Report 23/2017

2017-03-10

Current Report No. 23/2017 dated 10 March 2017

Increase in valuation of liability with respect to put option for non-controlling interests and recognition of additional deffered tax asset by subsidiary Grupa Wirtualna Polska S.A.

Legal basis: Art. 17 paragraph. 1 MAR - confidential information.

Content of Report:

The Management Board of Wirtualna Polska Holding S.A. (“Company”) hereby announces that on 10 March 2017 in coordination with the auditor – PricewaterhouseCoopers spółka z o.o. with its seat in Warsaw (00-683 Warszawa, Aleja Armii Ludowej 14) the following resolutions were adopted:
1. a resolution of the Management Board of the Company regarding increase in valuation of liability with respect to put option for non-controlling interests, presented in the consolidated financial statements of the Group
The Management Board revised the valuation of the put option liability for non-controlling interest in one of Group’s subsidiaries, increasing its valuation by PLN 47 million. This amount will negatively impact the consolidated net income of the Group for the year ending 31 December 2016.
Both revenues and operating results of the subsidiary exceeded both the originally expected values at the acquisition date as well as the updated financial forecasts at the end of 2015. The Management revised the long-term forecast for this company. Consequently, the valuation of subsidiary and option to buy shares owned by the minority shareholders increased.
2. a resolution of the Management Board of the Company and the Management Board of Grupa Wirtualna Polska S.A. regarding the recognition of additional deffered tax asset in the amount of PLN 55 million both in the financial statements of Grupa Wirtualna Polska S.A. and in the consolidated financial statement of the Group
On 22 December 2016, Grupa Wirtualna Polska S.A. sold all of its shares in WP Shopping. The tax loss on the sale of shares in WP Shopping as per individual accounting books of GWP amounted to PLN 378 million - a title for maximum deffered tax assets of PLN 72 million. The Company has prepared detailed tax projections for the following years, showing the estimated taxable income on the basis of which the Management Board has decided to recognize an additional deferred tax asset on the tax loss in GWP of PLN 55 million, thereby recognizing a profit of PLN 55 million both in standalone financial statement of GWP and consolidated financial statement of the Group for the year ending 31 December 2016.
Legal basis: Art. 17 paragraph. 1 MAR - confidential information.

Signatures of the individuals representing the Company:
Jacek Świderski – President of the Management Board/Chief Executive Officer
Elżbieta Bujniewicz – Belka – Member of the Management Board/Chief Financial Officer