Period covered by the financial statement: Report currency: Polish złoty (PLN)

Transcription

1 Grant Thornton An instinct for growth Opinion and report of statutory auditor with respect to audited financial statement for 2012 Amica Wronki Spółka Akcyjna 1 / 132

2 Opinion of an independent statutory auditor Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp.k. Ul. Abpa Antoniego Baraniaka 88 E Poznań Poland T F For the shareholders of Amica Wronki Spółka Akcyjna 1 We have audited the accompanying financial statements Amica Wronki SA (the Company), headquartered in Wronki, ul. Mickiewicza 52, consisting of the balance sheet as at 31 December 2012, the statement of comprehensive income, statement of changes in equity and cash flow account for the period from 1 January 2012 to 31 December 2012 and the notes on the adopted accounting standards and other explanatory notes. 2 The Company's Management Board is responsible for preparing the financial report and report on activity in line with the applicable legislation. The Management Board and members of The Supervisory Board are obliged to ensure that the financial statements and report on the activities meet the requirement provided for in the Accounting Act of 29 September 1994 (unified text: Journal of Laws of 2009 No. 152, item. 1223, as amended) (Accounting Act), 3 Our task was the audit of the attached financial statement and the giving of an opinion, on the basis of the audit, whether the report is correct, meets the requirements of the accounting principles (policy) and presents reliably and clearly all the relevant information for an assessment of the material and financial situation and also the financial result of the Company drawn up based on correctly maintained accounting books. The examination of the financial statement was conducted according to the provisions: - Chapter 7 of the Accounting Act, - national auditing standards issued by the National Council of Statutory Auditors. 2 / 132

3 We planned and conducted the examination in such a manner, in order to obtain reasonable certainty that the audited financial statements do not contain significant irregularities. Examination consisted of the checking - to a great degree at random - the documents and accounting book entries confirming the sums and information contained in the audited financial statement. The examination also included an assessment of the accounting principles (policies) applied by Company's Management Board, as also evaluation of the general presentation of the financial statement. We consider that the examination conducted by us has provided sufficient basis for the expression of opinion on the financial statement. 4 In our opinion, the financial statements in all material respects: - present reliably and clearly the information relevant to the evaluation of the Company's assets and financial situation for as ta 31 December 2012, as also its financial result for the financial year from January 1 January 2012 to 31 December 2012, - were drawn up according to the accounting principles arising from the International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) and the associated interpretations announced in the form of ordinances of the European Commission, and in the extent not regulated by these Standards - conform to the requirements of the Accounting Act and the executive regulations issued on its basis, based on correctly maintained accounting books, - are in accord with the legal regulations and Articles of Association affecting the content of the financial statements. 5 We acquainted ourselves with the report drawn up by the Management Board on the Company's activity for the period from the 1 January 2011 to 31 December It is our opinion that the report takes into account the provisions of article 49 section 2 of the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information disclosed by issuers of securities and the conditions for recognition as equivalent of the information whose disclosure is required under the laws of a state which is not an EU member state (Journal of Laws No 33/2009, item 259, as amended) Contained in this report of activities the sums and information originating from the financial statements examined by us correspond to these statements. Jan Letkiewicz Statutory auditor No 9530 Key auditor conducting the review on behalf of Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp. k, Poznań, ul. Abpa Antoniego Baraniaka 88E, an entity authorized to audit financial statements, the registration number 3654 Poznań, 24 April / 132

4 Report of the examination of the financial statement for 2012 Amica Wronki Spółka Akcyjna 4 / 132

5 Amica Wronki Spółka Akcyjna 1 Information on the Company Amica Wronki Spółka Akcyjna (Company) was established on the 18th of October 1996 as a result of the transformation of the Company "Fabryka Kuchni Wronki" Sp. z o.o. into the Company "Amica Wronki" S. A. The Company was established for an indefinite period of time. The Company's registered office is in Wronki, at ul Mickiewicza no. 52. The Company's core business are the following: - production of household appliances, - wholesale and retail sales of personal and home use articles, - legal, accounting advice and consulting, - production and distribution of heat (hot steam and water). The Company was registered on the 7 June 2001 in the register of entrepreneurs - the National Court Register maintained by the District Court in Poznań - Nowe Miasto and Wilda in Poznań, IX Commercial Division of the National Court Register, under the number KRS The company has a VAT number and REGON business statistical number The share capital of the Company at the end of the financial year, the 31 December 2012, amounted to 15,551,000 PLN. The equity of the Company on that day amounted to 386,569 thousand PLN. According to explanatory note 28 to financial statement of the 31st December 2012 the ownership structure of the Company's share capital was as follows: Shareholder Number of shares Number of voting rights Nominal value of shares Proportion of share capital Holding Wronki S.A % Noble TFI S.A % ING TFI S.A % Querrcus TFI S.A % Other shareholders % Total % Registered shares in the amount of 2,896,750 have privileged voting rights at the General Shareholders' Meeting. Each registered share has 2 voting rights. According to the information submitted by the company as at 24 April 2013 in the period from 1 January 2012 to 31 December 2012 and after the day of balance statement, until the day if issuing this report, the following changes took place in the ownership of the Company (concerning shareholders holding at least 5% of the votes of the General Shareholders Meeting): Shareholder as at quantity as at % as at quantity as at % as at quantity as at % Holding Wronki S.A % % % Noble TFI S.A % % % ING OFE % % % Querrcus TFI S.A % % % Other shareholders % % % Total % % % 2013 Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp k. 5 / 132

6 Amica Wronki Spółka Akcyjna The Company is the parent of the Amica Wronki SA. Capital Group. The Company's subsidiaries were revealed in note 22 of explanatory information to the examined financial statement for the year ending on the 31 December The Company's Management Board on 24 April 2013 was composed of: - Jacek Rutkowski - President of the Management Board, - Wojciech Antkowiak - Vice President of the Management Board, - Wojciech Kocikowski - Member of the Management Board, - Marcin Bilik - Member of the Management Board, - Tomasz Dudek - Member of the Management Board, In the period from the 1st of January 2011 to the 25th April 2012 there were no changes in the composition of the Company's Management Board: 2 Financial statement for the previous year The financial statement of the Company for the financial year ending 31 December 2011 (previous financial year) was audited by Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp. k, on behalf of whom acted statutory auditor Jan Letkiewicz, registration no As a result of the audit of the financial statements the statutory auditor issued an opinion without reservations. The Company's financial statement for the financial year ending on the 31 December 2011 was approved by the General Shareholders Meeting on the 1st of June The shareholders passed a resolution whereby the entire net profit for 2011 to the sum of 36,715,000 PLN would be allocated to supplementary capital. The Company's financial statement for the financial year ending on the 31st of December 2011 (the previous financial year) together with the opinion of the statutory auditor, by resolution of the General Shareholders Meeting on endorsement of the financial statement, profit distribution and report on the Company's activity were submitted on the 26th of July 2012 in the National Court Register. The required elements of financial statements for the financial year ended 31st December 2011 (previous year), together with the statutory auditor's opinion, the resolutions of the General Shareholders Meeting on the endorsement of the financial statements and profit distribution were published in the Official Journal of the Republic of Poland H. 3 Information on entity authorised for examination and statutory auditing Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp. k. with its registered office in Poznan,ul. Abpa Antoniego Baraniaka 88E, is an entity authorised to examine the financial statements, entered under the number 3654 on the list maintained by the National Council of Statutory Auditors in Poland. On behalf of Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp. k. the audit of the Company's financial statements was supervised by statutory auditor Jan Letkiewicz, registration no / 132

