DORADCA Zespół Doradców Finansowo-Księgowych Spółka z o.o.

Transcription

1 Zespół Doradców Finansowo-Księgowych Lublin, Al. J. Piłsudskiego 1a, tel , fax OPINION OF AN INDEPENDENT AUDITOR ON THE CONSOLIDATED FINANCIAL STATEMENTS OF THE ROVESE CAPITAL GROUP for the period between 1 January 2012 and 31 December 2012 The Company is entered on the list of entities authorised to audit financial statements under No. 232, District Court Lublin-Wschód in Lublin based in Świdnik, 6th Commercial Division of the National Court Register (KRS) under KRS No , share capital PLN 216,000, NIP (Tax ID): , REGON (Business ID):

2 OPINION OF AN INDEPENDENT AUDITOR for the General Meeting and the Supervisory Board of the ROVESE Capital Group s parent We have audited the attached consolidated financial statements of the ROVESE Capital Group, with ROVESE Spółka Akcyjna, based in Kielce at Al. Solidarności 36, Kielce, as the parent, comprising: consolidated balance sheet prepared as at 31 December 2012, showing total assets and equity and liabilities of PLN 3,484,562,000 consolidated income statement for the financial year between 1 January 2012 and 31 December 2012, showing the net loss of PLN 62,776,000 consolidated statement of comprehensive income for the financial year between 1 January 2012 and 31 December 2012, showing the total comprehensive income of PLN (-)57,623,000 statement of changes in consolidated equity for the financial year between 1 January 2012 and 31 December 2012, showing an increase in equity by PLN 520,248,000 consolidated statement of cash flows for the financial year between 1 January 2012 and 31 December 2012, showing an increase in cash by PLN 416,572,000 additional and explanatory notes. The parent s Management Board is responsible for the preparation of the consolidated financial statements in line with the applicable regulations and the Management Report of the Capital Group. The parent s Management Board and Members of the Supervisory Board are obliged to ensure compliance of the consolidated financial statements and the Management Report of the Capital Group with the requirements provided for in the Act of 29 September 1994 on accounting (J.L. of 2009, No. 152, item 1223, as amended) hereinafter referred to as the Accounting Act. Our responsibility was to audit the consolidated financial statements and express our opinion on them as regards compliance with the applicable accounting principles (policy) of the Capital Group and whether in all material aspects they present the economic and financial standing of the Capital Group as well as its financial performance in an accurate and clear way. We have audited the consolidated financial statements in accordance with: chapter 7 of the Accounting Act, national standards of financial revision as issued by the Polish National Council of Statutory Auditors, International Standards on Auditing as regards issues not regulated by the aforementioned regulations. We have planned the audit and audited the consolidated financial statements in such a way as to obtain reasonable certainty which allows for expressing an opinion on these statements. The audit included, in particular, verifying for correctness the accounting principles (policy) implemented by the parent and subsidiaries and checking mainly by random verification of supporting documents that are the basis for the figures and information included in the consolidated financial statements, and the general assessment of the consolidated financial statements. We believe that the audit has provided a reasonable basis for our opinion. In our opinion, the audited consolidated financial statements, covering both figures and facts: provide an accurate and clear presentation of all the information essential to give an opinion on the economic and financial standing of the Capital Group audited as at 31 December 2012, as well as its financial performance for the financial year between 1 January 2012 and 31 December 2012, Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 2

3 have been prepared in accordance with the International Accounting Standards, International Financial Reporting Standards and related interpretations announced as regulations of the European Commission, and to the extent not regulated by these Standards in compliance with the requirements of the Accounting Act and related executive regulations, comply with the legal regulations applicable in the Capital Group, influencing the content of the consolidated financial statements. When preparing the consolidated financial statements, the ROVESE Capital Group applied the provision of para. 10 (d) of IAS 27 according to which a lower-level parent of the capital group needs not produce consolidated financial statements for the group if its head parent produces consolidated financial statements available for public use that comply with the International Financial Reporting Standards. We report that separate financial statements of the subsidiaries: CersanitWestGmbh (Germany, Berlin), CERSANIT UK Limited (Great Britain, London) UAB Cersanit Baltic (Lithuania, Vilnius), Cersanit Luxembourg S.a.r.l. (Luxembourg), LXIV S.a.r.l. (Luxembourg), have not been subject to the obligatory audit by an independent auditor. The share of these statements is insignificant for the audited consolidated financial statements. Financial statements of the above entities prepared in the form of consolidation packages in line with the principles under the International Accounting Standards and International Financial Reporting Standards have been subject to appropriate revision procedures during the audit of consolidated financial statements of the Capital Group. We report that separate financial statements of the related entities: OMD Sp. z o.o. in liquidation (Poland, Opoczno), Kopalnia Piasku Kwarcowego Polkwarc in liquidation (Poland, Częstochowa), have not been subject to the obligatory audit by an independent auditor and have not been subject to consolidation. The share of these statements is insignificant for the audited consolidated financial statements. The financial statements of: "ROVESE" Spółka Akcyjna in Kielce, Cersanit II Spółka Akcyjna in Starachowice, Cersanit III Spółka Akcyjna in Wałbrzych, Opoczno Trade in Kielce, Opoczno I in Opoczno, Opoczno III in Opoczno, Cersanit Trade Mark in Kielce, UAB Cersanit Baltic (Vilnius, Lithuania), Cersanit Cyprus Limited (Nikosia, Cyprus), CRTV Limited (Nikosia, Cyprus), Cersanit Luxembourg S.a.r.l. (Luxembourg), LXIV S.a.r.l. (Luxembourg), Cersanit West Gmbh (Berlin, Germany), Cersanit UK Limited (London, Great Britain) and CERSANIT KRASYNYSTAW Capital Group have been prepared in line with the principles resulting from the International Accounting Standards and the International Financial Reporting Standards. The separate financial statements of: Avtis LLC (Frianovo, Russia), Cersanit Rus LLC (Moscow, Russia), Frianovo Ceramic Factory LLC (Frianovo, Russia), Bułakovo-2 LLC (Frianovo, Russia), Złoty Irys LLC (Moscow, Russia), Tiles Trading LLC (Moscow, Russia), Cersanit Trade LLC (Frianovo, Russia), S.C. Cersanit Romania SA (Roman, Romania), S.C. Cersanit Bacau SRL (Bacau, Romania), Cersanit Trade SRL (Roman, Romania), FTF Cersanit Tiles Factory SRL (Roman, Romania), CERSANIT INVEST LLC (Chizhovka, Ukraine), Cersanit Ukraina LLC (Chizhovka, Ukraine), Cersanit Trade Ukraina LLC (Kiev, Ukraine) have been prepared in line with the accounting principles resulting from the local regulations applicable in these countries. For the purposes of consolidating the ROVESE Capital Group, these statements were restated to the principles applicable in the Group and in the form of consolidation packages contained in the audit, including for the purposes of verifying their compliance with the principles of the ROVESE Capital Group. We have acquainted ourselves with the Management Report of the ROVESE Capital Group prepared for the period between 1 January 2012 and 31 December 2012 and we have found that the information included therein complies with the audited consolidated financial statements. The information presented in the Management Report of the Capital Group takes into account appropriate provisions of the Regulation of the Minister of Finance of 19 February 2009 on current and periodic information to be submitted by Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 3

