Amica Wronki S.A. FINANCIAL REPORT For the 1st quarter of March 2009

Transcription

1 Amica Wronki S.A. FINANCIAL REPORT For the 1st quarter of March 2009 Interim financial report complying with the requirements of IAS34 Interim Financial Reporting

2 Financial data SELECTED FINANCIAL DATA FOR qtr 2009 (cumulative) thousands PLN 1 qtr 2008 (cumulative) balance as of qtr 2009 (cumulative) thousands EUR 1 qtr 2008 (cumulative) and balance as of Net revenues from sales of products, goods and material Profit (loss) on operating activities Profit (loss) before tax Net profit (loss) Net cash flows from operating activities Net cash flows from investment activities Net cash flows from financial activities Total net cash flows Total assets Liabilities and reserves Long term liabilities Short term liabilities Equity capital Share capital Number of shares 8, , , , Number of own shares for disposal Profit (loss) per ordinary share (PLN / EUR) Book value per share (PLN / EUR) * Declared or paid dividend per share (PLN / EUR) * In order to calculate the book value per share, equity capital was increased by the value of shares presented in equity capital with a negative sign. Financial data was converted to the euro according to the following currency exchange rates: Currency exchange rates for the profit and loss account as well as cash flow statement are as follows and Currency exchange rates for the balance sheet are and respectively 2

3 FINANCIAL REPORT Balance BALANCE Situation as of , the 1st quarter 2008 thousands Situation as of ASSETS I. Fixed assets Intangible assets, including: goodwill 2. Tangible fixed assets Long-term receivables 3.1 From subsidiaries and affiliates 3.2 From other entities 4. Long-term investments Investments in real property Financial assets available for sale a) in subsidiaries and affiliates, including shares in subsidiaries and affiliates consolidated by property - law method b) in other entities 4.3 Granted loans Other long-term investments Long-term deferred charges and accruals Assets from deferred taxes Other deferred charges and accruals II. Current assets Inventory Short-term receivables From subsidiaries and affiliates From other entities Short-term investments Short-term financial assets a) in subsidiaries and affiliates b) in other entities c) cash and other cash assets Other short-term investments 4. Short-term deferred charges and accruals III. LONG-TERM ASSETS DESIGNATED FOR SALE Total assets

4 BALANCE Situation as of , the 1st quarter 2008 thousands Situation as of LIABILITIES I. Equity capital Share capital Called up share capital (negative value) 3 Own shares (negative value) Reserve capital Revaluation reserve capital Other reserve capital 7 Profit (loss) of previous years Net profit (loss) Write-offs on net profit during the financial year (negative value) II. Liabilities and reserves Reserves for liabilities Reserves for deferred income tax Retirement benefits reserves a) long-term b) short-term 1.3 Other securities a) long-term b) short-term Long term liabilities To subsidiaries and affiliates 2.2 To others Short term liabilities To subsidiaries and affiliates To others Accruals and deferred income long-term short-term Liabilities associated with long-term assets III. allocated for sale Total liabilities Book value Number of shares 8, , Book value per share (PLN) Number of shares after consideration of own shares 7, , Diluted book value per share (PLN)

5 PROFIT AND LOSS ACCOUNT PROFIT AND LOSS ACCOUNT period from to thousands PLN period from to I. Net revenues from sales of products, goods and materials, including: from subsidiaries and affiliates Net revenues from sale of products Net revenues from sales of products, goods and materials II. Cost of products, goods and materials sold, including: 178, ,441 - to subsidiaries and affiliates , Cost of production 149, , Cost of goods and materials sold III. Gross profit (loss) on sales IV. Cost of sales V. General administrative expenses VI. Profit (loss) on sales VII. Other operating income Subsidies 6 3. Other operating income VIII. Other operating costs Loss on sale of non-financial fixed assets Revaluation of non-financial fixed assets Other operating costs IX. Profit (loss) on operating activities X. Financial revenue Interest, including: from subsidiaries and affiliates Others XI. Financial costs Interest, including: for subsidiaries and affiliates Others XII. Gross profit (loss) XIII. Income tax current deferred 413 (68) XV. Net profit XVI. Total other income (35 964) Cash flow hedging instruments (44.429) Income tax from hedging instruments (2,231) 3. Resolution of reserves for re-evaluated fixed assets XVII. Total revenue for the period (35 929) Net profit (loss) (annual) Weighted average of number of ordinary shares (number of shares) 7, , Profit (loss) per ordinary share (PLN)

6 Changes in equity Basic Reserve Nondistributed Assets Cash flow Reserve from Total Capital Capital available hedging revaluation equity results for sale instruments capital Balance as of (23,227) Changes in equity capital for (1,514) (68,231) (60 516) Buy-back to redeem own shares (1,514) (1,514) Total revenue for (68,231) (59 002) Balance as of (24,741) (60 132) Changes in equity capital in the 1st quarter of 2009, (277) (35,988) (36,206) including: Buy-back of own shares for redemption (277) (277) Total revenue For the 1st quarter of (35,988) (35,929) Balance as of , ,985 9,166 (25,018) (96 120) 2,

7 Cash flow account CASH FLOW ACCOUNT period from to thousands PLN period from to Cash flows from operating activities (indirect A. method) I. Net profit 35 5, Income tax Profit before tax II. Total adjustments Depreciation Currency translation gains (losses) Interest and profit sharing (dividend) Profit (loss) on investment activities Change in provisions Change in inventory Change in receivables Change in short-term liabilities excluding credits and loans Change in prepayments and accruals Other adjustments Income tax paid Net cash flows from operating activities (I+/-II) - III. indirect method B. Cash flows from investment activities I. Inflows Disposal of intangible and tangible fixed assets 3-79 Disposal of investments in real property and in intangible assets From financial assets, including: a) in subsidiaries and affiliates b) in other entities 4. Other inflows from investment activities II. Outflows Acquisition of intangible and tangible fixed assets Investments in real property and in intangible assets 3. For financial assets, including: 8 a) in subsidiaries and affiliates 8 Dividends and other profit sharing paid out to minority 4. shareholders 5. Other outflows from investment activities III. Net cash flows from investment activities (I-II) C. Cash flows from financial activities I. Inflows Net inflows from issuance of shares and other capital 1. instruments and from capital contributions 2. Credits and loans Issuance of debt securities