7 Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp. k was selected by the Supervisory Board on the 29th of February 2012 to conduct the audit of the financial statements of the Company for the financial year ending on the 31 December We conducted the audit of this financial statement on the basis of the contract concluded with the Company's Management Board on the 7th of March Extent and time of audit The purpose of our examination was to express a written opinion together with a report, whether the financial statement for the financial year ending on the 31 December 2012, in all major aspects, reliably and clearly represents the material and financial situation, as also the financial results of Capital Group, according to the accounting principles (policy), arising from the International Accounting Standards, International Financial Reporting Standards and connected interpretations announced in the form of ordinances of the European Commission, and in the extent not regulated by these Standards - complying with the requirements of the Accounting Act and the executive regulations issued on its basis. In the examination of positions of the financial statement and documentation we list the tests and samples appropriate for financial auditing. On the basis of these tests and samples we are satisfied with regard to the correctness of the examined positions. Examination limited to selected samples was also applied to tax settlements and tax obligations, and consequently differences may arise between our conclusions and the results of examinations conducted by the tax authorities. Our examination was not aimed at identification or clarification of occurrences, which, if indeed occurred, could be basis for criminal proceedings by relevant authorities. We did not examine other issues, which could occur outside the accounting system, having no effect on the financial statement being verified. The examination of the Company's financial statements for the financial year ending 31 December 2012 was conducted from 12 December 2012 to 24 April 2013, also in the Company's registered office from 12 December 2012 to 14 December 2012 and from 18 March 2015 to 27 March Declaration of independence Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp. k., members of management of the General Partner, the chain to which the entity authorised to audit belongs, the statutory auditor conducting the investigation and other persons participating in the investigation meet the conditions for issuing an impartial and independent opinion on the Company's consolidated financial statements being investigated, as described in art. 56 of the Act of 7 May 2009 regarding statutory auditors, entities authorised to audit financial statements and public supervision (Journal of Laws, No. 77, item 649, as amended). 6 Accessibility of information and statements received The Company's Management Board submitted to us on the 24 April 2013 a written statement of the completeness, reliability and propriety of the examined financial statement and also, that between the balance date and the day of completing the examination nothing had occurred which might have a significant effect on the Company's financial standing and would require to be taken into account in the financial statement. The Company's Management Board confirmed to us that it takes responsibility for the approved consolidated financial statement and stated that it would make available to us during the audit all accounting books, financial data, information and other documents required and also provided us with clarification essential to the issue of an opinion on the examined financial statement. 7 / 132

8 We believe that the evidence obtained provided us with sufficient basis to express an opinion on the financial statements and, therefore, there were no limitations to the scope of our review. 7 Accounting system The Company's accounting books are in maintained using SAP R/3 computer system installed in the company's registered office. The Company maintains current documentation which is referred to in article 10 of the Accounting Act and also applies accounting principles (policy). It is our opinion that the accounting principles (policy) presented in notes to the Company's financial statement is adapted to Company's specific business. Approved closing balance as at 31 December 2011 was correctly entered into accounting books as an opening balance for 1st of January Our examination has not revealed any substantial deficiencies which could affect financial data and information contained in the financial statement, pertaining to: - documentation of commercial operations, - reliability, correctness and transparency of accounting books, - association of accounting entries with accounting proofs and the examined financial statement, - methods of securing data access and processing using computers, - protection of accounting documentation, accounting books and financial statements. 8 Balance ASSETS (thousands PLN) A. FIXED ASSETS Intangible Fixed Assets Goodwill of subsidiaries Property, plant and equipment Investments Financial assets Long-term deferred charges and accruals B. CURRENT ASSETS Inventory Short-term receivables Short-term investments Short-term deferred charges and accruals C. ASSETS CLASSIFIED AS ITEMS FOR SALE TOTAL ASSETS / 132

9 Amica Wronki Spółka Akcyjna LIABILITIES (thousands PLN) A. EQUITY CAPITAL B. LIABILITIES AND RESERVES Reserves for liabilities Long term liabilities Current Liabilities Deferred charges and accruals C. Liabilities associated with assets for sale TOTAL LIABILITIES: Statement of comprehensive income (thousands PLN) REVENUE AND COSTS (thousands PLN) 1 Net revenue from sale of products Cost of operating activities Profit (loss) on sales Other operating revenue Other operating costs Profit (loss) on operating activities Financial revenue Financial costs Gross profit (loss) Income tax Net profit (loss) Total other income (4 295) Comprehensive income for the period Additional information concerning selected items of the financial statement The Company's asset and liability structure is presented in the financial statement for the year ending on the 31 December 2012, which we examined. The inventory of the Company's assets was taken in accordance with the Accounting Act. The difference between the value of assets resulting from accounting books and their value established by stocktaking was settled in accounting books for The revenue and associated costs were recognised in accounting books taking into account the matching principle and accrual basis assumption. 11 Basic data and key financial performance indicators Presented below is selected information and financial indicators for the years 2010, 2011 and 2012, which illustrate the Company's financial situation in this period. All indicators have been calculated on the basis of information contained in the Company's financial statements for the years ending on the 31 December 2012 and on the 31 December / 132

