Revenues, costs and results of discontinued operations during the reporting period, or intended to be discontinued in the next period.

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1. Information on financial instruments The company publishes information on financial instruments in the classification of financial instruments included in the consolidated financial statements,

1 1. Information on financial instruments The company publishes information on financial instruments in the classification of financial instruments included in the consolidated financial statements, which is part of the Consolidated Annual Report for Data regarding the off-balance sheet items, in particular, contingent liabilities, including guarantees and warranties (including bills of exchange) granted by the issuer, with a separate indication of those granted to subsidiaries as at : The value of contingent liabilities on equalled 12,434,800 PLN. This amount consisted of: In the 4th quarter of 2007, ZPUE S.A. granted sureties to W. Investment Group Sp. z. o.o. (currently ZPUE Holding Sp. z o.o.), for a total sum of 106,000 PLN, in connection with the signing of an agreement between W. Investment Group Sp. z o.o. (currently ZPUE Holding Sp. z o.o.) and the local labour office (Powiatowy Urząd Pracy) on behalf of the Włoszczowa local authorities (Starostwo Powiatowe), to reimburse the costs of fitting out work stations for unemployed people hired. During the first half of 2010, the Management Board of ZPUE S.A. received information from W. Investment Group Sp. z o.o. (currently ZPUE Holding Sp. z o.o.), that it had kept to the conditions of two agreements (no. 25/07 of and no. 10/07 of ) signed with the District Employment Office, resulting in the surety issued being reduced to 52,800 PLN. The sum of 2,882,000 PLN is the value of the surety (payment security) granted by the Company on 18 November 2008 to Elektromontaż-1 Katowice S.A. for the repayment of obligations from the investment credit agreement nr K of 18 November 2008 for a sum of 2,305,000 PLN, signed with Bank Zachodni WBK S.A. based in Wrocław. The surety in question for the repayment of the Katowice company's liabilities is valid until 24 December On 29 June 2010 the Management Board of ZPUE S.A. updated the patronage declaration of 8 July 2008 (the Company announced this in current report 14/2008), i.e. reduced the sum of the surety granted to STOLBUD Włoszczowa S.A., with regard to repaying the liabilities resulting from Contract no /4/RB/2007 signed with PKO BP S.A. for credit of 5,400,000 PLN in the current account. In accordance with the declaration in question, ZPUE S.A.'s Management Board has undertaken to guarantee repayment of the aforementioned credit up to a sum of 5,000,000 PLN. The Board of Management of ZPUE S.A. also signed a patronage declaration with regard to repaying the liabilities of STOLBUD Włoszczowa S.A. up to 4,500,000 PLN, resulting from Contract no /3/I/10/2007 signed with PKO BP S.A. for a non-renewable working capital loan of 7,000,000 PLN. The conditional liabilities in question were granted with the consent of the Supervisory Board (Resolution no. 11/2010) and will be binding until 30 June Liabilities to the state or local government units for obtaining the ownership of buildings and structures at ZPUE SA Capital Group has no liabilities to the state or local government entities with respect for acquiring property rights and buildings. Revenues, costs and results of discontinued operations during the reporting period, or intended to be discontinued in the next period. In 2010, there were no revenues, costs and results from discontinued operations. ZPUE SA Capital Group Companies have no plans to discontinue any business. 3. Consolidated cost of production of fixed assets in construction and fixed assets for own needs - in 2010 was 6,860,000 PLN. 4. Incurred capital expenditures and expenditure planned over the next 12 months from the balance date, including expenditures for non-financial assets, and also incurred and planned expenditures for environmental protection. Capital expenditures incurred in 2010 amounted to 9,680,000 PLN. Investments were mostly investments in fixed assets (6,682,000 PLN). For intangible investment an amount 484,000 PLN was allocated, while 2,514,000 PLN was allocated to R&D. Investments in 2010 were related to: purchase, construction and modernization of buildings and structures - 3,015,000 PLN. 1

2 purchase of machinery and equipment - 3,155,000 PLN. expenditure for means of transport - 194,000 PLN. intangible assets - 484,000 PLN. research and development - 2,514,000 PLN. Other - 318,000 PLN. The Companies did not bear the expenditure on environmental protection in 2010, and have no plans to incur such expenditure in Significant transactions with related parties on terms other than market terms. During 2010, ZPUE SA did not conclude any transactions with related parties on terms other than market terms. 6. Undertakings that are not subject to full consolidation or consolidation by the equity method - none. 7. Information on employment. As at in ZPUE SA Capital Group employed people. Blue-collar workers employees, White-collar workers 300 employees. Blue-collar workers: foreman Concrete maker, reinforcement installer electrical installer automation engineer driver painter loader equipment fitter other fitters machinery and equipment operator qualified assistant maintenance employee finishing works technician welder locksmith fitter-welder lab technician Total: 55 employees 70 employees 138 employees 46 employees 9 employees 19 employees 16 employees 121 employees 129 employees 116 employees 10 employees 33 employees, 47 employees 7 employees 79 employees 75 employees 2 employees 972 employees White-collar workers: The management board directors regional directors managers foremen product technologist specialists agent sales representatives security employee Total: 6 employees 5 employees 4 employees, 31 employees 10 employees 2 employees 157 employees 47 employees 33 employees, 5 employees 300 employees 8. Information on the total salaries, bonuses or benefits separately for managing and supervising personnel of the issuer - a separate information about the salaries and awards received for performing functions in the governing bodies of subsidiaries and associates. 2