8 4. Other inflows from financial activities II. Outflows Acquisition of own shares Dividends and other payments to shareholders Profit distribution liabilities other than profit distribution 3. payments to shareholders 4. Repayment of credits and loans Redemption of debt securities Payment of liabilities arising from financial leases Interest III. Net cash flows from financial activities (I-II) D. Total net cash flows (A.III+/-B.III+/-C.III) E. Balance sheet change in cash, including: change in cash due to currency translation differences F. Opening balance of cash G. Closing balance of cash, including of limited disposability Supplementary information to interim financial report general information IAS1.126 Amica Wronki S.A. is it joint stock company registered in Poland by the Regional Court in Poznań Nowe Miasto and Wilda in Poznań, 8th Commercial Division of The National Court Register on 7 June 2001 (National Court Register number KRS 17514). The company's registered office is at 52 Mickiewicza Street in Wronki. The company's core activities according to Polish business classification PKD 2971 are: Manufacture of electrical and gas heating appliances, electrical refrigerators and washing machines, Import of materials and export of ready products, Wholesale and retail sales, Sales of maintenance and repair services and heating media. Composition of the Management Board as of 31 March 2009 was as follows: Jacek Rutkowski Andrzej Kadziński Wojciech Kocikowski - President of the Management Board - Vice President of the Management Board - Member of The Board Advising on Financial Matters 8

9 Composition of the Supervisory Council as of 31 March 2009: Tomasz Rynarzewski Piotr Sawala Jarosław Obara Bogna Sikorska Wojciech Kochanek - Chairman of the Supervisory Council - Member of the Supervisory Council - Member of the Supervisory Council - Independent Member of the Supervisory Council - Member of the Supervisory Council Amica Wronki S.A. is the parent company of the following companies: Amica International GmbH, Gram A/S, Gram Italia, Sidegrove Ltd, Amica Commerce sro, Hansa Russia, Amica Far East Limited, Inteco Business Solutions Sp. z o.o. which together form the Amica Capital Group. The parent company of Amica Capital Group is Holding Wronki S.A. Description of major adopted accounting principles. 1. The basis for drawing up of this financial report The Management Board of Amica Wronki SA passed a resolution to issue financial reports meeting the requirements of International Financial Reporting Standards (IFRS) as of the beginning of This financial report meets the requirements of the International Financial Reporting Standards. This financial report has been drawn up with the assumption of business continuity according to International Financial Reporting Standards (IFRS). This report is presented in its shortened form according to the requirements of IAS 34 Interim financial reports. Report currency. Respective values of the financial report are presented in thousands of Polish Zloties (PLN). 2. The differences between previously published financial data for the 1st quarter of 2008 and data presented in this financial report for the same period. Figures published in this financial report for the 1st quarter of the previous year do not differ from figures published for the same quarter of Accounting principles Conversion of items expressed in foreign currencies: Current valuation. Transactions expressed in foreign currencies are converted according to average currency rate published by the National Bank of Poland on the day the transaction is processed. 9

10 Balance valuation: cash assets expressed in foreign currencies are evaluated at the balance day according to average currency exchange rate published on this day by the National bank of Poland. Financial assets available for sale in foreign currencies are valuated according to historical cost and are presented at the purchase price. Financial assets such as loans and receivables expressed in foreign currencies are evaluated according to fair market value and are converted according to currency exchange rate used on the day of determining their fair value. All currency translation differences arising out of balance valuation are presented in appropriate items of profit and loss account. Tangible fixed assets IAS16.73(a)(c) Current valuation of tangible fixed assets is based on the purchase price or cost of production increased by the cost of external financing -- interest, which cannot be directly attributed to construction, purchase or production of the respective item and are a reduced by the final value of the item. Balance valuation of these items is based on the purchase price or cost of production reduced by depreciation and write-offs due to permanent impairment loss. Valuation of fixed assets under construction is based on general costs directly attributable to cost of purchase or production reduced by write-offs due to permanent impairment loss. Depreciation is calculated linearly and this proportional to estimated economic cycle of a given fixed asset. The table below presents the depreciation rates used by the company: Applied depreciation rate ranges Fixed assets group rate range Group 1 -- buildings 1.25% % Group 2 -- structures 1.5% - 6.0% Group 3 -- boilers and power machinery 2.85% Group 4 -- machines, equipment, apparatus 3.0% % Group 5 -- specialised machinery, equipment and apparatus 4.35% % Group 6 -- technical equipment 2.55% % Group 7 -- means of transport 4.35% % Group 8 -- tools, accessories, mobile equipment 2.95% % 10

11 Intangible assets Goodwill: It is the difference between purchase price and the fair value of identifiable net fixed assets of a subsidiary, affiliate or a joint enterprise at the date of takeover. It is presented as a separate item in assets. Goodwill acquired by merger is equivalent to payments made by the acquiring company in anticipation of future financial benefits arising from the assets which cannot be identified or quantified. Goodwill is not subject to depreciation but it is determined every year to review its value and it is presented on the balance sheet as the purchase price reduced by cumulated impairment loss write-offs. The surplus in the share of acquiring company in the net fair value of identifiable assets, liabilities and contingent obligations of the company being acquired above the purchase price is presented (after revaluation of the purchased assets) in profit and loss account. Other intangible assets IAS1.110 Current valuation of other tangible fixed assets is based on the purchase price or cost of production increased by the cost of external financing -- interest, which can be directly attributed to construction, purchase or production of the respective item. Balance valuation is based on the purchase prices or cost of production (taking into account cost of external financing) reduced by depreciation and write-offs due to permanent impairment loss. IAS IAS Other intangible assets characterised by a defined economic cycle are subject to linear depreciation throughout their use. Other intangible assets whose life cycle is indefinite are not subject to depreciation and are evaluated annually to determine any permanent impairment loss. The depreciation rates applied to intangible assets range from 6.7% to 67%. IAS1.110 Except for development work meeting the requirements of IAS 38 Intangible assets the company does not capitalise intangible assets developed internally (for example, company logos, clients, etc). Cost borne during production of these items is recorded on the profit and loss account at the moment when the cost is incurred. Pursuant to provisions of IAS 38.54, the company does not capitalise the cost of development work and this cost debits the financial result in the period it was incurred. 11