10 Amica Wronki Spółka Akcyjna KPI Calculation formula KPI value Sales revenue (thousands PLN) Net financial result (thousands PLN) Equity capital (thousands PLN) Total assets (thousands PLN) return on assets (ROA) (%) return on equity (ROE)(%) net profit margin (%) closing balance of net financial results / total assets net financial result / opening balance of equity Net profit margin on sales / revenue from the sale current ratio Total current assets / short term liabilities cash ratio cash / short term liabilities receivables turnover ratio (days) liabilities turnover ratio (days) inventory turnover ratio (days) sustainability of financing ratio debt-to-assets ratio (%) receivables from deliveries and services* x 365 days / sales revenue liabilities from deliveries and services and other liabilities x 365 days / internal cost of sales inventory x 365 days / internal cost of sales (equity capital + longterm liabilities) / total liabilities (total liabilities - equity) / total liabilities % 4.8% 2.2% 11.1% 10.9% 5.7 % 4.2% 4.2% 3.6 % 1.5% 1.2% 1.2% % 53.1% 48.6% 48.6% 55.0% 58.4% Inflation indicator: annual average (%) from December to December (%) * Before reduction by write-downs. 12 Business continuity In chapter "Basis for preparation and accounting principles" pt. a of the supplementary information to the examined financial statement of the Company for year ending on the 31 December 2012 the Management Board announced that the financial statement was drawn up on the assumption of a continuation of activity by the Company for a period not less than 12 months from the day of the 31 December 2012, and that no circumstances occurred indicating a threat to the continuation of activity by the Company. During our examination we did not note the existence of significant circumstances, which might convince us that the Company is not in a condition to continue activity for at least 12 months counting from the date of balance, that is from the 31 December 2012 with the effect intended or enforced cessation or significant limitation of current activity. 10 / 132

11 13 Additional information concerning the adopted accounting policy and other clarifications Additional information on the adopted accounting principles and other explanatory information to the financial statement for the financial year ending on the 31 December 2012 was drawn up in all material aspects according to the accounting principles (policy), arising from the International Accounting Standards, International Financial Reporting Standards and associated interpretations announced in the form of ordinances of the European Commission, and in the extent not regulated in these Standards - appropriate to the requirements of the Accounting Act and issued in the form of executive regulations. 14 Report on the Company's activity We familiarised ourselves with the Management Board's report on the Company's activity for the financial year ending on the 31 December The information contained in this report of activity originating from the financial statement for the financial year ending on the 31 December 2012 corresponds to it. Report on the activities of the Company takes into account the provisions of article 49 section 2 of the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information disclosed by issuers of securities and the conditions for recognition as equivalent of the information whose disclosure is required under the laws of a state which is not an EU member state (Journal of Laws No 33/2009, item 259, as amended) 15 Compliance with laws and regulations In a written statement that we received from the Company's Management Board it stated that according to its best knowledge the company complied with all laws and regulations whose infringement could significantly affect the financial statement which we examined. This report contains 8 pages. Jan Letkiewicz Statutory auditor No 9530 Key auditor conducting the review on behalf of Grant Thornton Frąckowiak Spółka z ograniczoną odpowiedzialnością sp. k, Poznań, ul. Abpa Antoniego Baraniaka 88E, an entity authorized to audit financial statements, the registration number 3654 Poznań, 24 April / 132

12 Wronki, 25 April 2013 Dear Shareholders, On behalf of the Board of Management of AMICA WRONKI, it is with great satisfaction that I present to you the Company's financial statement, the Amica Wronki Capital Group's consolidated financial statement for 2012, and a description of the major events of the past reporting period (included in the report on the Company's activities), the contents of which, in my opinion, allow us to look optimistically at the future despite some of the macroeconomic forecasts for the coming years in Poland and Europe appearing unusually complex and uncertain. Just as was the case in the financial year before last, the main share of revenue for 2012 will also consist of sales results for foreign markets. This also indicates that the decision taken by us years ago to create and consistently expand our company on the basis of international distribution channels was the right one, and we shall remain faithful to this strategy in the years to come. The key elements for the long-term increase in the Company's value and strengthening of the market position of the Company's products, over the next few years, would appear to be further strong development of trading platforms abroad, and the expansion of production potential. We have already mentioned this many times, but it is worth another reminder that on 19 October 2012 we proudly celebrated a record in the production of cooking appliances - on that day, for the first time in the company's history the millionth kitchen appliance manufactured in a single year rolled off the assembly line. This was a great day for the Amica brand, a celebration of our company's community - the employees at every level, whose commitment and dedication allow the Management Board to consistently realise our development plans. Our plans are clear, perhaps also bold, but also justified by our recent results - we want to be one of the best companies in Europe in this branch. I believe that Amica is able to meet this challenge, although we must not forget that each day brings new challenges for us to face. It has become almost a tradition that, along with publication of the results for 2012, I wish to thank my Colleagues from the Supervisory Board, the core and wider Management Board, Amica's Employees and those of the subsidiaries for the commitment they have put into the development of the Company - the time and energy you dedicate, the comments and thoughts which you share with us are the foundation of Amica's activities and point us in the right direction. In passing on the attached reports, I also wish to extend my warmest thanks to our Customers for the trust they have shown - we will make every effort to ensure that the products offered by Amica meet your requirements and expectations. I also thank our suppliers and collaborators, in appreciation of their tangible contributions to our achievements and production of the Company's present and future results. With sincere respect, /-/ Jacek Rutkowski President of the Board 12 / 132

13 AMICA WRONKI S.A. SEPARATE FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2012 TO 31 DECEMBER 2012 WRONKI, 24 APRIL / 132

14 CONTENTS SELECTED FINANCIAL DATA BALANCE SHEET STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF COMPREHENSIVE INCOME continued STATEMENT OF CHANGES IN EQUITY CASH FLOW ACCOUNT CASH FLOW ACCOUNT (continued) ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENT General Basis for preparation and accounting principles Error correction and change in accounting principles Operating segments Investments in subsidiaries and affiliated companies Intangible assets (including goodwill) Property, plant and equipment Assets in leasing Investment property Financial assets and liabilities Assets and reserves for deferred tax Inventory Receivables from deliveries and services and other receivables Cash and equivalents Fixed assets designated for sale and discontinued activities Shareholders' Equity Employee benefits Other reserves Liabilities from deliveries and services and other liabilities Deferred charges and accruals Operating revenue and costs Financial revenue and costs Income tax Profit per share and dividends paid Transactions with affiliates and subsidiaries Contingent assets and liabilities Risk affecting financial instruments Capital management Significant events during fiscal year Events after the balance date Other information Approval for publication / 132

15 SELECTED FINANCIAL DATA SELECTED FINANCIAL DATA thousands PLN thousands EUR Year 2012 Year 2011 Year 2012 Year Net revenue from sales of products, goods and material Profit (loss) on operating activities Profit (loss) before tax Net profit (loss) allocated to company shareholders 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 Current Liabilities Equity capital allocated to shareholders Share capital Number of shares Number of own shares for disposal Number of own shares for redemption Net profit (loss) per ordinary share (PLN) Book value per share (PLN / EUR) Paid dividend per share (PLN / EUR) / 132