4 issuers of securities and conditions for considering as equivalent information required under the law of a non-member state (J.L. of 2009, No. 33, item 259, as amended). Maciej Miotła, Registry No Stefan Czerwiński, Registry No Group's auditor, key auditor Auditor, President of the Management Board responsible for the audit on behalf of: DORADCA DORADCA Zespół Doradców Finansowo-Księgowych Zespół Doradców Finansowo-Księgowych No. 232 No. 232 Lublin, 21 March 2013 Stamp of the authorised entity Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 4

5 Zespół Doradców Finansowo-Księgowych Lublin, Al. J. Piłsudskiego 1a, tel , fax REPORT TO THE OPINION OF AN INDEPENDENT AUDITOR ON THE CONSOLIDATED FINANCIAL STATEMENTS OF THE ROVESE CAPITAL GROUP for the period between 1 January 2012 and 31 December 2012 The Company is entered on the list of entities authorised to audit financial statements under No. 232, District Court Lublin-Wschód in Lublin based in Świdnik, 6th Commercial Division of the National Court Register (KRS) under KRS No , share capital PLN 216,000, NIP (Tax ID): , REGON (Business ID):

6 CONTENTS I. General report Details of the audited Capital Group Details of the Capital Group s parent Information on the consolidated financial statements for the year preceding the audited year Details of the authorised entity and the auditor of the Group responsible for the audit of the consolidated financial statements for Details of the audited financial statements Availability of data and statements of the Capital Group's parent... 7 II. Analysis of the economic and financial standing of the Capital Group... 9 III. Detailed report Completeness and correctness of the consolidation documentation Principles and methods for valuation of assets and equity and liabilities Description of the consolidated financial statements Rightness of deviations from the consolidation principles and the application of equity method defined in IFRS, approved by the EU IV. Final remarks Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 1

7 Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group I. General report 1. Details of the audited Capital Group Name of the Capital Group: Name of the parent: Parent s registered office: ROVESE Capital Group Al. Solidarności 36, Kielce "ROVESE" Spółka Akcyjna - from 4 January 2012 "CERSANIT" Spółka Akcyjna - to 3 January 2012 As at 31 December 2012, the ROVESE Capital Group is composed of: ROVESE Spółka Akcyjna, with its registered office in Kielce, as the parent subsidiaries presented below: Subsidiary Total capital share [%] Cersanit I (Poland, Krasnystaw) Cersanit II SA (Poland, Starachowice) Cersanit III S.A (Poland, Wałbrzych) CERSANIT IV (Poland, Krasnystaw) Opoczno I (Poland, Opoczno) Opoczno lii (Poland, Opoczno) 0.50 Opoczno Trade (Poland, Kielce) Cersanit Luxembourg S.a.r.l. (Luxembourg) CERSANIT INVEST LLC (Ukraine, Chizhovka) Cersanit Ukraina LLC (Ukraine, Chizhovka) Cersanit Cyprus Limited (Cyprus, Nicosia) Cersanit Trade Ukraina LLC (Ukraine, Kiev) Avtis LLC (Russia, Frianovo) Cersanit Rus LLC (Russia, Moscow) Frianovo Ceramic Factory LLC (Russia, Frianovo) Bułakovo-2 LLC (Russia, Frianovo) Złoty Irys LLC (Russia, Moscow) Tiles Trading LLC (Russia, Moscow) Cersanit Trade LLC (Russia, Frianovo) LXIV S.a.r.l. (Luxembourg) CRTV Limited (Cyprus, Nicosia) FTF Cersanit Tiles Factory SRL (Romania, Roman) Cersanit Trade SRL (Romania, Roman) S.C. Cersanit Romania SA (Romania, Roman) S.C. Cersanit Bacau SRL (Romania, Bacau) CERSANIT UK Limited (Great Britain, London) Cersanit West GmbH (Germany, Berlin) in liquidation UAB Cersanit Baltic (Lithuania, Vilnius) in liquidation Cersanit Trade Mark (Poland, Kielce) Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 2

8 The Capital Group comprises EBR Global Services Sp. z o.o. in Kielce as an associated entity accounted for using the equity method. The parent of the Capital Group, ROVESE Spółka Akcyjna in Kielce, is not a subsidiary to any other company. The parent and the subsidiaries forming the Group were established for an indefinite period of time. The subsidiaries and associates presented below have not been subject to consolidation due to lack of benefits earned by the parent from their operating activities. Related entity Total capital share [%] OMD in liquidation (Poland, Opoczno) Kopalnia Piasku Kwarcowego Polkwarc in liquidation (Poland, Częstochowa) The subsidiary Cersanit Luxembourg S.a.r.l. is the parent of the lower-level capital group, whose subsidiary is Cersanit Cyprus Limited (owned in 99.94% by Cersanit Luxembourg S.a.r.l. and in 0.06% by ROVESE SA). The company creates a lower-level capital group, whose subsidiary is CERSANIT INVEST LLC. In addition, CERSANIT INVEST LLC, a subsidiary, is the parent of Cersanit Ukraina LLC in which it holds 99.99% of shares. As a result, the indirect share of ROVESE SA is 99.43%. Cersanit I in Krasnystaw, a subsidiary, is the parent of Cersanit IV in Krasnystaw. LXIV S.a.r.l. in Luxembourg is the parent of Cersanit III SA in Wałbrzych. When preparing the consolidated financial statements, the ROVESE Capital Group applied the provision of 10 (d) of IAS 27 according to which a lower-level parent of the capital group needs not produce consolidated financial statements for the group if its head parent produces consolidated financial statements available for public use that comply with the International Financial Reporting Standards. The consolidated financial statements of the ROVESE Capital Group have been prepared as follows: firstly, consolidation was made for the CERSANIT KRASNYSTAW Capital Group, and then its financial statements were included in the consolidated financial statements of the ROVESE Capital Group. The consolidated financial statements of the lower-level parent company have been subject to the auditing procedures. In the audited financial year, the Capital Group extended to include the associate EBR Global Services Sp. z o.o. in Kielce (formerly, Projekt Echo-100 Sp. z o.o.), in which the parent took hold of 45.00% of shares. Moreover, in 2012, the following changes took place in the composition of the Capital Group: the merger of Cersanit Trade Ukraina LLC and Opoczno Ukraina LLC was conducted, the parent sold one share of a nominal value of PLN 50, in the subsidiary Opoczno I Sp. z o.o. to the other subsidiary Opoczno Trade Sp. z o.o. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 3

