share of particular media segment in total advertising expenditure, in the first half of 2016, is presented in the

table below:

Tab. 5

Advertising

spendings, in

total


100.0% 50.5% 25.5% 6.0% 8.0% 6.0% 2.5% 1.5%

1.2 Copy sales of dailies [4]

In the second quarter of 2016, the total paid circulation of dailies decreased by 9.6% yoy. The largest decrease was

observed in regional dailies.

In the first half of 2016, the drop in total paid circulation of dailies in Poland amounted to 8.5%. The largest decrease

was observed in regional dailies.

1.3 Cinema admissions [10]

In the second quarter of 2016, the number of tickets sold in Polish cinemas increased by almost 10.9% yoy and

amounted to 8.4 million.

In the first half of 2016, the number of tickets sold in Polish cinemas increased by 10.0% yoy to 23.7 million tickets.


AGORA GROUP


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2. INTERNAL FACTORS

2.1. Revenue

Tab. 6

in million PLN 2Q 2016 % share 2Q 2015 % share % change yoy

Total sales (1) 296.2 100.0% 292.8 100.0% 1.2%

Advertising revenue 150.5 50.8% 151.5 51.7% (0.7%)

Copy sales 34.2 11.5% 35.9 12.3% (4.7%)

Ticket sales 31.2 10.5% 26.1 8.9% 19.5%

Printing services 39.6 13.4% 37.7 12.9% 5.0%

Other 40.7 13.8% 41.6 14.2% (2.2%)

in million PLN 1H 2016 % share 1H 2015 % share % change yoy

Total sales (1) 584.7 100.0% 575.6 100.0% 1.6%

Advertising revenue 272.2 46.6% 267.0 46.4% 1.9%

Copy sales 68.9 11.8% 73.5 12.8% (6.3%)

Ticket sales 89.1 15.2% 77.0 13.4% 15.7%

Printing services 76.6 13.1% 76.8 13.3% (0.3%)

Other 77.9 13.3% 81.3 14.1% (4.2%)

(1) particular sales positions, apart from ticket sales and printing services, include sales of Publishing House and film

activities (co-production and distribution in the Movies and Books segment), described in details in point IV.B in

this report.

In the second quarter of 2016, the Group's total revenues amounted to PLN 296.2 million and increased by 1.2%

yoy.

In the second quarter of 2016, the Group’s advertising revenues decreased by 0.7% yoy and amounted to PLN 150.5

million. They were lower yoy in the Press as well as the Movies and Books segments. However, the increase in the

advertising revenues was noted in Outdoor, Internet and Radio segments.

In the second quarter of 2016, the Group’s copy sales revenues amounted to PLN 34.2 million and decreased by

4.7% yoy. It was mainly due to the reductions in copy sales of printed press and lower yoy revenues from the sales of

Agora’s Publishing House publications.

In the second quarter of 2016, revenues from tickets sold in the cinemas comprising the Helios network increased

by 19.5% yoy and amounted to PLN 31.2 million. In the reporting period, the number of tickets sold in the Helios

cinemas amounted to over 1.7 million, which meant an increase of 13.4% yoy. In the same period, the overall

number of cinema tickets sold in Poland amounted to almost 8.4 million and increased by nearly 10.9% yoy [10].

In the second quarter of 2016, revenues from the sales of printing services in the Group amounted to PLN 39.6

million and increased by 5.0% yoy.

The revenues from other sales amounted to PLN 40.7 million and decreased by 2.2% yoy. In the corresponding

period of 2015, the amount of other sales was significantly influenced by the revenues related to the co-production

and distribution of the game The Witcher 3: Wild Hunt, amounting to PLN 14.9 million. In the second quarter of

2016, this revenue item was positively affected by the revenues related to the sales of the game The Witcher 3: Wild

Hunt and its extensions in the amount of PLN 6.9 million.


AGORA GROUP


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In the first half of 2016, the Group's total revenues amounted to PLN 584.7 million and increased by 1.6% yoy.

In the first half of 2016, the Group’s advertising revenues increased by 1.9% yoy and amounted to PLN 272.2

million. The largest growth in advertising revenues was reported in the Outdoor segment. Advertising revenues in

the Internet, Radio, as well as Movies and Books segments also increased.

In the first half of 2016, the Group’s copy sales revenues amounted to PLN 68.9 million and decreased by 6.3% yoy.

The factors that influenced the level of the Group’s copy sales revenues were, among others, the continued

downward trend with regard to copy sales of printed press and the high sales results of the film Bogowie on DVD in

the first half of 2015.

In the first half of 2016, revenues from tickets sold in the cinemas comprising the Helios network increased by

15.7% yoy and amounted to PLN 89.1 million. In the analysed period, the number of tickets sold in the Helios

cinemas amounted to almost 5.0 million, which meant an increase by 12.3% yoy. In the same period, the overall

number of cinema tickets sold in Poland amounted to 23.7 million and increased by 10.0% yoy [10].

In the first half of 2016, revenues from the sales of printing services in the Group amounted to PLN 76.6 million and

were similar (a decrease by 0.3% yoy) to those in the first half of 2015.

The revenues from other sales amounted to PLN 77.9 million and decreased by 4.2% yoy. The dynamics of this

revenues was significantly affected by the revenues related to the co-production and distribution of the game The

Witcher 3: Wild Hunt, amounting to PLN 14.9 million, registered in the second quarter of 2015. In the first half of

2016, this revenue item was increased by the revenues related to the game The Witcher 3: Wild Hunt and its

extensions in the amount of PLN 7.1 million.


AGORA GROUP


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2.2. Operating cost

Tab. 7

in million PLN 2Q 2016 % share 2Q 2015 % share % change yoy

Operating cost net, including: (297.5) 100.0% (289.2) 100.0% 2.9%

External services (105.5) 35.5% (94.9) 32.8% 11.2%

Staff cost (81.2) 27.3% (79.8) 27.6% 1.8%

Raw materials, energy and consumables (56.3) 18.9% (54.0) 18.7% 4.3%

D&A (24.2) 8.1% (30.1) 10.4% (19.6%)

Promotion and marketing (22.0) 7.4% (20.6) 7.1% 6.8%

in million PLN 1H 2016 % share 1H 2015 % share % change yoy

Operating cost net, including: (583.0) 100.0% (569.5) 100.0% 2.4%

External services (207.5) 35.6% (190.2) 33.4% 9.1%

Staff cost (160.7) 27.6% (156.3) 27.4% 2.8%

Raw materials, energy and consumables (110.6) 19.0% (109.6) 19.2% 0.9%

D&A (49.2) 8.4% (53.5) 9.4% (8.0%)

Promotion and marketing (38.1) 6.5% (39.5) 6.9% (3.5%)

The Group’s net operating costs increased by 2.9% yoy in the second quarter of 2016 and amounted to PLN 297.5

million. In the first half of 2016, this increase was 2.4% yoy, up to PLN 583.0 million.

There was an increase in the cost of external services recorded both in the second quarter, as well as in the first half

of 2016. It should be noticed that this cost position was affected by the settlement with the producer of the game

The Witcher 3: Wild Hunt due to the sales of the game and its extensions.

In the second quarter of 2016 the increase in the operating costs was caused mainly by higher yoy costs of

brokerage services in the Internet, Movies and Books, as well as Radio segments, increased costs of film copy

purchase, production services, as well as transport and distribution.

In the first half of 2016 the largest increase was observed in the costs of film copy purchase in the Movies and Books

segment. The costs of advertising brokerage services, production services as well as rental and lease payments were

also higher yoy.

The Group’s staff cost increased by 1.8% yoy, to PLN 81.2 million, in the second quarter of 2016, and by 2.8% yoy, to

PLN 160.7 million, in the first half of 2016. This cost item went up in most of the Group’s operating segments. The

segments in which the staff cost was lower yoy in both periods were the Press and Print segments. This is mainly

related to lower full-time employment in those segments than in the corresponding periods of 2015.

The increase in this cost item in the Internet segment resulted, among other things, from consolidation of the

company of GoldenLine and headcount increase at the AdTaily network and the Trader.com (Polska) Sp. z o.o.

company. Higher staff costs in the Movies and Books segment were connected with the expansion of the Helios

network of cinemas and in the Radio segment – with the strengthening of the sales teams, and in Outdoor segment

with higher yoy execution rates of sales budgets.

The Group’s headcount as at the end of June 2016 amounted to 3,007 full time employees and decreased by 26

FTEs yoy. This reduction results from a lower level of employment in the Press and Print segments.


AGORA GROUP


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The Group offers different incentive plans for its employees (for example: cash motivation plans, incentive plans in

sales departments, motivation plans for management board members, etc.), the cost of which is charged to the

Group’s staff costs items.

The increase in the cost of raw materials, energy and consumables, recorded in comparison with the second

quarter and first half of 2015, results mainly from a higher cost of production materials.

The Group's cost of promotion and marketing increased in the second quarter of 2016 by 6.8% yoy to

PLN 22.0 million. This resulted from more intense promotional activity in the Radio, as well as Movies and Books

segments. In the remaining operating segments of the Group, cost of promotion and marketing was maintained at

the same level as in the previous year or reduced. In the first half of 2016, the promotion and marketing costs were

3.5% lower yoy. Their slight increase was recorded only in the Radio and Outdoor segments.

3. PROSPECTS

3.1. Revenue

3.1.1. Advertising market[3]

In the second quarter of 2016, the advertising market in Poland increased by 2.0% yoy. Advertisers spent almost PLN

2.2 billion yoy to promote their products and services. In the first half of 2016, the total amount of expenditure on

advertising increased by 2.5% and amounted to ca PLN 3.99 billion.

The Company observes symptoms showing the slow down of the advertising market performance. The lower than

expected growth of advertising expenditure in the largest segment of advertising market – TV and continued

dcecrease of advertisinf expenditure in press. In case of press an additional negative factor influencing the condition

of this market segment – apart from global market trends – is the change in the way public institutions and state

owned companies allocate their advertising budgets. Taking into account the above circumstances, as well as, the

signals from Polish economy, the Company decided to modify its estimates regarding the growth dynamics of

advertising market expenditure in Poland. According to Company’s estimates based on the analysis of market data

the advertising market expenditure in 2016 shall grow by 2-4% yoy. The data on estimated changes in the dynamics

of particular media segments are presented in the table below:

Tab. 8

Total advertising

expenditure Television Internet Magazines Radio Outdoor Dailies Cinema

2 - 4% 2-4% 8-10% (10%)-(7%) 3-5% 3-6% (19%)-(16%) 4-6%

In this Management Discussion and Analysis to the financial statements for the first half of 2016 the Company

adjusted its estimates regarding the change in the advertising market expenditure in TV, dailies and outdoor. The

Company changed also the growth dynamics for the whole advertising market in Poland in 2016. The estimates for

Internet, radio and magazines remained unchanged.

3.1.2 Copy sales

In 2016, negative trends relating to copy sales of dailies and magazines in their print versions shall continue,

however their dynamics should be lower than in previous years. The Company develops the sales of its digital

content. In the beginning of 2014, Agora implemented a new model of access to the digital content of Gazeta

Wyborcza and a digital subscription offer. In the Company's opinion, such activities, together with other factors, will

stabilize the Press segment's financial results in the long term.

3.1.3. Ticket sales

The most significant factor affecting attendance in Polish cinemas is the repertoire. Based on the available

information, the number of tickets sold in Polish cinemas in the first half of 2016 amounted to 23.7 million, which

means an increase by 10.0% yoy [10]. Results for the first half of 2016 and the repertoire for the rest of the current


AGORA GROUP


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year allow the Company to estimate that the cinema attendance in the entire 2016 may be higher than the one

observed in 2015.

3.2 Operating cost

In 2016, the Group is planning to execute development projects in selected business segments, which may result in

an increase of operating cost. Segments with the largest projects to be executed include: Internet, Radio, Outdoor,

as well as Movies and Books. Additionally, the level of the operating cost shall be affected by the launch of TV

channel Metro in the fourth quarter of 2016.

3.2.1 Costs of external services

The cost of external services in the consecutive quarters of 2016 will largely depend on the cost of brokerage

services - in particular in the Internet segment, costs of film copy purchase related directly to the level of revenues

from the cinema ticket sales, the launch of new TV channel Metro and the EUR/PLN exchange rate. In addition, the

increase of this cost position will be caused by opening of new cinema facilities planned for 2016, fees for movie

producers related to Group’s movie distribution business and execution of other development projects.

3.2.2 Staff cost

The level of staff cost in the consecutive quarters of 2016 shall increase yoy due to execution of development

projects in the Group. In the Internet segment the increase in staff cost will be connected mainly with consolidation

of GoldenLine company and development of selected websites of Gazeta.pl and mobile applications, and

strengthening the sales teams. In the Radio and Outdoor segments this growth may be related to further

strengthening of sales teams. This cost position will be also affected by the launch of TV channel Metro.

3.2.3 Promotion and marketing cost

In first half of 2016, the promotion and marketing cost was lower by 3.5% yoy. In the remaining quarters of 2016,

the Agora Group plans further development activities, which also include promotional activities. The dynamics of the

changes in individual media, the number of launched development projects – including launch of a new TV channel

Metro and film co-production and distribution activity, as well as market activities of the Group’s competitors may

affect the level of these expenses. Considering the above factors, the Company estimates that in 2016 this cost

position may be higher yoy, especially in Internet and Radio segments.

3.2.4 Cost of raw materials and energy

In the first half of 2016, the value of this cost position increased by 0.4% yoy. According to the Company's opinion,

the level of this cost position in the rest of 2016 will be shaped by similar market trends. The Group’s Print segment

has the largest impact on this cost position, especially the cost of production materials, the volume of production

and EUR/PLN exchange rate.


AGORA GROUP


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III. FINANCIAL RESULTS

1. THE AGORA GROUP

The consolidated financial statements of the Agora Group for the first half of 2016 include: Agora S.A. and

21 subsidiaries, which operate principally in the internet, print, cinema, radio and outdoor segments. Additionally,

the Group held shares in jointly controlled entities Stopklatka S.A. and Online Technologies HR Sp. z o.o., as well as in

associated companies Instytut Badan Outdooru IBO Sp. z o.o. and Hash.fm Sp. z o.o.

A detailed list of companies of the Agora Group is presented in the note 11 and selected financial data together with

translation into EURO are presented in note 18 to the condensed semi-annual consolidated financial statements.

2. PROFIT AND LOSS ACCOUNT OF THE AGORA GROUP

Tab. 9

in PLN million 2Q 2016 2Q 2015 % change

yoy 1H 2016 1H 2015

% change

yoy

Total sales (1) 296.2 292.8 1.2% 584.7 575.6 1.6%

Advertising revenue 150.5 151.5 (0.7%) 272.2 267.0 1.9%

Copy sales 34.2 35.9 (4.7%) 68.9 73.5 (6.3%)

Ticket sales 31.2 26.1 19.5% 89.1 77.0 15.7%

Printing services 39.6 37.7 5.0% 76.6 76.8 (0.3%)

Other 40.7 41.6 (2.2%) 77.9 81.3 (4.2%)

Operating cost net, including: (297.5) (289.2) 2.9% (583.0) (569.5) 2.4%

Raw materials, energy and consumables (56.3) (54.0) 4.3% (110.6) (109.6) 0.9%

D&A (24.2) (30.1) (19.6%) (49.2) (53.5) (8.0%)

External services (105.5) (94.9) 11.2% (207.5) (190.2) 9.1%

Staff cost (81.2) (79.8) 1.8% (160.7) (156.3) 2.8%

Promotion and marketing (22.0) (20.6) 6.8% (38.1) (39.5) (3.5%)

Gain on a bargain purchase (2) - - - 2.2 - -

Operating result - EBIT (1.3) 3.6 - 1.7 6.1 (72.1%)

Finance cost, net, incl.: (0.2) 0.5 - (5.6) 0.1 -

Revenue from short-term investment 0.4 0.3 33.3% 0.9 1.2 (25.0%)

Interest on bank loans, borrowings, finance

lease and similar items (0.8) (0.9) (11.1%) (1.8) (2.0) (10.0%)

Remeasurement of equity interest at the

acquisition date (2) - - - (5.5) - -

Share of results of equity accounted

investees 0.2 0.5 (60.0%) (0.1) (0.2) 50.0%

Profit/(loss) before income tax (1.3) 4.6 - (4.0) 6.0 -

Income tax (4.2) (1.1) 281.8% (7.1) (1.2) 491.7%

Net profit/(loss) for the period (5.5) 3.5 - (11.1) 4.8 -

Attributable to:

Equity holders of the parent (5.1) 3.8 - (12.3) 3.6 -

Non - controlling interest (0.4) (0.3) (33.3%) 1.2 1.2 -

EBIT margin (EBIT/Sales) (0.4%) 1.2% (1.6pp) 0.3% 1.1% (0.8pp)

EBITDA 22.9 33.7 (32.0%) 50.9 59.6 (14.6%)

EBITDA margin (EBITDA/Sales) 7.7% 11.5% (3.8pp) 8.7% 10.4% (1.7pp)


AGORA GROUP


translation only

(1) particular sales positions, apart from ticket sales and printing services, include sales of Publishing House division

and film activities (co-production and distribution in the Movies and Books segment), described in details in point IV.B

in this report.

(2) the line items - gain on a bargain purchase and remeasurement of equity interest at the acquisition date – are

related to the acquisition of GoldenLine Sp. z o.o on January 25th, 2016. This transaction and its influence on the

financial result of the Group is described in note 12 to the condensed semi-annual consolidated financial statements.

2.1. Financial results presented according to major segments of the Agora Group for the first

half of 2016 [1]

Major products and services, as well as operating revenue and cost of the Agora Group are presented in detail in

part IV of this MD&A (“Operating review – major segments of the Agora Group”).

Tab. 10

in PLN million Press Movies

and Books Outdoor Internet Radio Print

Reconciling

positions (3)

Total

(consoli-

dated)

1H 2016

Total sales (1) 135.7 169.1 81.4 79.8 55.0 80.6 (16.9) 584.7

% share 23.2% 28.9% 13.9% 13.6% 9.4% 13.8% (2.8%) 100.0%

Operating cost net (1) (135.7) (158.7) (67.2) (70.2) (48.0) (83.6) (19.6) (583.0)

EBIT - 10.4 14.2 9.6 7.0 (3.0) (36.5) 1.7

Finance cost, net

(5.6)

Share of results of

equity accounted

investees

(0.1)

Income tax

(7.1)

Net loss for the period (11.1)

Attributable to:

Equity holders of the

parent (12.3)

Non-controlling

interest 1.2

EBITDA 4.8 25.6 22.0 12.1 8.5 4.9 (27.0) 50.9

CAPEX (2) (0.8) (15.5) (7.2) (3.5) (1.2) (1.0) (3.3) (32.5)

(1) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media if such

promotion is executed without prior reservation between segments of the Agora Group; the direct variable cost

of campaigns carried out on advertising panels is the only cost that is included above; it is allocated from the Outdoor

segment to other segments;

(2) based on invoices booked in the period, the amount in the Movies and Books segment includes also PLN 6.5

million of non-current assets in lease;

(3) reconciling positions show data not included in particular segments, i.a.: other revenues and costs of Agora’s

supporting divisions (centralized IT, administrative, finance and HR functions, etc.), new TV channel and the

Management Board of Agora S.A., Agora TC Sp. z o.o., intercompany eliminations and other matching adjustments

which reconcile the data presented in the management reports to the consolidated financials of the Agora Group.


AGORA GROUP


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2.2. Finance cost, net

Net financial activities of the Group for the first half of 2016 were influenced mainly by interest from bank deposits,

cost of commissions and interest on bank loans and lease liabilities, as well as the effect of the remeasurement of

previously held equity interest in the subsidiary GoldenLine sp. z o.o. at the date of obtaining control over the

company.

3. BALANCE SHEET OF THE AGORA GROUP

Tab. 11

in PLN million 30.06.2016 31.03.2016 % change to

31-03-2016 31-12-2015

% change to

31-12-2015 30.06.2015

Non-current assets 1,154.5 1,155.4 (0.1%) 1,162.3 (0.7%) 1,123.5

share in balance sheet total 73.3% 74.8% (1.5pp) 72.2% 1.1 pp 72.7%

Current assets 420.1 390.1 7.7% 447.9 (6.2%) 421.1

share in balance sheet total 26.7% 25.2% 1.5pp 27.8% (1.1 pp) 27.3%

TOTAL ASSETS 1,574.6 1,545.5 1.9% 1,610.2 (2.2%) 1,544.6

Equity holders of the parent 1,101.2 1,144.4 (3.8%) 1,153.5 (4.5%) 1,143.9

share in balance sheet total 69.9% 74.0% (4.1pp) 71.6% (1.7 pp) 74.1%

Non-controlling interest 18.4 20.3 (9.4%) 16.7 10.2% 16.0

share in balance sheet total 1.2% 1.3% (0.1pp) 1.0% 0.2pp 1.0%

Non-current liabilities and

provisions 139.6 113.6 22.9% 118.6 17.7% 109.6

share in balance sheet total 8.9% 7.4% 1.5pp 7.4% 1.5 pp 7.1%

Current liabilities and

provisions 315.4 267.2 18.0% 321.4 (1.9%) 275.1

share in balance sheet total 20.0% 17.3% 2.7pp 20.0% - 17.8%

TOTAL LIABILITIES AND EQUITY 1,574.6 1,545.5 1.9% 1,610.2 (2.2%) 1,544.6

3.1. Non-current assets

The decrease in non-current assets, versus 31 March 2016 and 31 December 2015, resulted mainly from

depreciation and amortisation charges, which were, to some extent, compensated by new investments. The change

in non-current assets versus 31 December 2015 was also affected by the acquisition of assets of GoldenLine Sp. z

o.o. in the first quarter of 2016 and the decrease in investments in equity accounted investees due to obtaining

control over GoldenLine Sp. z o.o.

3.2. Current assets

The increase in current assets, versus 31 March 2016, results mainly from the increase in accounts receivable and

short-term securities, which were, to some extent, compensated by a decrease in cash and cash equivalents.

The decrease in current assets, versus 31 December 2015, results mainly from the decrease in accounts receivable

and short-term securities.


AGORA GROUP


translation only

3.3. Non-current liabilities and provisions

The increase in non-current liabilities and provisions, versus 31 March 2016 and 31 December 2015, stems mainly

from the increase in long-term loans as Agora S.A. used a tranche available within its time credit limit. The increase

in non-current liabilities and provisions, versus 31 December 2015, was also affected by the higher deferred tax

liabilities resulting mainly from the acquisition of Goldenline Sp. z o.o, which was to some extent, compensated by

the payment of the first instalment of the liability related to the acquisition of the TV license by Green Content Sp.

z o.o.

3.4. Current liabilities and provisions

The increase in current liabilities and provisions, versus 31 March 2016, stems mainly from recognition of the

dividend liability (in the amount of PLN 35.7 million). There has been also an increase in other current liabilities and

in short-term borrowings. The above changes were, to some extent, compensated by a decrease in accruals.

The decrease in current liabilities and provisions, versus 31 December 2015, stems from the decrease in accounts

payable, tax liabilities and accruals, as well as lower balance of short-term loans and finance lease liabilities. The

above changes were, to some extent, compensated by the recognition of the dividend liability and an increase in

other financial liabilities due to initial recognition of put option granted to a non-controlling shareholder of

GoldenLine Sp. z o.o. in the first quarter of 2016.

4. CASH FLOW STATEMENT OF THE AGORA GROUP

Tab. 12


yoy 1H 2016 1H 2015

% change

yoy

Net cash from operating activities 1.7 21.5 (92.1%) 10.5 52.8 (80.1%)

Net cash from investment activities (33.0) (58.3) (43.4%) (14.5) (65.2) (77.8%)

Net cash from financing activities 21.7 2.1 933.3% 2.9 (14.8) -

Total movement of cash and cash

equivalents (9.6) (34.7) (72.3%) (1.1) (27.2) (96.0%)

Cash and cash equivalents at the end

of period 30.1 25.2 19.4% 30.1 25.2 19.4%

As at 30 June 2016, the Agora Group had PLN 103.6 million in cash and short-term monetary assets, out of which

PLN 30.1 million was in cash and cash equivalents (cash, bank accounts and bank deposits) and PLN 73.5 million in

short-term securities. Additionally, the Group had a cash receivable of PLN 29.6 million deposited by the subsidiary

AMS S.A. as a cash collateral securing the bank guarantees issued in relation to the concession contract for

construction and utilization of bus shelters in Warsaw (out of which PLN 10.8 million is presented within long-term

receivables).

In the first half of 2016, Agora S.A. has not been engaged in any currency option instruments or other derivatives

(used for hedging or speculative purposes).

In May 2016, Agora S.A., on the basis of Annex no. 1 to the multi - purpose credit line agreement, used a non-

renewable tranche of the time credit in the amount of PLN 25.0 million within the available credit limit for the

purpose of financing the current expenses realized in the normal course of the business of the Company. The

tranche shall be paid up in 13 equal installments from June 30, 2017 till June 30, 2020.

On the basis of the Annex no. 2 to the multi - purpose credit line agreement signed on 24 May 2016 with Bank

Polska Kasa Opieki S.A., Agora S.A. was provided with a time credit of up to PLN 100.0 million, which may be used by

31 May 2017 and with a credit facility in the current account of up to PLN 35.0 million, which may be used by 31 May


AGORA GROUP


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2017. As at 30 June 2016, the amount of the time credit is diminished by the tranche used in the amount of PLN 25.0

million.

As at the date of this MD&A report, considering the cash position, the cash pooling system functioning in the Group

and available credit facility, the Agora Group does not anticipate any liquidity problems with regards to its further

investment plans (including capital investments).

4.1. Operating activities

The decrease in net inflows from operating activities, in the first half of 2016, stems mainly from the lower result

from the main operating activities of the Group and changes in working capital of the Group (mainly payment of

payables and accruals), as well as higher payments of income tax liabilities.

4.2. Investment activities

Net outflows from investing activities, in the first half of 2016, results mainly from expenditure on property, plant

and equipment and intangibles as well as acquisition of GoldenLine sp. z o.o. Those outflows were to some extent

compensated by the net proceeds from disposal of short-term securities and the return of cash paid by the Company

in connection with the subscriptions for shares of Stopklatka S.A.

4.3. Financing activities

Net inflows from financing activities, in the first half of 2016, results mainly from inflows from bank loans (including

the one related to the tranche of the time credit used by Agora S.A. in the amount of PLN 25.0 million). Moreover,

the net cash flows from financing activities included mainly repayments of bank loans and financial lease payments.


AGORA GROUP


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5. SELECTED FINANCIAL RATIOS [5]

Tab.13

2Q 2016 2Q 2015

(2)

% change

yoy 1H 2016

1H 2015

(2)

% change

yoy

Profitability ratios Net profit margin (1.7%) 1.3% (3.0pp) (2.1%) 0.6% (2.7pp)

Gross profit margin 30.4% 29.9%* 0.5pp 29.1% 29.4%* (0.3pp)

Return on equity (1.8%) 1.3% (3.1pp) (2.2%) 0.6% (2.8pp)

Efficiency ratios

Inventory turnover 13 days 13 days - 13 days 13 days -

Debtors days 61 days 63 days (3.2%) 66 days 67 days (1.5%)

Creditors days 40 days 42 days* (4.8%) 42 days 42 days -

Liquidity ratio

Current ratio 1.3 1.5 (13.3%) 1.3 1.5 (13.3%)

Financing ratios

Gearing ratio (1) 1.0% - - 1.0% - -

Interest cover (1.7) 4.6 - 1.0 3.6 (72.2%)

Free cash flow interest cover (21.3) 2.4 - (16.8) 4.5 -

(1) as at 30 June 2015 the Group had net cash position;

(2) ratios marked with “*” symbol were adjusted in connection to the adjustment of comparative amounts as

described in note 2 to the condensed semi-annual consolidated financial statements.

Definitions of financial ratios [5] are presented at the end of part IV of this MD&A ("Operating review – major

segments of the Agora Group").


AGORA GROUP


translation only

IV. OPERATING REVIEW - MAJOR SEGMENTS OF THE AGORA GROUP

IV.A. PRESS [1]

The Press segment includes the pro-forma consolidated financials of Gazeta Wyborcza, Magazines and Free Press

division.