16 *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 Exchange rate for calculating the balance sheet items / 132

17 BALANCE SHEET as at as at ASSETS I. Fixed assets Intangible assets, of which: goodwill Goodwill of subsidiaries 3. Property, plant and equipment Investments Investment property Others 5. Financial assets Financial assets available for sale a) in subsidiaries and affiliates b) in other entities 5.2 Long-term loans and receivables for subsidiaries and affiliates for other entities Other long-term financial assets Long-term deferred charges and accruals Deferred income tax assets Other deferred charges and accruals 0 0 II Current Assets Inventory Short-term receivables From affiliated entities 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. Assets classified as items for sale 0 Total assets / 132

18 BALANCE SHEET (CONTINUED) as at as at LIABILITIES I. Shareholders' Equity Equity capital allocated to shareholders Share capital Called up share capital (negative value) Own shares (negative value) Supplementary capital Revaluation reserve capital Other reserve capitals 1.8 Profit (loss) from previous years Net profit (loss) Write-offs from the net profit during financial year (negative value) II Liabilities and reserves Reserves for liabilities Deferred income tax reserve Retirement benefits reserves a) Long-term b) Short-term Other reserves a) Long-term b) Short-term Long term liabilities Towards affiliated entities Towards other entities Current Liabilities Towards affiliated entities Towards other entities Deferred charges and accruals Long-term Short-term III. Liabilities associated with assets for sale 0 Total liabilities Book value Number of shares Number of own shares Number of shares taking into account own shares Book value per share (PLN) / 132

19 STATEMENT OF COMPREHENSIVE INCOME Year 2012 Year 2011 I. Net revenue from sales of products, goods and materials, including: from subsidiaries and affiliates Net revenue from sale of products Net revenue from sales of products, goods and materials II. Costs of products, goods and materials sold, of which: to subsidiaries and affiliates Cost of producing goods sold Value of goods and materials sold III. Gross profit (loss) on sales IV. Sales costs V. General administrative expenses VI. Profit (loss) on sales VII. Other operating revenue Profit on sales of non-financial fixed assets 2. Subsidies Revaluation of non-financial assets Other operating revenue VIII. Other operating costs Loss on sales of non-financial fixed assets Revaluation of non-financial assets 3. Other operating costs IX. Profit (loss) on operating activities X. Financial revenue Share dividends, including: from subsidiaries and affiliates Interest, of which: from subsidiaries and affiliates Profit on sale of investments 4. Revaluation of investment 5. Others XI. Financial costs Interest, including: for subsidiaries and affiliates Loss on sale of investments 3. Revaluation of investment 4. Others Profit (loss) from sales of all or part of shares in XII. subsidiaries STATEMENT OF COMPREHENSIVE INCOME continued 19 / 132

20 Year 2012 Year 2011 XIII. Profit (loss) before tax XIV. Income tax current deferred XIV. Other obligatory decrease of gross profit (increased loss) XV. Net profit in the financial year including: allocated to company shareholders allocated to minority shareholders XVI. Total other income Cash flow hedging instruments Income tax from hedging instruments Resolution of reserves for re-evaluated fixed assets XVII. Comprehensive income for the period Net profit (loss) Weighted average of number of ordinary shares (number of shares) Number of shares issued Number of own shares Profit (loss) per ordinary share (PLN) / 132

21 STATEMENT OF CHANGES IN EQUITY Stated capital Supplementary capital Nondistributed result Assets /own shares/ available for sale Net cash flow hedging instruments Reserve from revaluation Balance as at Adjustment of fundamental errors 0 Balance at after adjustment of fundamental error Changes in equity capital in 2011, including Buy-back to redeem own shares Re-booking of financial result to equity capital Comprehensive income for Dividends Other changes Balance as at Total equity capital Balance as at Adjustment of fundamental errors Balance at after adjustment of fundamental error Changes in equity capital in 2012, including Buy-back to redeem own shares Re-booking of financial result to equity capital Comprehensive income for Merger with a subsidiary Other changes Balance as at / 132

22 CASH FLOW ACCOUNT A period from to Period from to A. Cash flows from operating activities I Net profit Income tax II. Profit before tax III. Total adjustments Minority profit (loss) 2 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 Cash flows related to hedging Other adjustments Income tax paid Net cash flows from operating activities (I+/-II) - indirect IV. method B. Cash flows from investment activities I. Inflows Disposal of intangible assets and property, plant and equipment Disposal of investments in real property and in intangible assets 3. From financial assets, including: a) in subsidiaries and affiliates sale of financial assets - dividend and profit sharing repayment of long-term loans - Interest other inflows from financial assets b) in other entities sale of financial assets - dividend and profit sharing - repayment of long-term loans - Interest other inflows from financial assets 4. Other inflows from investment activities / 132

23 CASH FLOW ACCOUNT (continued) A period from to Period from to II. Outflows Acquisition of intangible assets and property, plant and equipment Investments in real property and in intangible assets 3. For financial assets, including: a) in subsidiaries and affiliates acquisition of financial assets granted long-term loans b) in other entities - acquisition of financial assets - granted long-term loans 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 instruments and from capital contributions 2. Credits and loans Issuance of debt securities 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 From other financial liabilities Payment of liabilities arising from financial leases Interest Other outflows from financial activities 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 change in cash due to consolidation F. Opening balance of cash G. Closing balance of cash, including of limited disposability / 132