12 Investment property IAS40.75(a) This includes land, buildings and structures purchased for financial benefit due to increasing value or other benefits, for example to gain profit from lease. These assets are not used by the company. Not less frequently at the date of the balance sheet these investment properties are evaluated by the purchase price or the cost of production reduced by depreciation and write-offs due to permanent impairment loss. Depreciation is linear throughout the estimated economic cycle of the investment. IAS40.75(b) IAS40.75(c) Not applicable. There are no difficulties in classification of investment property. IAS40.75(d) (e) Not applicable. IAS40.79(b) Depending on the type of investment property owned, depreciation rates of 2.5% and 4.5% were used. Financial instruments (financial assets and financial liabilities) IFRS 7.21, IAS1.108 All financial assets and financial liabilities are initially presented according to purchase price reflecting the fair value paid (for assets) or fair value of payments received (for liabilities). After initial recognition financial assets are classified as follows: Assets and liabilities group Assets valued by their fair market price by a financial result. Loans and receivables Investments held until due Valuation principle According to fair value without deduction of the cost of sale or write-off In the depreciated cost using the internal rate of return (IRR) and when the due date is not known, at the purchase price (for example for loans with unspecified repayment dates) In the depreciated cost using the internal rate of return (IRR). The principles for recognition and financial report Profits and losses on assets or financial liabilities are presented in profit and loss account. The difference in valuation adjusts the value of the assets being valuated and it is presented on the opposite side in financial results for the current period The difference in valuation adjusts the value of the assets being valuated and it is presented on the opposite side in financial results for the current period Dividends from financial assets Financial assets available for available for sale are presented in At the purchase price sale the financial result when the entity obtains the right to them Financial assets designated as According to principles of hedge According to principles of hedge 12

13 hedged items accounting accounting At a fair value with the exception of derivatives which will be settled by supply of capital instruments, whose fair value cannot be reliably determined Financial liabilities valuated as fair value in the financial results (including derivatives, which are not hedging instruments) Financial liabilities designated as hedged items Other financial liabilities According to principles of hedge accounting At the depreciated cost using the internal rate of return (IRR). Profit or loss is presented in financial items of the financial result According to principles of hedge accounting The difference in valuation adjusts the value of the item being valuated and it is presented on the opposite side in financial results for the current period Financial assets and publication whose fair value cannot be reliably determined Purchase price having taken into account write-offs due to a permanent impairment loss Presented as purchase price in the balance sheet until sold. Write-offs due to permanent impairment loss are booked as financial costs Criteria applied when presenting and excluding financial assets and liabilities. An entity presents a given asset or liability only when it becomes a party to an agreement concerning this instrument. An entity excludes an asset when: contractual rights to cash flows from the asset expire, or Asset is transferred and this transfer meets the requirements for exclusion from the balance sheet as described in IAS32.20 An entity transfers an asset when, and only when: contractual rights to receive cash flows from this asset are transferred retains the contractual rights to receive cash flows from this asset but according to an agreement meeting the requirements of IAS it is obliged to transfer the cash flows to one or more recipients When an asset is excluded the difference between the balance sheet value and received payment and all accumulated profits and losses included in equity capital are presented in the financial result for this period. If the transfer does not qualify for exclusion from the balance sheet because the entity still benefits from and bears the risk associated with the asset, the entity continues to book this asset and opens an additional liability position associated with the payment received. An entity excludes a liability or its part exclusively when this liability expires, i.e. when contractual obligation has been fulfilled, discontinued or it expired. The difference between the balance sheet value of financial liability or its part which expired or was transferred to a different position, and the value of payment, taking into account all noncash assets or assumed obligations transferred is presented in the financial result for this period. The company differentiates between the short term and long term financial assets and liabilities. 13

14 IAS Ordinary transactions of purchase and sale of financial assets and liabilities are presented for the day they are settled. Leasing IAS1.110 Pursuant to provisions of IAS 17, the company defines leasing as an agreement whereby in exchange for a fee or a series of fees the lesser transfers to the leaseholder the right to use a given asset for an agreed period of time. Pursuant to the company's financial policy, some of equipment is used based on financial leasing agreement, i.e. in general all of the risk and all benefits arising from asset ownership are allocated to the company. Tangible fixed assets used pursuant to leasing agreements are capitalised on the day the leasing agreement commences as the lower of the two values: the fair value of the leased asset or the current value of the minimum fee. Leasing fees are distributed between financial costs and a reduction of unpaid liability balance in order to obtain a fixed periodical interest rate on the unpaid liability balance. Financial costs are booked directly in the profit and loss account. In the event that transfer of ownership at the end of leasing period appears unlikely, fixed assets used pursuant to financial leasing agreements are subject to depreciation for the shorter period of the two: the leasing period or the use period. Assets and reserves for deferred income tax IAS Assets for deferred income tax are determined as an amount for future deduction from income tax, in connection with negative transient differences, which will cause in the future the reduction of income tax base and of tax loss available for deduction. Reserve for deferred income tax is created at the amount of due tax to be paid in the future in connection with the occurrence of positive transience differences, that is differences which will cause tax base to increase in future periods. The amount of assets and reserves being created takes into account the tax rates in force during the years when these amounts will affect the tax base. Assets and reserves are not subject to compensation. Changes in assets and reserves due to deferred income tax are presented in profit and loss account for the financial year, unless these items referred to transactions settled with equity capital, and then they are reflected in equity capital. 14