9 2. Details of the Capital Group s parent The parent in the ROVESE Capital Group is ROVESE Spółka Akcyjna in Kielce. The Company is entered into the Register of Businesses under KRS No It was entered into the Register by the District Court in Kielce, 10th Commercial Division of the National Court Register. The parent is an issuer of securities referred to in Article 4 of the Regulation of the European Parliament and of the Council of 19 July 2002 No. 1606/2002/EC, on the application of international accounting standards (O J EC L 243, , p. 1; O J EU Special edition in Polish, chapter 13, volume 29, page 609) and based on Article 55 of the Accounting Act of 29 September 1994 prepares consolidated financial statements of the Group in compliance with the International Accounting Standards and the International Financial Reporting Standards, approved by the EU. The parent has the following: - NIP (Tax ID): , - REGON (Business ID): The parent s business are the holding operations and distribution of products manufactured by the companies of the ROVESE Capital Group. In the audited year, the subsidiaries operated in the following fields: - manufacture and distribution of bathroom furnishing products, - management of lower-level capital expenditure. Detailed description of the Capital Group entities has been presented in item 1 of the additional and explanatory notes Equity of the Capital Group and its changes in the audited year In the reporting period, the parent's initial capital increased by PLN 54,096, due to the new issue of 540,960,106 I-series shares of a nominal value of PLN 0.10 each, in accordance with Resolution No. 3 of the Extraordinary General Meeting of 19 September 2012 (notarial deed: Repertory A No. 4640/2012). The increase of the capital was registered with the competent court on 23 January According to the data from a current copy of entry in the Register of Businesses of the National Court Register (KRS), the registered capital amounts to PLN 81,144, and is divided into 811,440,159 shares of a nominal value of PLN 0.10 each. The parent s ownership structure as at the date of this opinion, following the admission and introduction of I-series shares to stock exchange trading, was as follows: Shareholder Number of shares Nominal value of shares Share in initial capital [%] Michał Sołowow 503,884,146 50,388, including indirectly through: FTF Galleon SA Calgeron Investment Limited Barcocapital Investment Limited 267,581,829 63,281, ,030,917 26,758, ,328, ,203, Shareholder Number of shares Nominal value of shares Share in initial capital [%] ING OFE 118,557,186 11,855, Aviva OFE Aviva BZ WBK 67,530,249 6,753, Other shareholders 121,468,578 12,146, Total 811,440,159 81,144, On 31 December 2012, the Capital Group's equity amounted to PLN 2,109,186,000, and increased by 32.7% compared to the previous year. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 4

10 2.2. Parent s manager In the audited period and as at the date of this opinion, the parent's Management Board was composed of: - Wojciech Stankiewicz President of the Management Board since 24 January 2012, - Michał Wólczyński Vice-President of the Management Board since 24 January 2012, - Tomasz Rejman Vice-President of the Management Board since 24 January 2012, - Jacek Kuźnieców Member of the Management Board since 6 March 2012 till 14 March 2013, - Piotr Mrowiec Member of the Management Board, - Ireneusz Kazimierski Member of the Management Board, Vice-President of the Management Board since 15 March 2013, - Michał Romański Member of the Management Board since 24 January On 24 January 2012, the following people were appointed to the Management Board of the parent: Wojciech Stankiewicz, Michał Wólczyński, Tomasz Rejman and Michał Romański. On 6 March 2012, Jacek Kuźnieców was appointed to the parent's Management Board. The above changes were notified to, and registered with the relevant court register. On 15 March 2013 the Supervisory Board of "ROVESE" SA appointed the existing Member of the Management Board Ireneusz Kazimierski the Vice-President of the Management Board and dismissed Mr. Jacek Kuźnieców from the Company's Management Board. Until the date of this opinion, these changes have not been filed for registration in a relevant court register. 3. Information on the consolidated financial statements for the year preceding the audited year The consolidated financial statements for the previous financial year were audited by DORADCA in Lublin. The statements were given an unqualified opinion. The consolidated financial statements of the Capital Group for the period between 1 January 2011 and 31 December 2011 were approved by way of Resolution No. 5 of 26 June 2012 of the General Meeting of the parent. The approved consolidated financial statements of the Capital Group were: submitted together with other documents in the National Court Register on 5 July 2012, published in Monitor Polski B Official Gazette No. 271 of 30 October 2012 under item Details of the authorised entity and the auditor of the Group responsible for the audit of the consolidated financial statements for 2012 Audit of the consolidated financial statements of the Capital Group for 2012 was carried out by DORADCA in Lublin, entered on the list of authorised auditing entities, kept by the Polish National Council of Statutory Auditors under No The auditor was selected by the Supervisory Board of the parent, based on the Resolution of 29 June 2012, which is in accordance with relevant provisions of the Company's Articles of Association. The audit was carried out pursuant to Agreement No. 1/NF/5/98 concluded between DORADCA in Lublin and ROVESE SA in Kielce, to which an addendum was signed on 12 July On behalf of the authorised entity, the audit was carried out by an audit team managed by key auditor, Maciej Miotła (No. in the Register 10152). Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 5