24 ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENT General a) Information on the Company was founded by a notary act of 18 October The Company is registered in the register of entrepreneurs of the National Court Register maintained by the District Court in Poznań Nowe Miasto and Wilda, IX Commercial Division, under the number KRS The Company was issued the business statistical number REGON The Company's shares are listed on the Warsaw Stock Exchange. The Company's registered office is at 52 Mickiewicza Street in Wronki (64-510). The Company's registered office is also its main place of company's business. The company is a parent company of Amica Wronki Capital Group, composed of the following companies: Amica International GmbH, Gram A/S, Amica Commerce sro, Hansa Rosja ooo, Hansa Ukraina ooo, Amica Far East Ltd, Inteco Business Solution Sp. z o.o, Hotel Olympic Sp. z o.o, Amica Marketing. Sp. z o.o, AGD Media Sp. z o.o,, Nova Panorama Sp. z o.o., Nowe Centrum Sp. z o.o The parent company of Amica Capital Group is Holding Wronki. The ultimate holding entity is a natural person. b) Composition of the Company's Management Board and Supervisory Board The Company's Management Board on the day the Separate Financial Statement was confirmed for publication, i.e. 24 April 2013, was composed of: Mr Jacek Rutkowski, President of the Board, Mr Wojciech Antkowiak, Vice President of the Management Board responsible for Trade and Marketing Mr Marcin Bilik, Vice President of the Management Board responsible for Operational Affairs Mr Wojciech Kocikowski, Mr Tomasz Dudek, Vice President of the Management Board responsible for Finance Vice President of the Management Board responsible for Purchasing and Logistics In the period from the 1st of January 2012 to the 24th of April 2013 there were no changes in the composition of the Company's Management Board. On 24 April 2013 the Parent Company's Supervisory Board was composed of: Mr Tomasz Rynarzewski - Chairman of the Supervisory Board Mr Piotr Sawala - Member of the Supervisory Board Mr Wojciech Kochanek - Member of the Supervisory Board Ms Bogna Sikorska - Independent Member of the Supervisory Board Mr Grzegorz Golec -Independent Member of the Supervisory Board In the period from the 1st of January 2012 to the 24th of April 2013 composition of the Supervisory Board did not change. c) The Nature of the Company's Business The Company's core business is: 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. 24 / 132

25 A broader description of the business conducted by the Company was included in note 1 concerning operational segments. d) Approval for publication The present financial statement prepared for the year ending 31 December 2012 (along with comparative data) was approved for publication by the Company's Management Board on 24 April 2013 (see note 29). Basis for preparation and accounting principles a) The basis for drawing up the separate financial statement The Company's financial statement has been prepared in compliance with the International Financial Reporting Standards (henceforth "the IFRS") approved by the European Union, in force since 31 December Both the functional and the presentation currency of the present Company's financial statement is the Polish zloty, and. This financial statement was prepared with the assumption that the business of the company is to continue operating in the foreseeable future. On the date this financial report is approved for publication there are no circumstances that could be regarded as a threat to the continued business operations of the Company. b) Changes in standards or interpretations Changes in the standards or interpretations in force and applied by the Company since 2012 The accounting principles adopted for preparing the financial statement are influenced by the new or amended standards and interpretations below, which are in force from 01 January 2012: IFRS 7 (Amendment) Financial Instruments: Disclosures - effective date: annual periods beginning on or after 1 July The amendment introduces additional disclosures about transfers of financial assets, both those which result in derecognition in the balance sheet, as well as those that give rise to corresponding liabilities. IFRS 1 (change) "First-time Adoption of International Financial Reporting Standards" - comes into force: annual periods beginning on or after 1 July So far, IFRS 1 offered the opportunity to take advantage of certain exemptions depending on whether the transaction occurred before or after 1 January Amendment to IFRS 1 applies to the replacement of that date with the date of transition to applying IFRS. In addition, a procedure was amended when an entity has acted during acute hyperinflation, when price indices could not be achieved and foreign currency was not stable. IAS 12 (Amendment), "Income tax" - effective date: annual periods beginning on or after 01 January The revised standard governs how the deferred tax is calculated in cases where the tax law applies differently to recovering the value of the investment property through its use (rents) and the sale, the entity has no plans to sell it. The amendment IAS 12 causes the withdrawal of SIC 12 interpretation because its rules have been incorporated into the standard. The amendment will not significantly affect the consolidated financial statement. Standards and interpretations effective in the version published by the IASB, but not approved by the European Union, are presented below in the section on standards and interpretations that have not entered into force. The above mentioned changes in standards and interpretations effective since 01 January 2012 shall remain without effect on the financial statements. Application of a standard or interpretation before it comes into force No voluntary early application of any standard or interpretation has been used in the present financial statement. 25 / 132

26 Published standards and interpretations which did not come into force on 31 December 2012 and their influence on the Company's statement By the day the present financial statement was prepared, the following new or amended standards and interpretations had been published, in force for annual periods after 2012: IFRS 9 (change) "Financial Instruments: Classification and Measurement" - comes into force: annual periods beginning on or after 01 January 2015 (the standard is not approved by the European Commission). The new standard is intended to replace the current IAS 39. The section of IFRS 9 published to date contains provisions on classification and valuation of financial assets, classification and valuation of financial liabilities and derecognition of financial assets and liabilities. The Company is in the process of assessing the effect of this change on the financial statement. IFRS 10 "Consolidated Financial Statements" effective date: annual periods beginning on or after 01 January 2014 (the standard is approved by the European Commission). The new standard replaces most of IAS 27 "Consolidated and Separate Financial Statements". IFRS 10 introduces a new definition of control; nonetheless, the rules and procedures for consolidation do not change. IFRS 11 "Joint Arrangements" effective date: annual periods beginning on or after 01 January 2014 (the standard is approved by the European Commission). IFRS 11 replaces IAS 31 "Interests in Joint Ventures". In the new standard, the accounting approach to joint arrangements results from their economic substance i.e. rights and obligations of the parties. In addition, IFRS 11 eliminates the possibility of accounting for investments in joint ventures using the proportionate consolidation. These investments are accounted for using the equity method as currently used for associates. IFRS 12 "Disclosure of Interests in Other Entities" - effective date: annual periods beginning on or after 01 January 2014 (the standard is approved by the European Commission). New IFRS 12 sets out the requirements for disclosure of information on consolidated and unconsolidated entities, in which the entity issuing the report has significant involvement. This will allow investors to assess the risks to which the entity creating special purpose entities and other similar structures is exposed. IAS 27 (amendment) "Separate Financial Statements" and IAS 28 (amendment) "Investments in Associates and Joint Ventures" - effective date: annual periods beginning on or after 1 January 2014 (the amendments are approved by the European Commission). Amendments to IAS 27 and 28 are the consequence of introduction of IFRS 10, IFRS 11 and IFRS 12. IAS 27 will apply only to separate financial statements, while IAS 28 will cover the investments in joint ventures. IFRS 13 "Fair Value Measurement" - effective date: annual periods beginning on or after 01 January 2013 (the standard is approved by the European Commission). New standard unifies the concept of fair value for all IFRSs and IASs as well as introduces common guidelines and principles, which were previously scattered among different standards. The amendment will not significantly affect the financial statement. IAS 19 (Amendment), "Employee Benefits" - effective date: annual periods beginning on or after 01 January 2013 (the amendment is approved by the European Commission). The document introduces several changes, most important of which relate to defined benefit plans: liquidation of "corridor" method and presentation of the re-valuation effects in other comprehensive income. IAS 1 (Amendment) "Presentation of Financial Statements" - date of entry into force: annual periods beginning on or after 01 July 2012 (the amendment is approved by the European Commission). The requirement for presentation of other comprehensive income has been changed. According to the revised IAS 1, other comprehensive income should be grouped into two sets: o items which at a later date will be reclassified to profit or loss (e.g. effects of valuation of the o hedging instruments) and elements that will not be subject to reclassification to profit or loss (e.g. valuation of fixed assets to fair value, which is then recognized under retained profits, and not included in the profit or loss). The amendment to IAS 1 will affect the extent of disclosures presented in the financial statements. The amendment does not affect the recognition and valuation of other comprehensive income. 26 / 132