Tab. 14


yoy 1H 2016 1H 2015

% change

yoy

Total sales, including: 73.8 80.4 (8.2%) 135.7 148.7 (8.7%)

Copy sales 31.7 32.6 (2.8%) 62.6 65.6 (4.6%)

incl. Gazeta Wyborcza (1) 25.8 26.3 (1.9%) 51.7 54.1 (4.4%)

incl. Magazines 4.0 4.6 (13.0%) 7.8 8.6 (9.3%)

Advertising revenue (2) 39.8 46.7 (14.8%) 69.7 81.2 (14.2%)

incl. Gazeta Wyborcza (3) 23.7 30.1 (21.3%) 41.2 52.4 (21.4%)

incl. Magazines (4) 6.6 6.4 3.1% 11.7 10.9 7.3%

incl. Metrocafe.pl (4), (5) 4.4 5.0 (12.0%) 7.5 9.1 (17.6%)

Total operating cost, including (6): (71.0) (73.7) (3.7%) (135.7) (141.2) (3.9%)

Raw materials, energy, consumables and

printing services (18.8) (18.9) (0.5%) (35.4) (36.9) (4.1%)

Staff cost (27.8) (30.3) (8.3%) (56.3) (59.4) (5.2%)

D&A (2.4) (2.6) (7.7%) (4.8) (5.0) (4.0%)

Promotion and marketing (2), (7) (12.6) (12.6) - (22.6) (22.8) (0.9%)

EBIT 2.8 6.7 (58.2%) 0.0 7.5 100%

EBIT margin 3.8% 8.3% (4.5pp) 0.0% 5.0% (5.0pp)

EBITDA 5.2 9.3 (44.1%) 4.8 12.5 (61.6%)

EBITDA margin 7.0% 11.6% (4.6pp) 3.5% 8.4% (4.9pp)

(1) since the first quarter of 2016 the sales from copy sales of Gazeta Wyborcza include the revenues from the sales

of digital subscriptions of the daily. The data for previous periods were adjusted accordingly. In previous reporting

periods the revenues from the sales of digital subscriptions were presented in other revenues;

(2) the amounts do not include revenues and total cost of cross-promotion of different media between the Agora

Group segments (only direct variable cost of campaigns carried out on advertising panels) if such promotion is

executed without prior reservation;

(3) in 2015 the presented amounts refer to only a portion of total revenues from dual media offers (published both in

Gazeta Wyborcza, as well as on GazetaPraca.pl, Domiporta.pl, Komunikaty.pl verticals and Nekrologi.Wyborcza.pl

website), which is allocated to the print edition of Gazeta Wyborcza. Since 2016 total revenues from dual media

offers are presented in the advertising revenues of Gazeta Wyborcza.

(4) in 2016 custom publishing activities, which till the end of 2015 were reported together with the results of

Metrocafe.pl, are offered by the Magazines division. The data for 2015 were not adjusted in this respect.

(5) the amounts refer to total revenues of the Free Press including revenues from Metrocafe.pl’s display advertising

(previously Metro), classifieds and inserts as well as from metroBTL services and Metrocafe.pl’s special activities;

(6) segment operating costs associated with the production of the Group's own titles are settled on the basis of

allocation of direct and indirect cost associated with their production from the Print segment;

(7) the amounts include inter alia the production and promotional cost of gadgets offered with Gazeta Wyborcza and

Agora’s magazines.


AGORA GROUP


translation only

1. REVENUE

In the second quarter of 2016, the total revenues of the Press segment decreased by 8.2% yoy and amounted to PLN

73.8 million. The value of the segment’s revenues was affected the most by the by 14.8% yoy decrease in revenues

from the advertising sales, mainly at Gazeta Wyborcza. Revenues from the advertising sales of monthlies published

by the segment were, however, higher yoy.

In the first half of 2016, the total revenues of the Press segment decreased by 8.7% yoy to PLN 135.7 million. The

value of the segment’s revenues was affected the most by the by 14.2% yoy decrease in revenues from the

advertising sales, mainly at Gazeta Wyborcza.

1.1. Copy sales

1.1.1. Copy sales and readership of Gazeta Wyborcza [4]

In the second quarter of 2016, Gazeta Wyborcza maintained its leading position among the opinion-forming dailies.

The average payable distribution of Gazeta Wyborcza amounted to 161 thousand copies and decreased by 9.4% yoy.

In the analysed period, the revenue from copy sales of Gazeta Wyborcza decreased by 1.9% yoy. In the analysed

period, the weekly readership of Gazeta Wyborcza stood at 5.7% (1.7 million readers; CCS, weekly readership index),

which placed it as the second daily among nationwide dailies.

In the first half of 2016, Gazeta Wyborcza maintained its leading position among the opinion-forming dailies. The

average payable distribution of Gazeta Wyborcza amounted to 165 thousand copies and decreased by 8.1% yoy. In

the analysed period, the revenue from copy sales of Gazeta Wyborcza decreased by 4.4% yoy. In the analysed

period, the weekly readership of Gazeta Wyborcza stood at 6.6% (2.0 million readers; CCS, weekly readership index),

which placed it as the second daily among nationwide dailies.

1.1.2. Copy sales of Agora’s magazines

In the second quarter of 2016, the revenues of the Magazines and Free Press division from copy sales decreased by

13.0% yoy. The average number of copies sold by Agora’s monthlies amounted to 344.8 thousand copies and

increased by 6.2% yoy. It is worth noting that in 2016 the monthlies’ portfolio was expanded to include a new title –

Pogoda na zycie and the promotion of e-editions of selected magazines influenced the level of copy sales.

In the first half of 2016, the revenues of the Magazines and Free Press division decreased by 9.3% yoy. In this period,

the average number of copies sold by Agora’s monthlies amounted to 331.2 thousand copies and increased by 6.0%

yoy. It is the result of the market launch of a new magazine – Pogoda na zycie and the promotion of e-editions of

selected magazines.

1.2. Advertising sales [3]

1.2.1. Advertising sales of Gazeta Wyborcza

In the second quarter of 2016, Gazeta Wyborcza’s net advertising revenue (including display advertising, classifieds

and inserts) amounted to PLN 23.7 million (down by 21.3% yoy).

In the first half of 2016, Gazeta Wyborcza’s net advertising revenue (including display advertising, classifieds and

inserts) amounted to PLN 41.2 million (down by 21.4% yoy).

It should be remembered that since 2016 total revenues from dual media offers are presented in the advertising

revenues of Gazeta Wyborcza. In 2015 the presented amounts refered to only a portion of total revenues from dual

media offers (published both in Gazeta Wyborcza, as well as on GazetaPraca.pl, Domiporta.pl, Komunikaty.pl

verticals and Nekrologi.Wyborcza.pl website), which was allocated to the print edition of Gazeta Wyborcza.

In the second quarter of 2016, the ad spend in dailies in Poland decreased by 16.0% yoy. In the discussed period of

time, Gazeta Wyborcza’s revenues from display advertising decreased by almost 18.5% yoy, and its estimated share

in display ad spend in dailies decreased by ca 1.0pp yoy and amounted to 37.0%.

In the second quarter of 2016, Gazeta Wyborcza’s share in the national newspapers ad spend amounted to ca 46.0%

and increased by ca 0.5pp yoy. During this period of time, Gazeta Wyborcza’s share in Warsaw ad spend in dailies

decreased by ca 2.5pp yoy. At the same time, Gazeta Wyborcza’s share in local dailies (excluding Warsaw) decreased

by over 2.5pp yoy.


AGORA GROUP


translation only

In the first half of 2016, the adspend in dailies in Poland decreased by over 17.0% yoy. Gazeta Wyborcza’s revenues

from display advertising decreased by over 20.5% yoy, and its estimated share in display ad spend in dailies

decreased by 1.5pp yoy and amounted to over 36.0%.

In the first half of 2016, Gazeta Wyborcza’s share in the national newspapers ad spend amounted to ca 45.5% and

decreased by almost 0.5pp yoy. During this period of time, Gazeta Wyborcza’s share in Warsaw ad spend in

newspapers decreased by over 2.0pp yoy. In the analysed period, Gazeta Wyborcza’s share in local dailies (excluding

Warsaw) decreased by over 2.5pp.

One should bear in mind that these advertising market estimations may represent some margin of error due to

significant discounting pressure on the part of the advertisers. Once the Company has more reliable market data, it

may adjust the ad spending estimations in the consecutive reporting periods.

In the second quarter of 2016, the share of ad pages in Gazeta Wyborcza’s total pagecount amounted to ca 23.0%

(down by ca 4.9pp yoy), while the average number of paid-for ad pages published daily in all local and national

editions amounted to ca 76 and decreased by 25.2% yoy.

In the first half of 2016, the share of ad pages in Gazeta Wyborczas’s total pagecount amounted to ca 22.0% (down

by ca 5.2pp yoy), while the average number of paid-for ad pages published daily in all local and national editions

amounted to ca 71 and was lower by ca 23.7% yoy.

1.2.2. Advertising sales of Metrocafe.pl [3],[4]

In the second quarter of 2016, Metrocafe’s total ad revenues declined by 12.0% yoy, including the display

advertising revenue drop by ca 11.0% yoy. At the same time, the total display ad spend in all daily newspapers

decreased by 16.0% yoy. As a result, Metrocafe.pl increased its share in advertising spending in all dailies by ca 0.5pp

to over 6.0%. Metrocafe.pl’s share in advertising spending in national dailies remained at the same level yoy and

increased its share by over 1.0pp yoy in local dailies. Metrocafe.pl increased its share in Warsaw dailies by over

1.0pp yoy to ca 27.5%.

In the first half of 2016, Metrocafe.pl’s total ad revenues declined by 17.6% yoy, including the display advertising

revenue drop by ca 17.5% yoy. At the same time, the total display ad spend in all daily newspapers decreased by

over 17.0% yoy. As a result Metrocafe.pl maintained its share in advertising spending in all dailies at nearly 6.0%.

Metrocafe.pl’s share in advertising spending in national dailies decreased by nearly 0.5pp yoy, and increased by

almost 1.0pp yoy in local dailies. Metrocafe.pl maintained its share in Warsaw dailies at over 25.5%.

1.2.3. Advertising sales of Agora’s magazines

In the second quarter of 2016, the advertising sales of the Agora’s magazines increased by 3.1% yoy to PLN 6.6

million. At the same time, advertisers limited their expenditure in the magazines by 6.5% yoy. Agora had 3.8% share

in the total national magazines ad spend (based on rate card data) [7] and 7.1% share in monthlies (based on rate

card data) [7].

In the first half of 2016, the advertising sales of the Agora’s magazines increased by 7.3% yoy to PLN 11.7 million.

At the same time, advertisers limited their expenditure in the magazines by ca 7.5% yoy. Agora had nearly 3.5%

share in the total national magazines ad spend (based on rate card data) [7] and 6.8% share in monthlies (based on

rate card data) [7].

The growth in advertising revenues of Agora’s monthlies, both in the second quarter and in the first half of 2016,

resulted from the launch of a new title – Pogoda na zycie since January 2016 and the transfer of the custom

publishing offer from Metrocafe.pl to Agora’s monthlies.

2. COST

In the second quarter of 2016, the segment’s operating costs decreased by 3.7% yoy and amounted to PLN 71.0

million. It was a result of lower staff cost, mainly due to a lower headcount and lower yoy execution of sales budgets

in the segment’s sales departments.

In the first half of 2016, the segment's operating costs declined by 3.9% yoy and amounted to PLN 135.7 million. It

was a result of lower staff cost, mainly due to a lower headcount and lower yoy execution of sales budgets in the

segment’s sales departments. At the same time, the segment’s costs of raw materials, energy, consumables and

printing services decreased, which resulted from lower volume of production of titles issued.


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3. NEW INITIATIVES

In the first half of 2016, the Press segment was focused on development of its product portfolio — both paper-based

and digital.

Since February 2016, the Thursday, Friday and Saturday paper editions of Gazeta Wyborcza have been available at

new prices: PLN 3.40 on Thursdays and Fridays and PLN 3.50 on Saturdays. The subscription offer for the digital

version of the daily has also been modified, providing readers with two packages to choose from: Wyborcza and

Wyborcza Premium, both available at new prices.

Since 4th

of June 2016, Gazeta Wyborcza has been available with modified layout, changed content arrangement and

a modified logo. Information is more distinctly separated from commentaries, the latter now being printed on a grey

background. The order of sections has also been altered. For instance, economy-related topics appear closer to the

title page. The refreshed logo of Gazeta Wyborcza features a modern font and the word “Wyborcza” is more visible,

referencing the logos of the digital brand — Wyborcza.pl or Wyborcza.biz. The logos of 19 local editions of the daily

have also been changed.

A new layout has also been designed for Gazeta Wyborcza’s flagship supplement: Saturday’s Magazyn Swiateczny. A

new, more legible font and section mastheads are the most prominent changes in the Saturday edition.

12th

January 2016 marked the launch of Agora’s new monthly — Pogoda na zycie. The magazine, published in

collaboration with Radio Pogoda, is addressed to readers who like to reminisce about cultural icons: actors, singers

and cabaret artists of the 1950’s, 60’s and 70’s as well as everyday life during those times.

Starting with its February issue, the Dziecko monthly has been coming out in a new format, with a refreshed layout,

changed order of sections and at a lower price. The magazine provides practical advice and tips for parents on the

upbringing and care of infants and young children.

The January 21st

, 2016 marked the début of the new shopping platform Avanti24 established as a combination of

Avanti24 and Groszki.pl. The website offers lifestyle-oriented advice addressed mainly to women of all ages who are

interested in fashion, beauty and the latest trends. It also functions as an aggregator of online stores with a

convenient product search engine.

In February 2016, an innovative project developed by Gazeta Wyborcza and BIQdata.pl was awarded funding as part

of Google’s Digital News Initiative in the Large Projects category. The project’s aim is to help Poles understand the

impact of large and small-scale politics on their everyday lives, including their household budgets, education and

healthcare. A total of 7 Polish projects received funding, including two submitted by Agora — one by Gazeta

Wyborcza and one by Radio TOK FM.


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IV.B. MOVIES AND BOOKS [1]

The Movies and Books segment includes the pro-forma consolidated financials of Helios S.A. and NEXT FILM Sp. z

o.o., which form the Helios group, and Agora’s Special Projects division comprising, i.a, the Publishing House division

and film production division.

Tab. 15


yoy 1H 2016 1H 2015

% change

yoy

Total sales, including : 70.7 71.1 (0.6%) 169.1 167.5 1.0%

Tickets sales 31.2 26.0 20.0% 89.2 77.0 15.8%

Concession sales 12.8 10.4 23.1% 32.4 27.8 16.5%

Advertising revenue (1) 5.3 6.1 (13.1%) 12.4 12.3 0.8%

Revenues from film activities (1), (2) 1.7 1.8 (5.6%) 3.6 10.2 (64.7%)

Revenues from Publishing House 16.6 24.2 (31.4%) 25.2 34.0 (25.9%)

Total operating cost, including: (76.5) (75.2) 1.7% (158.7) (156.7) 1.3%

Raw materials, energy and

consumables (3) (6.2) (5.6) 10.7% (14.6) (13.2) 10.6%

External services (3) (31.2) (27.3) 14.3% (73.8) (67.5) 9.3%

Staff cost (3) (8.6) (7.4) 16.2% (17.5) (14.8) 18.2%

D&A (3) (7.2) (6.6) 9.1% (14.9) (13.8) 8.0%

Promotion and marketing (1), (3) (6.6) (4.6) 43.5% (10.8) (12.2) (11.5%)

Costs related to Publishing House (4) (16.2) (22.5) (28.0%) (25.1) (32.1) (21.8%)

EBIT (5.8) (4.1) (41.5%) 10.4 10.8 (3.7%)

EBIT margin (8.2%) (5.8%) (2.4pp) 6.2% 6.4% (0.2pp)

EBITDA (5) 1.5 9.7 (84.5%) 25.6 32.0 (20.0%)


(1) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media (only

the direct variable cost of campaigns carried out on advertising panels) if such a promotion was executed

without prior reservation;

(2) the amounts comprise the revenues from film co-production (executed in Special Projects division) and film

distribution in cinemas (executed by NEXT FILM);

(3) the amounts do not include costs related to Publishing House division;

(4) the amounts include D&A cost in Publishing House division, which in the first half of 2016 amounted to PLN 0.3

million, and in the second quarter of 2016 to PLN 0.1 million (in the comparable periods of 2015 it amounted

respectively to PLN 7.4 million and 7.2 million).

In the second quarter of 2016, the operating result of the Movies and Books segment at the EBITDA level decreased

to PLN 1.5 million and the operating loss at the EBIT level amounted to PLN 5.8 million. When comparing the

segment’s data yoy, it is important to notice the significant impact of the Publishing House’s inflows from co-

production and distribution of the game The Witcher 3: Wild Hunt on both the revenues and the operating result of

the segment at the EBIT and EBITDA level in 2015 [1]. In the second quarter of 2016 revenues from the sales of the

the game and its extensions in the amount of PLN 6.9 million positively affected the level of the segment’s revenues.

The Publishing House closed the second quarter of 2016 with an operating profit at the EBIT level, which amounted

to PLN 0.4 million [1].

In the first half of 2016 the segment’s operating result at the EBIT level amounted to PLN 10.4 million and was lower

yoy, while the segment’s EBITDA decreased to PLN 25.6 million. The segment’s operating result in 2015 was


AGORA GROUP


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significantly and positively affected by the Publishing House’s inflows from co-production and distribution of the

game The Witcher 3: Wild Hunt [1]. The factors that positively influenced the level of revenues and the segment’s

operating result in 2016 were higher than the market increase in attendance at the Helios network cinemas, which

translated into higher ticket sales and higher concession sales yoy, as well as revenues related to the game The

Witcher 3: Wild Hunt and its extensions in the amount of PLN 7.1 million.

The Agora’s Publishing House closed the first half of 2016 with an operating result at the EBIT level of PLN 0.1 million

[1]. This result was lower yoy.

1. REVENUE [3]

In the second quarter of 2016, revenues of the Movies and Books segment decreased by 0.6% yoy and amounted to

PLN 70.7 million.

During this time, the number of visitors to Helios cinemas amounted to over 1.7 million people and increased by

13.4% yoy. This, combined with higher average ticket price and concession sales, translated into higher yoy revenues

from ticket sales and concession sales.

The segment’s total revenues from film co-production and distribution in the second quarter of 2016 amounted to

PLN 1.7 million, showing a decrease by 5.6% yoy. In the second quarter of 2016, NEXT FILM introduced two films to

the cinemas: a foreign one – A Tale of Love and Darkness, and a Polish one – Wszystko gra. At the same time,

cinemas screened films introduced to the big screen in earlier periods. In the second quarter of 2016, the Special

Projects division recorded revenues from film co-production of the films introduced to the Polish cinemas in earlier

periods, mainly Karbala in connection with the distribution in cinemas, on DVD and VOD.

In the second quarter of 2016, the revenues of the Agora’s Publishing House (operating within the Special Projects

division) amounted to PLN 16.6 million and decreased substantially yoy. In 2015, the level of revenues of the Agora’s

Publishing House was significantly affected by inflows from co-production and distribution of the game The Witcher

3: Wild Hunt. In 2016, the revenues of the Publishing House were positively affected by the sales of the game The

Witcher 3: Wild Hunt and its extensions which contributed PLN 6.9 million of revenues.

In the second quarter of 2016, the Agora's Publishing House issued 20 book publications, 3 music albums and 1 film

publication. As a result, during the analysed period, the Publishing House sold approximately 0.2 million books and

books with CDs and DVDs.

In the first half of 2016, the total sales of the Movies and Books segment amounted to PLN 169.1 million and

increased by 1.0% yoy.

During this time, the number of visitors to the Helios network cinemas amounted to 5.0 million people and

increased by 12.3% yoy. The higher attendance at the Helios network cinemas ensured higher revenues from ticket

sales in the amount of PLN 89.2 million and higher revenues from concession sales in the amount of PLN 32.4

million.

In the first half of 2016, the segment’s total revenues from film co-production and distribution amounted to PLN 3.6

million, showing a decrease yoy. In 2015, the revenues from film activities were significantly affected by the

distribution and co-production of the film Disco Polo. In the first half of 2016, NEXT FILM introduced two Polish films

to the cinemas – Excentrycy, czyli po słonecznej stronie ulicy and Wszystko gra and one foreign film – A Tale of Love

and Darkness. At the same time, the cinemas were displaying films introduced to the big screen in earlier periods. In

the first half of 2016, the Special Projects division recorded revenues from earlier film co-production, mainly Karbala

in connection with the distribution in cinemas, on DVD and VOD.

In the first half of 2016, the revenues of the Agora’s Publishing House amounted to PLN 25.2 million and decreased

by 25.9% yoy. In 2015, the level of revenues was significantly and positively affected by inflows from co-production

and distribution of the game The Witcher 3: Wild Hunt. In the first half of 2016 the level of revenues of the Agora’s

Publishing House was influenced by the sales of the game The Witcher 3: Wild Hunt and its extensions which

contributed PLN 7.1 million of revenues.

In the first half of 2016, the Agora's Publishing House issued 32 book publications, 6 music albums and 4 film

publications. As a result, during the analysed period, the Publishing House sold approximately 0.5 million books and

books with CDs and DVDs.


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2. COST

In the second quarter of 2016, the operating costs of the Movies and Books segment increased by 1.7% yoy and

amounted to PLN 76.5 million.

The increase in the segment’s operating costs in the second quarter of 2016 resulted from the increase in the cost of

external services connected with higher rental fees at the cinemas of the Helios network because of its expansion

and the weakening of the Polish currency. The second factor that caused the increase in this cost item are payments

for film copies due to the higher attendance in Helios cinemas and revenues from ticket sales. Higher yoy staff cost,

costs of materials and energy and the value of goods and materials sold are related to the expansion of the Helios

cinema network and higher yoy concession sales. The increase in promotion and marketing expenditure is related,

i.a., to the film distribution activities. The operating costs of the Publishing House were lower yoy and amounted to

PLN 16.2 million. In the corresponding period of 2015, the level of the Publishing House’s operating costs was

affected by the amortisation of the co-production contribution and settlement with the producer of the game The

Witcher 3: Wild Hunt. In the second quarter of 2016, the level of the Publishing House’s operating cost was also

affected by the settlement with the producer of the game related to the game and its extensions.

In the first half of 2016, the segment’s operating costs amounted to PLN 158.7 million and increased by 1.3% yoy.

The factors that contributed to the growth of the segment’s operating costs include, i.a., higher yoy costs of film

copy purchase which are a consequence of the higher attendance at the Helios network cinemas, which translated

into increased revenues from ticket sales. The higher value of goods and materials sold results from the expansion of

the Helios cinema network and higher attendance that caused, among other things, higher yoy concession sales. The

increase in staff costs and D&A costs is related mainly to the expansion of the Helios cinema network. The lower yoy

costs of promotion and marketing were influenced mainly by the decrease in costs related to the film distribution

activity. Lower yoy costs of the Publishing House is related to the costs of the amortisation of the co-production

contribution, borne in 2015, and settlement with the producer of the game The Witcher 3: Wild Hunt. It should be

noticed that in the second quarter of 2016 the publishing House incurred the cost of settlement with the game

producer related to the game and its extensions.

3. NEW INITIATIVES

In the first quarter of 2016, NEXT FILM, a Helios subsidiary company specialising in film distribution, introduced a

new film production entitled Excentrycy, czyli po słonecznej stronie ulicy to Polish cinemas. Agora also acted as the

co-producer of the film. In the second quarter of 2016, 2 titles distributed by NEXT FILM hit the big screen: A Tale of

Love and Darkness — a film adaptation of the best-selling novel by Amos Oz, directed by Natalie Portman, and

Wszystko Gra — the movie directed by Agnieszka Glinska.

In the first quarter of 2016, productions that were shown in cinemas in 2015 were released on DVD: Krol zycia and

Karbala in January 2016, and Obce niebo in February 2016. In the second quarter of 2016, in May, Agora released

Excentrycy, czyli po slonecznej stronie ulicy on DVD.

In mid-March 2016, Helios and the Blue City shopping and entertainment centre announced the opening of the

network’s new cinema in Warsaw. The launch of the multiplex is scheduled for the second half of 2017. In the first

half of 2016, Helios also signed agreements to open 6 new cinema facilities in the following cities: Przemysl,

Tomaszow Mazowiecki, Wolomin, Stalowa Wola, Krosno and Gdansk. In the first three cities, the new cinemas are

set to be launched in the fourth quarter of 2016, in the next two — in 2017 and the new cinema in Gdansk will be

opened in the first half of 2018..

On 8 April 2016, Krol swingu, a musical inspired by Janusz Majewski’s film Excentrycy, czyli po slonecznej stronie

ulicy, had its début in Wrocław. Cast in the leading roles were Maciej Stuhr, Sonia Bohosiewicz and Natalia Rybicka

who all starred in the movie, joined by singer Kuba Badach. Szczecin and Poznan also hosted these concerts with

swing hits of the 1950’s. The event was organised by: Agora and Festival Group.

In April 2016, the Polish edition of the unique Titanic, the Exhibition was opened. The exhibition has attracted over 1

million visitors across all Europe. Over 200 items retrieved from the wreck are displayed until October 9, 2016 in

Warsaw’s Palace of Culture and Science, as well as exact replicas of the ship’s interior. Agora is the co-organiser of

the Polish edition of the exhibition.


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IV.C. OUTDOOR (AMS GROUP)

The Outdoor segment consists of the pro-forma consolidated data of companies constituting the AMS group

(AMS S.A., Adpol Sp. z o.o.).

Tab. 16


yoy 1H 2016 1H 2015

% change

yoy

Total sales, including: 45.7 42.3 8.0% 81.4 74.1 9.9%

Advertising revenue (1) 45.1 41.5 8.7% 80.1 72.7 10.2%

Total operating cost, including: (35.0) (33.4) 4.8% (67.2) (64.7) 3.9%

Execution of campaigns (1) (6.9) (5.9) 16.9% (12.0) (11.3) 6.2%

Maintenance cost (1) (14.9) (16.1) (7.5%) (30.0) (30.7) (2.3%)

Staff cost (5.9) (4.7) 25.5% (10.8) (9.8) 10.2%

Promotion and marketing (0.8) (1.1) (27.3%) (2.2) (2.1) 4.8%

D&A (3.9) (3.1) 25.8% (7.8) (6.0) 30.0%

EBIT 10.7 8.9 20.2% 14.2 9.4 51.1%

EBIT margin 23.4% 21.0% 2.4pp 17.4% 12.7% 4.7pp

EBITDA 14.6 12.0 21.7% 22.0 15.4 42.9%

EBITDA margin 31.9% 28.4% 3.5pp 27.0% 20.8% 6.2pp

Number of advertising spaces (2) 23,820 24,036 (0.9%) 23,820 24,036 (0.9%)

(1) the amounts do not include revenues, direct and variable cost of cross-promotion of Agora’s other media on AMS

panels if such promotion was executed without prior reservation;

(2) excluding small advertising panels of AMS group installed on bus shelters and in the Warsaw subway, as well

as advertising panels on busses and trams.

Thanks to a significant increase in revenues, the Outdoor segment improved its operating results both in the second

quarter and in the first half of 2016.

In the second quarter of 2016, the segment’s operating result at the EBIT level increased by 20.2% yoy

and amounted to PLN 10.7 million. The segment also improved the result at the EBITDA level, and the EBITDA

margin increased to 31.9%.

In the first half of 2016, the segment’s operating result at the EBIT level increased by 51.1% yoy and amounted

to PLN 14.2 million. The segment’s EBITDA increased to PLN 22.0 million and the EBITDA margin increased by 6.2pp

yoy to 27.0%.

1. REVENUE [8]

In the second quarter of 2016, outdoor advertising spending, as estimated by IGRZ (the Outdoor Advertising

Chamber) increased by almost 5.5% yoy. In the first half of 2016, expenditure in the outdoor advertising market was

higher yoy by over 5.0%.

The dynamics of the increase in advertising revenues of AMS, both in the second quarter and in the first half of

2016, was higher than market outdoor advertising spending and amounted to, respectively, 8.7% and 10.2%. A

sharper increase in advertising revenues for the segment than that recorded by the market was achieved owing to

positive dynamics in advertisers’ spending on citylight panels.