15 Inventory IAS 2.36 (a) Inventory is valued as the purchase price or cost of production or at the net value that can be obtained, depending on which of these values is lower. Inventorying of materials and goods is presented as purchase price. Inventory of finished products and semi-finished products is presented as cost of production, including the entire costs directly associated with the production unit (materials and labour) and justified part of the indirect costs incurred during production of the finished products and semi-finished products. When determining the part of indirect costs attributable to complete products, the level of production capacity used is analysed as well as its relation to normal use of production capacity. In the event when so-called unjustified part of indirect costs has significant value, it is presented directly as cost of company's operations. The company has not adopted the alternative solution proposed in IAS 23, which involves including the cost of external financing in inventory. If the purchase price or cost of production of the inventories cannot be recovered, because the inventories are damaged, rendered unusable or their market value is substantially reduced (for complete merchandising goods), the company writes off their value to the net value that can be obtained on the market. The value of this write-off debits other operating costs. Permanent impairment loss Permanent impairment loss occurs in situations where there is a high probability that an asset presented in the ledger, meeting the requirements of IAS36.2, will not generate in the future the envisaged economical benefits, either wholly or partly. In such situations the entity writes this item off against other operating costs. Write-down due to permanent loss of market value is the surplus of a given intangible asset's balance sheet value over its value that can be recovered. The recoverable value reflects the net sales price of an intangible asset or its value in use, depending on which of these two is higher. Value in use is the current (discounted) estimated value of future cash flows, which are expected in connection with continued use of the intangible asset and its disposal at the end of its period of use. With reference to write-offs due to impairment loss, the company applies the principles laid down in International Accounting Standard 36 Impairment of Assets. For write-downs with reference to goodwill it is not possible to reverse the write-down even in the event of occurrence of circumstances, which restore goodwill at a later time. 15

16 Reserves IAS1.110 The company creates reserves when: The entity has an obligation (either by law or custom), resulting from past events It is likely that fulfilling of this obligation will create the necessity for cash outflow which includes economical benefits and it is possible to reliably estimate the amount associated with this obligation The reserves are verified for each balance date and are adjusted in order to reflect current and most accurate estimation. If there is no likelihood that the cash outflow which includes economical benefits is necessary to fulfil this obligation, the reserve is resolved. Among others, the company maintains reserves to cover the following: retirement bonuses, unused holiday pay, repairs under guarantee, cost of restructuring, which the company has committed to taking into account the criteria contained in IAS 37, damages, other liabilities. Cost of employee benefits IAS19.120(a) According to provisions of IAS-19, the company presents employee benefits including salaries and wages, social security contributions, holiday pay, medical leave pay, profit sharing and bonuses (if due to be paid within 12 months from the end of the period), and also non-cash benefits (medical care, company provided accommodation) for current employees, when they perform work in exchange for these benefits. According to provisions of IAS 19, the company allocates the cost of retirement bonuses to individual employment periods according to a formula used for determining the level of benefits resulting from the programme, unless employment in successive years will it lead to significantly higher benefits then those received for work in previous years. Maintained benefit programmes (obligation to pay retirement benefits and pensions) are valuated as fair value of the reserve created for this purpose. Annual deductions due to the programme are each time reflected in financial result. The value of assets due to a life insurance policy agreement covering a person who will be paid retirement benefit is presented as the reduction of the value calculated for the retirement benefits reserve balance date. Share capital Issued ordinary shares are included in the company's equity capital. 16

17 Costs associated with issuance of shares are presented as reduction of income from issuance. Amica shares owned by any of the subsidiaries are presented in the financial report as own shares for disposal until they are redeemed or disposed of. Income IAS18.35(a) Presented as likely economical benefit that the company will gain in connection with a given transaction. Revenue from sale of products and goods is presented if substantial risk and benefits from the ownership of the products and goods have been passed to the purchaser and the revenue can be reliably assessed. Interest income is presented on accrual basis, Financial revenue from dividends is presented when shareholders receive right to the dividend. The company does not include in the price of its products the costs which it will have to bear in future periods. This is why there is no basis for identifying the revenue of future periods attributable to this. Subsidies IAS 20.39(a) IAS1.110 They are presented in the books, if certainty exists that a subsidy will be won and if all requirements related to it are met. Subsidies are presented by their fair value. If a subsidy is related to a cost item, it is presented as income proportionally to costs which the subsidy is supposed to compensate. Subsidies related to an element of the assets, but initially presented as future income, and are reflected in costs throughout the estimated period of usage of an element of assets related to it (proportionally to the cause of asset depreciation) Hedging In order to manage the currency risks and interest rate risks the management board of Amica Wronki S.A. established the Hedging Policy providing guidelines for risk management. According to the adopted policy, currency and interest rate risks are minimised through application of the hedging instruments allowed by IAS 39. When establishing and recording hedge instruments, hedge accounting principles described in IAS 39 apply: 1. Only items which carry the risk of a given type capable of affecting the company's financial results are hedged, 2. Allowable hedge transactions are: - for currency translation risk hedging: forward contracts and purchased Foreign exchange options, zero-cost option strategies, - for interest rate fluctuation risk hedging: Interest Swap, cross currency interest rate swap 17

18 3. Presentation of changes in the fair value of hedging instruments is done for each balance date after hedging is established and the method of presentation of the fair value of these instruments is dependent on whether it is the fair value or cash flow that is being hedged and this value is determined at the end of each quarter, 4. each established hedging instrument is formally documented. Explanatory data required by IAS34 IAS 21. Balance valuation of items expressed in foreign currency To convert cash items expressed in foreign currencies at the balance date, average currency exchange rates published by the National Bank of Poland are used. In the event currency sale and currency purchase rates of a leading bank (CitiBank Handlowy) was used as the closing exchange rate, the financial result would be reduced by 896,000 PLN IAS 34.16(b) Seasonality or cyclicality of interim operations The company's operations are not seasonal or cyclical. Revenue on the domestic market is subject to slight fluctuation during the calendar year. Past analyses indicate that the highest level of sales of domestic appliances is observed during the 3rd quarter of each calendar year. The lowest demand for domestic appliances is observed in the period from April to June. IAS34.16(c) The nature and amount of items affecting assets, liabilities, equity, net income, or cash flows that are unusual because of their nature, size, or incidence Listed below are items affecting assets, liabilities, equity, net income, or cash flows which occurred during the reporting period: - the company purchased the remaining shares / 23.75% / in Gram Domestic A/S, a subsidiary of Amica International and increased the balance of value of long-term investments by 4,779,000 PLN. - in line with the Company's hedging policy, in past periods the Company entered into forward contracts which provided heading of future revenue from export sales, and whose negative fair value as of 31st March 2009 was 118,667,000 PLN, an increase in the first quarter by 44,429,000 PLN and which was booked as a revaluation reserve capital and after recognition as a deferred tax caused reduction of the Company's equity capital by 96,120,000 PLN and an increase of the negative equity capital for the first quarter of 35,988,000 PLN. - in line with the company's hedging policy, the company also entered into interest rate swaps (IRS) a) due to its high effectiveness, the interest rate swap transaction securing credit interest rate risk whose negative fair value as of 31st March 2009 is 1,051,000 PLN was booked as a 18