27 IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine" - effective date: annual periods beginning on or after 01 January 2013 (interpretation is approved by the European Commission). The International Financial Reporting Interpretations Committee published the interpretation relating to the accounting treatment of expenses incurred in the mines in order to gain access to deeper layers of the ore. According to the interpretation, the costs should be recognized as the inventory (in part attributable to the excavation of usable ore) and assets (in part attributable to gaining access to mineral ore deposits). The Company believes the amendment will have no effect on the financial statements. IFRS 7 (Amendment) Financial Instruments: Disclosures - effective date: annual periods beginning on or after 01 January 2013 (the amendment is approved by the European Commission). Changes to the standard provide necessary disclosures about financial assets and financial liabilities, which are shown as net amounts in the statement of financial position. Gross and net amounts of assets and liabilities that are offset should be disclosed in the notes. The amendment will not significantly affect the financial statement. IAS 32 (change) "Financial Instruments: Presentation" - comes into force: annual periods beginning on or after 01 January 2014 (the amendment is approved by the European Commission). Amendment to IAS 32 introduces detailed explanations of the conditions for the presentation of financial assets and liabilities on a net basis. The amendment will not significantly affect the financial statement. IFRS 1 (change) "First-time Adoption of International Financial Reporting Standards" - comes into force: annual periods beginning on or after 01 January 2013 (the amendment is not approved by the European Commission). The amendment will not significantly affect the financial statement. Amendment to IFRS 1 allows the entities adopting IFRS for the first time to recognise the loans obtained from the state on preferential terms, existing on the day of the transition, by one of the two methods selected by the entity: o o by the value resulting from accounting principles used until now, or by the value resulting from the retrospective application of the relevant standards that require specific recognition of government bailout in the financial statements (IAS 20 and IFRS 9 or IAS 39) provided that there was adequate information to allow correct estimation on the date of recognition of the loan. Amendments to IFRS 1, IAS 1, IAS 16, IAS 32, IAS 34 resulting from the "Annual Improvements Project: cycle," which is effective for annual periods beginning on or after 1 January 2013 (the changes approved by the European Commission). In addition to changes in presentation principles resulting from IAS 1, amendments to the standards will have no material impact on the financial statements. Amendments to the standards include: o o o o o IFRS 1 "First-time Adoption of International Financial Reporting Standards": regulates the procedure in the event that the company applied the IFRS, and then moved to other accounting policies and then again to IFRS. According to the amendment re-transition to IFRS can be madeeither on the basis of IFRS 1 or IAS 8. IFRS 1 "First-time Adoption of International Financial Reporting Standards": according to the change in the transition to IFRS, at the date of transition to IFRS the Company may adopt capitalized borrowing costs determined in accordance with the previously applied accounting policy. After that date, IAS 23 must be applied IAS 1 "Presentation of Financial Statements": change is not to require the addition of notes to a third balance sheet, that is presented in the statements in the event of changes in accounting policies or presentation. IAS 1 "Presentation of Financial Statements": details that an entity may present in the financial statements additional periods or days (beyond those required by the standard), but does not have to present them to all parts of the statements (for example, it may show only the additional balance without additional statement of comprehensive income) however, it must provide notes to this additional period or date. IAS 16 "Property, Plant and Equipment": removed inconsistency, which meant that some adopter of IAS 16 believed that parts are to be classified as inventory. According to the 27 / 132

28 revised standard, replacement parts should be recognized as fixed assets or inventory in accordance with the general criteria laid down for the assets in IAS 16. o IAS 32 "Financial Instruments: Presentation": provides clarification that tax consequences of payments to owners and transaction costs should be accounted for in accordance with IAS 12. o IAS 34 "Interim Financial Reporting": harmonizes disclosure requirements for assets and liabilities of segments of IFRS 8. IFRS 10 (revised) "Consolidated Financial Statements", IFRS 11 (amendment), "Joint Arrangements" and IFRS 12 (revised) "Disclosure of Interests in Other Entities " - effective date: annual periods beginning on or after January 1, 2013 (the changes not approved by the European Commission). Changes to the newly issued standards on consolidation bring clearer than ever transitional principles for the presentation of comparable data. IFRS 10 (revised) "Consolidated Financial Statements", IFRS 12 (revised) "Disclosure of Interests in Other Entities" and IAS 27 (amendment) "Separate Financial Statements" - effective date: annual periods beginning on or after January 1, 2014 (the changes not approved by the European Commission). The change involves exemption from consolidation for investment entities. Investment entity is an entity that meets the following definition: o obtains funds from one or more investors in order to provide the investors with investment management services, o undertakes to ensure investors that its business purpose is solely to invest resources strictly to achieve profit from the growth of investment and/or dividend, o evaluate the effectiveness of its investments on the basis of their fair value. The Company intends to implement the above regulations within the times anticipated by the standards or interpretations. c) Accounting principles The present financial report was drawn up according to the historical cost principle, except for derivatives valued by fair market value. Presentation of financial statements The financial statement is presented in accordance with IAS 1 (see also point b above). The Company presents its "Profit and loss account" as part of the "Statement of comprehensive income". The "Profit and loss account" is presented in a calculated version, while the "Cash flow account" is prepared by the direct method. In the event that accounting principles are changed or errors corrected retrospectively, the Company presents a balance additionally prepared for the beginning of the comparative period. Property, plant and equipment Current valuation of property, plant and equipment is based on the purchase price or cost of production increased by the borrowing cost -- 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. Land and perpetual usufruct right to the land are not subject to depreciation. 28 / 132

29 The table below presents the scope of useful life applied by the Company: Group Buildings and structures Machines and equipment Means of transport Other tangible assets: Period years 1-50 years 3-25 years 3-25 years Intangible Fixed Assets Current valuation of intangible assets is based on the purchase price or cost of production increased by the borrowing cost -- 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. 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. 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 the 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. The table below presents the scope of useful life applied by the Company: Group Trademarks Patents and licenses Computer software Other intangible assets Period 6 years 3-15 years 3-15 years 2-10 years The company recognises its granted CO₂ emission rights in intangible assets. These rights have been valued on the basis of guidelines contained in the Regulation of the Council of Ministers regarding the environmental fees of Investment property 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 balance statement date 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. 29 / 132