3 Salaries of individual managers and supervising personnel is given in Section 2 of the Management Board's Report on the Activity of ZPUE SA Capital Group in 2010, which is part of this report. 9. Information about the value of unpaid advances, credit, loans, guarantees, sureties or other agreements obliging payment to the Issuer, granted to persons managing or supervising and their spouses, relatives and second degree kin, adopted children or parents and others with whom they are personally connected, along with the conditions for charging interest and repaying these amounts. In 2010 ZPUE SA did not grant any loans to the managers and supervising personnel. 10. Information on the entity authorised to examine financial statements. On 9 July 2010, by Resolution No. 12/2010 the Supervisory Board of ZPUE SA Włoszczowa Resolution has selected the entity authorized to review the interim financial statements for the first half of 2010 and to audit the annual report for the year The entity selected to review the financial statements for the first half of 2010 and audit the Company's annual report for 2010 was the company ECA Seredyński i Partnerzy Sp. z o.o. (formerly the Europejskie Centrum Audytu Sp. z o.o.) Krakow, ul. Prague 6 / 5, entered on a list of entities authorized to audit financial statements under registration number 3115 maintained by the National Chamber of Statutory Auditors. The choice of entity authorised to examine financial statements was made in accordance with the Issuer's Statute as well as the applicable legislation and professional standards. ZPUE S.A. has been collaborating with ECA Seredyński i Partnerzy Sp. z o.o. since will be the third settlement period for which financial statements will be examined by the aforementioned auditor. The contract between the entities mentioned of 9 July 2010 was signed for a period of one year. The Parties to the Contract established that ZPUE S.A. will pay 21,000 PLN net for investigating the financial statement for 2010, and11,500 PLN net for investigating the half-yearly financial statement. The contract does not provide for payment for fiscal consultancy services or other types of services. On the basis of the Annex to this Agreement additional provision was made for the examination of the consolidated annual report of the ZPUE SA Capital Group, and therefore the value of the Agreement was increased by 6,000 PLN net. Payment for the investigation of ZPUE S.A.'s financial statement for 2009 was 21,000 PLN net, and for the review of the half-yearly financial statement 11,500 PLN net. The contract between the entities mentioned for 2009 does not provide for payment for fiscal consultancy services or other types of services. In 2010, the Management Board of ZPUE SA also concluded an agreement with the above entity for accounting consulting services for a salary of 16,500 PLN net, and an agreement for valuation of the company for a salary of 10,000 PLN net. 11. Significant events relating to previous years, recognised in the financial statements for the current period - none. 12. Significant events occurring after the balance data which were not recognised in the financial statements - none. 13. Information about the relationship between the legal predecessor and the issuer, and the method of taking over the assets and liabilities. ZPUE SA Włoszczowa was established on 22 October 1996 based on notarial deed Rep. A No. 6499/96. Incorporated in the Company by contribution in kind was the property and trademark associated with a business carried by Bogusław Wypychewicz since 1988 (since 1994 together with his wife Małgorzata Wypychewicz) under the name Electric Equipment Factory (Zakład Produkcji Urządzeń Elektrycznych). The meaning of the law, the business run by Małgorzata and Bogusław Wypychewicz under the name Zakład Produkcji Urządzeń Elektrycznych is not a previous legal form of the Issuer. 14. The financial statements and comparative financial data, at least in relation to the essential items of balance sheet and profit and loss account, adjusted by the appropriate inflation rate and method of its use, the period of the last financial statement as a base period - if the cumulative average annual rate of inflation for the last three years the issuer's operations has reached or exceeded 100%. The presented consolidated financial statements for 2010 were not adjusted for inflation. 3