19 revaluation reserve capital and after recognition as a deferred tax caused reduction of the Company's equity capital by 315,000 PLN. b) due to its poor effectiveness according to principles of hedge accounting, Cross-Currency Interest Rate Swap transaction securing credit interest rate risk and currency translation risk whose negative fair value as of 31st March 2009 was 12,153,000 was booked as intended by the company (compensation of unrealised currency translation gain/losses on balance items that are not hedged by forward contracts) into financial result, which reduced the result of the 1 quarter by 2.960,000 PLN. On the balance day of 31 March 2009 the company had opened: - forward contracts for a total nominal value of 98 million securing planned currency cash flows resulting from revenue out of export sales calculated as a surplus of revenue above the cost expressed in the Euro (net currency item of the profit and loss account), to be realised in 2009 (surplus covered in 90%) and 2010 (approximately 70% of the surplus covered), - interest rate swap (IRS) transaction securing credit interest rate risk with termination date of the 11 March 2013, which on 31st of December 2009 a balance of 26,033,000 PLN, - Cross-Currency Interest Rate Swap to hedge: a) credit interest rate risk with termination date of the 11 March 2013, which on 31st of March 2009 a balance of 26,909,000 PLN. b) currency translation risk for assets expressed in foreign currency which are not attributable to net currency item on profit and loss account hedged by forward contracts, IAS34.16(d) Changes to estimates presented in previous reporting periods Determining the balance value of some of the company's assets and liabilities requires an assessment of how uncertain events will affect these items on the balance date. Company estimates, which could significantly affect the balance value of assets and liabilities refer primarily to calculation of permanent impairment loss, the economic cycle of a given fixed asset and the reserve. In this reporting period there have been no changes to estimates concerning the economic cycle of the company's fixed assets. In the 1st quarter of 2009 when compared with the situation at the end of 2008 estimated reserves have changed as follows: Assets from deferred taxes increased by 8,224,000 PLN Income tax reserve was increased by 172,000 PLN Retirement benefits reserve has not changed Reserve for repairs under guarantee was reduced by 434,000 PLN Reserve for sales bonuses increased by 9,387,000 PLN Other reserves were increased by 11,466,000 PLN 19

20 IAS34.16(e) Issuances, repurchases, and repayments of debt securities During the reporting period the company issued short term bonds on the domestic market, while at the same time repurchasing bonds, which were issued earlier. These operations in the 1st quarter reduced the Company's debt to 5,139,000 PLN On the balance date Amica's liabilities associated with the issuance of bonds amounted to 39,997,000 PLN. IAS34.16(f ) Dividends paid, separately for ordinary shares and other shares In the reporting period no dividend was paid or declared to be paid. IFRS 8. Revenues and results attributable to individual business segments Amica Wronki S.A. is a manufacturer of household appliances and its production activities are held in a single location in the country. The production is organised in three facilities which are separated in terms of territory, type of production and organisation. These facilities produce: Heating equipment which includes range cookers, gas and electric hobs, gas-electric freestanding as well as built-in cookers refrigeration appliances, which include fridges, fridge freezers and freezers, available in many sizes, freestanding and built-in washing appliances including semi-automatic washing machines available in a full range of capacities and spin speed options. These product groups constitute the company's core business and the basic source of revenue and are the essential segment of financial reporting. Another basic activity undertaken by the company is commerce. In addition to sale of its own products the company's offer is complemented by an assortment of goods purchased from 3rd parties such as dishwashers, microwave ovens, cooker hoods, and small appliances such as vacuum cleaners, irons and electric kettles. Furthermore the company trades in materials and sells internally produced heat energy. The geographical segment, which supplements the information on Amica's business activities presents revenue by location of the company's clients. Presented below are data from regions where the Company achieves the highest turnover. Revenue and costs, which can be directly attributed to business segments are sourced directly from properly allocated documents. The company separately records balance values which are associated with separate business segments. 20

21 The table below presents income and results attributable to individual segments of activity for all the first quarter of 2009 (figures presented in thousands of PLN) Cookers Fridges Washing machines Goods Materials Value Share % Value Share % Value Share % Value Share % Value Share % Revenue from sales 1st qtr % % % % % 1st qtr % % % % % Cost of production of products/goods sold 1st qtr % % % % % 1st qtr % % % % % Cost of sales 1st qtr % % 1st qtr % % % % 0 0.0% % % 0 0.0% Profit in a segment 1st qtr st qtr Cookers Fridges Washing machines Goods Materials Value Share % 1st qtr 2009 Share % 1st qtr 2009 Share % 1st qtr 2009 Share % 1st qtr 2009 Share % Assets 1) Fixed assets 1st qtr % % % 0 0% 0 0% 1st qtr % % % 0 0% 0 0% 2) Current assets 1st qtr % % % % 0 0% 1st qtr % % % % 0 0% Liabilities 1) Liabilities 1st qtr % % % 1st qtr % % % Investment expenditure (increases 1st qtr of fixed assets) Depreciation 1st qtr st qtr

22 Business segment -- other information Adjustments of revenue, profit or loss, assets and liabilities (thousands PLN) 1st qtr st qtr 2008 Income Total revenue from reporting segments Other revenue ) Other revenue from sales ) Other operating income ) Other financial income The entity's total revenue st qtr st qtr 2008 costs Total cost from reporting segments Other costs ) Other cost of products, goods and materials sold ) other sales costs ) general administrative expenses ) other operating costs ) other financial costs The entity's total cost st qtr st qtr 2008 profit or loss Total profit/loss from reporting segments Other profit/loss from un-allocated values Gross profit Income tax 413 Net profit Assets 1st qtr st qtr 2008 Total assets from reporting segments Other assets Total assets Liabilities 1st qtr st qtr 2008 Total liabilities from reporting segments Other liabilities Total assets