11 The audit was carried out at the Company's registered office between 20 and 22 February 2013 and 13 and 14 March 2013, and outside the Company's registered office until the day of this opinion, i.e. 21 March The authorised entity, DORADCA, and the Group's auditor managing the audit comply with the requirements specified in Article 56 of the Act of 7 May 2009 on statutory auditors and their professional association and public supervision (J.L. No. 77, item 649, as amended) to give an unbiased and impartial opinion on the audited consolidated financial statements. The requirement of impartiality and independence is also fulfilled by members of the team involved in the audit of the consolidated financial statements. Our task was to give an opinion on the consolidated financial statements based on the conducted audit. The procedures implemented in the course of auditing of the consolidated financial statements were designed in such a way as to allow for giving an opinion on the consolidated financial statements as a whole. 5. Details of the audited financial statements The consolidated financial statements for the audited financial year comprise: - consolidated balance sheet prepared as at 31 December 2012, showing total assets and equity and liabilities of PLN 3,484,562,000 - consolidated income statement for the financial year between 1 January 2012 and 31 December 2012, showing the net loss of PLN 62,776,000 - consolidated statement of comprehensive income for the financial year between 1 January 2012 and 31 December 2012, showing the total comprehensive income of PLN (-)57,623,000 - statement of changes in consolidated equity for the financial year between 1 January 2012 and 31 December 2012, showing an increase in equity by PLN 520,248,000 - consolidated statement of cash flows for the financial year between 1 January 2012 and 31 December 2012, showing an increase in cash by PLN 416,572,000 - additional and explanatory notes. The parent prepared a Management Report of the Capital Group in the financial year, which was attached to the consolidated financial statements of the Capital Group. The consolidated financial statements were prepared as at 31 December 2012, based on the financial statements of the entities that form the Capital Group, and presented as if the Capital Group was one entity. The table below summarises information on opinions on separate financial statements of the parent and its subsidiaries and the lowerlevel Group, making up the ROVESE Capital Group. Member companies of the Capital Group Opinion date Auditor ROVESE Spółka Akcyjna in Kielce 21 March 2013 DORADCA Sp. z o.o. Lublin Lower-level Capital Group: CERSANIT KRASNYSTAW 19 March 2013 DORADCA Sp. z o.o. Lublin Cersanit II SA (Poland, Starachowice) 19 March 2013 DORADCA Sp. z o.o. Lublin Cersanit III S.A (Poland, Wałbrzych) 19 March 2013 DORADCA Sp. z o.o. Lublin Opoczno I (Poland, Opoczno) 19 March 2013 DORADCA Sp. z o.o. Lublin Opoczno Trade (Poland, Kielce) 19 March 2013 DORADCA Sp. z o.o. Lublin Opoczno III (Poland, Opoczno) 19 March 2013 DORADCA Sp. z o.o. Lublin Cersanit Trade Mark (Poland, Kielce) 19 March 2013 DORADCA Sp. z o.o. Lublin CERSANIT INVEST LLC (Ukraine, Chizhovka) 22 February 2013 Grant Thornton Ukraine Cersanit Ukraina LLC (Ukraine, Chizhovka) 22 February 2013 Grant Thornton Ukraine Cersanit Trade Ukraina LLC (Ukraine, Kiev) 22 February 2013 Grant Thornton Ukraine Cersanit Cyprus Limited (Cyprus, Nicosia) 2 March 2013 MGI Gregoriou & Co Ltd CRTV Limited (Cyprus, Nicosia) 8 March 2013 MGI Gregoriou & Co Ltd Avtis LLC (Russia, Frianovo) 19 February 2013 KSK Audit Opoczno Rus LLC (Russia, Moscow) 22 February 2013 KSK Audit Frianovo Ceramic Factory LLC (Russia, Frianovo) 19 February 2013 KSK Audit Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 6

12 Bulakowo-2 LLC (Russia, Frianovo) 19 February 2013 KSK Audit Złoty Irys LLC (Russia, Moscow) 30 January 2013 KSK Audit Tiles Trading LLC (Russia, Moscow) 15 February 2013 KSK Audit Cersanit Trade LLC (Russia, Frianovo) 22 February 2013 KSK Audit S.C. Cersanit Romania (Romania, Roman) 22 February 2013 SC Flor Consulting SRL S.C. Cersanit Bacau SRL (Romania, Bacau) 22 February 2013 SC Flor Consulting SRL Cersanit Trade SRL (Romania, Roman) 22 February 2013 SC Flor Consulting SRL TFT Cersanit Tiles Factory SRL (Romania, Roman) 22 February 2013 SC Flor Consulting SRL Separate statements of the subsidiary and associated entities: Cersanit West GmbH (Germany, Berlin) CERSANIT UK Limited (Great Britain, London) UAB Cersanit Baltic (Lithuania, Vilnius), Cersanit Luxembourg S.a.r.l. (Luxembourg), LXIV S.a.r.l. (Luxembourg), EBR Global Services Sp. z o.o. (Poland, Kielce) an associated entity accounted for using the equity method, have not been subject to the obligatory audit by an independent auditor. The share of these statements is insignificant for the audited consolidated financial statements. Financial statements of the above entities have been covered by appropriate revision procedures during the audit of consolidated financial statements of the Capital Group. Separate statements of related companies: OMD Sp. z o.o. in liquidation (Poland, Opoczno), Kopalnia Piasku Kwarcowego Polkwarc in liquidation (Poland, Częstochowa), have not been included in the consolidated financial statements prepared as at 31 December 2012, and these statements have not been subject to the obligatory audit by an independent auditor. The financials resulting from their financial statements are insignificant for the audited consolidated financial statements. 6. Availability of data and statements of the Capital Group's parent The parent s Management Board confirmed its responsibility for the correctness, reliability and clarity of the consolidated financial statements and the correctness of the consolidation documentation. The scope and manner of the audit of the consolidated financial statements have not been limited in any way. The Management Board of the parent made available to us all the financial statements of entities covered by the consolidated financial statements, the consolidation documentation and other required documents, and provided necessary explanations. The parent s Management Board made a statement on: complete disclosure of information in the consolidation documentation, recognition of all contingent liabilities in the consolidated financial statements, disclosing in the consolidated financial statements of any significant events which took place after the balance sheet date until the statement date. In the written statement that we have received it is confirmed that the information submitted to us was reliable and true to the best of the parent Management Board's knowledge and belief and included all events that could have influenced the consolidated financial statements. Contingent liabilities disclosed in the consolidated financial statements as at the balance sheet date amount to PLN 1,410,091,000 and refer mainly to loan sureties granted to related entities. They are presented by the parent in item 20 of the additional and explanatory notes. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 7

13 The significant events after the date of the consolidated financial statements relate to the acquisition by "ROVESE" S.A. in January % of shares in: OOO Opoczno RUS, OOO Pilkington's East, ZAO Syzranska Keramika, Meissen Keramik GmbH, and Pilkington's Manufacturing Limited. The price of acquisition of shares in the aforementioned entities amounted to PLN 266 million. The above price includes: Opoczno RUS PLN 75 million, Pilkington's East PLN million, - ZAO Syzranska Keramika PLN 2.5 million, - Meissen Keramik GmbH PLN 45 million, - Pilkington's Manufacturing Limited PLN 3 million. Details concerning the acquisition of the aforementioned entities have been presented in item 11 of the Management Report for the Issuer and the Rovese Capital Group. The audit of the consolidated financial statements, using methods specific for auditing, has not revealed any events indicating legal infringements that could form a basis for criminal proceedings by competent authorities. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 8