In the second quarter of 2016, the estimated share of AMS in outdoor advertising expenditure amounted to nearly

37.0% and in the first half of 2016 – to nearly 36.0%.


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2. COST

The operating cost of AMS group increased both in the second quarter and in the first half of 2016, respectively, by

4.8% yoy and 3.9% yoy.

The costs of campaign execution increased by 16.9% yoy in the second quarter and by 6.2% yoy in the first half of

2016, mainly as a result of a higher volume of poster printing services and higher posting costs due to the execution

of a larger number of orders.

A reduction in system maintenance costs by 7.5% yoy in the second quarter and by 2.3% yoy in the first half of 2016

results from effective optimisation of the portfolio of advertising panels, and a decrease in rental fees in selected

types of panels.

The increase in staff costs results from better performance in terms of sales targets which, among others, caused an

increase in variable remuneration components. The creation of a provision for the motivation plans executed at the

Group significantly influenced the level of those costs.

Promotion and marketing expenses in the second quarter of 2016 decreased by 27.3% yoy due to a lower total value

of completed joint non-profit/commercial campaigns. The increase in promotion and marketing expenses by 4.8%

yoy in the first half of 2016 is a result of a higher number of completed joint non-profit/commercial campaigns in the

first quarter of 2016.

The increase in D&A costs is related to intensive investment activities in connection with the performance of the

concession contract for the construction and exploitation of bus shelters in Warsaw. The number of citylight panels

at AMS’s disposal as at the end of the second quarter of 2016 amounts to nearly 14,500 pieces, 4,500 of which are in

Warsaw.

3. NEW INITIATIVES

In the first quarter of 2016, the Outdoor segment, in collaboration with an advertising agency and a commercial

partner, prepared a unique promotional campaign using the interactive functions of a citylight panel in bus shelters

in Wroclaw.

In May 2016, the interior of an advertising column was used for the first time in a promotional campaign in Poland.

As part of the first project, in a campaign for a retail chain, the AMS team used advertising columns filled with

flowers, whilst another project involved placing cones made of compact discs inside the columns, as well as models

of animals referencing the artwork of the music album being promoted. Both campaigns took place in Warsaw.


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IV.D. INTERNET [1], [6]

The Internet segment includes the pro-forma consolidated financials of Agora’s Internet Department, Trader.com

(Polska) Sp. z o.o., AdTaily Sp. z o.o., Sport4People Sp. z o.o. and Sir Local Sp. z o.o., since January 2016 – GoldenLine

Sp. z o.o. Since March 2016 SearchLab agency operates as a subsidiary company – Optimizers Sp. z o.o. (earlier

SearchLab Sp. z o.o.).

Tab. 17


yoy 1H 2016 1H 2015

% change

yoy

Total sales , including 43.5 39.9 9.0% 79.8 71.7 11.3%

Display ad sales (1) 35.7 33.4 6.9% 63.9 58.8 8.7%

Ad sales in verticals (2) 2.7 3.4 (20.6%) 6.2 6.7 (7.5%)

Total operating cost, including (35.7) (32.2) 10.9% (70.2) (61.0) 15.1%


Staff cost (12.8) (12.2) 4.9% (26.1) (24.3) 7.4%

D&A (1.2) (1.4) (14.3%) (2.5) (2.7) (7.4%)

Promotion and marketing (1) (4.5) (5.5) (18.2%) (8.2) (9.3) (11.8%)

EBIT 7.8 7.7 1.3% 9.6 10.7 (10.3%)

EBIT margin 17.9% 19.3% (1.4pp) 12.0% 14.9% (2.9pp)

EBITDA 9.0 9.1 (1.1%) 12.1 13.4 (9.7%)


(1) the amounts do not include total revenues and cost of cross-promotion of Agora’s different media (only direct

variable cost of campaigns carried out on advertising panels) if such promotion is executed without prior reservation,

as well as inter-company sales between Agora’s Internet Department, Trader.com (Polska) Sp. z o.o., AdTaily Sp. z

o.o., Sport4People Sp. z o.o., Sir Local Sp. z o.o. GoldenLine Sp. z o.o. and Optimizers Sp. z o.o.;

(2) in 2015 presented amounts include, among others, allocated revenues from the dual media offer (i.e. published

both in Gazeta Wyborcza, as well as on GazetaPraca.pl, Domiporta.pl, Komunikaty.pl verticals and

Nekrologi.Wyborcza.pl website). Since 2016 the revenues from dual media offers, as well as revenues from listings in

verticals Komunikaty.pl and NekrologiWyborcza.pl are not allocated to Internet division.

In the second quarter of 2016, the Internet segment improved its operating result at the EBIT level – it increased by

1.3%, to the amount of PLN 7.8 million. In the first half of 2016 the Internet segment’s operating result at the EBIT

level amounted to PLN 9.6 million and was lower than the result recorded in the first half of 2015 [1]. It should be

noted that the comparability of the results is impacted by the change in the settlement method for announcements

in the dual media offer or Komunikaty.pl and Nekrologi.Wyborcza.pl websites as well as the acquisition of majority

ownership of GoldenLine Sp. z o.o. as of January 2016. In connection with the acquisition of control over the

company in January 2016, its results are fully consolidated, while in 2015 they were recognized in the results of the

Agora Group using the equity method.

1. REVENUE

In the second quarter of 2016, the total revenues of the Internet segment increased by 9.0% yoy and amounted to

PLN 43.5 million. In the first half of 2016, the revenues of the Internet segment amounted to PLN 79.8 million and

increased by 11.3% yoy. The increase in revenues in both periods was affected, among other things, by the higher

yoy sales of display advertising and the sales of other Internet services, such as access to the candidate search

engine and employers’ profiles through the GoldenLine.pl website.

In the second quarter of 2016, the inflows from web display advertising sales increased by 6.9%, while the revenues

amounted to PLN 35.7 million. In the first half of 2016, this increase was 8.7%, up to the amount of PLN 63.9 million.

The increase in the segment’s advertising revenues was significantly influenced by higher sales of web display

advertising by the AdTaily network and affiliated networks as well as revenues generated by sports websites.


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The advertisement sales in verticals of the Internet segment declined, both in the second quarter and in the first half

of 2016. The negative dynamics of the revenues was mainly caused by the change in the method of settling inflows

from announcements in the dual media offer or Komunikaty.pl and Nekrologi.Wyborcza.pl websites with the Press

segment, as well as the change in recognising revenues from recruitment announcements in the company of

GoldenLine.

2. COST

In the second quarter of 2016, operating costs of the Internet segment increased by 10.9% yoy to PLN 35.7 million.

In the first half of 2016, the operating costs increased by 15.1% yoy and amounted to PLN 70.2 million. The increase

in operating costs was significantly affected by higher costs of external services and staff costs.

The cost of external services increased by 33.0% yoy, to PLN 15.3 million, in the second quarter of 2016, and by

35.8% yoy, to PLN 29.2 million, in the first half of 2016. The increase in this cost item was caused mainly by higher

rental cost of advertising space in the AdTaily network and the affiliated network. It is worth mentioning that the

increase in this cost item was compensated by growing revenues from advertising brokerage services, which

contributed to the growth of the segment’s total revenues. Apart from the higher rental cost of advertising space,

the segment also recorded an increase in the costs of computer services and other external services in GoldenLine

(consolidated as of January 2016), AdTaily and the Gazeta.pl website.

The staff cost increased by 4.9% yoy in the second quarter of 2016 and by 7.4% yoy in the first half of 2016. It is

mainly the result of the full consolidation of the GoldenLine company, an increased headcount at the companies of

AdTaily, Trader.com (Polska) and sports websites of Gazeta.pl, as well as higher costs of payouts from civil law

contracts, among others, at the Epic Makers network.

In the second quarter of 2016, promotion and marketing expenditure in the Internet segment decreased by 18.2%

yoy and in the first half of 2016 – by 11.8% yoy. This is connected mainly with the decrease in expenditure on

marketing of video services (as of the end of 2015 the operation of the Kinoplex.pl website was suspended),

affiliated marketing services, as well as the SirLocal.pl website.

3. IMPORTANT INFORMATION ON INTERNET ACTIVITIES

In June 2016, the reach of Gazeta.pl group websites among Polish internet users stood at 61.8%, and the number of

users reached 15.8 million. The total number of page views of Gazeta.pl group websites reached 690.3 million, with

an average viewing time of 1 hour per user [6].

In June 2016, 9.3 million internet users (reach of 36.4%) viewed the websites of Gazeta.pl group on mobile devices,

which made Gazeta.pl group the fifth player according to the market survey of Gemius PBI. The number of mobile

page views amounted to 265.1 million, and the share of mobile page views on the websites of Gazeta.pl group stood

at 38.4% and was the highest among Polish horizontal portals [6].

The websites of Gazeta.pl group are ranked among the top thematic market players. In accordance with the data of

Gemius PBI for June 2016, the websites of Gazeta.pl group are the leaders of the Fashion and beauty category

(Avanti24.pl), hold the second place in the Work category (Gazetapraca.pl, GoldenLine.pl), and the third place in the

Information and journalism, Sports (among others, Sport.pl) and Children and family (eDziecko.pl) categories.

Gazeta.pl has the fourth place in the thematic rankings – Construction and real property, Communities

(Forum.gazeta.pl, Blox.pl) and Cuisine and cooking (Ugotuj.to).

4. NEW INITIATIVES

In January 2016, Agora acquired a majority stake in GoldenLine Sp. z o.o. for PLN 8,48 million. With this transaction,

the Company will strengthen its position in the recruitment services market, by creating the only range of services

available to Polish employers and candidates to be this comprehensive.

In March 2016, Agora’s Internet segment was joined by Optimizers Sp. z o.o. This is the new name of an online

advertising agency specialising in performance marketing that belongs to the Agora Group and has been

transformed into a separate company. Optimizers provides advertising services in the area of performance

marketing to businesses of various sizes, representing various industries. The agency began operations in March

2009, focusing on SEM/SEO activities. Since then it has extended its service range to include new advertising

products.

In April 2016, a nationwide image campaign was launched for the Sport.pl brand to promote its website and Sport.pl

LIVE — the most popular sports application in Poland. Advertisements with the slogan Sport.pl to jest Twój live


AGORA GROUP


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(Sport.pl is your live) were published in online media, on the radio, in cinemas and as outdoor ads prior to the Euro

2016 tournament. Grzegorz Krychowiak, a player for Poland’s national football team and then star of the Spanish

club Sevilla FC, became the ambassador of Sport.pl. Additionally, for the duration of the Euro 2016 championships,

Sport.pl secured the partnership of some of the most active companies in the sports sponsoring market. Also for

Euro 2016, Sport.pl launched a new, faster mobile version of its website. It now has a much more modern design

and enables quicker access to information.

The Internet segment has also added new websites to its portfolio. In February 2016, Gazeta.pl launched

Weekend.Gazeta.pl, which is an extension of the online magazine’s weekend edition — long, compelling articles are

now also published on weekdays, from Monday to Friday. Also in February, Gazeta.pl launched

Wideonews.Gazeta.pl, an online video news service featuring short, attractive clips created for social media. March

2016 marked the premiere of Next.Gazeta.pl, a business and technology website. This project combines the high

quality of its unique, original content with an attractive, accessible form. Haps, Gazeta.pl’s new culinary format, has

been created exclusively for social media. Haps video recipes can be viewed conveniently on any device and on

various social platforms.

The segment has provided its users with new versions of its popular applications: Sport.pl LIVE for iOS-based devices

in February 2016 and Moja Ciaza from eDziecko.pl for Android-based devices in March.

As of June 2016, a completely new version of Gazeta.pl LIVE, the best Polish news application for Android-based

devices (the highest-rated app in its category by Google Play users), has been available. Its modern design makes it

even more user-friendly. The app also features a number of new functions enabling users to obtain interesting

information even quicker. The application has a new content layout based on a news feed with one distinguished

topic. Users can adjust it to their own needs and news consumption model.


AGORA GROUP


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IV.E. RADIO

The Radio segment includes the pro-forma consolidated financials of Agora’s Radio Department, all local radio

stations and a super-regional radio TOK FM, which are parts of the Agora Group. These include: 23 Golden Hits

(Zlote Przeboje) local radio stations, 4 local radio stations (since March 1, 2016; in 2015 and in January-February

2016 7 local radio stations broadcasted under the name Rock Radio), 7 local stations broadcasting under the brand

Radio Pogoda (3 stations since June 12, 2015, 4 stations since July 31, 2015, 7 stations since March 1, 2016) and a

super-regional news radio TOK FM broadcasting in 22 metropolitan areas (on July 22, 2016 Radio TOK FM started

broadcasting in Bydgoszcz i Rzeszow).

Tab. 18


yoy 1H 2016 1H 2015

% change

yoy

Total sales, including : 29.6 27.2 8.8% 55.0 48.7 12.9%

Radio advertising revenue (1), (2) 25.1 24.7 1.6% 47.0 44.6 5.4%

Total operating cost, including: (2) (24.3) (23.0) 5.7% (48.0) (44.3) 8.4%

Staff cost (7.9) (7.6) 3.9% (16.0) (14.7) 8.8%


D&A (0.7) (0.7) - (1.5) (1.4) 7.1%

Promotion and marketing (2) (2.8) (2.4) 16.7% (4.9) (4.3) 14.0%

EBIT 5.3 4.2 26.2% 7.0 4.4 59.1%

EBIT margin 17.9% 15.4% 2.5pp 12.7% 9.0% 3.7pp

EBITDA 6.0 4.9 22.4% 8.5 5.8 46.6%

EBITDA margin 20.3% 18.0% 2.3pp 15.5% 11.9% 3.6pp

(1) advertising revenues include revenues from brokerage services of proprietary and third-party air time;

(2) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media (only the direct

variable cost of campaigns carried out on advertising panels) if such a promotion was executed without prior

reservation.

In the second quarter of 2016, the Radio segment’s operating results on the EBIT and EBITDA levels improved,

amounting to PLN 5.3 million and PLN 6.0 million, respectively. This results mainly from increasing revenues of the

segment.

In the first half of 2016, owing to the dynamic growth of revenues (up by 12.9% yoy to PLN 55.0 million), the Radio

segment improved its operating results on both - the EBIT and EBITDA levels. They were significantly higher than in

2015, amounting to PLN 7.0 million and PLN 8.5 million, respectively.

1. REVENUE [3]

In the second quarter of 2016, the revenues of the Radio segment increased by 8.8% yoy and amounted to PLN 29.6

million, and in the first half of 2016, the revenues grew by 12.9% yoy and amounted to PLN 55.0 million. The

increase in the level of revenues both in the second quarter and in the first half of 2016 mainly resulted from higher

yoy sales of advertising services in Helios cinemas; and in the first half of 2016 also from higher yoy revenues from

sales of advertising in the radio stations of the Agora Radio Group. In the analysed periods of time, inflows from

barter transactions were higher yoy. In the second quarter of 2016, the market radio advertising expenditure

decreased by 1% yoyand in the first half of 2016 it increased by 3.5% year on year.

2. COST

In the second quarter of 2016, the segment's operating costs increased by 5.7% yoy and amounted to PLN 24.3

million. The increase in the operating cost resulted mainly from the costs of brokerage services and costs of

marketing surveys recognised as external services. Apart from the advertising brokerage costs and the costs related

to sales of advertising services in Helios cinemas, the external services item also includes rental fees, production

services as well as operator fees.


AGORA GROUP


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Higher costs of promotion and marketing are related mainly to the Radio Złote Przeboje promotional campaign

connected with the promotional campaign of Lionel Richie’s and Rod Stewart’s concerts.

In the first half of 2016, the segment’s operating costs increased by 8.4% yoy and amounted to PLN 48.0 million. This

increase was affected by higher staff costs related to a higher headcount in sales departments and to the launching

of a new radio station under the Radio Pogoda brand. The increase in the operating costs in the first half of 2016 was

also affected by higher costs associated with the sale of advertising services in Helios cinemas and costs of marketing

surveys reported under external services.

Higher cost of promotion and marketing are related mainly to the Radio Złote Przeboje promotional campaign.

3. AUDIENCE SHARES [9]

Tab. 19

% share in listening 2Q 2016 change in pp

yoy 1H 2016

change in pp

yoy

Group's music radio stations (Rock Radio, Złote

Przeboje and Radio Pogoda)

4.0% 0.1pp 3.9% (0.1pp)

News talk radio station TOK FM 1.8% 0.3pp 1.9% 0.5pp

4. NEW INITIATIVES

The Radio segment, in collaboration with the Press segment, developed the Pogoda na zycie monthly, which was

launched on January 12th

2016.

Since March 2016, Radio Pogoda has been available to audiences in Bydgoszcz, Wroclaw and the Silesian Metropolis,

with music and interesting programmes for mature listeners. The youngest brand in Agora Radio Group’s portfolio is

now present in 7 Polish cities. It was possible to launch new radio stations under the Radio Pogoda brand due to

changing the names of 3 of the Group’s stations broadcasting previously as Rock Radio. Rock Radio can still be found

on the airwaves in 4 Polish cities: Warsaw, Poznan, Opole and Cracow.

The launch of Radio Pogoda in 3 new locations coincided with a campaign aimed at showcasing the station to new

audiences via the local press, cinemas and outdoor advertising.

In mid-March 2016, Agora Radio Group’s Radio TOK FM started broadcasting in Sieradz and the surrounding area

(the transmitter is located in Zdunska Wola) on 105.4 FM. On July 22, 2016, new transmitters started operating in

Bydgoszcz and Rzeszów, making the station available in a total of 22 cities.

In turn, in mid-June 2016, Radio Zlote Przeboje started broadcasting from Skomielna Czarna in the Malopolskie

province on 94.00 MHz.

The Agora Radio Group (GRA) team is also working on developing its digital offering. GRA’s novel project Mikrofon

TOK FM, as part of which an online platform and an app are to be created, enabling listeners to submit their

comments in audio format and effectively co-create the content aired by Radio TOK FM, has been awarded funding

as part of Google’s Digital News Initiative in the category of prototype projects. A total of 7 Polish projects received

DNI funding, including two submitted by Agora — one by Gazeta Wyborcza and one by Radio TOK FM.


AGORA GROUP


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IV.F. PRINT [1]

The Print segment includes the pro-forma financials of Agora’s Print division and Agora Poligrafia Sp. z o.o.

Tab. 20


yoy 1H 2016 1H 2015

% change

yoy

Total sales, including: 41.6 40.1 3.7% 80.6 81.1 (0.6%)

Printing services (1) 39.6 37.7 5.0% 76.6 76.8 (0.3%)

Total operating cost, including (2): (43.6) (39.9) 9.3% (83.6) (79.5) 5.2%

Raw materials, energy and production

services (30.5) (27.9) 9.3% (58.5) (55.9) 4.7%

Staff cost (5.5) (5.8) (5.2%) (10.9) (11.1) (1.8%)

D&A (3.9) (3.9) - (7.9) (8.1) (2.5%)

EBIT (2.0) 0.2 - (3.0) 1.6 -

EBIT margin (4.8%) 0.5% (5.3pp) (3.7%) 2.0% (5.7pp)

EBITDA 1.9 4.1 (53.7%) 4.9 9.7 (49.5%)


(1) revenues from services rendered for external customers;

(2) segment operating costs associated with the production of the Group's own titles are settled on the basis of

allocation of direct and indirect cost associated with their production to the Press segment.

In the second quarter and first half of 2016, the Print segment’s EBITDA decreased to the amount of, respectively,

PLN 1.9 million and PLN 4.9 million [1]. A factor that influenced both – segment’s revenue and cost side – was

weakening PLN/EUR exchange rate.

1. REVENUE

In the second quarter of 2016, revenues from printing services for external customers reached PLN 39.6 million and

increased by 5.0%.

In the first half of 2016, revenues from printing services for external customers decreased by 0.3% yoy and

amounted to PLN 76.6 million.

2. COST

In the second quarter of 2016, the Print segment's operating costs increased by 9.3% yoy, mainly due to higher yoy

transportation and cost of production materials.

In the first half of 2016, the segment's operating costs increased by 5.2% yoy and amounted to PLN 83.6 million. This

growth resulted mainly from higher yoy cost of transportation and production materials.


AGORA GROUP


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NOTES

[1] EBIT and EBITDA of Press, Internet, Movies and Books as well as Print segments are calculated on the basis of cost

directly attributable to the appropriate operating segment of the Agora Group and excludes allocations of all

Company’s overheads (such as: cost of Agora’s Management Board and a majority of cost of the Company`s

supporting divisions), which are included in reconciling positions.

[2] the data on ticket sales in the cinemas comprising Helios group come from the accounting data of Helios reported

in accordance with full calendar periods.

[3] The data refer to advertising expenditures in six media (print, radio, TV, outdoor, Internet, cinema). In this MD&A

Agora has corrected the numbers for Internet and TV in the first quarter of 2015, Internet, TV, dailies, cinema and

outdoor in the second quarter of 2015 and in dailies, cinema and Internet in the first quarter of 2016.

Unless explicitly stated otherwise, press and radio advertising market data referred to herein are based on Agora’s

estimates adjusted for average discount rate and are stated in current prices. Given the discount pressure as well as

advertising time and space sell-offs, these figures may not be fully reliable and will be adjusted in the consecutive

reporting periods. In case of press, the data include only display advertising, excluding classifieds, inserts and

obituaries. The estimates are based on rate card data obtained from the following sources: Kantar Media

monitoring, Agora S.A. monitoring.

Presented TV, Internet and cinema figures are based on initial Starlink media house estimates; TV estimates include

regular ad broadcast and sponsoring with product placement, exclude teleshopping and other advertising forms.

Internet ad spend estimates include display, search engines (Search Engine Marketing), e-mail marketing and video

advertising.

Outdoor advertising figures are based on Izba Gospodarcza Reklamy Zewnetrznej estimates [8].

The Company would like to stress that one should bear in mind that these advertising market estimations may

represent some margin of error due to significant discount pressure on the market and lack of reliable data on the

average market discount rates. Once the Company has a more reliable market data in consecutive quarters, it may

correct the ad spending estimations in particular media.

[4] The data on the number of copies sold (total paid circulation) of daily newspapers is derived from the National

Circulation Audit Office (ZKDP). The term "copy sales" used in this MD&A is consistent with the sales declarations of

publishers to the National Circulation Audit Office.

The data on dailies readership are based on PBC General, research carried out by MillwardBrown on a random,

nationwide sample of Poles over 15 years of age. The CCS index was used (weekly readership index) - percentage of

respondents reading at least one edition of the title within 7 days of the week preceding research. Size of the sample:

nationwide PBC General for April-June 2016: N=5, 013; for January-June 2016: N = 10,039.


AGORA GROUP


translation only

[5] Definition of ratios:

Net profit margin = Net profit /(loss) attributable to equity holders of the parent

Sales of finished products, merchandise and materials

Gross profit margin = Gross profit / (loss) on sales

Sales of finished products, merchandise and materials

Return on equity =

Net profit / (loss) attributable to equity holders of the parent

(Equity attributable to equity holders of the parent at the beginning of the period

+ Equity attributable to equity holders of the parent at the end of the period)

/ 2 /(2 for semi-annual and 4 for quarterly results)

Debtors days =

(Trade receivables gross at the beginning of the period

+ Trade receivables gross at the end of the period) / 2

Sales of finished products, merchandise and materials / no. of days

Creditors days =

(Trade creditors at the beginning of the period

+ Trade creditors at the end of the period) / 2

Cost of sales / no. of days

Inventory turnover = (Inventories at the beginning of the period + Inventories at the end of the period) / 2

Cost of sales / no. of days

Current ratio I = Current Assets

Current liabilities

Gearing ratio =

Current and non-current liabilities from loans – cash and cash equivalents

– highly liquid short-term monetary assets

Total equity and liabilities

Interest cover = Operating profit / (loss)

Interest charge

Free cash flow interest

cover =

Free cash flow *

Interest charge

* Free cash flow = Net cash from operating activities + Purchase of property plant and equipment and intangibles.


AGORA GROUP


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[6] Real users, page views and spent time on the basis of Megapanel PBI/Gemius, cover Internet users age 7 years

and above, connecting to Internet from the territory of Poland and include only Internet domains registered on Agora

S.A. in Gemius SA’s Registry of Service Providers. Real users data of the Gazeta.pl group services are audited by

Gemius SA.

Since May 2016 a new methodology of Gemius PBI research has been introduced and the data for previous audited

periods is not comparable. According to the new methodology the data is presented jointly for PCs and mobile

platforms, and the reach of websites is reported accordingly. The way of weighing data and the definitions of indices

also changed.

The data for mobile platforms present the traffic through www, however it does not include the users of mobile

applications and the pageviews generated through mobile applications (Gazeta.pl LIVE, Sport.PL LIVE, Moje Dziecko,

Moja Ciaza, Tuba.fm).

[7] Average paid circulation of monthlies is based on the Agora’s own data. Rate card data on magazines obtained

from Kantar Media monitoring; commercial brand advertising and sponsored articles, excluding specialized

monthlies; accounted for 122 monthlies and 78 other magazines; in total 200 magazines for the period of April-June

2016 and 126 monthlies and 82 other magazines; in total 208 magazines for the period of January – June 2016.

[8] Source: report prepared by Izba Gospodarcza Reklamy Zewnetrznej (IGRZ) in cooperation with Starlink company

[9] Audience market data referred herein are based on Radio Track surveys, carried out by MillwardBrown SMG/KRC

(all places, all days and all quarter) in whole population and in the age group of 15+, from April to June (sample for

2015: 21,048; sample for 2016: 20,970) and from January to June (sample for 2015: 41,955; sample for 2016:

41,977).

[10] The data on cinema ticket sales are estimates of Helios group prepared on the basis of data received from

Boxoffice.pl (based on reports submitted by distributors of film copies). Cinema ticket sales are reported for periods,

which do not cover a calendar month, quarter or year. The number of tickets sold in the given period is calculated

from the first Friday of a given month, quarter or year until the first Thursday of the next reporting month, quarter or

year.


AGORA GROUP


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V. ADDITIONAL INFORMATION

V.A. INFORMATION CONCERNING SIGNIFICANT CONTRACT

� Execution of the Annex no. 2 to the Agreement granting Agora the multi-purpose credit line.

In the current report dated May 24, 2016 the Management Board of Agora S.A. informed that on May 24, 2016 the

Company signed an Annex no.2 to a multi-purpose credit line agreement ("Agreement") with Bank Polska Kasa

Opieki S.A. ("Bank). The original Agreement was signed on May 28, 2014; the Company informed about the initial

agreement in a current report no. 10/2014 of May 28, 2014, as well as in a current report no. 10/2015 of May 26,

2015. The Annex became effective on May 25, 2016.

According to the hitherto provisions of the Agreement, the Company could use the credit facility in the current

account (up to PLN 35,000,000) till May 28, 2016 and time credit (up to PLN 100,000,000) till May 31, 2016. In 2016,

according to Annex no. 1 of the Agreement, the Company used time credit of PLN 25,000,000 within the credit limit

for financing of the current expenses realized in the normal course of business of the Company. It shall be paid up in

13 equal installments from June 30, 2017 to June 30, 2020.

Due to the above and on the basis of the Annex, the Company shall be provided by the credit line in the amount of

up to PLN 135.000.000 divided into:

- credit facility in the current account of up to PLN 35.000.000, which can be used by the Company till May 31, 2017,

- time credit of up to PLN 100.000.000, which can be used by the Company till May 31, 2017. The amount of

available time credit is reduced by the used amounts of the credit.

The potential time credit will be paid in 13 equal quarterly installments, from June 30, 2018 until June 30, 2021.

Interest rate of the credit is defined on the basis of the WIBOR rate plus the Bank's margin.

The maximum amount of the credit limit exceeds 10% of the Company's equity, therefore, both the Agreement and

the Annex amending it, have been recognized as a significant agreement.

Other significant conditions of the Agreement remain unchanged.

V.B. IMPORTANT EVENTS

� Growth directions of the Agora Group, mid-term priorities od the Agora Group.

In the current report dated January 15, 2016 the Management Board of Agora S.A. informed, that as of end of

December 2015 the number of "Gazeta Wyborcza's" paid subscriptions reached 77 thousand, which significantly

exceeds Company's earlier expectations in Agora's mid-term development plan of the Agora Group.