23 Sales revenues by geographic area (thousands PLN) item Country 1st qtr st qtr Poland Germany Russian Federation Denmark the Czech Republic United Kingdom Sweden Serbia Ukraine Other countries Other revenue from sales TOTAL The company sells its products to individual clients both on the domestic market and European markets. In Germany its products are distributed through a subsidiary Amica International, which is fully controlled by Amica Wronki S.A. In North Europe sales are conducted partly through Gram, a subsidiary of Amica Wronki S.A. Similar sales model is used in the Czech Republic and Slovakia where sales are conducted through a subsidiary Amica Commerce. Information concerning main clients. None of the company's clients has exceeded 10% of the Company's total revenue from sales. IAS34.16(h) Material events subsequent to the end of the interim period that have not been reflected in the financial statements for the interim period. In the period between the balance date and the date of publication of this financial report no material events take place which can affect the company's financial situation and its assets. IAS34.16(i) The effect of changes in the composition of the Group during the interim period In the 1st quarter of 2009 the Company began restructuring aimed at improving effectiveness by making the organisation more simple and leaner. Restructuring involves all business areas, i.e. production, maintenance and repairs and administration. IAS34.16(j) Changes in contingent liabilities or contingent assets, which occurred in the 1st quarter of 2009 in the 1st quarter of 2009 Amica Wronki did not grant any surety and guarantees. In previous periods, the Company granted a guarantee for its subsidiary in foreign currency. Its value as of converted to PLN was 834,000 PLN and its validity expired on The Company does not have any other contingent liabilities. 23

24 IAS16.73(e) Changes in fixed assets - land (perpetual usufruct right to the land) CHANGES IN FIXED ASSETS (BY TYPE) - buildings, commercial premises and civil engineering facilities - equipment and machinery - means of transport - other fixed assets Fixed assets, total Gross value of fixed assets at the beginning of period b) increase (due to) purchase inventory -- surplus c) deductions (due to) liquidation sales shortages d) gross value of fixed assets at the end of period e) accumulated depreciation at the beginning of period f) depreciation for the period (due to) planned decreases g) accumulated depreciation at the end of period h) write-offs due to permanent impairment loss at the beginning 0 of period - increase 0 - decrease 0 h) write-offs due to permanent impairment loss at the end of the period j) net value of fixed assets at the end of period including: value of assets allocated for sale

25 IAS38.118(e) Changes in intangible assets cost of completed development work goodwill acquired concessions, patents, license and other assets, including: computer software other intangible assets advance payments for intangible assets Intangible assets, total a) gross value of intangible assets at the beginning of period b) increase (due to) purchase c) deductions (due to) liquidation d) gross value of intangible assets at the end of period e) accumulated depreciation at the beginning of period f) depreciation for the period (due to) planned depreciation decreases g) accumulated depreciation at the end of period h) write-offs due to permanent impairment loss at the beginning of period increase decrease h) write-offs due to permanent impairment loss at the end of the period j) net value of intangible assets at the end of period including: assets allocated for sale 10 10

26 IFRS 7.8 Financial asset categories Financial assets valued by their fair market price by a financial result, including: For trading, including: Trade derivatives Financial assets available for sale Derivatives recognised in financial assets and allocated as hedging instruments hedge accounting Loans granted and own receivables, including: Loans granted Short-term receivables as financial instruments Cash Total assets by category Financial liabilities valued by their fair market price by a financial result For trading, including: Trade derivatives Liabilities from derivatives allocated as hedging instruments -- hedge accounting Other liabilities Short-term liabilities as financial instruments liabilities from credits and issuance of debt securities Total liabilities by category Liabilities from financial leasing agreements Total financial liabilities IFRS 7.20 a) b) c) d) Income, costs, profits and losses from financial assets and liabilities. 1st qtr st qtr 2008 Financial assets valued by their fair market price by a financial result, including: For trading, including: Trade derivatives - revenues Trade derivatives - cost ( 911 ) ( 148 ) Financial assets available for sale - revenues Financial assets available for sale Derivatives recognised in financial assets and allocated as hedging instruments hedge accounting Derivatives recognised in financial assets and allocated as hedging instruments hedge accounting ( ) ( 129 ) Loans granted and own receivables, including: loans granted -- interest obtained Short-term receivables as financial instruments -- interest obtained 0 0 Cash -- interest Other liabilities ( ) ( ) Short-term liabilities as financial instruments -- interest paid ( 5 ) ( 3 ) liabilities from credits and issuance of debt securities -- interest paid ( ) ( ) Liabilities from financial leasing -- cost of interest ( 378 ) ( 315 )

27 Inventory IAS 2.36(b) IAS 1.75(c) Inventory materials Work in progress Finished products by production costs according to obtainable net value goods advance payments for deliveries Total Short-term receivables Short-term receivables a) from subsidiaries and affiliates from goods and services other receivables b) from other entities from goods and services from tax, customs, social security and other benefits other receivables Net short-term receivables, total ,428 c) allowance for uncollectible accounts Gross short-term receivables, total Receivables from goods and services - maturing after balance date: Receivables from goods and services up to 1 month to 3 months to 6 months months to 1 year more than 1 year overdue receivables Gross receivables from goods and services allowance for uncollectible accounts Total net receivables IAS 1.51, 52 Identification of other short term and long term liabilities (excluding long-term and short-term loans and credits): Other liabilities Long term liabilities liabilities from leasing agreements other financial liabilities, leasing and other instruments Short term liabilities liabilities from subsidiaries and affiliates liabilities from other entities regulatory liabilities liabilities from remuneration other financial liabilities; leasing, financial instruments issuance of debt securities other liabilities Total

28 Liabilities from goods and services according to due dates: Liabilities from goods and services up to 1 month to 3 months to 6 months months to 1 year more than 1 year overdue liabilities Total IAS 32.63(b) Agreed deadlines for repayment of credits and loans (by payment date of the last instalment): up to 12 months up to 3 years up to 5 years Total IAS 1.93 Costs by type 1st qtr st qtr 2008 Depreciation of fixed assets and intangible assets Use of materials and energy Third-party services Taxes and fees Salaries Cost of employee benefits Other costs by type Total costs by type Change in product inventory Cost of products manufactured for own needs Cost of sales (negative) General administrative expenses (negative) Cost of production Internal cost of goods and materials sold Other operating income 1st qtr st qtr 2008 Other operating income bonuses received on purchases subsidies for fixed assets reimbursement of international VAT payments damages received additional guarantee 10 - dissolved reserves leasing of investments other items