14 II. Analysis of the economic and financial standing of the Capital Group The analysis covers financials from the consolidated balance sheet, consolidated income statement, consolidated statement of cash flows and financial ratios from the audited year and two previous years. Tabular summaries used in the analysis of the Capital Group's economic and financial standing for constitute an appendix to this report. The analysis was performed at current prices, as inflation rates are not significant. Selected economic and financial ratios for the Capital Group have been presented in the table below: Details Unit Basic balance sheet amounts Balance sheet total PLN 000 2,990,115 3,222,007 3,484,562 Net assets PLN 000 1,318,219 1,588,938 2,109,186 Working capital PLN , ,564 1,110,282 Basic results Sales income PLN 000 1,531,462 1,638,209 1,668,980 Net result PLN ,075 82,725 (-)62,776 Liquidity ratios Current ratio Quick ratio I Financial leverage ratios Total debt ratio % Balance sheet rule of thumb ratio % Sustainability of financing structure ratio % Profitability ratios Return on sales (operating profit margin) % Return on sales (net profit margin) % (-)3.8 Return on equity % (-)3.0 Capital market ratios Weighted average number of shares in the period in ' , , ,172.5 Market price of shares (closing price as at the last day of the year) PLN P/E (-)6.6 P/BV Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 9

15 After an increase in value of assets and their funding sources by 7.8% as recorded in 2011, the balance sheet total in the audited year increased by 8.1%. The development of competitive advantage requires that the Group s potential be systematically adjusted to the business activity scale and growing market requirements. In 2011 the value of total non-current assets increased by 8.7%, whereas in 2012 their value decreased by 4.3%. In the audited year, investments in the Group's expansion, including its property, plant and equipment, were lower than respective depreciation write-downs, resulting in the decrease of their net value by 7.7%. As the range of activities was adjusted to market conditions, current assets increased in the audited year. The dynamics ratio recorded for this group of assets for 2012 amounted to 121.7%, with an increase in short-term financial assets only, which increased by 118.3%. In 2012 inventories decreased by 9.7% and short-term receivables by 11.3%. The aforesaid changes, in terms of dynamics, changed the structure of the Capital Group's assets. As at the end of 2012, the share of non-current assets in total assets, known as the immobilisation index, compared to the beginning of the year decreased by 6 percentage points to 46.1%, while the share of current assets increased from 47.9% as at 31 December 2011 to 53.9% as at the end of the audited year. Property, plant and equipment continue to be the largest item among assets; as at 31 December 2012 their share in total assets amounted to 32.5%. On the other hand, the most significant item among current assets is the short-term financial assets, with the share of 24.2% in total assets and 44.9% in current assets. As regards the funding sources, total equity increased by 32.7%, while debt fell by 15.8%. An increase in equity led to the reduction of long-term liabilities by 23.1% and short-term liabilities by 8.8%. In this group of funding sources, all significant liability items decreased, except for provisions and income tax liabilities. The decrease in long-term liabilities was primarily due to lower long-term loans (by 24.6%). The above-described changes in funding sources contributed to an increase in the sustainability of financing structure ratio to the level of 78.2%, with a simultaneous decrease in the total debt ratio from 50.7% as at 31 December 2011 to 39.5% at the end of the audited year. The consequence of the aforementioned changes was also an adjustment made in the structure of funding of assets, compared to the previous year. The share of equity increased from 49.3% as at the end of the previous year to 60.5% as at 31 December An increase of the share of equity by 11.2 percentage points was accompanied by a reduction in long-term liabilities by 7.2 percentage points and a decrease of share of short-term liabilities from 25.8% as at 31 December 2011 to 21.8% as at the end of the audited year. In the entire analysed period the working capital shows a positive value, which means that the Capital Group s non-current assets and part of current assets were financed with the capital employed. This is also confirmed with the balance sheet rule of thumb ratio, which, respectively for the three analysed years, amounted to: 134.6%, 142.4% and 169.7%. Changes in the structure of assets and capital in 2012 improved the static liquidity ratios. Maintenance of current ratio at 2.5 and quick ratio I at 1.8 leads to the conclusion that the Capital Group is able to pay its liabilities on an ongoing basis. It should be noted that in the management of their liquidity the Group companies use cash pooling. Based on the summary of the consolidated income statement figures, it has been established that the most important item in the Capital Group's income are sales of products and goods with a 97.7% share in total income. The share of other operating and financial income is insignificant. An analysis of costs for shows a cost structure typical of manufacture and commercial Capital Groups. Prevailing cost items are: cost of products and goods sold, which constitutes 64.8% of the total costs, and selling costs constituting 22.2% in the total cost structure. General and administrative expenses represent 6.2% of total costs. Based on a detailed analysis of primary costs it can be concluded that the largest items among costs are consumption of materials and energy with the structure ratio of 49.6%, and outsourced services with the share in primary costs for 2012 amounting to 14.6%. The share of personal costs (wages and salaries, social insurance and other benefits) in the costs according to types was 17.3%. Data from the income statement shows that sales of products and goods for 2012 amounted to PLN 1,668,980,000, and costs of goods and products sold, plus selling costs and general and administrative expenses, amounted to PLN 1,638,374,000. After adjusting for other operating income and costs, the operating result (EBIT) amounted to PLN 18,228,000, i.e. was by 86.1% lower than in the preceding year. This profit adjusted for the loss on financing activities of PLN 70,144,000 and obligatory charges on financial result gives the net loss of PLN 62,776,000. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 10

16 In the audited year, a slower growth rate was observed in total income (by 6.9% compared to 19.8% increase in total costs), resulting in poorer gross and net financial result. In the audited year, the return on sales measured by EBIT amounted to only 1.1%, i.e. was by 6.9 percentage points lower than in Due to the negative financial result, all profitability ratios established based on the net result were negative. As the data in table 6 shows, the Capital Group in the audited year obtained funds from operating activities, in which positive cash flows for the year amounted to PLN 232,024,000. This amount, together with cash flows from financing activities, was sufficient to finance investing activities and cover all expenses under the financing activities, as evidenced by total positive cash flows. The positive balance of cash from financing activities at the level of PLN 365,922,000 is largely the result of raising funds by the issue of new shares. In terms of cash flows related to loans in the audited year, their outstanding amount (principal plus interest) clearly exceeds the value of new loans. As a result of the audit of the consolidated financial statements, including analysis of the financial standing of the Capital Group, no threats related to the going concern in the year following the audited year due to intended or forced discontinuation (or substantial limitation) of its current activities, have been identified. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 11