30 IAS 40.(b)Not applicable IAS 40.(c)There are no difficulties in classification of investment property. IAS40 (d)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, IAS 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). A financial instrument is any agreement which results in a financial asset arising for one of the parties and simultaneously a financial liability or capital instrument for the other party. A financial asset or liability is only presented when the Company becomes a party to an agreement concerning this instrument. Ordinary transactions of purchase and sale of financial assets and liabilities are presented for the day they are settled. A financial asset is excluded from the balance sheet in the event that the rights to economic benefits arising from the agreement signed and the risk attached thereto are realised, expired, or the Company has denounced them. The Company excludes a liability only when this liability expires, i.e. when contractual obligation has been fulfilled, discontinued or has expired. On the day of purchase, the Company's financial assets and liabilities are evaluated at fair market value, most commonly by the fair value paid in the case of an asset or received in the case of a liability. The Company includes transaction costs in the initial value of the assessment of all financial assets and liabilities, apart from the category of assets and liabilities calculated at fair value by the profit and loss account. On balance day, the financial assets and liabilities are calculated according to the principles shown below. Financial assets For evaluation in the initial inclusion, the Company classifies financial assets other than hedging derivatives as follows: loans and receivables financial assets measured as a fair market value by the profit and loss account, investments held to maturity, and financial assets available for sale. These categories defined the valuation method on balance day and the inclusion of profits or losses form valuation in the profit and loss account, or in other total revenue. Profits and losses included in the profit and loss account are presented as financial revenue or costs, except for impairment write-offs on receivables from deliveries and services, which are presented as other operating costs. All financial assets apart from those measured as a fair market value by the profit and loss account are assessed on each balance day for indications that they may be losing value. A financial asset is subject to an impairment write-off if there is objective evidence that it is losing value. Indications of impairment loss are analysed for each category of financial asset separately, as presented below. Loans and receivables are financial assets which are not derivatives, with defined or definable payment periods, which are not quoted on the active market. Loans and receivables are recognised according to the 30 / 132

31 depreciated cost based on the effective interest rate. Short-term receivables are calculated at the value requiring payment due to the insignificant effect of the discount. Financial assets qualified as loans and receivables are shown on the balance sheet as: long-term assets under "Loans and receivables" and short-term assets under "Short-term financial assets" and "Receivables" Allowance for uncollectible accounts is updated when collecting of a full amount is no longer possible. Major receivable accounts are measured individually in the event that a debtor is in arrears or if objective evidence is obtained that the debtor cannot make the full payment (for example due to the debtor's difficult financial situation, a court case against the debtor, changes in the economic environment unfavourable for the debtor). For receivables which are not assessed individually, indicators of loss of value are analysed within specific classes of assets defined by credit risk (resulting from the branch, region or structure of the customer). The impairment write-off index for specific classes is based on trends observed in the recent past connected with difficulties in debtors repaying receivables. Financial assets measured as a fair market value by the profit and loss account categorised as for trading or initially categorised to be evaluated at fair value by the profit and loss account die to non-fulfilment of the criteria defined in IAS 39. This category includes all derivatives displayed in the balance under "Financial derivatives", apart from hedging derivatives as included by the hedge accounting. Instruments belonging to this category are calculated according to fair value and the effects of the valuation are included in the profit and loss account. Profits and losses from measurement of financial asset are defined by the change in fair value established based on prices current on balance day and coming from the active market, or based on measurement techniques if there is no active market. Investments held to maturity are classified as financial assets with a defined or possible to define payment structure or established due date which the Company intends to and can hold until due, with the exception of assets classified as loans and receivables. Investments held to maturity are valued by a depreciated cost using the effective interest rate method. If there is any evidence indicating the possibility of a loss in value of investments held to maturity (e.g. assessment of the credit ability of companies issuing stock), the assets are valued at the current value of the estimated future cash flow. Changes in the value of the balance investment, including impairment loss write offs, are included in the profit and loss account. Financial assets available for sale are financial assets which are not derivatives and which have been classified as available for sale or do not qualify for any of the above categories of financial assets. The Company includes shares in subsidiaries in this category. On the balance sheet, these assets are shown under "Financial assets available for sale". Shares in companies not listed on stock exchange are valued at the purchase price minus impairment writeoffs, due the lack of possibility to reliably estimate their fair market value. Impairment write-offs are recognised in the profit and loss account. All other financial assets for sale are valued by their fair market price. Profits and loss from revaluation are included as other total revenue and cumulated in the revaluation reserve capital of financial assets available for sale, apart from impairment write-offs and currency translation differences from monetary assets, which are recognised in the profit and loss account. Also recognised in the profit and loss account are interest payments which are recognised when revaluating those financial assets according to the amortised cost using the effective interest rate method. Reversal of impairment loss write-offs in financial assets available for sale is included in other total revenue, apart from impairment loss write-offs on debt instruments, whose reversal is included in the profit and loss account if the increase in the instrument's value can be objectively linked with an event occurring after the impairment was recognised. 31 / 132

32 At the moment an asset is excluded from the balance, the cumulative profits and losses previously recognised in the other total revenue is transferred from equity capital to the profit and loss account and presented under other total revenue as a reclassification from transfer to the financial result. Financial liabilities After initial recognition, financial liabilities are valued according to the amortised cost using the effective interest rate, except for financial liabilities classified as for trade, or classified as assessed at fair value by the profit and loss account. The Company includes derivatives other than hedging instruments as financial instruments to be valued as a fair market value by the profit and loss account. Short-term receivables for deliveries and services are calculated at the value requiring payment due to the insignificant effect of the discount. Profits and losses from revaluation of financial liabilities are presented in the profit and loss account as financial activity. Hedge accounting In order to manage the currency risks and interest rate risks the management board of established the Hedging Policy providing guidelines for risk type management. According to the adopted policy, currency and interest rate risks are minimised through application of the hedging instruments allowed by IAS 39. The Company applies defined accounting principles for derivatives securing cash flows and fair value. Implementation of hedge accounting requires the Company to fulfil the conditions defined in IAS 39 concerning documentation of the hedging policy, the possibility of hedged transactions taking place and the efficiency of the hedging. During the period covered by the financial statement, the Company indicated certain forward contracts as securing cash flows and fair value. The forward contracts were signed by the Company in order to manage currency translation risk in connection with the legally binding sales and purchase transactions conducted in foreign currencies. The Company additionally indicated an Interest Rate SWAP (IRS) contract as a safeguard on interest flow on cash credits. All hedging derivatives are valued by their fair market price. In the part for which a given hedging instrument forms an effective safeguard, the change in fair value of the instrument is recognised in other total revenue and accumulated in revaluation reserve capital of instruments hedging cash flow. The inefficient part of a hedge is recognised in the profit and loss account. At the moment a hedged item affects the profit and loss account, the cumulative profits and losses from evaluating hedging derivatives, previously recognised in the other total revenue, are transferred from equity capital to the profit and loss account. If a hedged transaction results in non-financial assets or liabilities being recognised, profits and losses from evaluating hedging derivatives, previously recognised in the other total revenue, are transferred from equity capital and recognised in the assessment of initial value (purchase price) of the hedged asset. If a probability has arisen of a planned future hedged transaction not being concluded, profits and losses from evaluating hedging derivatives safeguarding cash flow are immediately transferred to the profit and loss account. Leasing IAS Pursuant to the 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. 32 / 132