29 Other operating costs 1st qtr st qtr 2008 Other operating costs replacement of faulty equipment shortages and damage 50 - grants damages for former employees - inventory scrapping penalties and fines 54 - registered receivables depreciation and tax on fixed property and long-term investments other operating costs Transactions with subsidiaries IAS1.126(c) IAS24.12 Amica Wronki is controlled by Holding Wronki, owning 36.51% of Amica Wronki SA shares. The remaining shares are owned by many shareholders, including employees. Holding entity of the highest order is a natural person who owns (directly and indirectly) 74% of shares in Holding Wronki S.A.; This entity does not publish financial reports available to the public. IAS27.40 Subsidiaries subject to consolidation Name and country of the subsidiary's registered office % of owned shares in the subsidiary (directly) Type of affiliation Gram A/S, Dania Trade in Amica products in Scandinavia Gram Italia Commerce Amica Commerce, the Czech Republic Trade in Amica products in the Czech Republic and Slovakia Sidegrove Holdings Ltd, Provision of services Cypr Hansa Russia Commerce Amica International Commerce Amica Far East Commerce and provision of services Inteco Consulting and IT services 29

30 All consolidated subsidiaries prepared the financial reports for IAS Entities affiliated with Amica according to provisions of IAS 24: In addition to consolidated entities (see table above) there are also affiliated entities whose affiliation is of non-capital nature. These are: Holding Wronki S.A parent company of a higher order providing customs/bonded and consignment warehouse services to the Group Subsidiary Prodom (due to insignificant character of its financial data this company is not subject to consultation) this company does not conduct any business activities. The company is in the process of liquidation. The company's key personnel including Members of the Board and the Supervisory Council KKS Lech SA the company is mainly active in the sporting and hospitality sectors Ekstraklasa S.A. Transactions with affiliated entities conducted in the 1st quarter of 2009 were of commercial character and were entered into on market conditions and these transactions resulted from current operational activities conducted by these companies. The largest by value group of typical transactions with affiliated entities were operations associated with the sales of products produced by Amica Wronki S.A. and purchase of materials necessary to manufacture these products. List of commercial transactions with affiliated entities. Amica Wronki S.A. z 1st qtr 2009 Revenue costs receivables liabilities 1st qtr st qtr 2009 Holding Wronki SA Inteco 102 KKS LECH Poznań Amica International Gram Italia Gram Domestic Amica Commerce PRODOM Sidegrove Holdings Ltd Hansa Sp. z o.o st qtr

31 In addition to the commercial transactions typical for affiliated companies there are no financial transactions. The balance of receivables as of due to loans granted to subsidiaries in previous periods was 15,219,000 PLN, including interest on granted loans owed to the Company at the amount of 987,000 PLN. IAS37.14a Recognised reserves. According to the provisions of the Act on recycling of used electrical and electronic appliances, the company is obliged to organise and finance recycling of used household appliances. The obligation to create a reserve to finance these activities results from paragraph 14 lit. a IAS 37. Interpretation IFRIC 6 Liabilities arising from Participating in a Specific Market Waste, as the agreed interpretation of the provisions of paragraph 14 lit. a IAS 37. IFRIC 6 concludes that the event that triggers liability recognition an obligation to create the reserve is participation in the market during a measurement period. Consequently, the obligation resulting from cost of Management of used household equipment does not arise at the moment when these products are produced or sold. Since the obligation associated with used household equipment is related to participation in the market during the measurement period and not with production or the sale of used products to be disposed of, the obligation arises only in the event of participation in the market during the measurement period and lasts as long as participation in the market. Determination of the time of occurrence of an event triggering the obligation may be independent of the specific period during which action is taken to manage and waste and during which the related costs are incurred. Obligations resulting from the above regulations the company transferred to ElektroEko Organizacja Odzysku Sprzętu Elektrycznego i Elektronicznego S.A. by signing an agreement on 29 May Pursuant to this agreement, the company incurred the cost 964,000 PLN associated with organising and collection of used appliances during the 1st quarter of 2009, and for a period of 12 months the amount is 2,301,000 PLN So far the company has not created a reserve for future liabilities from this obligation, since it was not possible to reliably estimate the amount of this liability according to provisions of paragraph 14 lit. c IAS 37. The company conducts analyses of available market data concerning the cost of disposal and recycling and is planning to create the reserve in future periods. Other information The position of the Board concerning the possibility of meeting the previously released forecasts for the current financial year. The company has not published financial forecasts for the current financial year. Shareholders owning directly or indirectly at least 5% of the total number of voting rights in the General Shareholders' Meeting of Amica Wronki S.A. Shareholder's name Sidegrove Holdings Ltd. Number of shares % of owned share capital of Amica Number of voting rights % of total number of voting rights Holding Wronki

32 Shares owned by the management of Amica Wronki Shares owned by the Members of the Board of Amica Wronki S.A.: Owners name Number of shares as of Acquisition (disposal) of shares Number of shares as of Jacek Rutkowski Andrzej Kadziński Shares owned by the Members of the Supervisory Council of Amica Wronki S.A.: Owners name Number of shares as of Acquisition (disposal) of shares Number of shares as of Tomasz Rynarzewski A presentation of the main proceedings being conducted by courts, the appropriate authority for arbitration or public administration bodies is outlined below. In addition to the cases indicated below which are being heard against Amica Wronki S.A., proceedings have also been initiated against a subsidiary Amica Wronki S.A., namely Prodom, for the payment of o PLN 10,978,