In the current report dated May 13, 2016 the Management Board of Agora S.A. informed of growth directions of

the Agora Group, indicated mid-term priorities of the Agora Group and strategic tasks for coming years of each

Agora Group’s segment.

� Recommendation of the Management Board of Agora S.A. concerning payment of dividend.

In the current report dated May 12, 2016 the Management Board of Agora S.A. informed about adoption of the

resolution of May 12, 2016 recommending the General Meeting of Shareholders to pay a dividend in the amount of

PLN 0.75 per one share.

Analyzing the financial results and condition of markets on which the Company runs its business activities, the

Management Board decided to propose to shareholders payment of dividend by:


AGORA GROUP


translation only

(i) allocating total net profit for the fiscal year 2015 in the amount of PLN 13,721,654.78 (say: thirteen million seven

hundred twenty one thousand six hundred fifty four zlotys and seventy eight groszy) for the dividend payment for

the Company's shareholders,

(ii) appropriation of PLN 22,027,414.72 (say: twenty two million twenty seven thousand four hundred fourteen

zlotys and seventy two groszy) from the Company's reserve capital for the dividend payment to the Company's

shareholders.

Total amount recommended by the Management Board to be paid out in the form of dividend equals PLN

35,749,069.50 (say: thirty five million seven hundred forty nine thousand sixty nine zlotys and fifty groszy) which

means that the dividend recommended by the Company amounts to PLN 0.75 (say: seventy five groszy) per share.

The proposed dividend day is July 14, 2016 and the proposed distribution date is August 2, 2016.

Those dates meet the requirements set by Dobre Praktyki Spolek Notowanych na GPW - the period between them

does not exceed the period of 15 working days.

The above recommendation received a positive opinion of the Supervisory Board.

� General Meeting of Shareholders of Agora S.A.

In the current report dated May 24, 2016 the Management Board of Agora S.A. convened the Annual General

Meeting of Shareholders of Agora S.A. for June 23, 2016 at 11:00 a.m. (the "General Meeting of Shareholders").

In the current report dated May 24, 2016, the Management Board of Agora S.A. published the draft resolutions to

be voted on at the General Meeting of Shareholders.

In the current reports dated June 16, 2016, the Management Board of Agora S.A. announced candidates to the

Supervisory Board of Agora S.A., who were submitted by the entitled Shareholders.

In the current report dated June 23, 2016, the Management Board of Agora S.A. published the resolutions adopted

by the General Meeting of Shareholders, including resolutions relating to: (i) appointment of the Supervisory Board

for the common three - year term of office and (ii) payment of dividend to the Company’s Shareholders in amount

and on terms recommended by the Management Board of Agora S.A.

In the current report dated June 23, 2016, the Management Board of Agora S.A. informed that the following

shareholders held more than 5% of the total number of votes at the General Meeting of Shareholders held on June

23, 2016:

Agora - Holding Sp. z o.o.: 22,528,252 votes, i.e. 49.73% of the votes at the General Meeting of Shareholders and

34.77% of the total number of votes.

- Otwarty Fundusz Emerytalny PZU "Zlota Jesien": 7,000,000 votes, i.e. 15.45% of the votes at the General Meeting

of Shareholders and 10.80% of the total number of votes.

- MDIF Media Holdings I, LLC: 5,355,645 votes i.e. 11.82% of the votes at the General Meeting of Shareholders and

8.27% of the total number of votes.

- Nationale-Nederlanden Otwarty Fundusz Emerytalny: 4,000,000 votes i.e. 8.83% of the votes at the General

Meeting of Shareholders and 6.17% of the total number of votes.

- Aegon Otwarty Fundusz Emerytalny: 3,457,000 votes i.e. 7.63% of the votes at the General Meeting of

Shareholders and 5.34% of the total number of votes.

In the current report dated June 23, 2016, the Management Board of Agora S.A. informed, that on June 23, 2016

the General Meeting of Shareholders of the Company appointed the following persons to the Company's

Supervisory Board: Mrs. Wanda Rapaczynski, Mrs. Anna Maria Krynska – Godlewska, Mr. Andrzej Szlezak, Mr.


AGORA GROUP


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Tomasz Sielicki, Mr. Dariusz Formela, Mr. Andrzej Dobosz. Additionally, the Management Board of Agora S.A.

informed, that the General Meeting of Shareholders of the Company appointed Mr. Andrzej Szlezak to the position

of the Chairman of the Supervisory Board.

V.C. CHANGES IN CAPITAL AFFILIATIONS OF THE ISSUER WITH OTHER ENTITIES

On January 18, 2016 the following financial instruments were assigned to the Company as a result of subscription

for shares made by the Company on December 31, 2015 in connection with public offering of 4,641,304 series E

ordinary bearer shares of the company Stopklatka S.A.: (i) as a result of the basic subscription : 1,902,907, (ii) as a

result of the additional subscription: 13,144, which were paid for in the total amount of PLN 4,407 thousand. The

remaining, unused amount of cash paid by the Company in connection with the subscription for shares of Stopklatka

S.A., amounting to PLN 10,645 thousand, was returned to the Company on January 21, 2016. On February 9, 2016

the District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of the National Court Register

entered into the register of entrepreneurs of the National Court Register the increase of the share capital of

Stopklatka S.A. from the amount PLN 6,529,956 to the amount PLN 11,171,260. Agora S.A. currently owns 4,596,203

ordinary bearer shares of the nominal value of PLN 1 per share and the total nominal value of PLN 4,596,203 that

represent 41.14% of the company’s share capital and 41.14% of the votes at the General Meeting of Stopklatka S.A.

On January 25, 2016 Agora S.A. acquired 106 shares in the share capital of GoldenLine Sp. z o.o. with its registered

seat in Warsaw, from shareholders of that company, for the total price of PLN 8,480 thousand. As a result of the

above transaction, Agora S.A. currently owns 178 shares in the share capital of GoldenLine Sp. z o.o., with the

nominal value of PLN 1,000 each and the total nominal value of PLN 178 thousand, which represent 89% of the

company’s share capital and 89% of the votes at the shareholders’ meeting. On March 1, 2016 the District Court for

the capital city of Warsaw in Warsaw, XIII Commercial Division of the National Court Register entered into the

register of entrepreneurs of the National Court Register the above mentioned change.The minority shareholder of

the GoldenLine sp. z o.o. remains G.C. Geek Code Ltd, controlled by Mariusz Gralewski - the main founder of

GoldenLine Sp. z o.o. G.C. Geek Code Ltd holds 22 shares in GoldenLine sp. z o.o., which represent 11% of the share

capital and give the right to 22 votes at the general meeting of shareholders and represent 11% of the votes at the

general meeting of shareholders. According to the share purchase agreement principles of cooperation between

Agora S.A. and G.C. Geek Code shall be stated after the transaction. In case there is no agreement in this respect,

G.C. Geek Code will be entitled to sell its shares in the share capital of GoldenLine sp. z o.o. to Agora S.A., within 3

months from the date of the share purchase agreement, the terms and conditions being the same as in the contract

of January 25, 2016. On April 28, 2016 the deadline of 3 months was prolonged by 3 consecutive months, that is till

July 25, 2016. Until July 25, 2016, Agora S.A. received no statement on the execution by G.C. Geek Code of the above

put option, therefore, the option expired. Agora S.A. and G.C. Geek Code are currently negotiating the principles of

cooperation, aiming at conclusion of a contract regarding, among others, the terms and conditions of sale by G.C

Geek Code of its shares to Agora S.A. Moreover, on April 1, 2016 the extraordinary general meeting of shareholders

of the company GoldenLine Sp. z o.o. adopted a resolution increasing the share capital of the company GoldenLine

Sp. z o.o., as described further below.

On February 5, 2016 Agora S.A. acquired 8 shares in the share capital of AdTaily Sp. z o.o. with its registered seat in

Warsaw from a shareholder of that company for the total price of PLN 115 thousand. As a result of the above

transaction, Agora S.A. currently owns 730 shares in the share capital of AdTaily Sp. z o.o. with the nominal value of

PLN 50 per share and the total nominal value of PLN 36,500, which represent 86.90% of the company’s share capital

and 86.90% of votes at the shareholders’ meeting. On March 11, 2016 the District Court for Cracow-Srodmiescie in

Cracow, XI Commercial Division of the National Court Register, registered the above mentioned change with the

register of entrepreneurs of the National Court Register.

On March 1, 2016, the extraordinary general meeting of shareholders of the company Sport4People Sp. o.o. with its

registered office in Warsaw adopted a resolution on dissolution of the company and opening of the liquidation

proceedings. On April 4, 2016 the District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of

the National Court Register, registered the above mentioned change with the register of entrepreneurs of the

National Court Register.

On March 4, 2016, the District Court for the Capital City Warsaw, XIII Commercial Division of the National Court

Register, entered into the register of entrepreneurs of the National Court Register the company operating under the

business name Searchlab Sp. o.o. with its registered office in Warsaw. The sole shareholder of this company is Agora

S.A. Agora S.A. holds 100 shares in the share capital of the company Searchlab Sp. o.o., with the nominal value of

PLN 50 per share. The shares were taken up in return for a cash contribution in the amount of PLN 5 thousand. On


AGORA GROUP


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April 1, 2016 the extraordinary general meeting of shareholders of the company Searchlab Sp. z o.o. adopted a

resolution increasing the share capital of the company and changing the company`s name, as described further

below.

On March 23, 2016, the extraordinary general meeting of shareholders of Green Content Sp. z o.o. adopted the

resolution increasing the share capital by 2,000 new shares with the nominal value of PLN 50 per share and the total

nominal value of PLN 100 thousand. Agora S.A. covered 2,000 new shares with PLN 10,000 thousand cash

contribution. On April 29, 2016 the District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division

of the National Court Register registered the above mentioned change. After the registration, the share capital

amounts to PLN 200 thousand and is divided into 4,000 shares with nominal value of PLN 50 per share.

Consequently, Agora S.A. holds 4,000 shares representing 100% of the company’s share capital and 100% of the

votes at shareholders’ meeting.

On March 29, 2016, a minority shareholder (“Minority Shareholder”) of Helios S.A., holding 320,400 shares of the

Helios S.A., constituting 2.77% of the share capital (“Shares”), submitted a call to Helios S.A., based on art. 418 (1) of

the Commercial Companies Code (“CCC”), for convening the general meeting of shareholders of Helios S.A. and

placement on the agenda of an item regarding adoption of a resolution on Shares compulsory sell-out (“Call”).

As a result of (i) the Call, (ii) further calls, submitted pursuant to art. 418 (1) of CCC by the Minority Shareholder and

others minority shareholders of Helios S.A., who purchased a portion of the Shares from the Minority Shareholder

and (iii) resolutions adopted by the Extraordinary General Meetings of Shareholders of Helios S.A. held on May 10,

2016 and June 13, 2016, there are currently two ongoing sell-out procedures (pursuant to art. 418 (1) of CCC) and

one ongoing squeeze-out procedure (pursuant to art. 418 of CCC), aiming at the acquisition by the two shareholders

of Helios S.A., including Agora S.A., of the Shares held by the Minority Shareholder and other minority shareholders.

In connection with the ongoing sell out procedures, as of June 30, 2016 Agora S.A. transferred the amount of PLN

2,938 thousand to Helios S.A., as the sell-out price, calculated based on art. 418 (1) of CCC. As of June 30, 2016

Agora Group recognised in its balance sheet a liability to acquire the shares from the minority shareholders of Helios

S.A. in the total amount of PLN 3,170 thousand. The total amount includes the above mentioned amount of PLN

2,938 thousand, which Agora S.A. transferred to Helios S.A. and the amount transferred by a second shareholder of

Helios S.A. in connection with the ongoing sell out procedures. The final evaluation of Shares, which are subject to

the sell-out and squeeze-out procedures, will be calculated by an expert or experts appointed by the registry court

having the jurisdiction over the registered office of Helios S.A.

As of the date of publication of this report, the compulsory sell-out and squeeze-out procedures have not been

completed.

On April 1, 2016, the extraordinary general meeting of shareholders of Goldenline Sp. z o.o. adopted the resolution

increasing the share capital by 100 new shares with nominal value of PLN 1,000 per share and total nominal value of

PLN 100 thousand. Agora S.A. covered the 100 new shares with a non-cash contribution in a form of Centrum

Kompetencyjne Praca, which organisationally, financially and operationally constitutes, within the internal

organisational structure of the Company, a separate set of tangible and intangible assets intended for the

implementation of specific economic tasks, i.e. (i) the running of the Gazetapraca.pl website; and (ii) the sale of

recruitment solutions, and (iii) provision of services connected to the employer branding activities, which is an

independent enterprise performing these tasks. On June 13, 2016 the District Court for the capital city of Warsaw in

Warsaw, XIII Commercial Division of the National Court Register registered the above mentioned change. After the

registration, the share capital amounts to PLN 300 thousand and is divided into 300 shares with nominal value PLN

1,000 per share. Agora S.A. holds 278 shares representing 92,66% of the company’s share capital and 92,66% of the


On April 1, 2016, the extraordinary general meeting of shareholders of Searchlab Sp. z o.o. adopted the resolution

increasing the share capital by 1,900 new shares with nominal value of PLN 50 per share and total nominal value PLN

95 thousand. Agora S.A. covered 1,900 new shares with a non-cash contribution in a form of Agencja Reklamy

Internetowej “SearchLab”, which organisationally, financially and operationally constitutes, within the internal

organisational structure of the Company, a separate set of tangible and intangible assets, intended for the

implementation of specific economic tasks, i.e. (i) the sale and running of online advertising campaigns on external

surfaces of economic entities, with respect to which SearchLab operates as an agent for sales and performance of

advertising campaigns; and (ii) provision of advisory services and operation in the field of search engine optimisation

(SEO); which is an independent enterprise independently performing these tasks. On April 29, 2016 the District

Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of the National Court Register registered


AGORA GROUP


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the above mentioned change, and also change of Company’s name to Optimizers Sp. z o.o. After the registration, the

share capital amounts to PLN 100 thousand and is divided into 2,000 shares with nominal value PLN 50 per share.

Agora S.A. holds 2,000 shares, representing 100% of the company’s share capital and 100% of the votes at

shareholders’ meeting.

On May 12, 2016, the extraordinary general meeting of shareholders of AdTaily Sp. z o.o. („AdTaily”) adopted a

resolution increasing the share capital of that company by 36 new shares with nominal value of PLN 50 each and

total nominal value of PLN 1,800. The extraordinary general meeting of shareholders of Adtaily Sp. z o.o. resolved

that the newly created shares will be subscribed by two new minority shareholders, 18 shares by each of them. After

the registration of the increase in the register of entrepreneurs of the National Court Register, the share capital will

amount to PLN 43,800 and will be divided into 876 shares with nominal value of PLN 50 per share, Agora S.A. will

hold 730 shares representing 83.33% of the company’s share capital and 83.33% of the votes at shareholders’

meeting. As of the date of publication of this report, the above change has not been registered with the register of

entrepreneurs of the National Court Register.

On May 25, 2016, Grupa Radiowa Agory Sp. z o.o. with its registered seat in Warsaw (“GRA”) acquired 90 shares in

the share capital of Projekt Inwestycyjny Sp. z o.o. (“PI”) from a shareholder of that company. As a result of the

above transaction, GRA currently owns 300 shares in the share capital of PI, with the nominal value of PLN 500 per

share and the total nominal value of PLN 150,000, representing 100% of the company’s share capital and 100% of

the votes at the shareholders’ meeting. On June 16, 2016 the District Court for the capital city of Warsaw in Warsaw,

XIII Commercial Division of the National Court Register, registered the above mentioned change with the register of

entrepreneurs of the National Court Register.

On July 5, 2016, Agora S.A. received, from a former minority shareholder of Helios S.A., a call to pay an additional

price for the shares sold by this minority shareholder to the Company, based on a share sale agreement of

December 11, 2014, concluded between Agora S.A. and the minority shareholder.

On July 8, 2016, Agora S.A. received, from a non-controlling shareholder of Helios S.A., a call to purchase 0.38%

shares of Helios S.A. The call was submitted pursuant to the provisions of an option agreement dated August 31,

2010 and for the price for shares calculated in accordance with the provisions of this agreement.

On August 4,, 2016, in performance of the call for acquisition, received by Agora S.A. on July 8, 2016, Agora S.A. and

a non-controlling shareholder of Helios S.A. signed the Promised Share Purchase Agreement, as a result of which

Agora S.A. purchased 0.38% of shares of that company, for the total price of PLN 791 thousand, calculated in

accordance with provisions of the option agreement concluded between the parties. As a result, shares held by

Agora S.A. currently represent 88.88% of the company’s share capital and 88.88% of the voting rights at the

shareholders’ meeting.


AGORA GROUP


translation only

V.D. ADDITIONAL INFORMATION

1. Description of the Group

The description of the Group showing the entities subject to consolidation is presented in note 11 to the condensed

semi-annual consolidated financial statements.

2. Changes in ownership of shares or other rights to shares (options) by Management Board

members since the date of publication of the last quarterly report

Tab. 21

a. shares

as of

12 August

2016

decrease increase

as of

30 June

2016

decrease increase

as of

13 May

2016

Bartosz Hojka 2,900 - - 2,900 - - 2,900

Tomasz Jagiello 0 - - 0 - - 0

Grzegorz

Kossakowski 44,451 - - 44,451 - - 44,451

Robert Musial 1,233 - - 1,233 - - 1,233

In the described periods, the members of the Management Board did not have any other rights to shares (e.g.

options).

The members of the Management Board participate in the incentive plan described in the note 5 of the condensed

semi-annual consolidated financial statements.

3. Changes in ownership of shares or other rights to shares (options) by Supervisory Board

Members since the date of publication of the last quarterly report

Tab. 22

a. shares

as of

12 August

2016

decrease increase

as of

30 June

2016

decrease increase

as of

13 May

2016

Slawomir S. Sikora(1) n/a(1) - - n/a(1) - - 0

Tomasz Sielicki(1)(2) 33 - - 33 - - 33

Andrzej Szlezak(1)(2) 0 - - 0 - - 0

Dariusz

Formela(1)(2) 0 - - 0 - - 0

Wanda

Rapaczynski(1)(2) 882,990

- - 882,990 - - 882,990

Pawel Mazur(1) n/a(1) - - n/a(1) - - 0

Anna Krynska –

Godlewska(2) 0 - - 0 - - 0

Andrzej Dobosz(2) 0 - - 0 - - 0

In the described periods, the members of the Supervisory Board did not have any other rights to shares (e.g.

options).

(1) Members of the Supervisory Board of the former term of office (expired on June 23, 2016);

(2) Members of the Supervisory Board of the current term of office (appointed to the Supervisory Board by the

General Meeting of Shareholders of the Company of June 23, 2016) .


AGORA GROUP


translation only

4. Shareholders entitled to exercise over 5% of total voting rights at the General Meeting of

Agora S.A., either directly or through affiliates, as of the date of publication of the report for

the first half of 2016

Data update is performed on the basis of the official notifications from shareholders entitled to over 5% of total

voting rights at the General Meeting of the Company.

According to the formal notifications received from the Company’s shareholders, particularly on the basis of art. 69

of Act on Public Offer and the Conditions of Introducing Financial Instruments to the Organized Trading System and

on Public Companies dated July 29, 2005, as of the day of publication of the previous quarterly report (i.e. May 13,

2016), and as of the day of publication of this report, has significantly changed.

According to the abovementioned notifications, the following shareholders were entitled to exercise over 5% of the

total voting rights at the General Meeting of the Company as of the date of May 13, 2016:

Tab. 23

No. of shares % of share

capital no. of votes

% of voting

rights

Agora-Holding Sp. z o.o.

(in accordance with the last notification obtained on

September 24, 2015 )

5,401,852 11.33 22,528,252 34.77

Powszechne Towarzystwo Emerytalne PZU S.A.

(Otwarty Fundusz Emerytalny PZU Zlota Jesien and

Dobrowolny Fundusz Emerytalny PZU)

(in accordance with the last notification

obtained on December 27, 2012 )(1)

7,594,611 15.93 7,594,611 11.72

including:

Otwarty Fundusz Emerytalny PZU Zlota Jesien



7,585,661 15.91 7,585,661 11.71

Nationale-Nederlanden Powszechne Towarzystwo

Emerytalne S.A. (Nationale – Nederlanden Otwarty

Fundusz Emerytalny and Nationale – Nederlanden

Dobrowolny Fundusz Emerytalny) (in accordance

with the last notification obtained on August 7, 2015

)(2)

6,806,704 14.28 6,806,704 10.51

Aegon Powszechne Towarzystwo Emerytalne S.A.

(Aegon Otwarty Fundusz Emerytalny) (in accordance

with the last notification obtained on December 7,

2015)

3,283,154 6.89 3,283,154 5.07

(1) number of shares according to the shareholder’s notification – as of the December 27, 2012; proportion of voting rights and

percentage of share capital were recalculated by the Company after registration of redemption of Company’s share capital;.

(2) number of shares according to the shareholder’s notification – as of the August 7, 2015; proportion of voting rights and

percentage of share capital were recalculated by the Company after registration of redemption of Company’s share capital.

� Significant changes in the shareholders’ structure

In the current report dated June 6, 2016 The Management Board of Agora S.A., informed that on June 6, 2016 the

Company obtained a notification from the proxy of Media Development Investment Fund, Inc., (the "Dominant

Entity") and MDIF Media Holdings I, LLC, a company controlled by the Dominant Entity (the "Buyer") that as a result

of the settlement on June 3, 2016 of block transactions involving the acquisition of shares in the Company (the

"Transactions"), the direct stake that the Buyer holds in the total number of votes at a general meeting of the


AGORA GROUP


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shareholders of the Company has increased to 8.26% and the indirect stake that the Dominant Entity holds through

the Buyer in the total number of votes at a general meeting of the shareholders of the Company has increased to

8.26%. Prior to the completion of the Transactions, the Buyer did not directly and the Dominant Entity did not

indirectly hold any shares in the Company, nor was the Buyer directly or the Dominant Entity indirectly entitled to

exercise any votes at a general meeting of the Company. After the completion of the Transactions, the Buyer directly

and the Dominant Entity indirectly, through the Buyer, hold 5,350,000 shares in the Company representing a 11.22%

interest in the Company share capital entitling them to exercise 5,350,000 votes at a general meeting of the

shareholders of the Company, which represent 8.26% of the total number of votes at the general meeting of the

shareholders of the Company. In the separate current report dated on June 6, 2016, the Management Board of

Agora S.A. announced information on previous acquiring by the Company of knowledge on initiation by Media

Development Investment Fund, Inc. and MDIF Media Holdings I, LLC. of the negotiations with the Company's

financial investors in order to purchase the Company's shares from them.

In the current report dated June 10, 2016, The Management Board of Agora S.A. informed that on June 9, 2016 the

Company obtained a notification informing that due to the settlement of the sales of Agora's shares in block

transactions managed by Nationale - Nederlanden Powszechne Towarzystwo Emerytalne S.A. funds: Nationale -

Nederlanden Otwarty Fundusz Emerytalny ("OFE") and Nationale - Nederlanden Dobrowolny Fundusz Emerytalny

("DFE") decreased the total number of held shares and voting rights at the General Meeting of Shareholders of

Agora S.A. below 10%.

Before the disposal of shares OFE and DFE held 7,673,655 (seven million six hundred seventy three thousand six

hundred fifty five) Company's shares constituting 16.10% of the share capital of the Company and entitling to

7,673,655 (seven million six hundred seventy three thousand six hundred fifty five) votes at the Company's General

Meeting of Shareholders, which constituted 11.84% of total number of votes.

On June 9, 2016 OFE and DFE held 4,493,055 (four million four hundred ninety three thousand and fifty five)

Company's shares constituting 9.43% of the Company's share capital. These shares entitle to 4,493,055 (four million

four hundred ninety three thousand and fifty five) of votes at the Company's General Meeting of Shareholders,

which constitute 6.93% of total number of votes.

According to the formal notifications received from the Company’s shareholders, particularly on the basis of art. 69

of Act on Public Offer and the Conditions of Introducing Financial Instruments to the Organized Trading System and

on Public Companies dated July 29, 2005, as of the day of publication of this report for the first half of 2016 the

following shareholders were entitled to exercise over 5% of voting rights at the General Meeting of Shareholders of

the Company:

Tab. 24

No. of shares % of share

capital no. of votes

% of voting

rights

Agora-Holding Sp. z o.o.


obtained on September 24, 2015 )

5,401,852 11.33 22,528,252 34.77

Powszechne Towarzystwo Emerytalne PZU S.A.

(Otwarty Fundusz Emerytalny PZU Zlota Jesien and

Dobrowolny Fundusz Emerytalny PZU)


obtained on December 27, 2012 ) (1)

7,594,611 15.93 7,594,611 11.72

including:

Otwarty Fundusz Emerytalny PZU Zlota Jesien



7,585,661 15.91 7,585,661 11.71

Media Development Investment Fund, Inc. (MDIF

Media Holdings I, LLC.) (in accordance with the

formal notification obtained on June 6, 2016)

5 350 000 11.22 5 350 000 8.26


AGORA GROUP


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Nationale-Nederlanden Powszechne Towarzystwo

Emerytalne S.A. (Nationale – Nederlanden Otwarty

Fundusz Emerytalny and Nationale Nederlanden

Dobrowolny Fundusz Emerytalny)


obtained on June 9, 2016 )

4 493 055 9,43 4 493 055 6,93

Aegon Powszechne Towarzystwo Emerytalne S.A.

(Aegon Otwarty Fundusz Emerytalny) (in

accordance with the last notification obtained on

December 7, 2015)

3 283 154 6.89 3 283 154 5.07

(1) number of shares according to the shareholder’s notification – as of the December 27, 2012; proportion of voting rights and

percentage of share capital were recalculated by the Company after registration of redemption of Company’s share capital.

5. OTHER INFORMATION

� The Management Board’s statement of the possible realization of forecasts

The Management Board did not publish any forecasts of financial results and because of that this report does not

present any Management Board’s statement of the possible forecast execution.

� Changes in contingences and court cases

Any changes in contingencies since the date of closing of the last financial year and information about court cases

were described in notes 7 and 8 to the condensed semi-annual consolidated financial statements.

� Related party transactions

Transactions with related parties with the Group are of routine nature and were described in note 10 to the

condensed semi-annual consolidated financial statements.

6. THE DESCRIPTION OF BASIC HAZARDS AND RISK CONNECTED WITH THE UPCOMING

MONTHS OF THE CURRENT FINANCIAL YEAR

� Macroeconomic risk

Advertising revenues depend on the general economic situation in Poland and in Europe. They grow in the periods

of economic upswing and are marked by considerable decrease in time of the economic slowdown. According to the

Company’s estimations in the first half of 2016, advertisers spent 2.5% yoy more on advertising. Advertisers

increased their expenditure in all media except for press.

Additionally, it should be noted that the level of advertising revenues is dependent on both the ad volume as well as

prices of media purchase.

� Seasonality of advertising spending

The Group advertising revenues are marked by seasonal variation. The Group’s revenues in the first and third

quarter are usually lower than in the second and fourth quarter of a given financial year.

� Advertising market structure and the position of individual media in readership, TV and radio audience

market

The Group’s advertising revenues are generated by the following media: press, outdoor advertising, radio stations,

internet and cinemas. As a result of structural changes and media convergence particular media in the Agora

Group’s portfolio compete both with their business competitors and with television broadcasters - constituting over

half of the advertising market expenditure in the first half of 2016. The next largest segment of advertising market –

Internet held 25.5% share in total ad spend. Ad expenditure in magazines and dailies constituted 6.0% and 2.5%

share of total ad spend, respectively. Outdoor advertising held in the first half of 2016 6.0% of the advertising

market share and radio ad spend constituted 8.0% of total ad expenditure. Cinema advertising in Poland constituted

1.5% of all advertising expenditure. Bearing in mind the dynamics of particular media and the current estimates of


AGORA GROUP


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advertising market growth in 2016 there is a risk that the share of particular media in the advertising market will

change. This may influence the Group’s position and its revenues.

Additionally, as a result of the changes in media described above and consolidation on the advertising market the

competition between media grows and it may influence Group’s advertising revenues. Moreover, due to those

changes and technological progress there is no certainty that the Group will be able to react to them in a proper

time and manner, which may negatively influence the Group’s position and financial results.