4 15. Summary and explanation of the differences between the information disclosed in the financial statements and comparable financial data, and previously prepared and published financial statements. Between selected financial data presented in financial statements for the year 2010, and previously prepared and published financial statements for the four quarters of 2010 there were the following differences in the items of financial statements and profit and loss account: In the financial statements submitted to the Stock Exchange for the fourth quarter, the wrong method was adopted for the recognition of merger of ZPUE S.A. and ZPUE Gliwice Sp. z o.o. In the quarterly report it was assumed that the merger could be recognised in accordance with International Financial Reporting Standard 3 - Business combinations - purchase method. For purposes of these annual financial statements, however, it was assumed that, originally adopted method misrepresented the business transaction, as on the date of the merger (consolidation) both of the merging companies were controlled by one person who after the merger has not lost control of the merged entities. This finding prevented, as indicated above, the application of the purchase method as defined in International Financial Reporting Standard 3, and it was necessary to recognise the merger using a method consistent with the method laid down in Article 44c of the Accounting Act - pooling of interests method. According to this method on the day of the merger, assets and liabilities, revenues and costs of the merged companies are summed as of the date of the merger, after adjusting their valuesaccording to uniform valuation methods and making exclusions. Share capital of a company whose assets were transferred to another company is subject to exclusion. After this exclusion, all relevant items of the equity of the company, which receives the combined assets or of the newly established company is adjusted for the difference between total assets and liabilities. 16. Changes made in the accounting principles (policy) applied and method of preparing financial statements, compared with the previous financial year(s), the reasons for them and the influence of their financial effects on the material and financial situation, liquidity, financial result and profitability. ZPUE S.A. took control of the company ZPUE Gliwice Sp. z o.o. on Therefore on the date of acquisition of control ZPUE SA Capital Group was established, whose parent entity is ZPUE SA and ZPUE Gliwice Sp. z o.o. is its subsidiary. ZPUE SA owns 99.9% shares in the capital of ZPUE Gliwice Sp. z o.o. Accordingly, on the date of establishing ZPEU SA Capital Group, the Companies indicated above prepare financial statements in accordance with the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) and related interpretations published in the form of European Commission regulations, and where not regulated by the aforementioned regulations, in accordance with accounting principles defined in the Accounting Act of 29 September 1994 (Journal of Laws 2002 no. 76, item 694) and the legislation issued based thereon. The basis for preparing the Consolidated Financial Statement is the consolidation documentation which covers the financial statements of the constituent companies of the Group after taking into consideration consolidation exclusions and adjustments. The entities subject to consolidation apply uniform methods of valuation and preparation of financial statements in accordance with IAS. The Consolidated Statement was prepared on the basis of the financial statement of the parent company and the financial statement of the subsidiary. With consolidation by the full method, all the relevant items of assets and liabilities of the subsidiary and the parent company are totalled according to their full value. After totalling these up, corrections and consolidation exclusions were made, in accordance with the applicable regulations. With consolidation of the profit and loss account by the full method, all the relevant items of income and expenditure of the subsidiary and the parent company are totalled. Items on the subsidiary's profit and loss account are totalled at their full value regardless of the extent to which the parent company owns the subsidiary. After totalling these up, corrections and consolidation exclusions were made, in accordance with the applicable regulations. The following significant items are excluded from the consolidated financial statement: - mutual receivables and liabilities, Revenue and costs regarding operations carried out between consolidated entities, Profits and losses arising from operations conducted between entities subject to consolidation, included in the value of the assets and liabilities subject to consolidation, value of purchasing shares owned by the parent company in the subsidiary subject to consolidation. 4

5 17. Corrections made, the reasons for them and the influence of their financial effects on the material and financial situation, liquidity, financial result and profitability. There were no basic errors in the record of ZPUE S.A.'s Capital Group business activities. The statutory auditors' report contained no reservations. 18. Incidents of uncertainty as to the possibility of continuing activity, description of these uncertainties and a statement that such uncertainty appeared, and an indication whether the financial statement contains adjustments in connection with this. The information should also include a description of actions taken or planned by the issuer in order to eliminate the uncertainty. The Companies from Capital Group are not aware of any incidents which could cause a lack of continuity in the basic business activity. 19. In the case of a financial statement prepared for a period during which a merger took place, an indication that it is a financial statement prepared after the merger, and an indication of the date of the merger and the method used to settle the merger (purchase, share merger). No merger took place during the period for which the financial statement has been prepared. Valuation of shares in subsidiaries under the equity method - consequences that would result in its use, and impact on financial performance. The Issuer has no subsidiaries. 20. If the issuer does not prepare consolidated financial statements, the legal basis for not preparing consolidated financial statements should be provided in the additional explanatory note to the financial statements. ZPUE SA prepares consolidated financial statements. ZPUE SA is the parent entity in the ZPUE SA Capital Group. 5

THE MANAGEMENT BOARD'S REPORT ON THE ACTIVITY OF ZPUE S.A. CAPITAL GROUP FOR THE FIRST HALF OF 2011

THE MANAGEMENT BOARD'S REPORT ON THE ACTIVITY OF ZPUE S.A. CAPITAL GROUP FOR THE FIRST HALF OF 2011 WŁOSZCZOWA, AUGUST 2011 LIST OF CONTENTS 1. INFORMATION ABOUT THE ENTITIES WHICH COMPRISE THE CAPITAL