17 III. Detailed report 1. Completeness and correctness of the consolidation documentation The parent prepared consolidation documentation in accordance with Chapter 6 of the Regulation of the Minister of Finance of 8 August 2009 on detailed rules for the preparation by entities other than banks and insurance companies of consolidated financial statements of capital groups (J. L. of 2009, No. 162, item 1004), including the financial statements of related entities, consolidation adjustments and eliminations, as necessary to prepare consolidated financial statements and calculate equity attributable to noncontrolling shareholders. During the audit, we have not identified any irregularities of the consolidation documentation which could have a significant influence on the audited consolidated financial statements and which would have not been eliminated. 2. Principles and methods for valuation of assets and equity and liabilities In the financial year 2005, in connection with fulfilling the obligation defined in Article 55, section 6a of the Accounting Act, for the purposes of preparing consolidated financial statements, the Group changed the accounting principles (policy) to the International Accounting Standards and the International Financial Reporting Standards, as approved by the EU. The accounting policy of the ROVESE Capital Group and the rules for disclosure are presented in the descriptive part of the additional and explanatory notes to the consolidated financial statements of the Capital Group for the year ended on 31 December For the purposes of establishing the scope and methods of consolidation, as well as relationships, criteria provided for in the International Accounting Standards and the International Financial Reporting Standards were used. 3. Description of the consolidated financial statements The consolidated financial statements for 2012, as for the previous years, have been prepared with the use of the full consolidation method for the subsidiaries. The associated entity has been accounted for using the equity method. The structure of the Group s assets and equity and liabilities has been presented in a consolidated balance sheet for the year ended on 31 December The data disclosed in the consolidated financial statements is compliant with the consolidation documentation Equity of the Capital Group, including attributable to non-controlling interest The equity disclosed is compliant with the consolidation documentation and relevant legal documents. Data on equity is presented in the additional and explanatory notes to the consolidated financial statements and in the statement of changes in consolidated equity. Equity attributable to non-controlling interest, which is part of the Capital Group's equity, has been properly determined and presented Goodwill of subsidiaries The parent in its consolidated financial statements reported a goodwill of PLN 387,387,000. This amount relates to: - Opoczno SA (a company merged with CERSANIT SA) PLN 245,698,000 - S.C. Cersanit Romania SA PLN 6,329,000 - Avtis LLC PLN 18,311,000 - Cersanit Rus LLC PLN 56,712,000 - CRTV Ltd PLN 15,000 - Frianowo Ceramic Factory LLC PLN 57,239,000 Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 12

18 - Złoty Irys LLC PLN 3,083,000 The parent tested the asset for impairment. There were no grounds to recognise a write-down on goodwill Financial year of entities forming the Capital Group The financial statements of all the entities comprising the Capital Group, constituting the basis for the consolidated financial statements, were compiled as at 31 December 2012 and cover the financial data for the reporting period from 1 January 2012 to 31 December Consolidation eliminations and adjustments Consolidation eliminations and adjustments refer to: share and capital in subsidiaries, mutual settlements (receivables and liabilities) of entities subject to consolidation internal transactions (income and costs) of entities subject to consolidation inventory profits, turnover on sales of fixed assets in the Capital Group. Consolidation eliminations and adjustments are consistent with consolidation documentation and have been correctly recognised in the Capital Group's consolidated statements. Below there is a summary of adjustments and eliminations in the consolidated balance sheet of the ROVESE Capital Group for 2012 [in PLN '000]. Basic balance sheet amounts Total of the compilation Adjustments and eliminations Consolidated value Property, plant and equipment 1,147,923 (-)14,715 1,133,208 Goodwill 245,698 (+)141, ,387 Intangible assets 662,882 (-)650,792 12,090 Investment real estate 2, ,807 Long-term financial assets 1,076,295 (-)1,072,176 4,119 Long-term receivables 1, ,701 Deferred tax assets 109,406 (-)43,891 65,515 Inventories 509,352 (-)3, ,537 Short-term receivables 1,887,883 (-)1,358, ,265 Short-term financial assets 2,123,060 (-)1,280, ,933 Equity 3,478,214 (-)1,369,028 2,109,186 Long-term liabilities 990,616 (-)373, ,393 Short-term liabilities 3,298,176 (-)2,540, , Sales of all or part of shares in a subsidiary In the financial year, the Capital Group did not sell any shares in the subsidiaries outside the Group. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 13

19 3.6. Rules for measurement of financial instruments applied by the Capital Group In item 25 of the additional and explanatory notes, the Capital Group disclosed information on the measurement of its financial instruments as required by International Accounting Standard 39 Financial Instruments: Recognition and Measurement and International Financial Reporting Standard 7 Financial Instruments: Disclosures Items shaping the business profit/loss of the Capital Group Description of items shaping the business profit/loss of the ROVESE Capital Group was presented in the audited consolidated financial statements for the year ended on 31 December The table below is a synthetic presentation of consolidation adjustments and eliminations of the consolidated statement of comprehensive income of the Capital Group [in PLN 000]. Basic amounts of the consolidated income statement Total of the compilation Adjustments and eliminations Consolidated value Sales of products and goods 3,519,113 (-)1,850,133 1,668,980 Costs of products and goods sold 2,880,137 (-)1,740,507 1,139,630 Gross profit on sales 638,976 (-)109, ,350 Other operating income 52,376 (-)35,814 16,562 Selling costs 508,906 (-)118, ,322 General and administrative expenses 112,482 (-)4, ,422 Other operating costs 65,265 (-)36,325 28,940 Operating profit 4,699 (+)13,529 18,228 Financial income 144,081 (-)121,751 22,330 Financial costs 140,570 (-)48,096 92,474 Profit (loss) from shares in entities accounted for using the equity method 0 (-)8 (-)8 Gross profit (loss) 8,209 (-)60,134 (-)51,924 Income tax 7,921 (+)2,931 10,852 Net profit (loss) 288 (-)63,065 (-)62, Other components of the consolidated financial statements In the financial year, the Capital Group prepared other components of the consolidated financial statements (consolidated statement of cash flows, statement of changes in consolidated equity and additional and explanatory notes) in a complete manner and in line with the accounting regulations applicable to the Capital Group. Individual components of the audited consolidated financial statements have been found internally coherent. 4. Rightness of deviations from the consolidation principles and the application of equity method defined in IFRS, approved by the EU In the process of compiling the consolidated financial statements, no deviations from the principles of consolidation and application of the equity method have been identified which would cause modifications in the opinion of the auditor. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 14

20 IV. Final remarks While auditing the consolidated financial statements, no irregularities have been identified that might materially affect the correct presentation of information disclosed therein. During the audit, we have not noticed any facts indicating a breach of legal provisions that might affect the consolidated financial statements. We have also received written confirmations from Management Boards of the parent and member companies of the Capital Group that in the audited period there were no legal infringements in member companies of the ROVESE Capital Group. The summary of the audit results is included in the opinion attached as a separate document. This report includes 17 consecutively numbered pages. Each page is marked by the auditor's signature. Maciej Miotła, Registry No Stefan Czerwiński, Registry No Group's auditor, key auditor Auditor, President of the Management Board responsible for the audit on behalf of: DORADCA DORADCA Zespół Doradców Finansowo-Księgowych Zespół Doradców Finansowo-Księgowych No. 232 No. 232 Lublin, 21 March 2013 Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 15