Advertising revenues depend also on the readership figures and shares in radio and television audience. Due to the

process of structural changes in the media consumption, the media market changes dynamically – some sectors can

take advantage of the current changes while other can lose its position on the market. There is no certainty that the

Group’s position in the particular media sectors will remain unchanged.

� Press distribution

The main channel of press distribution, used by every press publisher in Poland, is networks of kiosks situated in

places of intense traffic. Distribution market in Poland is highly concentrated – two main distributors control over

80% of press distribution market. Therefore, significant financial or operational problems of either of them may have

a negative impact on copy sales and the results of the Group.

� Press

Presently paid press segment experiences a worldwide trend of copy sales decrease and shrinking of advertising

expenditure. Press titles, published by the Group and its competitors, are not resistant to the changes taking place

on the press market. The dynamics of the above mentioned processes may have a negative impact on dailies copy

sales and the revenues of the Group. Since 2014, the Group develops system of paid access to the digital content of

Gazeta Wyborcza. There is no certainty how this model of paid access to the digital content of the daily will affect

the Group's position in the long term perspective.

� Internet

Polish Internet advertising market is highly competitive. Number of internet users in Poland is stabilizing. The level of

Internet ad expenditure is also characterized by seasonality. The first and the third quarters of the financial year are

usually characterized by lower revenues and the fourth quarter is marked by higher revenues.

Internet business is highly dependent on technology progress and number of Internet users and maintaining a strong

position on that market is possible by means of investment in modern and innovative technology. In this segment of

advertising market the Group competes with local and international players. There is no guarantee, that on such a

competitive market the Group’s position and ad revenues will be unchanged.

� Outdoor

Outdoor advertising market in Poland is highly competitive. AMS S.A. competes with Polish companies, as well as big

international concerns. Outdoor advertising market is of high legal risk due to the possible changes in the rules

regarding the use of public space and introduction of new limitations in the centers of large urban areas, as well as

rules on fees and tax rates related to this business activity. The factors mentioned above may have an impact on the

Group’s result.

Yet, it is hard to estimate the impact of the last large legal act regulating the outdoor market – Act dated April 24,

2015 on chages selected regulations in connection with the strengthening tools for landscape protection. Local

governing bodies are in the process of consultation of the act on the local level.

In 2014, execution of the contract to construct of 1,580 bus shelters in Warsaw commenced. The investment process

shall last 3 years. The estimated cost of the bus shelters’ construction amounts to ca PLN 80 million. The duration of

the contract is nearly 9 years. The timely execution of the contract carries risk related to the necessity of acquiring a

number of approvals and administration decisions. Additionally, in such a competitive and changing environment

the macroeconomic and market assumptions necessary for the project success may not materialize.


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� Cinema

Helios group opens new cinemas in shopping and entertainment centres. Therefore, further development of the

cinema network is dependent upon the construction of new shopping and entertainment galleries in Poland and

ability to compete with other cinema operators for new space lease contracts. The pace of Polish infrastructure

development and the situation on the Polish real estate market (i.e. cost of space rent) may influence the results of

cinema operators.

Additionally, the available repertoire affects results of cinema business. Lack of interesting movies, abilities to

promote movies or the quality of movies may negatively affect cinema admissions. Moreover, economic downturn

may translate into lower expenditure on entertainment which may result in lower revenues from ticket sales and

willingness to buy food and beverages in cinema bars. Moreover, the cinema operators compete with other

technologies of film screening, inter alia, in Internet.

� Risks of running licensed business

The Group has been running its activities in radio market for years and since 2014 it started to operate in TV market.

Radio and TV operations are licensed activities in Poland. The license entries determine the scope and form of

business during the time for which the license is granted. There is a risk that demand, from radio and TV audience,

for a certain radio or TV format may decrease, while the Group will not be able to adjust to the market requirements

due to the obligation to respect program entries stated in the license.

� Radio stations

Polish radio ad market is highly competitive. Agora’s radio stations compete with other radio broadcasters, with

national reach, as well as other media – TV, press, internet and outdoor advertising. To maintain audience share it is

important to have a demanded radio format. There is no certainty that the Group’s current position in the radio

audience market will be unchanged. Competing for ad revenue, radio stations (also belonging to different media

concerns), create joint advertising offers. The popularity of these offers may significantly influence the shares of

particular radio broadcasters in radio ad market.

� Television

Due to the purchase of 41.04% stake in Stopklatka S.A. by Agora on March 12, 2014 r. the Company entered

television market. Our television channel competes with existing television broadcasters and potential new market

entrants. Among Stopklatka TV competitors there are larger broadcasters with better brand recognition and greater

financial resources than us. The increasing success in Poland of DTH, cable and DTT providers will likely result in the

increasing fragmentation of Polish TV viewing audiences, which may make it more difficult for us to persuade

advertisers to purchase airtime in Stopklatka TV. The results of Stopklatka are consolidated under the equity

method. In 2015 The National Broadcasting Council granted a subsidiary company of Agora S.A. – Green Content sp.

z o.o. a new license to broadcast a television programme via digital terrestrial platform in signal of eighth multiplex.

The launch od the station is planned in the fourth quarter of 2016. There is no certainty that a new TV channel will

gain popularity among audience at a highly competitive TV market and thus whether it will achieve a financial

success.

� Movie business

Movie distribution and co-production is of project nature, which may cause the volatitility of its results and lead to

periodic distortions of the Group’s results. The majority of outlays, especially those related to movie co-production,

is incurred long before the revenues related to that field of operations occur. The impact of this activity on the

Group’s results depends also on the popularity of particular film productions.

� Impairment tests

In line with the International Financial Reporting Standards, the Group runs impairment tests. In the past, some of

the tests resulted in impairment losses, which were reflected in the income statement (unconsolidated or

consolidated). There is no certainty that the tests run in the future will give positive effects.


AGORA GROUP


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� Currency risk

The Group’s revenues are expressed in Polish zlotys. Part of the operating cost, connected mainly with cinema

activities, the production materials and services and IT services, is related to the currency exchange rates. The

volatility of currency exchange rates may have influence on the level of Group’s operating cost and its financial

results. The development projects initiated by the Company, including the launch of a new TV channel in the fourth

quarter of 2016, may expose to a greater degree both, the Company and the Group, to this type of risk.

� Risk of losing key employees

The Group’s success is dependent on the involvement and qualifications of its key employees, who contributed

immensely to Group’s development and effective optimization of the Group’s operating processes. Due to the

market competition for highly qualified specialists there is no guarantee that the Group will be able to preserve all

valuable employees.

� Risk of receivables collection

Still a large number of companies in Poland declares bankruptcy, including customers of the Agora Group. The

financial difficulities of customers co-operating with different segments of the Agora Group may affect the Group’s

financial results. Additionally, there is no certainty, that in case of bankruptcy of its customers the Group will collect

all of its receivables.

� The risk of collective dispute

On December 12, 2011 an Inter-union trade organization NSZZ Soldarnosc AGORA S.A i INFORADIO SP. Z O.O.

(“OM”) was created. The trade unions operate in Agora S.A., Inforadio Sp. z o.o., Agora Poligrafia Sp. z o.o., AMS

S.A., Trader.com (Polska) Sp. z o.o. and Grupa Radiowa Agory Sp. z o.o. According to the law requirements the

managment boards of the companies in which trade unions operate consult or negotiate with them decisions in

legally determined cases.

The Group tries to maintain good relations with its employees and solve any problems as they appear, however it

can not be excluded that in the future the Group may experience a collective dispute in law determined cases.

� The risk of volatility of law regulations , especially those concerning the Group’s activities

Polish legal system is highly complicated and undergoes frequent and unpredictable changes. The Group activities

may be impacted especially by changes in regulations related to the Group’s operations, including the Copy Right

and Related Rights Act, European Union regulations concerning collective copyright and related rights management

organizations, Broadcasting Act, law on minimum wages and those determining the conditions of local special

development plan.

Additionally, the Group’s activities may be impacted by changes into regulations concerning Polish capital market

and tax issues.


AGORA GROUP


translation only

VI. MANAGEMENT BOARD’S REPRESENTATIONS

1. REPRESENTATION CONCERNING ACCOUNTING POLICIES

Management Board of Agora confirms that, to the best knowledge, the condensed semi-annual unconsolidated and

consolidated financial statements together with comparative figures, have been prepared according to all applicable

accounting standards and give a true and fair view of the state of affairs and the financial result of the Issuer and its

Capital Group.

Management Discussion and Analysis of the Group shows true view of the achievements and the state of affairs of

the Issuer’s Capital Group, including evaluation of risks and dangers.

2. REPRESENTATION CONCERNING ELECTION OF THE COMPANY’S AUDITOR FOR THE REVIEW

OF THE CONDENSED SEMI-ANNUAL FINANCIAL STATEMENTS

Management Board of Agora confirms that the Company’s auditor chosen for the review of semi-annual

unconsolidated and consolidated financial statements has been elected according to applicable rules and that the

company reviewing the Agora’s accounts as well as certified auditors engaged in the review of this financial

statements met objectives to present an objective and independent opinion on the review of the financial

statements in accordance with legal regulations and professional rules.


AGORA GROUP


translation only


Bartosz Hojka - President of the Management Board Signed on the Polish original

Grzegorz Kossakowski - Member of the Management Board Signed on the Polish original

Robert Musial - Member of the Management Board Signed on the Polish original

Tomasz Jagiello - Member of the Management Board Signed on the Polish original


AGORA GROUP

Condensed

semi-annual

consolidated

financial statements

as at 30 June 2016

and for six month

period ended

thereon

August 12, 2016

AGORA GROUP Condensed semi-annual consolidated financial statements as at 30 June 2016 and for 6 month period ended thereon

(all amounts in PLN thousands unless otherwise indicated) translation only


CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016

As at 30 June

2016

unaudited

As at 31

December 2015

audited

Assets

Non-current assets:

Intangible assets 466,025 448,064

Property, plant and equipment 656,354 669,689

Long-term financial assets 86 98

Investments in equity accounted investees 8,230 19,938

Receivables and prepayments 14,351 14,179

Deferred tax assets 9,473 10,388

1,154,519 1,162,356

Current assets:

Inventories 32,433 29,031

Accounts receivable and prepayments 277,933 281,716

Income tax receivable 348 121

Short-term securities and other financial assets 79,301 105,826

Cash and cash equivalents 30,083 31,163

420,098 447,857

Total assets 1,574,617 1,610,213

Accompanying notes are an integral part of these condensed semi-annual consolidated financial statements.




CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016 (CONTINUED)

Note

As at 30 June

2016

unaudited

As at 31

December 2015

audited

Equity and liabilities

Equity attributable to equity holders of the parent:

Share capital 47,665 47,665

Share premium 147,192 147,192

Retained earnings and other reserves 906,353 958,629

1,101,210 1,153,486

Non-controlling interest 18,433 16,699

Total equity 1,119,643 1,170,185

Non-current liabilities:

Deferred tax liabilities 26,599 22,527

Long-term borrowings 3 79,358 60,850

Other financial liabilities 15 15,853 16,575

Retirement severance provision 2,616 2,451

Provisions 812 927

Deferred revenues, accruals and other liabilities 14,364 15,259

139,602 118,589

Current liabilities:

Retirement severance provision 66 198

Trade and other payables 182,516 165,998

Income tax liabilities 3,527 9,463

Short-term borrowings 3 39,937 46,794


Provisions 2,005 2,115

Deferred revenues and accruals 80,493 92,567

315,372 321,439

Total equity and liabilities 1,574,617 1,610,213





CONSOLIDATED INCOME STATEMENT FOR SIX MONTHS ENDED 30 JUNE 2016

Six months

ended

Six months

ended

Note

30 June 2016

unaudited

30 June 2015

unaudited,

adjusted

Sales 4 584,735 575,571

Cost of sales (414,622) (406,234)

Gross profit 170,113 169,337

Selling expenses (110,468) (105,529)

Administrative expenses (60,907) (58,740)

Other operating income 7,029 6,661

Other operating expenses (4,091) (5,589)

Operating profit 4 1,676 6,140

Finance income 2,332 2,606

Finance costs (7,911) (2,544)

Share of results of equity accounted investees (51) (218)

Profit/(loss) before income taxes (3,954) 5,984

Income tax (7,163) (1,174)

Net profit/(loss) for the period (11,117) 4,810

Attributable to:

Equity holders of the parent (12,268) 3,613

Non-controlling interest 1,151 1,197

(11,117) 4,810

Basic / diluted earnings per share (in PLN) (0.26) 0.08





CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR SIX MONTHS ENDED

30 JUNE 2016

Six months

ended

Six months

ended

30 June 2016

unaudited

30 June 2015

unaudited


Other comprehensive income:

Items that will not be reclassified to profit or loss

- -

Items that will be reclassified to profit or loss

- -

Other comprehensive income for the period - -

Total comprehensive income for the period (11,117) 4,810

Attributable to:

Shareholders of the parent (12,268) 3,613

Non-controlling interests 1,151 1,197

(11,117) 4,810


Strona 6 [ w w w . a g o r a . p l ]



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR SIX MONTHS ENDED 30 JUNE 2016

Attributable to equity holders of the parent

Share capital

Treasury

shares

Share

premium

Retained

earnings and

other reserves Total

Non-controlling

interest Total equity

Six months ended 30 June 2016

As at 31 December 2015 audited 47,665 - 147,192 958,629 1,153,486 16,699 1,170,185

Total comprehensive income for the period

Net profit/(loss) for the period - - - (12,268) (12,268) 1,151 (11,117)

Total comprehensive income for the period - - - (12,268) (12,268) 1,151 (11,117)

Transactions with owners, recorded directly in equity

Contributions by and distributions to owners

Dividends declared - - - (35,749) (35,749) - (35,749)

Dividends of subsidiaries - - - - - (852) (852)

Total contributions by and distribtutions to owners - - - (35,749) (35,749) (852) (36,601)

Changes in ownership interests in subsidiaries

Acquisition of non-controlling interests - - - 538 538 (700) (162)

Acquisition of a subsidiary (note 12) - - - - - 2,035 2,035

Recognition of put option granted to non-

controlling interests - - - (1,760) (1,760) - (1,760)

Additional contribution of non-controlling

shareholders - - - (98) (98) 100 2

Other - - - (2,939) (2,939) - (2,939)

Total changes in ownership interests in

subsidiaries - - - (4,259) (4,259) 1,435 (2,824)

Total transactions with owners - - - (40,008) (40,008) 583 (39,425)

As at 30 June 2016 unaudited 47,665 - 147,192 906,353 1,101,210 18,433 1,119,643





CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR SIX MONTHS ENDED 30 JUNE 2016 (CONTINUED)


Share capital

Treasury

shares

Share

premium

Retained

earnings and

other

reserves Total

Non-

controlling



As at 31 December 2014 audited 50,937 (30,060) 147,192 981,520 1,149,589 15,490 1,165,079


Net profit for the period - - - 3,613 3,613 1,197 4,810

Total comprehensive income for the period - - - 3,613 3,613 1,197 4,810




Repurchase of own shares - (9,288) - - (9,288) - (9,288)

Total contributions by and distribtutions to owners - (9,288) - - (9,288) (676) (9,964)


Total changes in ownership interests in

subsidiaries - - - - - - -

Total transactions with owners - (9,288) - - (9,288) (676) (9,964)

As at 30 June 2015 unaudited 50,937 (39,348) 147,192 985,133 1,143,914 16,011 1,159,925





CONSOLIDATED CASH FLOW STATEMENT FOR SIX MONTHS ENDED 30 JUNE 2016

Six months

ended

Six months

ended

Note

30 June 2016

unaudited

30 June 2015

unaudited

Cash flows from operating activities


Adjustments for:

Share of results of equity accounted investees 51 218

Depreciation of property, plant and equipment 39,492 39,093

Amortization of intangible assets 9,688 14,384

Foreign exchange (gain)/loss 33 (67)

Interest, net 1,575 1,408

(Profit) / loss on investing activities (1,271) (1,412)

(Decrease) / increase in provisions (192) (1,083)

(Increase) / decrease in inventories (3,402) 949

(Increase) / decrease in receivables and prepayments 6,162 (6,819)

(Decrease) / increase in payables (17,346) (7,421)

(Decrease) / increase in deferred revenues and accruals (14,099) 10,464

(Profit) / loss on acquisition of subsidiary 12 3,309 -

Other adjustments (409) 536

Cash generated from operations 19,637 56,234

Income taxes paid (9,115) (3,432)

Net cash from operating activities 10,522 52,802

Cash flows from investing activities

Proceeds from sale of property, plant and equipment, and intangibles 1,861 1,939

Dividends received 360 -

Loan repayment received 3,600 -

Interest received 674 588

Disposal of short-term securities 75,734 40,603

Other inflows (1) 10,645 -

Purchase of property plant and equipment, and intangibles (38,128) (44,996)

Acquisition of subsidiary (net of cash acquired), associates and jointly

controlled entities (6,204) (2,824)

Acquisition of short-term securities (63,000) (58,000)

Loans granted - (2,495)

Net cash used in investing activities (14,458) (65,185)




Six months

ended

Six months

ended

30 June 2016

unaudited

30 June 2015

unaudited

Cash flows from financing activities

Proceeds from borrowings 32,943 15,783

Proceeds from factoring - 8,939

Other inflows 234 -

Repurchase of own shares - (9,288)

Acquisition of non-controlling interest (162) -

Dividends paid to non-controlling shareholders (852) (676)

Repayment of borrowings (17,255) (18,524)

Payment of finance lease liabilities (9,691) (8,722)

Interest paid (2,011) (1,730)

Other (350) (568)

Net cash used in financing activities 2,856 (14,786)

Net increase / (decrease) in cash and cash equivalents (1,080) (27,169)

Cash and cash equivalents

At start of period 31,163 52,330

At end of period 30,083 25,161

(1) the amount relates to cash paid by the Company in 2015 in connection with the subscriptions for shares of

Stopklatka S.A. described in note 12 and was returned to the Company on January 21, 2016.




[ w w w . a g o r a . p l ] Strona 10

NOTES TO THE CONDENSED SEMI-ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

AS AT 30 JUNE 2016 AND FOR SIX MONTH PERIOD ENDED THEREON

1. GENERAL INFORMATION

Agora S.A. with its registered seat in Warsaw, Czerska 8/10 street (“the Company”) principally produces and sells

newspapers (including Gazeta Wyborcza), carries out the Internet activity and is active as a publisher in magazines,

periodicals and books segment. The Company also engages in projects related to production and coproduction of

movies. Additionally, the Agora Group (“the Group”) is also active in the cinema segment through its subsidiaries

Helios S.A. and Next Film Sp. z o.o. (“Helios Group”) and in the outdoor segment through its subsidiary AMS S.A.

(“AMS”). Moreover, the Group controls 5 radio broadcasting companies and offers printing services for external

clients in printing houses belonging to the Company and to its subsidiary Agora Poligrafia Sp.z o.o. The Group is also

present in TV segment by holding shares in Stopklatka S.A. Additionally, in December 2015 the subsidiary Green

Content Sp. z o.o. received the decision of the President of the National Broadcasting Council on granting a license to

broadcast a television programme via digital terrestrial platform in signal of eighth multiplex.

As at 30 June 2016 the Agora Group (“the Group”) comprised: the parent company Agora S.A., and 21 subsidiaries.

Additionally, the Group held shares in 2 jointly controlled entities: Stopklatka S.A. and Online Technologies HR Sp. z

o.o. and in 2 associates: Instytut Badan Outdooru IBO Sp. z o.o. and Hash.fm Sp. z o.o.

Financial statements were prepared as at and for six months ended 30 June 2016, with comparative figures presented

as at 31 December 2015 and for six months ended 30 June 2015.

The financial statements were authorized for issue by the Management Board of Agora S.A. on August 12, 2016.

2. STATEMENT OF COMPLIANCE

The Consolidated Balance Sheet as of 30 June 2016, the Consolidated Income Statement, the Consolidated Statement

of Comprehensive Income, the Consolidated Cash Flow Statement and the Consolidated Statement of Changes in

Equity for six months ended 30 June 2016 have not been audited. The consolidated financial statements as at and

for twelve months ended 31 December 2015 have been audited by an independent auditor who issued an unqualified

opinion.

The condensed semi-annual consolidated financial statements have been prepared under International Accounting

Standard 34 “Interim Financial Reporting”, according to art. 55 point 5 of Accounting Act (Official Journal from 2013,

item 330 with subsequent amendments), regulations issued based on that Act and the Decree of Minister of Finance

dated 19 February 2009 on current and periodic information provided by issuers of securities and the conditions for

recognition as equivalent information required by the law of a non-Member State (Official Journal from 2015, item

133).

In the preparation of these condensed semi-annual consolidated financial statements, the Group has followed the

same accounting policies as used in the consolidated financial statements as at December 31, 2015, except for the

changes described below. The condensed semi-annual consolidated financial statements as at 30 June, 2016 should be

read together with the audited consolidated financial statements as at December 31, 2015.

For the Group’s financial statements for the year started with January 1, 2016 the following new intepretations and

amendments to existing standards, which were endorsed by the European Union, are effective:

1) Amendments to IAS 19 Employee Benefits: Defined Benefit Plans - Employee Contributions; 2) Amendments to IFRS - Improvements to IFRS 2010-2012;

3) Amendments to IFRS 11 Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations;

4) Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets - Clarification of Acceptable

Methods of Depreciation and Amortisation;

5) Amendments to IFRS - Improvements to IFRS 2012-2014;

6) Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture - Bearer Plants;

7) Amendments to IAS 27 Separate Financial Statements - Equity Method in Separate Financial Statements;

8) Amendments to IAS 1 Presentation of Financial Statements - Disclosure initiative.




The application of the above amendments had no material impact on the consolidated financial statements.

In 2016 the Group changed the name of the line item in the consolidated balance sheet from „Accounts payable” to

„Trade and other payables”. The scope of balances presented in this line item did not change. In Company`s opinion,

the new name reflects more accurately the information scope of this line item. The same change was applied to the

unconsolidated balance sheet of the Company.

Adjustments to comparative information

In 2016, the Group modified the presentation of expenses related to rental cost of advertising space in internet

business. Till the end of 2015 these costs were presented in the consolidated income statement in the line item

“Selling expenses” and starting from the first quarter of 2016 these costs are presented in the line item “Cost of

sales”. In the Company`s opinion, the new presentation more appropriately reflects the nature of these costs from the

perspective of classification of expenses according to their function. The comparative amounts were adequately

adjusted. The above change had no impact on previously reported amounts of operating profit, net profit and equity

of the Group.

The summary of adjustments made to the consolidated comparative amounts of the Group is presented in the table

below:

Six months

ended

Six months

ended

30 June 2015

(as reported)

Presentation

adjustments

30 June 2015

(as adjusted)

Cost of sales (397,027) (9,207) (406,234)

Gross profit 178,544 (9,207) 169,337

Selling expenses (114,736) 9,207 (105,529)

3. LONG-TERM AND SHORT-TERM BORROWINGS

In May 2016, Agora S.A., on the basis of Annex no. 1 to the multi - purpose credit line agreement, used a non-

renewable tranche of the time credit in the amount of PLN 25,000 thousand within the available credit limit for the

purpose of financing the current expenses realized in the normal course of the business of the Company. The tranche

shall be paid up in 13 equal installments from June 30, 2017 till June 30, 2020.

On the basis of the Annex no. 2 to the multi - purpose credit line agreement signed on 24 May 2016 with Bank Polska

Kasa Opieki S.A., Agora S.A. was provided with a time credit of up to PLN 100,000 thousand, which may be used by

31 May 2017 and with a credit facility in the current account of up to PLN 35,000 thousand, which may be used by

31 May 2017. As at 30 June 2016, the amount of the time credit is diminished by the tranche used in the amount of

PLN 25,000 thousand.

As at 30 June 2016, the Company had outstanding debt related to the time credit used in the amount of PLN 25,000

(including PLN 23,077 thousand presented in non-current liabilities) and PLN 6,628 thousand used within its current

account facility. Moreover, the company AMS S.A. had outstanding debt within its current account facility in the

amount of PLN 3,377 thousand.

As at 30 June 2016, external debt of the Helios S.A. including bank loans and finance lease liabilities amounted to PLN

84,185 thousand. This amount consisted of:

- bank loans in the amount of PLN 37,094 thousand (including PLN 24,206 thousand presented in non-current part);

- finance lease liabilities in the amount of PLN 47,091 thousand (including PLN 31,989 thousand presented in non-

current part) - connected mainly with finance leasing of the cinema equipment and cars.




4. SALES AND SEGMENT INFORMATION

In these condensed semi-annual consolidated financial statements, in accordance with IFRS 8 Operating segments,

information on operating segments are presented on the basis of components of the Group that management

monitors in making decisions about operating matters. Operating segments are components of the Group, about

which separate financial information is available, that is evaluated regularly by the chief operating decision maker in

the process of decision making regarding allocation of resources and assessing the performance of the Group.

For management purposes, the Group is organized into business units based on their products and services.

The Group activities are divided into six reportable operating segments as follows:

1) the Press segment includes the Group’s following activities: publishing of dailies: Gazeta Wyborcza and

Metrocafe.pl as well as publishing of the magazines within Agora’s Magazine Department and Free Press division,

2) the Movies and Books segment includes the Group’s activities within the cinema management of Helios S.A., film

distribution activities of Next Film Sp. z o.o. as well as activities of Agora`s Special Projects Department (including book

collections and film production),

3) the Outdoor segment includes the activities within the AMS Group, which provides advertising services on different

forms of outdoor advertising panels,

4) the Internet segment includes the following Group’s activities: the Internet and multi-media products and services

within the Agora’s Internet department, Trader.com (Polska) Sp. z o.o., AdTaily Sp. z o.o., Sport4People Sp. z o.o., Sir

Local Sp. z o.o., GoldenLine Sp. z o.o. and Optimizers Sp. z o.o.;

5) the Radio segment includes the Group’s activities within local radio stations, super-regional TOK FM radio and

Agora’s Radio Department,

6) the Print segment includes the Group’s activities related to printing services within the Agora’s Printing Department

and Agora Poligrafia Sp. z o.o.

Accounting policies for operating segments are the same as followed by the Agora Group, besides some issues

described below.

Data within each reportable segment are consolidated pro-forma. The Management Board monitors the operating

results of its business units separately for the purpose of making decisions about resource allocation and performance

assessment. Press segment operating costs associated with the production of the Group's own titles are settled on the

basis of allocation of direct and indirect costs associated with their production from the Print segment. Segment

performance is evaluated based on operating profit or loss.

Operating results of reportable segments do not include:

a) revenues and total cost of cross-promotion of Agora’s different media if such promotion is executed without prior

reservation between segments of the Agora Group; the direct variable cost of campaigns carried out on advertising

panels is the only cost that is included above; it is allocated from the Outdoor segment to other segments,

b) amortisation recognised on consolidation (described below).

Group financing (including finance costs and finance revenue) and income tax are managed on a Group level and are

not allocated to operating segments. Transfer prices between operating segments are set on the market basis in the

manner similar to transactions with third parties.

Reconciling positions show data not included in particular segments, inter alia: other revenues and costs of Agora’s

supporting divisions (centralized IT, finance, administrative, HR functions, etc.), new TV channel and the Management

Board, Agora TC Sp. z o.o., intercompany eliminations and other matching adjustments, which reconcile the data

presented in the management reports to the consolidated financials of the Agora Group.

Operating depreciation and amortisation includes amortisation of intangible assets and fixed assets of each segment.

Amortisation recognised on consolidation can be defined as consolidation adjustments, inter alia: the amortisation of

intangible assets and adjustments to property, plant and equipment recognised directly on consolidation.

Impairment losses and reversals of impairment losses show impairment losses and their reversals presented in other

operating expenses and income.




Amount of investment in associates and joint ventures accounted for by the equity method include the amount of

acquired shares adjusted by the Group`s share of net results of those entities accounted for by the equity method. The

financials presented for six months ended 30 June 2016 and 30 June 2015 relate to Online Technologies HR Sp. z o.o,

Instytut Badan Outdooru Sp. z o.o., Stopklatka S.A., GoldenLine Sp. z o.o. (in 2015) and Hash.fm Sp. z o.o.