33 No 1 Parties to the proceedings Date of claim made / debts declared Subject of the litigation Amica c/a Z. I. Kałamaga r. payment Document reference I C 1061/2006 Value of the subject of litigation Court /Executive officer Last action / document PLN 30,000, District Court in Poznan; Court Debt Collector in Kamień Pomorski, Court Debt Collector in Gorzów Wielkopolski The order on which the seizure proceedings are based is valid, according to the ruling of the Appeal Court in Poznan of January 16th The Supreme Court dismissed the cassation claim of the defendants -- the case was closed. On at the District Court in Gorzów Wlkp. debtors made the statement revealing their assets. Nowa Sól - by court ruling dated assets obtained from warrant sale of the estate in Gorzów Wlkp. were distributed - public auction of the estate is scheduled for Chwalęcice - Executive officer completed description and appraisal of the estate and filed with the Court a motion to set a date for a public auction, Myślibórz - Executive officer filed with the court a motion to set a date for public auction of the estate, Dębo Lubuskie - Executive officer filed with the court a motion to set a date for public auction of the estate, Międzyrzecz - Court dismissed the debtor's claim of impropriety of the description and appraisal of the estate - the ruling is not yet legally binding, Świdwin - after a complaint concerning the Executive Officer's inaction, the Executive Officer commissioned preparation of their description and appraisal of the estate. On the court issued a ruling ordering the sale of Zdzisław Kałamaga s shares in ARES, the ruling is binding. Court dismissed the company's motion to sell the shares is provided by article 185 all the Commercial Companies Code. An appeal was received, the date was set for If the appeal is dismissed, the Company's shares will be sold by way of execution proceedings by the Debt Collector. An expert already evaluated the shares AMICA c/a Drewex-Meble Sp. z o.o r. payment I Nc 753/05 AMICA c/a Krzysztof Ziemski FPHU WROCAR r. payment AMICA c/a Joanna Szymkowska, Małgorzata Szymkowska r. Duo Net sp. z o.o. with its registered offices in Warsaw Eviction proceedings payment IX GNc 665/07 I C 335/07/3 IX GNc 584/08/4 PLN 27, PLN 1,082, PLN 1,000 Court Debt Collector for area 8, Kielce Regional Court District Court in Poznan, Court Debt Collector for Poznań (Grunwald and Jeżyce) Regional Court District Court in Szamotuły PLN 319, District Court in Poznań The Debt Collector has taken steps aimed at recovering the debtor s dues, property has been sold and auctioned, information received by telephone suggests that the debtor is paying his debt in instalments, which the Debt Collector is paying into the creditor s account. The order is legally binding. A partial cession of the debts has been made to Jatex Finanse Ltd. The Court ordered eviction, the ruling is legally binding. After receipt from Wronki Town Hall of a confirmation that the defendant was offered communal housing we will achieve an enforcement clause for the eviction ruling. On the court issued a repayment order. On the basis of the order, the creditor has commenced proceedings to secure the claims. As a result of the order being made legally binding, the court added an enforcement clause on The creditor is conducting enforcement procedures for the sum adjudged in the order. As of to be repaid remains the primary

34 amount of 109, PLN including interest and legal costs. 6 7 Duo Net sp. z o.o. with its registered offices in Warsaw II Co 723/08 payment Melgaz - A. Pogorzelczyk, A. Barłożek Genera Partnership in Szczecin payment IX GNc PLN 3,000,000 Regional Court for Warsaw Wola in Warsaw PLN 2,733, District Court in Poznań Owing to non-payment of debts, the court office has issued a request to add an enforcement clause to the notarial act, in which the debtor undertook to honour the payment required in the act to a sum of PLN 3,000,000. Once the enforcement clause is obtained for the not very act, the Court office will file execution requests. On 31 March 2009 Court Office filed a petition to pay in execution proceedings out of a bill of exchange 8 9 AMICA c/a Ares Sp. z o. o. payment AMICA c/a DUKAT payment Composition and bankruptcy proceedings V GUp 8/05, V GU 47/05 XVIII Gu 24/06 PLN 31,900,000 PLN 171, Regional Court in Gorzów Wielkopolski 5th Commercial Division Regional Court in Lublin 18th Commercial Division The regional court in Gorzów Wielkopolski issued a ruling on changing the contents of the ruling regarding the declaration of bankruptcy, with the possibility of negotiating an arrangement for the bankruptcy declaration to include the liquidation of property. The list of debts names the sum recognised in the bankruptcy proceedings as PLN 4,252,027.10, plus interest totalling PLN 367, for the period between the bankruptcy declaration and the date of the ruling changing the proceedings from those of bankruptcy with the possibility of negotiating an arrangement to bankruptcy and liquidation proceedings. A mortgage has been placed on Ares property to a sum of PLN 30,000,000 to safeguard the debts from a bill of exchange guaranteed by Ares and issued by Mars for a sum of PLN 15,000,000 the mortgage registration is legally binding. On February 21st 2008, the Court of Appeals in Szczecin examined the appeal of the defendant company (Ares) against the ruling by the District Court in Gorzów Wielkopolski, which stated that the resolutions passed by Ares Partners Meeting were invalid, and dismissed the action. On , the court office issued a cassation appeal in this matter. On January 30th, the Supreme Court overruled the judgement of the Szczecin Appeal Court, and passed the case on to be reexamined, along with directives supporting the accusations made in the objection indicated by the court office. We are waiting for the court hearing date to be set. The registration of Ares capital of PLN 1,000,000 is legally binding. The Court dismissed the petition to increase the capital to the sum of PLN. The company has already filed an appeal in this case the court hearing has been set for AMICA declared its own debts in this matter, the list of debts drawn up is legally binding, the entire sum of debts has been recognised. Bankruptcy liquidation is being implemented, we are waiting for any dues which might be paid. 34

35 10 AMICA c/a ARTEX Sp. z o.o. payment XV Ukł. 33/03, XV Gu 5/06 PLN 938, Regional Court in Bydgoszcz 15th Commercial Division At AMICA s request, arrangement proceedings have been closed, the justification for taking further action is being analysed. 11 Zdzisław i Irena Kałamaga c/a AMICA r. issuing bills of exchange I Aca 428/07 Proceedings against Amica PLN 30,000,000 Appeal Court in Szczecin, 1st Civil Division The county court rejected the appeal to issue bills of exchange. The plaintiffs lodged an appeal, which the court has dismissed. Case closed 12 Katarzyna Kałamaga c/a AMICA r. Relief from execution proceedings I C /08 PLN 227,950 Regional Court in Szczecin, 1st Civil Division The Court released the seized artworks from the execution proceedings. The Court Office appealed against the decision of We are awaiting the next hearing. 35

36 Financial report of Amica Wronki SA for the 1st quarter of 2009 NOTES FROM THE MANAGEMENT BOARD - unless indicated otherwise, all figures are given in thousands of Polish Zloties - this report meets the requirements of International Financial Reporting Standards (IFRS). - the contents and the date of publication of this report comply with Polish laws and regulations Key information: 1st qtr 2009 Sales declining by PLN 47.3 m primarily due to declining export to the East Reduction of general and administrative expenses and sales cost by more than PLN 8 m Reduction of EBIT by PLN 6.9 m Net profit declining by PLN 5.5 m 36