21 Tables presenting the analysis of the economic and financial standing of the Capital Group for List of tables Table 1. Analytical consolidated balance sheets as at: 31 December 2010, 31 December 2011, 31 December Table 2. Basic amounts for the financial standing and economic ratios of the Capital Group. Table 3. Analytical consolidated income statements for the years: 2010, 2011, Table 4. Structure and dynamics of primary costs in the Capital Group. Table 5. Profitability ratios and effectiveness ratios of the Capital Group. Table 6. Analytical consolidated statements of cash flows for the years: 2010, 2011, Table 7. Dynamic ratios of financial liquidity in the Capital Group. List of charts Chart 1. Dynamics of consolidated assets. Chart 2. Structure of consolidated assets. Chart 3. Dynamics of consolidated equity and liabilities. Chart 4. Structure of consolidated equity and liabilities. Chart 5. Dynamics of total consolidated income and costs. Chart 6. Dynamics of consolidated profit/loss. Chart 7. Structure of primary costs. Chart 8. Profitability ratios. Chart 9. Liquidity ratios. Opinion of an Independent Auditor on the Consolidated Financial Statements of the ROVESE Capital Group Page 1

22 Table 1. Analytical consolidated balance sheets as at: , , in PLN ' (I) (li) (III) Dynamics (previous year = 100%) Details value structure value structure value structure ll/l III/II ASSETS Non-current assets (long-term) 1,544, % 1,679, % 1,606, % 108.7% 95.7% Property, plant and equipment 1,132, % 1,227, % 1,133, % 108.4% 92.3% Goodwill 381, % 393, % 387, % 103.3% 98.3% Intangible assets 8, % 11, % 12, % 139.7% 104.8% Investment real estate 2, % 2, % 100.0% Long-term financial assets 2, % 2, % 4, % 81.6% 169.2% Deferred tax assets 17, % 38, % 65, % 227.0% 169.8% Long-term receivables 2, % 2, % 1, % 97.5% 71.4% Current assets (short-term) 1,446, % 1,542, % 1,877, % 106.7% 121.7% Inventories 441, % 559, % 505, % 126.6% 90.3% Short-term receivables 577, % 596, % 529, % 103.5% 88.7% Short-term financial assets 427, % 386, % 842, % 90.4% 218.3% Total assets 2,990, % 3,222, % 3,484, % 107.8% 108.1% EQUITY AND LIABILITIES Equity attributable to shareholders of the parent 1,318, % 1,579, % 2,099, % 119.8% 132.9% Initial capital 21, % 27, % 81, % 125.0% 300.0% Share premium 486, % 670, % 1,193, % 137.6% 178.2% Supplementary capital 960, % 1,003, % 1,056, % 104.4% 105.3% Revaluation reserve 1, % 1, % 1, % 100.0% 100.0% Foreign exchange gains/losses on translation -42, % -39, % -34, % 93.0% 87.1% Retained earnings / Losses brought forward -109, % -82, % -198, % 75.3% 239.9% Minority interest % 9, % 9, % 99.1% Total equity 1,318, % 1,588, % 2,109, % 120.5% 132.7% Long-term liabilities 759, % 802, % 617, % 105.6% 76.9% Deferred income tax provision 6, % 15, % 30, % 238.9% 202.4% Interest-bearing loans 731, % 775, % 584, % 106.0% 75.4% Provision for employee benefits 1, % 1, % 1, % 106.6% 117.1% Other provisions % % % 28.9% 103.2% Other liabilities 19, % 9, % % 49.3% 0.9% Short-term liabilities 912, % 830, % 757, % 91.1% 91.2% Current part of interest-bearing bank loans and borrowings 529, % 449, % 397, % 85.0% 88.5% Trade liabilities 277, % 278, % 263, % 100.5% 94.7% Income tax liabilities % % 1, % 55.1% 356.9% Provision for employee benefits 9, % 7, % 8, % 76.9% 114.7% Other provisions 25, % 12, % 24, % 48.3% 204.0% Other liabilities 70, % 82, % 61, % 116.9% 74.8% Total liabilities 1,671, % 1,633, % 1,375, % 97.7% 84.2% Total equity and liabilities 2,990, % 3,222, % 3,484, % 107.8% 108.1% Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 2

23 Table 2. Basic balance sheet amounts and economic ratios No. Name of ratio (amount) Calculation method (formula) Ratio (amount) relating to: Changes in ratio (amount) (I) (II) (III) II-I III-I III-II Basic balance sheet amounts Dynamics (previous year = 100%) 1 Net assets (book value) equity - dividend 1,318,265 1,579,379 2,099, % 159.3% 132.9% 2 Capital employed equity + long-term liabilities 2,078,148 2,381,734 2,717, % 130.7% 114.1% 3 Working capital capital employed non-current assets 534, ,564 1,110, % 207.9% 158.0% 4 Current ratio 5 Quick ratio I 6 Quick ratio II current assets current liabilities liquid current assets current liabilities short-term financial assets current liabilities Static ratios of financial liquidity Inventories turnover in days 8 Receivables turnover in days 9 Liabilities turnover in days total inventories (average balance) x 365 operating costs trade receivables (average balance) x 365 sales income trade liabilities (average balance) x 365 operating costs - amortisation Turnover ratios Total debt ratio 8 Equity to assets ratio 9 Equity to non-current assets ratio (coverage by equity) 10 Inverted current ratio (coverage by creditors) 11 Balance sheet rule of thumb ratio 12 Sustainability of financing structure 13 Immobilisation index Ratios of financial leverage (solvency) and relating to structure of capitals and assets total liabilities total assets 55.9% 50.7% 39.5% equity total assets 44.1% 49.3% 60.5% equity non-current assets 85.4% 94.6% 131.3% current liabilities current assets 63.1% 53.8% 40.4% capital employed non-current assets 134.6% 142.4% 169.7% capital employed total equity and liabilities 69.5% 74.2% 78.2% non-current assets total assets 51.6% 52.1% 46.1% Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 3