Capital expenditure consists of additions based on the invoices booked in the reported period connected to purchases

of intangible and fixed assets. In case of Movies and Books segment capital expenditure do not include outlays related

to the cinema fit-out works to the extent in which those outlays are reimbursed by the owners of the premises, in

which those cinemas are located.

The Agora Group does not present geographical reporting segments, because its business activities are carried out

mainly in Poland.




4. SALES AND SEGMENT INFORMATION (CONTINUED)


Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total

Revenues from external customers 130,802 160,808 80,502 77,332 52,370 79,758 3,163 584,735

Intersegment revenues (2) 4,905 8,257 907 2,500 2,639 794 (20,002) -

Total revenues 135,707 169,065 81,409 79,832 55,009 80,552 (16,839) 584,735

Total operating cost (1), (2), (3) (135,732) (158,688) (67,160) (70,194) (47,960) (83,537) (19,788) (583,059)

Operating profit / (loss) (1) (25) 10,377 14,249 9,638 7,049 (2,985) (36,627) 1,676

Net finance income and cost (5,579) (5,579)


investees (3) - - - 93 - - (144) (51)

Income tax (7,163) (7,163)

Net loss (11,117)

(1) segments do not include amortisation recognised on consolidation, which is presented in reconciling positions;

(2) the amounts do not include revenues and total cost of cross-promotion of Agora’s different media if such promotion is executed without prior reservation between segments of the

Agora Group; the direct variable cost of campaigns carried out on advertising panels is the only cost that is included above; it is allocated from the Outdoor segment to other segments;

(3) reconciling positions show data not included in particular segments, inter alia: other cost and the result on other operating activities of Agora’s support divisions (centralized IT,

administrative, HR functions, etc.) and the Management Board and Agora TC Sp. z o.o. (PLN 43,463 thousand), intercompany eliminations and other matching adjustments which

reconcile the data presented in the management reports to the consolidated financials of the Agora Group. In case of equity accounted investees, the reconciling positions include the

investment in Stopklatka S.A.






Press

Movies and

books (3)

Outdoor

Internet

Radio

Print

Reconciling

positions

Total

Operating depreciation and

amortisation (4,854) (15,226) (7,762) (2,512) (1,539) (7,841) (7,947) (47,681)

Amortisation recognised on

consolidation (1) - (259) - (1,368) - - 127 (1,500)

Impairment losses (686) (244) (282) (469) (426) (127) (218) (2,452)

Reversals of impairment losses 412 8 133 89 114 39 8 803

Capital expenditure (2) 766 15,533 7,162 3,549 1,223 982 3,248 32,463

As at 30 June 2016

Press

Movies and

books Outdoor Internet Radio Print

Reconciling

positions (4) Total

Property, plant and equipment and

intangible assets 72,400 279,484 268,029 69,402 80,956 165,563 186,545 1,122,379

Investments in associates and joint

ventures accounted for by the equity

method - - - 1,703 - - 6,527 8,230

(1) is not presented in operating result of the Group’s segments;

(2) based on invoices booked in the period;

(3) capital expenditure include lease property, plant and equipment in the amount of PLN 6,527 thousand.

(4) reconciling positions include mainly Company’s headquarter (PLN 111,635 thousand) and other property, plant and equipment and intangible assets of Agora’s support divisions and

Agora TC Sp. z o.o. not included in particular segments and intercompany eliminations. In case of equity accounted investees, the reconciling positions include the investment in

Stopklatka S.A.






Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


Intersegment revenues (2) 3,945 8,174 1,351 2,546 2,585 715 (19,316) -

Total revenues 148,736 167,504 74,102 71,654 48,746 81,141 (16,312) 575,571


Operating profit/(loss) (1) 7,526 10,821 9,352 10,614 4,456 1,623 (38,252) 6,140

Net finance income and cost 62 62


investees (3) - - (15) 216 (419) (218)

Income tax (1,174) (1,174)

Net profit 4,810













Press

Movies and

books (3)

Outdoor

Internet Radio

Print

Reconciling

positions

Total


amortisation (4,959) (21,198) (6,019) (2,716) (1,369) (8,062) (8,478) (52,801)


consolidation (1) - (269) - (534) - - 127 (676)

Impairment losses (1,327) (460) (892) (438) (261) (143) 140 (3,381)

Reversals of impairment losses 1,061 221 686 150 145 47 1 2,311

Capital expenditure (2) 661 11,100 22,064 744 1,362 977 1,385 38,293

As at 30 June 2015

Press

Movies and


Reconciling

positions (4) Total





method - - - 13,259 - - 2,927 16,186






Stopklatka S.A.




5. INCENTIVE PLANS BASED ON FINANCIAL INSTRUMENTS

a) Three-Year-Long Incentive Plan for the period of 2013-2015

Starting from the third quarter 2013, Management Board members of the Company participated in an incentive

program (“Three-Year-Long Incentive Plan” for the period of 2013-2015), which was described in consolidated

financial statements for the year 2015.

The rules, goals, adjustments and conditions for Three-Year-Long Incentive Plan fulfillment for the Management Board

members were specified in the Supervisory Board resolutions.

Till the end of 2014 the Three -Year-Long Incentive Plan was based on two components: the stage of realisation of the

financial result (“the EBITDA target”) and the percent of Company’s share price increase (“the Target of Share Price

Increase”).

In 2014, due to the fulfillment of the condition concerning the achievement of certain EBITDA level of the Agora Group

(being the sum of operating profit/loss and amortization and depreciation), the Three -Year-Long Incentive Plan was

modified so that, starting from the first quarter of 2015, the potential reward resulting from the Three -Year-Long

Incentive Plan was based only on the percent of Company’s share price increase. As a result, the liability relating to the

EBITDA target component of the Plan accumulated so far has been reversed and credited to the Income Statement in

the fourth quarter of 2014.

The value of potential reward resulting from the component based on the percent of Company’s share price increase

was charged to the Income Statement in proportion to the full vesting period of the Three-Year-Long Incentive Plan,

that is from the third quarter of 2013 till the second quarter of 2016.

In accordance with its assumptions, Three -Year-Long Incentive Plan for the period of 2013-2015 was settled in cash in

the second quarter of 2016. The realization of the plan resulted in the total payment of PLN 1,628 thousand.

b) Incentive Plan for years 2016-2017

Starting from the second quarter 2016, Management Board members of the Company participate in a new incentive

program, on the basis of which, they will be eligible to receive an annual bonus based on two components described

below:

(i) the stage of realisation of the target based on the EBITDA of the Agora Group (“the EBITDA target”). The EBITDA

target is specified as the EBITDA result (being the sum of operating profit/loss and amortization and depreciation)

to be reached in the given financial year determined by the Supervisory Board. The amount of potential bonus

depends on the stage of the EBITDA target fulfillment and will be determined on the basis of the audited

consolidated financial statements of the Agora Group for the given financial year;

(ii) the percent of Company’s share price increase (“the Target of Share Price Increase”). The amount of potential

reward in this component of the Incentive Plan will depend on the percent of Company’s share price increase in

the future. The share price increase will be calculated as a difference between the average of the quoted closing

Company’s share prices in the first quarter of the financial year commencing after the financial year for which the

bonus is calculated (“the Average Share Price IQ”) and the average of the quoted closing Company’s share prices

in the fourth quarter of the financial year preceding the financial year for which the bonus is calculated (“the

Average Share Price IVQ”). If the Average Share Price IQ will be lower than the Average Share Price IVQ, the

Target of Share Price Increase is not satisfied and the bonus in this component of the Incentive Plan will not be

granted.

The bonus from the Incentive Plan depends also on the fulfillment of a non-market condition, which is the

continuation of holding the post of the Management Board member.

The rules, goals, adjustments and conditions for the Incentive Plan fulfillment for the Management Board members

are specified in the Supervisory Board resolution.




As at 30 June 2016, the fair value of potential reward from the fulfillment of the EBITDA target has been calculated on

the basis of the best estimate of the expected fulfillment value of the EBITDA target for 2016 and was charged to the

Income Statement in proportion of the actual accumulated EBITDA level reached till the balance sheet of the current

financial statements in the estimated value of the EBITDA target realization for 2016.

The fair value of the potential reward concerning the realization of the Target of Share Price Increase, was estimated

on the basis of the Binomial Option Price Model (Cox, Ross, Rubinstein model), which takes into account – inter alia –

actual share price of the Company (as at the balance sheet date of the current financial statements) and volatility of

the share price of Company during the last 12 months preceding the balance sheet date. As at 30 June 2016, the value

was charged to the Income Statement in proportion to the vesting period of the Incentive Plan.

The basic parameters of the Binomial Option Price Model used for calculation of the fair value of the potential reward

from the realization of the Target of Share Price Increase and the estimated cost of the Incentive Plan charged to the

Income statement of the Agora Group for the period, are described below:

the share price of Agora S.A. as at the current balance sheet date PLN 12.55

volatility of the share price of Agora S.A. during the last twelve months % 32.79

the Average Share Price IVQ PLN 12.03

risk-free rate % 1.13-1.61

(at the maturity dates)

Total impact of the Incentive Plan on the current financial statements of the Agora Group:

Six months

ended 30 June

2016

Income statement – increase of staff cost 642

Income statement - deferred income tax (122)

Liabilities: accruals - as at the end of the period 642

Deferred tax asset - as at the end of the period 122

The cost of the Incentive Plan concerning the Management Board of Agora S.A.:

Six months

ended 30 June

2016

Bartosz Hojka 225

Tomasz Jagiello 139

Grzegorz Kossakowski 139

Robert Musial 139

Total

642




6. CHANGES IN PROVISIONS AND IMPAIRMENT LOSSES FOR ASSETS

In the period from January 1, 2016 to June 30, 2016 the following impairment losses were accounted:

- impairment loss for receivables: decrease by PLN 543 thousand,

- impairment loss for inventory: increase by PLN 894 thousand,

- impairment loss for tangible assets and intangible assets: decrease by PLN 430 thousand.

Additionally in the period from January 1, 2016 to to June 30, 2016 the following provisions were changed:

- provision for onerous contracts: decrease by PLN 116 thousand,

- provision for legal claims and similar: decrease by PLN 110 thousand,

- retirement severance provision: increase by PLN 34 thousand.

7. CONTINGENCIES, GUARANTEES AND OTHER COLLATERALS

As at 30 June 2016, the Group had contingencies, guarantees and other collaterals arising in the ordinary course of

business from which it is anticipated that no material liabilities will arise, other than those noted below:

Amount

Benefiting party Debtor Valid till 30 June 2016 31 Dec

2015

Provisions

booked

Guarantees provided by Agora

S.A.

Bank Pekao S.A. Agora’s

employees

28 Jan 2017 -

05 Jul 2020

270 289 -

Bank Pekao S.A. Doradztwo

Mediowe Sp. z

o.o.

30 Jun 2017 14,400 14,400 -

Bank Pekao S.A. Trader.com

(Polska) Sp. z

o.o.

30 Jun 2017

2,400

2,400

-

Bank Pekao S.A. Optimizers Sp.

z o.o.

30 Jun 2017

1,200

-

-

Bank Pekao S.A. Optimizers Sp.

z o.o.

31 Jul 2020

375

-

-

Bank Pekao S.A. Green Content

Sp. z o.o.

31 Jul 2020

375

-

-

Guarantees provided by AMS S.A.

Tejbrant Polska Sp. z o.o. Adpol Sp. z o.o. 30 Jun 2017 3,000 3,000 -

Guarantees provided by Adpol Sp. z o.o.

mBank S.A. AMS S.A. 28 Feb 2017 -

30 Apr 2017

44,400 44,400 -

Bills of exchange issued by AMS S.A. and Adpol Sp. z o.o.

Urzad Miejski Wroclawia AMS S.A. 31 May 2016 - 34 -

Gmina Miasto Szczecin AMS S.A. indefinite

period

90 90 -

mBank S.A. AMS S.A. 31 Dec 2016 -

31 Dec 2017

206 2,730 -

Zarzad Drog Miejskich Warszawa Adpol Sp. z o.o. 1 Jan 2022 200 200 -




The total amount of the contingencies, guarantees and other collaterals is smaller than 10% of the Group’s equity.

Additionally, Helios S.A. issued blank promissory notes as collaterals for bank loan agreements and finance lease

agreements and guarantees on rent agreements.

Moreover, AMS S.A. provided to the bank cash deposits as a cash collateral securing the bank guarantees issued in

relation to the concession contract for construction and utilization of bus shelters in Warsaw. As at 30 June 2016 the

deposit receivable amounts to PLN 29.6 million (including PLN 10.8 million presented within long-term receivables).

Information on contingent liabilities related to legal disputes is described in note 8.

8. COURT CASES

As at June 30, 2016, the Group has not entered into litigation for claims or liabilities that in total exceed 10% of the

Group’s equity. Provision for legal claims as at June 30, 2016, amounted to PLN 252 thousand (as at December 31,

2015: PLN 362 thousand).

Additionally, as at June 30, 2016, the companies of the Group are a party of legal disputes in the amount of PLN 2,864

thousand (as at December 31, 2015: PLN 2,573 thousand) in cases when the Management Board estimates the

probability of loss for less than 50%. Such disputes are contingent liabilities.

9. SEASONALITY

Advertising revenues are subject to seasonality – revenues earned in the first and third quarters are usually lower than

in the second and fourth quarters.

Cinema revenues are subject to seasonality – revenues earned in the second and third quarters are usually lower than

in the first and fourth quarters.

10. RELATED-PARTY TRANSACTIONS

(a) Management Board and Supervisory Board remuneration

The remuneration of Management Board members of Agora S.A. amounted to PLN 7,452 thousand (six months ended

June 30, 2015: PLN 2,008 thousand). This amount includes also one-off bonus payments, inter alia, the one resulting

from realization of Three-Year-Long Incentive Plan described in note 5.

The remuneration of Supervisory Board members of Agora S.A. amounted to PLN 231 thousand (six months ended

June 30, 2015: PLN 234 thousand).

(b) Other related parties (not consolidated)

There were no material transactions and balances with entities other that disclosed below:

Six months

ended 30

June 2016

Six months

ended 30

June 2015

Jointly controlled entities

Sales 433 335

Purchases of goods and services (280) (602)

Interest on loans granted 47 57

Other operating income - 1

Associates

Sales 16 18


Interest on loans granted 55 43

Dividends received 360 -




Six months

ended 30

June 2016

Six months

ended 30

June 2015

Major shareholder

Sales 32 31

Other operating income 86 122

As at 30 June

2016

As at 31

December

2015


Shares 7,417 7,511

Short-term receivables 244 135

Short-term liabilities 236 407

Loans granted 2,033 5,735

Associates

Shares 813 12,427




Major shareholder

Short-term receivables 1 -


Dividend liability 4,051 -

The above transactions carried out between related parties are of routine nature.




11. DESCRIPTION OF THE GROUP

The list of companies from the Group:

% of shares held (effectively)

30 June

2016

30 December

2015

Subsidiaries consolidated

1 Agora Poligrafia Sp. z o.o., Tychy 100.0% 100.0%

2 AMS S.A., Warsaw 100.0% 100.0%

3 IM 40 Sp. z o.o., Warsaw (1) 72.0% 72.0%

4 Grupa Radiowa Agory Sp. z o.o. (GRA), Warsaw 100.0% 100.0%

5 Adpol Sp. z o.o., Warsaw (2) 100.0% 100.0%

6 Inforadio Sp. z o.o., Warsaw (1) 66.1% 66.1%

7 Agora TC Sp. z o.o., Warsaw 100.0% 100.0%

8 Doradztwo Mediowe Sp. z o.o, Warsaw (1) 100.0% 100.0%

9 Trader.com (Polska) Sp. z o.o., Warsaw 100.0% 100.0%

10 AdTaily Sp. z o.o., Warsaw (4) 83.3% 86.0%

11 Helios S.A., Lodz 88.5% 88.5%

12 Next Film Sp. z o.o., Lodz (3) 88.5% 88.5%

13 Sport4People Sp. z o.o. in liquidation, Cracow 100.0% 100.0%

14 Projekt Inwestycyjny Sp. z o.o., Warsaw (1), (5) 70.0% 70.0%

15 Sir Local Sp. z o.o., Warsaw 78.4% 78.4%

16 TV Zone Sp. z o.o., Warsaw 100.0% 100.0%

17 Green Content Sp. z o.o., Warsaw 100.0% 100.0%

18 Joy Media Sp. z o.o., Warsaw 100.0% 100.0%

19 PTA Sp. z o.o., Warsaw 100.0% 100.0%

20 GoldenLine Sp. z o.o., Warsaw (6) 92.7% 36.0%

21 Optimizers Sp. z o.o., Warsaw (7) 100.0% -

Joint ventures and associates accounted for the equity method

22 Online Technologies HR Sp. z o.o., Szczecin 46.2% 46.2%

23 Instytut Badan Outdooru IBO Sp. z o.o., Warsaw (2) 40.0% 40.0%

24 Stopklatka S.A., Warsaw (8) 41.1% 41.0%

25 Hash.fm Sp. z o.o., Warsaw 49.5% 49.5%

Companies excluded from consolidation and equity accounting

26 Polskie Badania Internetu Sp. z o.o., Warsaw 15.8% 15.8%

(1) indirectly through GRA Sp. z o.o.;

(2) indirectly through AMS S.A.;

(3) indirectly through Helios S.A.;

(4) acquisition of shares from a non-controlling shareholder and subscription for new shares by non-controlling

shareholders, besides, on April 15, 2016, the National Court Register registered the change of the company`s seat from

Cracow to Warsaw;

(5) acquisition of shares from a non-controlling shareholder;

(6) obtaining control over the company in January 2016 and an increase of the share capital by creating new shares

covered with a non-cash contribution in a form of Centrum Kompetencyjne Praca;

(7) company set up in March 2016 under the business name Searchlab Sp. z o.o., on April 29, 2016 the National Court

Register registered the change of the business name of the company to Optimizers sp. z o.o.;

(8) acquisition of shares in connection with the public offering announced by the company.




12. BUSINESS COMBINATIONS

� Acquisition of GoldenLine Sp. z o.o.

On January 25, 2016 Agora S.A. acquired 106 shares in the share capital of GoldenLine Sp. z o.o. (“GoldenLine”), from

shareholders of that company, for the total price of PLN 8,480 thousand. Before the conclusion of the above

agreement, Agora was already in possession of 72 shares of GoldenLine, which represented 36% of the share capital

and gave the right to 72 votes, constituting 36% of the votes at the shareholders meeting of the company, and which

were acquired on 29th of December, 2011. As a result of the transaction on January 25, 2016, Agora S.A. owns 178

shares in the share capital of GoldenLine, with the nominal value of PLN 1,000 each and the total nominal value of PLN

178 thousand, which represent 89% of the company’s share capital and 89% of the votes at the shareholders’

meeting.

The minority shareholder of the GoldenLine remains G.C. Geek Code Ltd, controlled by Mariusz Gralewski - the main

founder of GoldenLine. G.C. Geek Code Ltd holds 22 shares in GoldenLine, which represents 11% of the share capital

and gives the right to 22 votes at the general meeting of shareholders and represents 11% of the votes at the general

meeting of shareholders. The sale agreement provided that after the transaction principles of cooperation between

Agora and G.C. Geek Code shall be stated. In case there is no agreement in this respect, G.C. Geek Code will be

entitled to sell its shares in the share capital of the Company to Agora, within 3 months from the date of the share

purchase agreement, the terms and conditions being the same as in the contract of January 25, 2016. On April 28,

2016 the deadline of 3 months was prolonged on the basis of agreement between the parties by 3 consecutive

months, that is till July 25, 2016. Until July 25 Agora S.A. received no statement on the execution by G.C. Geek Code of

the above put option, therefore, the option expired. Agora S.A. and G.C. Geek Code are currently negotiating the

principles of cooperation, aiming at conclusion of a contract regarding, among others, the terms and conditions of sale

by G.C Geek Code of its shares to Agora S.A.

Obtaining control over GoldenLine enables the Group to concentrate its activities in the field of recruitment services

and Employer Branding in that company. Thanks to this transaction and the fact that, on April 1, 2016, Agora

contributed to Goldenline Sp. z o.o. a non-cash contribution in the form of Centrum Kompetencyjne Praca, Agora

Group will strengthen its market position in the category "Work" and will provide comprehensive solutions in the

rapidly growing market of recruitment services.

Business combination accounting

As a result of the above mentioned transaction, the Group has obtained control over the company GoldenLine Sp.

z o.o. Since the date of its acquisition the company is fully consolidated. The Group measured the non-controlling

interest in the acquired company at the non-controlling interest`s proportionate share of the acquiree`s identifiable

net assets.

The fair value of acquired assets and assumed liabilities and fair value of consideration transferred as at the

acquisition date is as follows:

Fair value as at the

acquisition date

Assets

Intangible assets (1) 20,940

Property, plant and equipment 535

Trade receivables 1,948

Other receivables and prepayments 22

Cash and cash equivalents 2,276

25,721

Liabilities

Deferred tax liabilities (3,561)

Trade payables (415)

Other current liabilities (462)




Fair value as at the

acquisition date

Income tax liabilities (18)

Deferred revenues and accruals (2,762)

(7,218)

Identificable net assets at fair value 18,503

Non-controlling interests (2,035)

Fair value of pre-existing equity interest in the company (5,760)

Cash consideration transferred (8,480)

Goodwill/(bargain purchase) as at the acquisition date (2,228)

(1) According to IFRS 3, the Group measured the acquired intangible assets of GoldenLine Sp. z o.o. at their

acquisition-date fair value and recognized three intangible assets, which met the condition of identifiability under IFRS

3, and have been not presented up till now in the balance sheet of the company, that is: the GoldenLine domain, the

value of IT software & technology and the user database, whose total fair value amounted to PLN 18,740 thousand.

According to IFRS 3, the Group remeasured its pre-existing 36% equity interest in the company to its fair value as at

the acquisition date, which resulted in a loss of PLN 5,537 thousand (being PLN 5,760 thousand less PLN 11,297

thousand carrying amount of the equity-accounted investee at the date of acquisition). The loss on the

remeasurement of previously held equity interest was recognized as finance cost in the consolidated income

statement of Agora Group for the first quarter of 2016.

Simultaneously, the identificable net assets measured at fair value as at the acquisition date exceeded the aggregate

amount of the fair value of consideration transferred, the fair value of pre-existing equity interest in the company and

the value of the non-controlling interests and the Group recognized the resulting gain on a bargain purchase in the

amount of PLN 2,228 thousand, which was included in other operating income in the consolidated income statement

of Agora Group for the first quarter of 2016.

As a result, the total negative impact of the acquisition of the company GoldenLine on the consolidated net result of

the Agora Group in the first quarter of 2016 amounted to PLN 3,309 thousand.

The fair value of the acquired trade receivables amounted to PLN 1,948 thousand. The gross contractual amounts of

acquired trade receivables was PLN 2,100 thousand, of which PLN 152 thousand was expected to be uncollectible.

The acquisition-related costs of PLN 98 thousand have been expensed and were included in administrative expenses in

the income statement of the Agora Group for the first quarter of 2016.

From the date of acquisition till June 30, 2016, GoldenLine has contributed revenues of PLN 7,377 thousand and a net

loss of PLN 174 thousand to the consolidated revenues and net profit of the Agora Group.

The right granted to the non-controlling shareholder to sell his remaining equity interest in the company to Agora

(“put option”) meets the definition of a financial liability under IAS 32 and was recognised in the consolidated balance

sheet of Agora Group at its redemption amount amounting to PLN 1,760 thousand as at the acquisition date.

According to the Group accounting policy, at the initial recognition, the value of this liability decreased the line

retained earnings within the Group`s equity.




� Other changes in subsidiaries and joint ventures

On January 18, 2016 the following financial instruments were assigned to the Company as a result of subscription for

shares made by the Company on December 31, 2015 in connection with public offering of 4,641,304 series E ordinary

bearer shares of the company Stopklatka S.A.: (i) as a result of the basic subscription : 1,902,907, (ii) as a result of the

additional subscription: 13,144, which were paid for in the total amount of PLN 4,407 thousand. The remaining,

unused amount of cash paid by the Company in connection with the subscription for shares of Stopklatka S.A.,

amounting to PLN 10,645 thousand, was returned to the Company on January 21, 2016. On February 9, 2016 the

District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of the National Court Register entered

into the register of entrepreneurs of the National Court Register the increase of the share capital of Stopklatka S.A.

from the amount PLN 6,529,956 to the amount PLN 11,171,260. Agora S.A. currently owns 4,596,203 ordinary bearer

shares of the nominal value of PLN 1 per share and the total nominal value of PLN 4,596,203 that represent 41.14% of

the company’s share capital and 41.14% of the votes at the General Meeting of Stopklatka S.A.

On February 5, 2016 Agora S.A. acquired 8 shares in the share capital of AdTaily Sp. z o.o. from a shareholder of that

company for the total price of PLN 115 thousand. As a result of the above transaction, Agora S.A. currently owns 730

shares in the share capital of AdTaily Sp. z o.o. with the nominal value of PLN 50 per share and the total nominal value

of PLN 36,500, which represent 86.90% of the company’s share capital and 86.90% of votes at the shareholders’

meeting. On March 11, 2016 the District Court for Cracow-Srodmiescie in Cracow, XI Commercial Division of the

National Court Register, registered the above mentioned change with the register of entrepreneurs of the National

Court Register.

On March 1, 2016, the extraordinary general meeting of shareholders of the company Sport4People Sp. o.o. adopted

a resolution on dissolution of the company and opening of the liquidation proceedings. On April 4, 2016 the District

Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of the National Court Register, registered the

above mentioned change with the register of entrepreneurs of the National Court Register.

On March 4, 2016, the District Court for the Capital City Warsaw, XIII Commercial Division of the National Court

Register, entered into the register of entrepreneurs of the National Court Register the company operating under the

business name Searchlab Sp. o.o. with its registered office in Warsaw. The sole shareholder of this company is Agora

S.A. Agora S.A. holds 100 shares in the share capital of the company Searchlab Sp. o.o., with the nominal value of PLN

50 per share. The shares were taken up in return for a cash contribution in the amount of PLN 5 thosuand. On April 1,

2016 the extraordinary general meeting of shareholders of the company Searchlab Sp. z o.o. adopted a resolution

increasing the share capital of the company and changing the company`s name, as described further below.

On March 23, 2016, the extraordinary general meeting of shareholders of Green Content Sp. z o.o. adopted the

resolution increasing the share capital by 2,000 new shares with the nominal value of PLN 50 per share and the total

nominal value of PLN 100 thousand. Agora S.A. covered 2,000 new shares with PLN 10,000 thousand cash

contribution. On April 29, 2016 the District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of

the National Court Register registered the above mentioned change. After the registration, the share capital amounts

to PLN 200 thousand and is divided into 4,000 shares with nominal value of PLN 50 per share. Consequently, Agora

S.A. holds 4,000 shares representing 100% of the company’s share capital and 100% of the votes at shareholders’

meeting.

On April 1, 2016, the extraordinary general meeting of shareholders of Goldenline Sp. z o.o. adopted the resolution

increasing the share capital by 100 new shares with nominal value of PLN 1,000 per share and total nominal value of

PLN 100 thousand. Agora S.A. covered the 100 new shares with a non-cash contribution in a form of Centrum

Kompetencyjne Praca, which organisationally, financially and operationally constitutes, within the internal

organisational structure of the Company, a separate set of tangible and intangible assets intended for the

implementation of specific economic tasks, i.e. (i) the running of the Gazetapraca.pl website; and (ii) the sale of

recruitment solutions, and (iii) provision of services connected to the employer branding activities, which is an

independent enterprise performing these tasks. On June 13, 2016 the District Court for the capital city of Warsaw in

Warsaw, XIII Commercial Division of the National Court Register registered the above mentioned change. After the

registration, the share capital amounts to PLN 300 thousand and is divided into 300 shares with nominal value PLN

1,000 per share. Agora S.A. holds 278 shares representing 92,66% of the company’s share capital and 92,66% of the





On April 1, 2016, the extraordinary general meeting of shareholders of Searchlab Sp. z o.o. adopted the resolution

increasing the share capital by 1,900 new shares with nominal value of PLN 50 per share and total nominal value PLN

95 thousand. Agora S.A. covered 1,900 new shares with a non-cash contribution in a form of Agencja Reklamy

Internetowej “SearchLab”, which organisationally, financially and operationally constitutes, within the internal

organisational structure of the Company, a separate set of tangible and intangible assets, intended for the

implementation of specific economic tasks, i.e. (i) the sale and running of online advertising campaigns on external

surfaces of economic entities, with respect to which SearchLab operates as an agent for sales and performance of

advertising campaigns; and (ii) provision of advisory services and operation in the field of search engine optimisation

(SEO); which is an independent enterprise independently performing these tasks. On April 29, 2016 the District Court

for the capital city of Warsaw in Warsaw, XIII Commercial Division of the National Court Register registered the above

mentioned change, and also change of Company’s name to Optimizers Sp. z o.o. After the registration, the share

capital amounts to PLN 100 thousand and is divided into 2,000 shares with nominal value PLN 50 per share. Agora S.A.

holds 2,000 shares, representing 100% of the company’s share capital and 100% of the votes at shareholders’

meeting.