24 Classification of expenses by Table 3. Consolidated income statements for the years: 2010, 2011, 2012 in PLN '000 function Details Dynamics (previous year = 100%) value structure value structure value structure II/I III/II Total income 1,455, % 1,596, % 1,707, % 109.7% 106.9% Total costs 1,438, % 1,468, % 1,759, % 102.1% 119.8% Sales of products and goods 1,531, % 1,638, % 1,668, % 107.0% 101.9% Costs of products, goods and materials sold 929, % 1,036, % 1,139, % 111.5% 109.9% Gross profit on sales 602,026 x 601,588 X 529,350 x 99.9% 88.0% Other operating income 11, % 18, % 16, % 162.7% 89.3% Selling costs 335, % 351, % 390, % 104.7% 111.1% General and administrative expenses 115, % 113, % 108, % 97.8% 95.6% Other operating costs 21, % 24, % 28, % 112.6% 118.0% Operating profit 140,243 X 130,983 X 18,228 x 93.4% 13.9% Financial income 54, % % 22, % 72.4% 57.0% Financial costs 75, % 72, % 92, % 95.4% 128.1% Profit (loss) from shares in entities accounted for using the equity method % Profit (loss) on sales of shares in a related entity % Gross profit (loss) 118,633 X 98,042 X -51,924 x 82.6% Income tax 23,558 x 15,317 x 10,852 x 65.0% 70.8% Net profit (loss) of the sold company undue to the parent x x x Net profit (loss) 95,075 X 82,725 X -62,776 x 87.0% Other comprehensive income for the financial year 12,627 x 2,844 x 5,153 x Total comprehensive income for the financial year 107,702 X 85,569 X -57,623 x 79.4% Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 4

25 Table 4. Structure and dynamics of primary costs in PLN '000 Details Dynamics (previous year = 100%) value structure value structure value structure ll/l III/II Depreciation/Amortisation 111, % 115, % 144, % 103.4% 125.0% 2 Consumption of materials and energy 672, % 726, % 769, % 108.1% 106.0% 3 Outsourced services 233, % 238, % 226, % 102.3% 95.0% 4 Taxes and charges 18, % 21, % 16, % 115.4% 74.5% 5 Wages and salaries % 224, % 224, % 112.6% 99.9% 6 Social insurance and other benefits % 45, % 43, % 110.2% 95.4% 7 Other primary costs 81, % 94, % % 115.8% 133.7% Total primary costs 1,358, % 1,466, % 1,551, % 108.0% 105.8% Table 5. Profitability ratios and effectiveness ratios No. Name of ratio Ratio relating to: Changes in ratio Calculation method (formula) II-I III-I III-II 1 Return on sales (net profit margin) 2 Return on sales (operating profit margin) 3 Return on assets 4 Total return on capital 5 Return on equity 6 Financial leverage 7 Total assets turnover 8 Non-current assets turnover Profitability ratios net profit sales income operating profit sales income net profit total assets net profit + interest x (1-t) total equity and liabilities net profit equity return on equity total return on capital Effectiveness ratios sales income total assets (average balance) sales income non-current assets (average balance) 6.2% 5.0% -3.8% % 8.0% 1.1% % 2.6% -1.8% % 4.0% -0.6% % 5.2% -3.0% Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 5

26 Table 6. Consolidated statements of cash flows for the periods: in PLN '000 Details Dynamics (previous year = 100%) value structure value structure value structure ll/l III/II I. Gross profit (loss) 118, % 98, % -51, % 82.6% II. Adjustments for items: 88, % 6, % 283, % 7.8% % Depreciation/Amortisation 111, % 115, % 144, % 103.4% 125.0% Profit (loss) from shares in entities accounted for using the equity method 8 0.0% Foreign exchange gains (losses) -32, % 36, % -22, % Interest and dividends 54, % 52, % 46, % 96.2% 89.3% Profit (loss) on investing activities % % 9 0.0% 9,988.9% Movements in receivables -34, % -14, % 49, % 43.0% Movements in inventories -51, % -98, % 39, % 191.7% Movements in liabilities and provisions 60, % -13, % 2, % Income tax paid -15, % -16, % -24, % 107.6% 146.3% Other -4, % -51, % 48, % 1,220.0% III. Net cash flows from operating activities 207, % 104, % 232, % 50.6% 221.2% Sales of property, plant and equipment and intangible assets 1, % 4, % % 316.8% 15.8% Acquisition of property, plant and equipment and intangible assets -78, % -159, % -132, % 202.9% 82.9% Sales of financial assets 10, % Purchase of financial assets % Acquisition of a subsidiary, net of cash acquired Dividends and interest received 1, % % % 2.2% 170.3% Repayment of borrowings granted -2.0% % % 63.2% 32.9% Borrowings granted % -3, % -50, % 3,475.6% 1,621.8% Other 3, % 1, % % 34.4% 39.2% Net cash flows from investing activities -67,370 x -146,254 x -181,374 x 217.1% 124.0% Inflows relative to issue of shares 150, % 318,664-2,943.8% 577, % 211.6% 181.3% Contributions to equity returns -130,000 1,200.9% Inflows from loans/borrowings taken 592, % 147,207-1,359.9% 36, % 24.8% 24.7% Repayment of loans/borrowings Issue of debt securities -501, % -291,462 2,692.5% -197, % 58.2% 67.9% Interest paid -62, % -55, % -50, % 88.2% 91.2% Redemption of debt securities Other % % % Net cash flows from financing activities 179,636 x -10,825 x 365,922 x Total net cash flows 319,462 x -52,167 x x Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 6

27 Table 7. Dynamic ratios of financial liquidity No. Name of ratio Calculation method (formula) 1. Ability to generate net cash from operating activities 2. Share of net profit in net cash flows from operating activities operating flows net cash flows + investment and financial inflows net profit operating flows 3. Cash sufficiency ratio operating flows repayment of liabilities + dividend payment + expenditure on intangible assets and property, plant and equipment 4. Cash productivity on sales ratio operating flows sales income + other operating income Ratio relating to: Changes in ratio (I) (II) (III) II-I III-l III-II 56.3% 17.9% 27.4% % 78.9% -27.1% % 16.4% 53.8% % 6.3% 13.8% Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 7

28 [in PLN '000] DORADCA Dynamics of assets Short-term financial assets Short-term receivables Inventories Deferred tax assets Long-term financial assets Intangible assets Goodwill Property, plant and equipment Structure of assets Non-current assets (long-term) Current assets (short-term) Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 8

29 [in PLN '000] DORADCA Dynamics of equity and liabilities Liabilities related to assets held for sale Short-term liabilities Long-term liabilities Total equity Structure of equity and liabilities Total equity Total liabilities Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 9

30 [in PLN '000] [in PLN '000] DORADCA Dynamics of total income and costs Total income Total costs Structure of primary costs Depreciation/Amortisation Consumption of materials and energy Outsourced services Taxes and charges Wages and salaries Social insurance and other benefits Other primary costs Dynamics of profit/loss Gross profit on sales Operating profit Gross profit (loss) Net profit for the financial year 2012 Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 10

31 Profitability ratios Return on assets Total return on capital Return on equity Liquidity ratios Current ratio Quick ratio I Appendix to the Report to the Opinion of an Independent Auditor on the Consolidated Financial Statements of the Rovese Capital Group Page 11