On May 12, 2016, the extraordinary general meeting of shareholders of Adtaily Sp. z o.o. („Adtaily”) adopted a

resolution increasing the share capital of that company by 36 new shares with nominal value of PLN 50 each and total

nominal value of PLN 1,800. The extraordinary general meeting of shareholders of Adtaily Sp. z o.o. resolved that the

newly created shares will be subscribed by two new minority shareholders, 18 shares by each of them. After the

registration of the increase in the register of entrepreneurs of the National Court Register, the share capital will

amount to PLN 43,800 and will be divided into 876 shares with nominal value of PLN 50 per share, Agora S.A. will hold

730 shares representing 83.33% of the company’s share capital and 83.33% of the votes at shareholders’ meeting. As

of the date of publication of this report, the above change has not been registered with the register of entrepreneurs

of the National Court Register.

On May 25, 2016, Grupa Radiowa Agory Sp. z o.o. (“GRA”) acquired 90 shares in the share capital of Projekt

Inwestycyjny Sp. z o.o. (“PI”) from a shareholder of that company. As a result of the above transaction, GRA currently

owns 300 shares in the share capital of PI, with the nominal value of PLN 500 per share and the total nominal value of

PLN 150,000, representing 100% of the company’s share capital and 100% of the votes at the shareholders’ meeting.

On June 16, 2016 the District Court for the capital city of Warsaw in Warsaw, XIII Commercial Division of the National

Court Register, registered the above mentioned change with the register of entrepreneurs of the National Court

Register.

� Call for the repurchase of shares in a subsidiary

On March 29, 2016, a minority shareholder (“Minority Shareholder”) of Helios S.A., holding 320,400 shares of the

Helios S.A., constituting 2.77% of the share capital (“Shares”), submitted a call to Helios S.A., based on art. 418 (1) of

the Commercial Companies Code (“CCC”), for convening the general meeting of shareholders of Helios S.A. and

placement on the agenda of an item regarding adoption of a resolution on Shares compulsory sell-out (“Call”).

As a result of (i) the Call, (ii) further calls, submitted pursuant to art. 418 (1) of CCC by the Minority Shareholder and

others minority shareholders of Helios S.A., who purchased a portion of the Shares from the Minority Shareholder and

(iii) resolutions adopted by the Extraordinary General Meetings of Shareholders of Helios S.A. held on May 10, 2016

and June 13, 2016, there are currently two ongoing sell-out procedures (pursuant to art. 418 (1) of CCC) and one

ongoing squeeze-out procedure (pursuant to art. 418 of CCC), aiming at the acquisition by the two shareholders of

Helios S.A., including Agora S.A., of the Shares held by the Minority Shareholder and other minority shareholders.

In connection with the ongoing sell out procedures, as of June 30, 2016 Agora S.A. transferred the amount of PLN

2,938 thousand to Helios S.A., as the sell-out price, calculated based on art. 418 (1) of CCC. As at June 30, 2016 Agora

Group recognised in its balance sheet a liability to acquire the shares from the minority shareholders of Helios S.A. in

the total amount of PLN 3,170 thousand. The total amount includes the above mentioned amount of PLN 2,938

thousand, which Agora S.A. transferred to Helios S.A. and the amount transferred by a second shareholder of Helios

S.A. in connection with the ongoing sell-out procedures. The final evaluation of Shares, which are subject to the sell-

out and squeeze-out procedures, will be calculated by an expert or experts appointed by the registry court having the

jurisdiction over the registered office of Helios S.A.




As of the date of publication of this report, the compulsory sell-out and squeeze-out procedures have not been

completed.

13. FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY FOR THE CONDENSED SEMI –

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS OF AGORA S.A. AND THE TRANSLATION

METHOD OF FINANCIAL DATA

The functional and presentation currency for Agora S.A. and other companies as well as for the presented semi –

annual consolidated financial statements is Polish zloty.

Selected financial data presented in the financial statements has been translated into EURO in the following way:

� income statement and cash flow statement figures for the two quarters of 2016 (two quarters of 2015) using the

arithmetic average of exchange rates published by NBP and ruling on the last day of each month for two quarters.

For the two quarters of 2016 EURO 1 = PLN 4.3805 (EURO 1 = PLN 4.1341).

� balance sheet figures using the average exchange rates published by NBP and ruling as at the balance sheet date.

The exchange rate as at 30 June 2016 – EURO 1 = PLN 4.4255; as at 31 December 2015 – EURO 1 = PLN 4.2615, as

at 30 June 2015 – EURO 1 = PLN 4.1944.

14. PROPERTY, PLANT AND EQUIPMENT

In the period from January 1, 2016 to June 30, 2016, the Group purchased property, plant and equipment in the

amount of PLN 33,039 thousand (in the period of January 1, 2015 to June 30, 2015: PLN 39,968 thousand).

As at June 30, 2016, the commitments for the purchase of property, plant and equipment amounted to PLN 33,956

thousand (as at December 31,2015: PLN 34,785 thousand).

The Management Board of the Company would like to point out that the commitments for the purchase of property,

plant and equipment include also future liabilities resulting from the signed agreements related to the realization of

the concession contract for the construction and utilization of 1,580 bus shelters in Warsaw and 600 shelters in

Cracow. The investment process in Warsaw has commenced in 2014 and shall last 3 years. The estimated total cost of

the bus shelter construction in Warsaw amounts to ca PLN 80 million. The investment process in Cracow has

commenced in 2015 and shall last 10 years.

Moreover, according to the medium term development plans of the Agora Group announced in March 2014, the

subsidiary Helios S.A., plans to open new cinema facilities. Since March 2014 till the end of 2018 the investment

outlays related to this process may amount to ca PLN 80 million. In 2014 the number of new facilities, by which the

Helios network enlarged, was 3 and in 2015 – 4.

15. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

The Group applies the following hierarchy for disclosing information about fair value of financial instruments – by

valuation technique:

Level 1: quoted prices in active markets (unadjusted) for identical assets or liabilities;

Level 2: valuation techniques in which inputs that are significant to fair value measurement are observable, directly or

indirectly, market data;

Level 3: valuation techniques in which inputs that are significant to fair value measurement are not based on

observable market data.

The table below shows financial instruments measured at fair value at the balance sheet date:




As at 30

June 2016 Level 1

Level 2

Level 3

Certificates in investment funds 73,537

-

73,537

-

Financial assets measured at fair value 73,537

-

73,537

-

Put option liabilities 18,404

-

-

18,404

Contingent payment liability 4,277

-

-

4,277

Financial liabilities measured at fair value 22,681

-

-

22,681

As at 31

December

2015

Level 1

Level 2

Level 3


-

85,771

-


-

85,771

-

Put option liabilities 16,575

-

-

16,575


-

-

4,304


-

-

20,879

The table below shows a reconciliation from the beginning balance to the ending balance for financial instruments in

Level 3 of the fair value hierarchy:

As at 30

June 2016

As at 31

December

2015

Opening balance 20,879

22,218

Additions resulting from initial recognition (note 12) 1,760

-

Expiration of put option recognised in equity -

(213)

Remeasurement recognised in profit or loss 42

(507)

Exercise of the put option

-

(619)

Closing balance 22,681

20,879

Key assumptions that are most significant to the fair value measurement of financial instruments in Level 3 of the fair

value hierarchy include: estimated level of the EBITDA result (being the sum of operating profit/loss and amortization

and depreciation) during the period specified in put option conditions and discount rate.

15. PROFIT DISTRIBUTION FOR THE YEAR 2015

In accordance with the resolution adopted by the General Meeting of Shareholders on June 23, 2016, the net profit of

Agora S.A. for the financial year 2015 was distributed in the form of dividend in the total amount of PLN 35,749

thousand (the additional amount was distributed from the reserve capital). The dividend amounted to PLN 0.75 per

share. Shareholders of record on 14 July 2016 were eligible to participate in the dividend payment.

The dividend payment was made on August 2, 2016.

17. POST BALANCE-SHEET EVENTS




On July 5, 2016, Agora S.A. received, from a former non-controlling shareholder of Helios S.A., a call to pay an

additional price for the shares sold by this minority shareholder to the Company, based on a share sale agreement of

December 11, 2014, concluded between Agora S.A. and the non-controlling shareholder.

On July 8, 2016, Agora S.A. received, from a non-controlling shareholder of Helios S.A., a call to purchase 0.38% shares

of Helios S.A. The call was submitted pursuant to the provisions of an option agreement dated August 31, 2010 and for

the price for shares calculated in accordance with the provisions of this agreement.

On August 4, 2016, in performance of the call for acquisition, received by Agora S.A. on July 8, 2016, Agora S.A. and a

non-controlling shareholder of Helios S.A. signed the Promised Share Purchase Agreement, as a result of which Agora

S.A. purchased 0.38% of shares of that company, for the total price of PLN 791 thousand, calculated in accordance

with provisions of the option agreement concluded between the parties. As a result, shares held by Agora S.A.

currently represent 88.88% of the company’s share capital and 88.88% of the voting rights at the shareholders’

meeting.




18. SELECTED CONSOLIDATED FINANCIAL DATA TOGETHER WITH TRANSLATION INTO EURO

PLN

thousand

EURO

thousand

Six months

ended 30

June 2016

unaudited

As at 31

December

2015

audited

Six months

ended 30

June 2015

unaudited

Six months

ended 30

June 2016

unaudited

As at 31

December

2015

audited

Six months

ended 30

June 2015

unaudited

Sales

584,735

575,571

133,486

139,225

Operating profit/(loss) 1,676

6,140

383

1,485

Profit/(loss) before

income taxes (3,954)

5,984

(903)

1,447

Net profit/(loss) for the

period attributable to

equity holders of the

parent

(12,268)

3,613

(2,801)

874

Net cash from operating

activities 10,522

52,802

2,402

12,772

Net cash used in investing

activities (14,458)

(65,185)

(3,301)

(15,768)

Net cash used in

financing activities 2,856

(14,786)

652

(3,577)

Net increase / (decrease)

in cash and cash

equivalents

(1,080)

(27,169)

(247)

(6,572)

Total assets 1,574,617

1,610,213

355,805

377,851

Non-current liabilities 139,602

118,589

31,545

27,828

Current liabilities 315,372

321,439

71,262

75,429

Equity attributable to

equity holders of the

parent

1,101,210

1,153,486

248,833

270,676

Share capital 47,665

47,665

10,771

11,185

Weighted average

number of shares 47,665,426

47,906,531

48,151,633

47,665,426

47,906,531

48,151,633

Earnings per share (in

PLN / in EURO) (0.26)

0.08

(0.06)

0.02

Book value per share (in

PLN / in EURO) 23.10 24.08

5.22 5.65


AGORA GROUP

Condensed

interim

consolidated


as at 30 June 2016

and for three and

six month period

ended thereon

August 12, 2016

a g o r a

AGORA GROUP Condensed interim consolidated financial statements as at 30 June 2016 and for 3 and 6 month period ended thereon



CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016

As at 30 June

2016

unaudited

As at 31

March 2016

unaudited

As at 31

December

2015

audited

As at 30 June

2015

unaudited

Assets

Non-current assets:

Intangible assets 466,025 469,010 448,064 412,210

Property, plant and equipment 656,354 653,063 669,689 663,286

Long-term financial assets 86 92 98 111

Investments in equity accounted

investees 8,230

7,985 19,938

16,186

Receivables and prepayments 14,351 14,644 14,179 25,222

Deferred tax assets 9,473 10,592 10,388 6,484

1,154,519 1,155,386 1,162,356 1,123,499

Current assets:

Inventories 32,433 28,748 29,031 29,233

Accounts receivable and prepayments 277,933 257,733 281,716 283,661

Income tax receivable 348 201 121 282

Short-term securities and other

financial assets 79,301

63,830 105,826

82,750

Cash and cash equivalents 30,083 39,649 31,163 25,161

420,098 390,161 447,857 421,087

Total assets 1,574,617 1,545,547 1,610,213 1,544,586

Accompanying notes are an integral part of these condensed interim consolidated financial statements.

a g o r a




CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016 (CONTINUED)

As at 30 June

2016

unaudited

As at 31

March 2016

unaudited

As at 31

December

2015

audited

As at 30 June

2015

unaudited


Equity attributable to equity holders

of the parent:

Share capital 47,665 47,665 47,665 50,937

Treasury shares - - - (39,348)

Share premium 147,192

147,192 147,192

147,192

Retained earnings and other reserves 906,353 949,582 958,629 985,133

1,101,210 1,144,439 1,153,486 1,143,914

Non-controlling interest 18,433 20,290 16,699 16,011

Total equity 1,119,643 1,164,729 1,170,185 1,159,925


Deferred tax liabilities 26,599 25,140 22,527 27,967

Long-term borrowings 79,358 54,331 60,850 51,939

Other financial liabilities 15,853 16,575 16,575 21,500

Retirement severance provision 2,616 2,451 2,451 2,575

Provisions 812 870 927 1,043

Deferred revenues, accruals and other

liabilities 14,364 14,229 15,259 4,548

139,602 113,596 118,589 109,572


Retirement severance provision 66 198 198 30

Trade and other payables 182,516 135,224 165,998 149,318

Income tax liabilities 3,527 3,282 9,463 2,975

Short-term borrowings 39,937 35,741 46,794 34,285


Provisions 2,005 2,126 2,115 2,542

Deferred revenues and accruals 80,493 84,587 92,567 78,013

315,372 267,222 321,439 275,089

Total equity and liabilities 1,574,617 1,545,547 1,610,213 1,544,586


a g o r a




CONSOLIDATED INCOME STATEMENT FOR THREE AND SIX MONTHS ENDED 30 JUNE

2016

Three months

ended

Six months

ended

Three

months

ended

Six months

ended

Note

30 June 2016

unaudited

30 June 2016

unaudited

30 June 2015

unaudited,

adjusted

30 June 2015

unaudited,

adjusted

Sales 2 296,253 584,735 292,752 575,571

Cost of sales (206,116) (414,622) (205,080) (406,234)

Gross profit 90,137 170,113 87,672 169,337

Selling expenses (60,368) (110,468) (54,966) (105,529)

Administrative expenses (32,055) (60,907) (29,886) (58,740)

Other operating income 2,716 7,029 3,154 6,661

Other operating expenses (1,783) (4,091) (2,365) (5,589)

Operating profit/(loss) 2 (1,353) 1,676 3,609 6,140

Finance income 741 2,332 1,332 2,606

Finance costs (929) (7,911) (845) (2,544)


investees 245 (51) 447 (218)

Profit/(loss) before income taxes (1,296) (3,954) 4,543 5,984

Income tax (4,207) (7,163) (993) (1,174)

Profit/(loss) for the period (5,503) (11,117) 3,550 4,810

Attributable to:

Equity holders of the parent (5,068) (12,268) 3,841 3,613

Non-controlling interest (435) 1,151 (291) 1,197

(5,503) (11,117) 3,550 4,810

Basic/diluted earnings per share (in

PLN) (0.11) (0.26) 0.08 0.08


a g o r a




CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THREE AND SIX

MONTHS ENDED 30 JUNE 2016

Three months

ended

Six months

ended

Three

months

ended

Six months

ended

30 June 2016

unaudited

30 June

2016

unaudited

30 June 2015

unaudited

30 June 2015

unaudited

Profit/(loss) for the period (5,503) (11,117) 3,550 4,810

Other comprehensive income:

Items that will not be reclassified to profit or loss

- - - -

Items that will be reclassified to profit or loss

- - - -

Other comprehensive income for the period - - - -

Total comprehensive income for the period (5,503) (11,117) 3,550 4,810

Attributable to:

Shareholders of the parent (5,068) (12,268) 3,841 3,613

Non-controlling interests (435) 1,151 (291) 1,197

(5,503) (11,117) 3,550 4,810


[ w w w . a g o r a . p l ]



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR SIX MONTHS ENDED 30 JUNE 2016


Share capital

Treasury

shares

Share

premium

Retained

earnings and

other reserves Total

Non-

controlling



As at 31 December 2015 audited 47,665 - 147,192 958,629 1,153,486 16,699 1,170,185


Net profit/(loss) for the period - - - (12,268) (12,268) 1,151 (11,117)

Total comprehensive income for the period - - - (12,268) (12,268) 1,151 (11,117)



Dividends declared - - - (35,749) (35,749) - (35,749)


Total contributions by and distribtutions to owners - - - (35,749) (35,749) (852) (36,601)


Acquisition of non-controlling interests - - - 538 538 (700) (162)

Acquistion of a subsidiary - - - - - 2,035 2,035

Recognition of put option granted to non-controlling

interests - - - (1,760) (1,760) - (1,760)

Additional contribution of non-controlling shareholders - - - (98) (98) 100 2

Other - - - (2,939) (2,939) - (2,939)

Total changes in ownership interests in subsidiaries - - - (4,259) (4,259) 1,435 (2,824)

Total transactions with owners - - - (40,008) (40,008) 583 (39,425)

As at 30 June 2016 unaudited 47,665 - 147,192 906,353 1,101,210 18,433 1,119,643


[ w w w . a g o r a . p l ]



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR SIX MONTHS ENDED 30 JUNE 2016 (CONTINUED)


Share capital

Treasury

shares

Share

premium

Retained

earnings and

other

reserves Total

Non-

controlling

interest

Total

equity


As at 31 December 2014 audited 50,937 (30,060) 147,192 981,520 1,149,589 15,490 1,165,079


Net profit for the period - - - 3,613 3,613 1,197 4,810

Total comprehensive income for the period - - - 3,613 3,613 1,197 4,810




Repurchase of own shares - (9,288) - - (9,288) - (9,288)

Total contributions by and distribtutions to owners - (9,288) - - (9,288) (676) (9,964)


Total changes in ownership interests in subsidiaries - - - - - - -

Total transactions with owners - (9,288) - - (9,288) (676) (9,964)

As at 30 June 2015 unaudited 50,937 (39,348) 147,192 985,133 1,143,914 16,011 1,159,925




(all amounts in PLN thousands unless otherwise indicated) translation

only

CONSOLIDATED CASH FLOW STATEMENT FOR THREE AND SIX MONTHS ENDED 30 JUNE

2016

Three

months

ended

Six months

ended

Three

months

ended

Six months

ended

30 June 2016

unaudited

30 June 2016

unaudited

30 June

2015

unaudited

30 June 2015

unaudited


Profit/(loss) before income taxes (1,296) (3,954) 4,543 5,984

Adjustments for:


investees (245) 51

(447) 218

Depreciation of property, plant and

equipment 19,584 39,492

19,570 39,093

Amortization of intangible assets 4,622 9,688 10,490 14,384

Foreign exchange (gain) /loss (5) 33 93 (67)

Interest, net 759 1,575 659 1,408

(Profit) / loss on investing activities (463) (1,271) (447) (1,412)

(Decrease) / increase in provisions (145) (192) (503) (1,083)

(Increase) / decrease in inventories (3,685) (3,402) 929 949

(Increase) / decrease in receivables and

prepayments (17,089) 6,162

(25,753) (6,819)

(Decrease) / increase in payables 6,051 (17,346) 4,779 (7,421)

(Decrease) / increase in deferred revenues

and accruals (4,336) (14,099)

8,358 10,464

(Profit) / loss on acquisition of subsidiary - 3,309 - -

Other adjustments (490) (409) 75 536

Cash generated from operations 3,262 19,637 22,346 56,234

Income taxes paid (1,529) (9,115) (878) (3,432)

Net cash from operating activities 1,733 10,522 21,468 52,802


Proceeds from sale of property, plant and

equipment and intangibles 317 1,861 1,882 1,939

Dividends received - 360 - -

Loan repayment received - 3,600 - -

Interest received 301 674 264 588

Disposal of short-term securities 29,793 75,734 10,513 40,603

Other inflows (1) - 10,645 - -

Purchase of property, plant and equipment

and intangibles (18,411) (38,128)

(19,604) (44,996)

Acquisition of subsidiary (net of cash

acquired), associates and jointly controlled

entities - (6,204) (2,824) (2,824)

Acquisition of short-term securities (45,000) (63,000) (48,000) (58,000)

Loans granted - - (495) (2,495)

Net cash used in investing activities (33,000) (14,458) (58,264) (65,185)




only

Three

months

ended

Six months

ended

Three

months

ended

Six months

ended

30 June 2016

unaudited

30 June 2016

unaudited

30 June

2015

unaudited

30 June 2015

unaudited


Proceeds from borrowings 31,085 32,943 11,894 15,783

Proceeds from factoring - - 8,939 8,939

Other inflows 234 234 - -

Repurchase of own shares - - (9,288) (9,288)

Acquisition of non-controlling interest (46) (162) - -

Dividends paid to non-controlling

shareholders (852) (852) (676) (676)

Repayment of borrowings (4,629) (17,255) (3,179) (18,524)

Payment of finance lease liabilities (3,080) (9,691) (4,577) (8,722)

Interest paid (786) (2,011) (798) (1,730)

Other (225) (350) (155) (568)

Net cash used in financing activities 21,701 2,856 2,160 (14,786)

Net increase / (decrease) in cash and cash

equivalents (9,566) (1,080) (34,636) (27,169)


At start of period 39,649 31,163 59,797 52,330

At end of period 30,083 30,083 25,161 25,161


Stopklatka S.A. and was returned to the Company on January 21, 2016.





only

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS AT

30 JUNE 2016 AND FOR 3 AND 6 MONTHS PERIOD ENDED THEREON

1. GENERAL INFORMATION

Agora S.A. with its registered seat in Warsaw, Czerska 8/10 street (“the Company”) principally produces and sells

newspapers (including Gazeta Wyborcza), carries out the Internet activity and is active as a publisher in magazines,

periodicals and books segment. The Company also engages in projects related to production and coproduction of

movies. Additionally, the Agora Group (“the Group”) is also active in the cinema segment through its subsidiaries

Helios S.A. and Next Film Sp. z o.o. (“Helios Group”) and in the outdoor segment through its subsidiary AMS S.A.

(“AMS”). Moreover, the Group controls 5 radio broadcasting companies and offers printing services for external

clients in printing houses belonging to the Company and to its subsidiary Agora Poligrafia Sp.z o.o. The Group is also

present in TV segment by holding shares in Stopklatka S.A. Additionally, in December 2015 the subsidiary Green

Content Sp. z o.o. received the decision of the President of the National Broadcasting Council on granting a license to

broadcast a television programme via digital terrestrial platform in signal of eighth multiplex.

As at 31 March 2016 the Agora Group (“the Group”) comprised: the parent company Agora S.A., and 21 subsidiaries.

Additionally, the Group held shares in 2 jointly controlled entities: Stopklatka S.A. and Online Technologies HR Sp. z

o.o. and in 2 associates: Instytut Badan Outdooru IBO Sp. z o.o. and Hash.fm Sp. z o.o.

Financial statements were prepared as at and for three and six months ended 30 June 2016, with comparative figures

presented as at 31 March 2016, 31 December 2015 and as at and for three and six months ended 30 June 2015.

The financial statements were authorized for issue by the Management Board of Agora S.A. on August 12, 2016.

2. SALES AND SEGMENT INFORMATION

In these condensed interim consolidated financial statements, in accordance with IFRS 8 Operating segments,

information on operating segments are presented on the basis of components of the Group that management

monitors in making decisions about operating matters. Operating segments are components of the Group, about

which separate financial information is available, that is evaluated regularly by the chief operating decision maker in

the process of decision making regarding allocation of resources and assessing the performance of the Group. For

management purposes, the Group is organized into business units based on their products and services.

Detailed information about the accounting policies for presentation of operating segments and the scope of their

activity have been included in the condensed semi-annual consolidated financial statements as at 30 June 2016 and

for six month period ended thereon.



Page 11 [ w w w . a g o r a . p l ]


Three months ended 30 June 2016

Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total



Total revenues 73,808 70,651 45,682 43,547 29,652 41,588 (8,675) 296,253


Operating profit (loss) (1) 2,761 (5,853) 10,737 7,857 5,352 (1,991) (20,216) (1,353)

Net finance income and cost (188) (188)


investees (3) - - - 86 - - 159 245

Income tax expense (4,207) (4,207)

Net loss (5,503)













Press

Movies and

books (3)

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


amortisation (2,435) (7,337) (3,871) (1,214) (777) (3,865) (3,960) (23,459)


consolidation (1) - (129) - (684) - - 63 (750)

Impairment losses (237) - (219) (182) (239) - (159) (1,036)

Reversals of impairment losses 259 26 54 - 83 89 - 511

Capital expenditure (2) 481 12,959 2,577 1,991 776 745 1,878 21,407









Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total



Total revenues 135,707 169,065 81,409 79,832 55,009 80,552 (16,839) 584,735


Operating profit / (loss) (1) (25) 10,377 14,249 9,638 7,049 (2,985) (36,627) 1,676

Net finance income and cost (5,579) (5,579)


investees (3) - - - 93 - - (144) (51)

Income tax (7,163) (7,163)

Net loss (11,117)













Press

Movies and

books (3)

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


amortisation (4,854) (15,226) (7,762) (2,512) (1,539) (7,841) (7,947) (47,681)


consolidation (1) - (259) - (1,368) - - 127 (1,500)


Reversals of impairment losses 412 8 133 89 114 39 8 803

Capital expenditure (2) 766 15,533 7,162 3,549 1,223 982 3,248 32,463

As at 30 June 2016

Press

Movies and


Reconciling

positions (4) Total





method - - - 1,703 - - 6,527 8,230



(3) capital expenditure include lease property, plant and equipment in the amount of PLN 6,527 thousand;



Stopklatka S.A.






Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total



Total revenues 80,401 71,105 42,308 39,840 27,230 40,128 (8,260) 292,752


Operating profit/ (loss) (1) 6,709 (4,076) 8,830 7,553 4,207 183 (19,797) 3,609



investees (3) - - - 140 - - 307 447

Income tax expense (993) (993)

Net profit 3,550













Press

Movies and

books (3)

Outdoor

Internet Radio

Print

Reconciling

positions

Total


amortisation (2,532) (13,795) (3,162) (1,381) (699) (3,937) (4,215) (29,721)


consolidation (1) - (135) - (267) - - 63 (339)


Reversals of impairment losses 408 215 253 35 41 6 - 958

Capital expenditure (2) 293 8,635 12,766 330 1,159 508 656 24,347









Press

Movies and

books

Outdoor

Internet

Radio

Print

Reconciling

positions

Total


Intersegment revenues (2) 3,945 8,174 1,351 2,546 2,585 715 (19,316) -

Total revenues 148,736 167,504 74,102 71,654 48,746 81,141 (16,312) 575,571


Operating profit/(loss) (1) 7,526 10,821 9,352 10,614 4,456 1,623 (38,252) 6,140



investees (3) - - (15) 216 (419) (218)

Income tax (1,174) (1,174)

Net profit 4,810













Press

Movies and

books (3)

Outdoor

Internet Radio

Print

Reconciling

positions

Total


amortisation (4,959) (21,198) (6,019) (2,716) (1,369) (8,062) (8,478) (52,801)


consolidation (1) - (269) - (534) - - 127 (676)

Impairment losses (1,327) (460) (892) (438) (261) (143) 140 (3,381)

Reversals of impairment losses 1,061 221 686 150 145 47 1 2,311

Capital expenditure (2) 661 11,100 22,064 744 1,362 977 1,385 38,293

As at 30 June 2015

Press

Movies and


Reconciling

positions (4) Total





method - - - 13,259 - - 2,927 16,186



(3) capital expenditure include lease property, plant and equipment in the amount of PLN 4,300 thousand;



Stopklatka S.A.




only

3. CHANGES IN PROVISIONS AND IMPAIRMENT LOSSES FOR ASSETS

In the period from January 1, 2016 to June 30, 2016 the following changes in impairment losses were accounted (in

brackets the amounts for the second quarter of 2016):

- impairment loss for receivables: decrease by PLN 543 thousand (decrease by PLN 1,069 thousand),

- impairment loss for inventory: increase by PLN 894 thousand (increase by PLN 547 thousand),

- impairment loss for tangible assets and intangible assets: decrease by PLN 430 thousand (increase by PLN

250 thousand).

Additionally in the period from January 1, 2016 to to June 30, 2016 the following provisions were changed (in brackets

the amounts for the second quarter of 2016):

- provision for onerous contracts: decrease by PLN 116 thousand (decrease by PLN 58 thousand),

- provision for legal claims and similar: decrease by PLN 110 thousand (decrease by PLN 121 thousand),

- retirement severance provision: increase by PLN 34 thousand (increase by PLN 34 thousand).

4. OTHER NOTES

The Management Board of Agora S.A. believes that the notes to Agora Group’s condensed semi-annual consolidated

financial statements present all other material information required to assess the Group’s financial position and

financial results in the period from January, 1, 2016 to June, 30, 2016 and therefore the condensed interim

consolidated financial statements should be read together with the condensed semi-annual consolidated financial

statements, which are included in the semi-annual report.

Accounting policies applied to prepare condensed interim consolidated financial statements meet the International

Accounting Standard 34 “Interim Financial Reporting” and are the same as for the condensed semi-annual

consolidated financial statements.


In 2016, the Group modified the presentation of expenses related to rental cost of advertising space in internet

business according to description presented in note 2 to the condensed semi-annual consolidated financial

statements.

The summary of adjustments made to the consolidated comparative amounts of the Group is presented in the table

below:

Six months ended

Six months

ended

30 June 2015

(as reported)

Presentation

adjustments

30 June 2015

(as adjusted)

Cost of sales (397,027) (9,207) (406,234)

Gross profit 178,544 (9,207) 169,337


Three months

ended

Three months

ended

30 June 2015

(as reported)

Presentation

adjustments

30 June 2015

(as adjusted)

Cost of sales (199,796) (5,284) (205,080)

Gross profit 92,956 (5,284) 87,672





only






[ w w . a g o r a . p l ] Page 1

AGORA S.A.

Condensed

semi-annual

unconsolidated


as at 30 June 2016

and for 6 month

period ended thereon

August 12, 2016


AGORA S.A. Condensed semi-annual unconsolidated financial statements as at 30 June 2016 and for 6 month period ended thereon


UNCONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016

As at 30 June

2016

unaudited

As at 31

December 2015

audited

Assets

Non-current assets:

Intangible assets 57,148 59,635

Property, plant and equipment 272,640 281,851

Long term financial assets 591,791 569,446

Receivables and prepayments 9,189 17,912

930,768 928,844

Current assets:

Inventories 22,447 19,566

Accounts receivable and prepayments 190,673 175,499

Income tax receivable 4 -

Short-term securities and other financial assets 42,283 83,715

Cash and cash equivalents 12,936 11,682

268,343 290,462

Total assets 1,199,111 1,219,306




UNCONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016 (CONTINUED)

Note

As at 30 June

2016

unaudited

As at 31

December 2015

audited


Equity:

Share capital 47,665 47,665

Share premium 147,192 147,192

Other reserves 119,855 119,855

Retained earnings 649,299 696,049

964,011 1,010,761



Long-term borrowings 23,163 -

Retirement severance provision 2,043 1,905

Deferred revenues and accruals 8 15

Other 100 81

36,789 14,183


Retirement severance provision 47 163

Trade and other payables 117,262 108,801

Short-term borrowings 8,571 17,878


Provisions 187 297

Deferred revenues and accruals 42,375 50,358

198,311 194,362

Total equity and liabilities 1,199,111 1,219,306




UNCONSOLIDATED INCOME STATEMENT FOR SIX MONTHS ENDED 30 JUNE 2016

Six months

ended

Six months

ended

30 June 2016

unaudited

30 June 2015

unaudited,

adjusted

Sales 296,092 328,920

Cost of sales (205,535) (221,845)

Gross profit 90,557 107,075

Selling expenses (90,804) (94,370)

Administrative expenses (39,360) (39,530)

Other operating income 1,699 2,449

Other operating expenses (2,050) (2,978)

Operating loss (39,958) (27,354)

Finance income 28,817 30,971

Finance costs (526) (816)


Income tax expense 665 5,359


Basic / diluted earnings per share (in PLN) (0.23) 0.17

UNCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR SIX MONTHS ENDED

30 JUNE 2016

Six months

ended

Six months

ended

30 June 2016

unaudited

30 June 2015

unaudited


Other comprehensive income for the period - -

Total comprehensive income for the period (11,002) 8,160

[ w w w . a g o r a . p l ]



UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR SIX MONTHS ENDED 30 JUNE 2016

Share capital Treasury shares

Share premium Other reserves Retained earnings Total equity


As at 31 December 2015 audited 47,665 - 147,192 119,855 696,049 1,010,761


Net loss - - - - (11,002) (11,002)

Total comprehensive income for the

period - - - - (11,002) (11,002)



Dividends declared - - - - (35,749) (35,749)

Other - - - - 1 1

Total transactions with owners - - - - (35,748) (35,748)

As at 30 June 2016 unaudited 47,665 - 147,192 119,855 649,299 964,011


As at 31 December 2014

audited 50,937 (30,060) 147,192 137,289 700,798 1,006,156


Net profit - - - - 8,160 8,160

Total comprehensive income for the

period - - - - 8,160 8,160


Contributions by and distributions to

owners

Repurchase of own shares - (9,288) - - - (9,288)

Reserve capital for share buy-back - - - (20,877) 20,877 -

Total transactions with owners - (9,288) - (20,877) 20,877 (9,288)

As at 30 June 2015 unaudited 50,937 (39,348) 147,192 116,412 729,835 1,005,028




UNCONSOLIDATED CASH FLOW STATEMENT FOR SIX MONTHS ENDED

30 JUNE 2016

Six months

ended

Six months

ended

30 June 2016

unaudited

30 June 2015

unaudited



Adjustments for:

Depreciation of property, plant and equipment 15,877 16,330

Amortization of intangible assets 4,078 11,867

Foreign exchange (gain)/loss - (1,564)

Interest, net (305) (326)

(Profit) / loss on investing activities (926) (674)

Dividend income (26,677) (27,429)

(Decrease) / increase in provisions (89) (623)

(Increase) / decrease in inventories (2,882) 282

(Increase) / decrease in receivables and prepayments 11,077 (3,224)

(Decrease) / increase in payables (21,756) 4,569

(Decrease) / increase in deferred revenues and accruals (7,367) 14,182

Other adjustments 90 455

Cash generated from operations (40,547) 16,646

Income taxes paid - -

Net cash from operating activities (40,547) 16,646


Proceeds from sale of property, plant and equipment, and intangibles 6,960 124

Dividends received 1,055 9,663

Repayment of loans granted 6,000 1,143

Interest received 832 433

Disposal of short-term securities 63,805 10,007

Repayment of finance lease receivables - 7,902

Other inflow (1) 10,645 -

Purchase of property plant and equipment, and intangibles (13,425) (8,942)

Acquisition of subsidiary (net of cash acquired) associates and jointly

controlled entities (21,708) (52)

Acquisition of short-term securities (34,000) (41,000)

Loans granted (2,000) (2,000)

Net cash used in investing activities 18,164 (22,722)




UNCONSOLIDATED CASH FLOW STATEMENT FOR SIX MONTHS ENDED

30 JUNE 2016 (CONTINUED)



NOTES

1. General information

Agora S.A. with its registered seat in Warsaw, Czerska 8/10 street (“the Company”) principally produces, sells and

promotes daily newspapers (including Gazeta Wyborcza) and carries out the Internet activity. The Company is also

active as a publisher in magazines, periodicals and books segment and offers printing services for external clients in

printing houses belonging to Agora S.A. and its subsidiary Agora Poligrafia Sp. z o.o. Moreover the Company has shares

in companies, which operate in cinema, outdoor, radio and TV segments. Detailed information about the structure

and the scope of activity of the Agora Group have been included in the condensed semi-annual consolidated financial

statements as at 30 June 2016 and for six month period ended thereon.

Company’s advertising revenues are subject to seasonality – revenues earned in the first and third quarter are usually

lower than in the second and fourth quarter.

The financial statements were prepared as at 30 June 2016 and for six months ended 30 June 2016 with comparative

figures as at 31 December 2015 and for six months ended 30 June 2015.

The financial statements were authorised for issue by the Management Board on 12 August 2016.

Six months

ended

Six months

ended

30 June 2016

unaudited

30 June 2015

unaudited


Proceeds from borrowings 25,000 6,150

Proceeds from cash pooling 13,444 3,446

Repurchase of own shares - (9,288)

Repayment of borrowings (11,250) (8,732)

Outflows from cash pooling (3,000) -

Payment of finance lease liabilities (5) -

Interest paid (292) (296)

Other (260) (400)

Net cash used in financing activities 23,637 (9,120)

Net increase / (decrease) in cash and cash equivalents 1,254 (15,196)


At start of period 11,682 28,075

At end of period 12,936 12,879




2. Changes in provisions and impairment losses for assets

In the period from January 1, 2016 to June 30, 2016 the following impairment losses and provisions were changed in

the unconsolidated financial statements of Agora S.A.:

- impairment loss for financial assets: decrease by PLN 400 thousand,

- impairment loss for receivables: decrease by PLN 437 thousand,

- impairment loss for inventory: increase by PLN 887 thousand,

- impairment loss for tangible assets and intangible assets: increase by PLN 70 thousand,

- provision for legal claims and similar: decrease by PLN 110 thousand,

- retirement severance provision: increase by PLN 21 thousand.

3. Property, plant and equipment

In the period from January 1, 2016 to June 30, 2016, the Company purchased property, plant and equipment in the

amount of PLN 7,351 thousand (in the period of January 1, 2015 to June 30, 2015: PLN 3,670 thousand).

As at June 30, 2016 commitments for the purchase of property, plant and equipment amounted to PLN 541 thousand

(as at December 31, 2015 amounted to PLN 2,962 thousand).

4. Related party transactions

(a) Management Board and Supervisory Board remuneration

The remuneration of Management Board members of Agora S.A. amounted to PLN 7,452 thousand (six months ended

June 30, 2015: PLN 2,008 thousand). This amount includes also one-off bonus payments, inter alia, the one resulting

from realization of Three-Year-Long Incentive Plan described in note 5 to the condensed semi-annual consolidated

financial statements.

The remuneration of Supervisory Board members of Agora S.A. amounted to PLN 231 thousand (six months ended

June 30, 2015: PLN 234 thousand).

(b) Entities related to Agora S.A.

There were no material transactions and balances with related entities other that disclosed below:

Six months

ended 30

June 2016

Six months

ended 30

June 2015

Subsidiaries

Sales 13,788 18,386

Purchases of goods and services (42,144) (42,672)


Other operating costs - (186)

Dividends income 26,677 27,429

Other finance income 681 2,205

Finance costs (197) (246)


Sales 229 186



Finance income 47 57

Associates

Sales 16 18





Six months

ended 30

June 2016

Six months

ended 30

June 2015

Major shareholder

Sales 32 31

Other operating income 86 122

As at 30 June

2016

As at 31

December

2015

Subsidiaries

Shares (1) 571,502 537,659

Cash pooling receivables 3,711 1,131

Non-current receivables 8,705 17,299

Short term receivables 19,701 19,181

Dividends receivables 25,622 -

Cash pooling liabilities 25,592 12,561

Short term liabilities 10,682 9,908



Shares 11,593 11,593

Short term receivables 70 135

Short term liabilities 234 407


Associates

Shares 949 12,584



Major shareholder

Short-term receivables 1 -


Dividend liability 4,051 -

(1) the change relates mainly to the acquisition of additional shares in GoldenLine Sp. z o.o. and a share capital

increase in Green Content Sp. z o.o. covered with a cash contribution.

5. Other financial liabilities

Other short - term financial liabilities include the contingent payment liability in the amount of PLN 4,277 thousand

resulting from the share sales agreement concluded on December 11, 2014 , on the basis of which Agora S.A. acquired

384,600 shares of Helios S.A. from a non-controlling shareholder and liabilities to Agora S.A. subsidiaries resulting from

settlements related to the cash pooling system, which functions within Agora Group since December 5, 2014.



[ w w . a g o r a . p l ] Page 10

6. Financial instruments measured at fair value

The table below shows financial instruments measured at fair value at the balance sheet date:

As at 30

June 2016 Level 1

Level 2

Level 3


-

35,739

-


-

35,739

-


-

-

4,277


-

-

4,277

As at 31

December

2015

Level 1

Level 2

Level 3


-

65,405

-


-

65,405

-


-

-

4,304


-

-

4,304

The table below shows a reconciliation from the beginning balance to the ending balance for financial instruments in

Level 3 of the fair value hierarchy:

As at 30

June 2016

As at 31

December

2015

Opening balance 4,304

4,483

Remeasurement recognised in profit or loss (27)

(179)

Closing balance 4,277

4,304

Key assumptions that are most significant to the fair value measurement of financial instruments in Level 3 of the fair

value hierarchy include estimated level of the EBITDA result (being the sum of operating profit/loss and amortization

and depreciation) and discount rate. As at 30 June 2016, according to a call to pay an additional price for shares

received from a former non-controlling shareholder of Helios S.A., the contingent payment liability was calculated on

the basis of historical data of Helios group for the last two financial years according to the share sale agreement dated

December 11, 2014.



[ w w . a g o r a . p l ] Page 11

7. Other notes


financial statements present all other material information required to assess the Group’s financial position and

financial results for six months ended 30 June 2016 and therefore the condensed semi-annual unconsolidated financial

statements should be read together with the condensed semi-annual consolidated financial statements.

The condensed semi-annual unconsolidated financial statements have been prepared in accordance with International

Accounting Standard 34 “Interim Financial Reporting”. In the preparation of these condensed semi-annual

unconsolidated financial statements, the Company has followed the same accounting policies as used in the

unconsolidated financial statements as at December 31, 2015, except for the changes described below. The condensed

semi-annual unconsolidated financial statements as at 30 June, 2016 should be read together with the audited

consolidated financial statements as at December 31, 2015.

In 2016 the Company changed the name of the line item in the unconsolidated balance sheet from „Accounts payable”

to „Trade and other payables”. The scope of balances presented in this line item did not change. In Company`s

opinion, the new name reflects more accurately the information scope of this line item.


In 2016, the Company modified the presentation of expenses related to rental cost of advertising space in internet

business. Till the end of 2015 these costs were presented in the unconsolidated income statement in the line item

“Selling expenses” and starting from the first quarter of 2016 these costs are presented in the line item “Cost of sales”.

In the Company`s opinion, the new presentation more appropriately reflects the nature of these costs from the

perspective of classification of expenses according to their function. The comparative amounts were adequately

adjusted. The above change had no impact on previously reported amounts of operating profit, net profit and equity

of the Company.

The summary of adjustments made to the unconsolidated comparative amounts of the Company is presented in the

table below:

Six months ended

Six months

ended

30 June 2015

(as reported)

Presentation

adjustments

30 June 2015

(as adjusted)

Cost of sales (210,659) (11,186) (221,845)

Gross profit 118,261 (11,186) 107,075




[ w w . a g o r a . p l ] Page 12

8. Selected unconsolidated financial data together with translation into EURO

PLN

thousand

EURO

thousand

Six months

ended 30

June 2016

unaudited

As at 31

December

2015

audited

Six months

ended 30

June 2015

unaudited

Six months

ended 30

June 2016

unaudited

As at 31

December

2015

audited

Six months

ended 30

June 2015

unaudited

Sales 296,092

328,920

67,593

79,563

Operating loss (39,958)

(27,354)

(9,122)

(6,617)

Profit/(loss) before

income taxes (11,667)

2,801

(2,663)

678

Net profit/(loss) for the

period (11,002)

8,160

(2,512)

1,974

Net cash from operating

activities (40,547)

16,646

(9,256)

4,027

Net cash used in investing

activities 18,164

(22,722)

4,147

(5,496)

Net cash used in financing

activities 23,637

(9,120)

5,396

(2,206)

Net increase / (decrease)

in cash and cash

equivalents

1,254

(15,196)

286

(3,676)

Total assets 1,199,111

1,219,306

270,955

286,121

Non-current liabilities 36,789

14,183

8,313

3,328

Current liabilities 198,311

194,362

44,811

45,609

Equity 964,011

1,010,761

217,831

237,184

Share capital 47,665

47,665

10,771

11,185

Weighted average

number of shares 47,665,426

47,906,531

48,151,633

47,665,426

47,906,531

48,151,633

Basic/diluted earnings per

share (in PLN / in EURO) (0.23)

0.17

(0.05)

0.04

Book value per share (in

PLN / in EURO) 20.22 21.10

4.57 4.95



[ w w . a g o r a . p l ] Page 13







AGORA S.A.

Condensed

interim

unconsolidated


as at 30 June 2016

and for three and six

month period ended

thereon

August 12, 2016

AGORA S.A. Condensed interim unconsolidated financial statements as at 30 June 2016 and for 3 and 6 month period ended thereon



UNCONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016

As at 30 June

2016

unaudited

As at 31

March 2016

unaudited

As at 31

December

2015

audited

As at 30 June

2015

unaudited

Assets

Non-current assets:

Intangible assets 57,148 58,354 59,635 59,437

Property, plant and equipment 272,640 275,937 281,851 292,763

Long term financial assets 591,791 588,216 569,446 571,870

Receivables and prepayments 9,189 13,643 17,912 401

930,768 936,150 928,844 924,471

Current assets:

Inventories 22,447 19,214 19,566 20,319

Accounts receivable and prepayments 190,673 161,595 175,499 209,299

Income tax receivable 4 2 - 27

Short-term securities and other financial

assets 42,283 30,918

83,715

36,571

Cash and cash equivalents 12,936 21,926 11,682 12,879

268,343 233,655 290,462 279,095

Total assets 1,199,111 1,169,805 1,219,306 1,203,566




UNCONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2016 (CONTINUED)

As at 30 June

2016

unaudited

As at 31

March 2016

unaudited

As at 31

December

2015

audited

As at 30 June

2015

unaudited


Equity:

Share capital 47,665 47,665 47,665 50,937

Treasury shares - - - (39,348)

Share premium 147,192 147,192 147,192 147,192

Other reserves 119,855 119,855 119,855 116,412

Retained earnings 649,299 674,260 696,049 729,835

964,011 988,972 1,010,761 1,005,028



12,182 16,017

Long-term borrowings 23,163 - - -

Other financial liabilities - - - 4,483

Retirement severance provision 2,043 1,905 1,905 2,003

Deferred revenues and accruals 8 13 15 23

Other 100 91 81 88

36,789 12,208 14,183 22,614


Retirement severance provision 47 163 163 20

Trade and other payables 117,262 83,456 108,801 91,380

Short-term borrowings 8,571 8,254 17,878 6,150


Provisions 187 308 297 614

Deferred revenues and accruals 42,375 46,122 50,358 52,193

198,311 168,625 194,362 175,924

Total equity and liabilities 1,199,111 1,169,805 1,219,306 1,203,566




UNCONSOLIDATED INCOME STATEMENT FOR THREE AND SIX MONTHS ENDED 30 JUNE

2016

Three

months

ended

Six months

ended

Three

months

ended

Six months

ended

30 June 2016

unaudited

30 June 2016

unaudited

30 June 2015

unaudited,

adjusted

30 June 2015

unaudited,

adjusted

Sales 161,626 296,092

178,826 328,920

Cost of sales (108,236) (205,535) (117,201) (221,845)

Gross profit 53,390 90,557 61,625 107,075

Selling expenses (48,125) (90,804) (50,029) (94,370)

Administrative expenses (20,599) (39,360) (20,207) (39,530)

Other operating income 906 1,699 976 2,449

Other operating expenses (648) (2,050) (1,361) (2,978)

Operating loss (15,076) (39,958) (8,996) (27,354)

Finance income 27,345 28,817 28,432 30,971

Finance costs (229) (526) (218) (816)

Profit/(loss) before income taxes 12,040 (11,667) 19,218 2,801

Income tax (1,252) 665 2,055 5,359

Profit/(loss) for the period 10,788 (11,002) 21,273 8,160

Basic/diluted earnings per share (in PLN) 0.23 (0.23) 0.44 0.17

UNCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THREE AND SIX

MONTHS ENDED 30 JUNE 2016

Three

months

ended

Six months

ended

Three

months

ended

Six months

ended

30 June 2016

unaudited

30 June 2016

unaudited

30 June 2015

unaudited

30 June 2015

unaudited

Profit/(loss) for the period 10,788 (11,002) 21,273 8,160

Other comprehensive income for the

period - -

- -

Total comprehensive income for the period 10,788 (11,002) 21,273 8,160

[ w w w . a g o r a . p l ]



UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR SIX MONTHS ENDED 30 JUNE 2016

Share capital

Treasury

shares

Share premium Other reserves Retained earnings Total equity


As at 31 December 2015 audited 47,665 - 147,192 119,855 696,049 1,010,761


Net loss - - - - (11,002) (11,002)

Total comprehensive income for the period - - - - (11,002) (11,002)



Dividends declared - - - - (35,749) (35,749)

Other - - - 1 1

Total transactions with owners - - - - (35,748) (35,748)

As at 30 June 2016 unaudited 47,665 - 147,192 119,855 649,299 964,011


As at 31 December 2014 audited 50,937 (30,060) 147,192 137,289 700,798 1,006,156


Net profit - - - - 8,160 8,160

Total comprehensive income for the period - - - - 8,160 8,160



Repurchase of own shares - (9,288) - - - (9,288)

Reserve capital for share buy-back - - - (20,877) 20,877 -

Total transactions with owners - (9,288) - (20,877) 20,877 (9,288)

As at 30 June 2015 unaudited 50,937 (39,348) 147,192 116,412 729,835 1,005,028




UNCONSOLIDATED CASH FLOW STATEMENT FOR THREE AND SIX MONTHS ENDED

30 JUNE 2016

Three

months

ended

Six months

ended

Three

months

ended

Six months

ended

30 June 2016

unaudited

30 June 2016

unaudited

30 June 2015

unaudited

30 June 2015

unaudited


Profit/(loss) before income taxes 12,040 (11,667) 19,218 2,801

Adjustments for:

Depreciation of property, plant and

equipment 7,907 15,877 8,119 16,330

Amortization of intangible assets 1,778 4,078 9,109 11,867

Foreign exchange (gain) /loss - - 326 (1,564)

Interest, net (90) (305) (154) (326)

(Profit) / loss on investing activities (506) (926) (385) (674)

Dividend income (26,317) (26,677) (27,429) (27,429)

(Decrease) / increase in provisions (100) (89) (186) (623)

(Increase) / decrease in inventories (3,234) (2,882) (312) 282

(Increase) / decrease in receivables and

prepayments (3,748) 11,077 (18,947) (3,224)

(Decrease) / increase in payables (1,555) (21,756) 416 4,569

(Decrease) / increase in deferred revenues

and accruals (3,404) (7,367) 9,231 14,182

Other adjustments 48 90 75 455

Cash generated from operations (17,181) (40,547) (919) 16,646

Income taxes (paid)/received - - - -

Net cash from operating activities (17,181) (40,547) (919) 16,646


Proceeds from sale of property, plant and

equipment, and intangibles 3,586 6,960 84 124

Dividends received 695 1,055 1,388 9,663

Repayment of loans granted 200 6,000 447 1,143

Interest received 353 832 160 433

Disposal of short-term securities 22,840 63,805 4 10,007

Repayment of finance lease receivables - - 3,940 7,902

Other inflows (1) - 10,645 - -

Purchase of property, plant and equipment,

and intangibles (4,887) (13,425) (2,214) (8,942)

Acquisition of subsidiaries, associates and

jointly controlled entities (3,008) (21,708) - (52)

Acquisition of short-term securities (34,000) (34,000) (31,000) (41,000)

Loans granted - (2,000) - (2,000)

Net cash used in investing activities (14,221) 18,164 (27,191) (22,722)




Three

months

ended

Six months

ended

Three

months

ended

Six months

ended

30 June 2016

unaudited

30 June 2016

unaudited

30 June 2015

unaudited

30 June 2015

unaudited


Proceeds from borrowings 25,000 25,000 6,150 6,150

Proceeds from cash pooling - 13,444 374 3,446

Repurchase of own shares - - (9,288) (9,288)

Repayment of borrowings (1,626) (11,250) - (8,732)

Outflows from cash pooling (605) (3,000) - -

Payment of finance lease liabilities (5) (5) - -

Interest paid (184) (292) (126) (296)

Other (168) (260) (127) (400)

Net cash used in financing activities 22,412 23,637 (3,017) (9,120)

Net increase / (decrease) in cash and cash

equivalents (8,990) 1,254 (31,127) (15,196)


At start of period 21,926 11,682 44,006 28,075

At end of period 12,936 12,936 12,879 12,879



ADDITIONAL INFORMATION

1. General information

Agora S.A. with its registered seat in Warsaw, Czerska 8/10 street (“the Company”) principally produces, sells and

promotes daily newspapers (including Gazeta Wyborcza) and carries out the Internet activity. The Company is also

active as a publisher in magazines, periodicals and books segment and offers printing services for external clients in

printing houses belonging to Agora S.A. and its subsidiary Agora Poligrafia Sp.z o.o. Moreover the Company has shares

in companies which operate in cinema, outdoor, radio and TV segments. Detailed information about the structure and

the scope of activity of the Agora Group have been included in the condensed semi-annual consolidated financial

statement as at 30 June 2016 and for six month period ended thereon.

The financial statement was prepared as at 30 June 2016 and for three and six months ended 30 June 2016 with

comparative figures as at 31 March 2016, 31 December 2015 and as at 30 June 2015 and for three and six months

ended 30 June 2015.

The financial statements were authorised for issue by the Management Board on 12 August 2016.




2. Changes in provisions and impairment losses for assets

In the period from January 1, 2016 to June 30, 2016 the following impairment losses and provisions were changed in

the unconsolidated financial statements of Agora S.A. (in brackets the amounts for the second quarter of 2016):

- impairment loss for financial assets: decrease by PLN 400 thousand (decrease by PLN 200 thousand),

- impairment loss for receivables: decrease by PLN 437 thousand (decrease by PLN 899 thousand),

- impairment loss for inventory: increase by PLN 887 thousand (increase by PLN 543 thousand),

- impairment loss for tangible assets and intangible assets: increase by PLN 70 thousand (increase by PLN

70 thousand),

- provision for legal claims and similar: decrease by PLN 110 thousand (decrease by PLN 121 thousand),

- retirement severance provision: increase by PLN 21 thousand (increase by PLN 21 thousand).

3. Other notes


financial statements and the notes to Agora S.A. condensed semi-annual unconsolidated financial statements present

all other material information required to assess the Company’s financial position and financial results in the period

from January, 1, 2016 to June, 30, 2016 and therefore the condensed interim unconsolidated financial statements

should be read together with the condensed semi-annual consolidated financial statements and condensed semi-

annual unconsolidated financial statements, which are included in the semi-annual report.

Accounting policies applied to prepare condensed interim unconsolidated financial statements of Agora S.A. meet the

International Accounting Standard 34 “Interim Financial Reporting” and are the same as for the condensed semi-

annual unconsolidated financial statements.


In 2016, the Company modified the presentation of expenses related to rental cost of advertising space in internet

business according to description presented in note 7 to the condensed semi-annual unconsolidated financial

statements.

The summary of adjustments made to the unconsolidated comparative amounts of the Company is presented in the

table below:

Six months ended

Six months

ended

30 June 2015

(as reported)

Presentation

adjustments

30 June 2015

(as adjusted)

Cost of sales (210,659) (11,186) (221,845)

Gross profit 118,261 (11,186) 107,075


Three months

ended

Three months

ended

30 June 2015

(as reported)

Presentation

adjustments

30 June 2015

(as adjusted)

Cost of sales (110,660) (6,541) (117,201)

Gross profit 68,166 (6,541) 61,625


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