33 Some equipment is used by the Company 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. 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 Deferred income tax assets 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. Cash and equivalents Cash and equivalents covers cash in hand and at bank, deposits payable on demand and high-liquidity shortterm investments (up to 3 months), easily exchangeable for cash, with an insignificant chance of a change in value. Inventory IAS 2.36(a)Inventories are measured as follows: Inventories are measured at purchasing price From January 2012, the Company changed the principles for balance sheet valuation of finished goods and merchandise. By the end of 2011, the goods were valued goods at cost and finished products at the cost of manufacture, which values were approximated by means of record prices adjusted for variations. Starting from 2012, the valuation of both groups of inventories is performed without adjusting them for deviation. Deviations between the fixed record price and the actual prices are recognized immediately in the cost of goods sold and merchandise. The record price is determined based on the planned purchase price/cost of manufacture and will be updated in case of significant deviations. The value of deviations related to comparative periods is deemed by the Company as not essential. The company does not recognise the cost of external financing as value of 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. 33 / 132

34 Permanent impairment loss If an assets component does not in its significant part or in whole generate any foreseeable economical profits, 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 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. Cost of employee benefits IAS (a)According to the 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 the 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. The Company does not have a programme of defined benefits (obligation to pay retirement benefits and pensions). Stated capital The stated capital is displayed in the nominal value of the shares issued, in accordance with the statute of the Company and the entry in the National Court Register. Shares in the Company purchased and held by the Company or consolidated companies reduce equity capital. Own shares are valued with the purchase price Capital from selling shares above their nominal value arises from the surplus of the issue price over the nominal value of the share, minus the issue costs. Other capitals cover: capital from the accumulation of other comprehensive income covering: o revaluation of property, plant and equipment to fair value (see sub point concerning property, plant and equipment), o assessment of instruments hedging the cash flows (see sub point regarding hedge accounting), All transactions with the owners of the Company are presented individually in the "Statement of changes in equity". Operating segments In differentiating operating segments, the Company's Management Board considers product lines representing the main products supplied by the Company. Each segment is managed separately within a given product line, 34 / 132

35 due to the specific nature of the products manufactured requiring different technology, resources and approaches. Implementation of IFRS 8 did not affect the necessity to differentiate other segments than those presented in the Company's last financial statement (see also the point regarding changes in standards and interpretations). In accordance with IFRS 8 the results of operating segments result from internal reports periodically verified by the Company's Management Board. The Company's Management Board analyses the results of the operational segments at the level of profit (loss) from operating activities. Sales revenue shown in the profit and loss account is not different from the revenue presented within operating segments, apart from revenue not classified to segments and consolidation exclusions affecting inter-segmental transactions. Business combinations Business combinations covered by IFRS 3 are settled using the purchase method. On the day of the takeover, the assets and liabilities of the acquired company are evaluated according to fair value and in accordance with IFRS 3 are identified as assets and liabilities, along with contingent liabilities, regardless of whether they were disclosed in the financial statement before the takeover. An increase in the purchase price (merger cost) above the fair value of the identifiable net assets of the company is included in the assets of the balance sheet as goodwill. Goodwill is equivalent to payments made by the acquiring company in anticipation of future financial benefits arising from the assets which cannot be individually identified or quantified. After initial recognition goodwill is calculated according to purchase price reduced by total write-offs due to impairment loss. If the purchase price (merger cost) is lower than the fair value of the identifiable net assets of the company, the difference is immediately included in the profit and loss account The Company includes profits from takeovers in the item other operating revenue. In the case of mergers of companies under joint control, the Company does not apply the rules of IFRS 3, but instead settles such transactions by the share combination method as follows: assets and liabilities of the entity taken over are recognised in the balance. The balance is considered to be the value which was originally defined by the controlling entity, rather than the values resulting from the individual financial statement of the acquired company, intangible assets and contingent liabilities are recognised according to the principles applied by the entity before the merger, in accordance with the appropriate IFRS, no goodwill is created - the difference between the merger price and the shares acquired in the controlled company is recognised directly in capital in the item "results from previous years". minority shares are valued in proportion to the net balance of the assets of the company controlled, comparative data is translated in such a way that the combination took place at the beginning of the comparative period. If the date when a subordinate relationship arose with a company is later than the beginning of the comparative period, the comparative data are presented from the moment when the relationship first arose. Transactions in foreign currencies Transactions expressed in foreign currencies are converted to Polish zloty using the currency exchange rates prevailing on the day the transaction is made (spot rate) or rate announced by the National Bank of Poland on the day preceding the date of the transaction. 35 / 132

36 On the balance date the cash items expressed in foreign currencies are converted to Polish zlotys using the individual average currency exchange rates at the end of the reporting period as published by the National Bank of Poland. Non-cash items recognised according to historical cost expressed in foreign currency are presented at historical currency exchange rate on the day the transaction is made. Non-cash balance sheet items recorded according to their fair value, expressed in a foreign currency, are valued according to the exchange rate on the day the fair value was established, i.e. the average rate set for a given currency by the National Bank of Poland. Currency translation differences arising from the settlement of transactions or revaluing cash items other than derivatives are recognised respectively under financial revenue or costs, as a net sum. Currency translation differences from revaluation of derivatives expressed in a foreign currency are included in the profit and loss account, unless they constitute security on cash flow. Derivatives hedging cash flow are recognised according to principles of hedge accounting. Borrowing costs Financing costs which can be attributed directly to the purchase, construction or manufacture of an adapted asset are activated as part of the purchase price or production cost of that asset. Interest rates constitute borrowing costs The Company has been applying the above principles prospectively since 1 January 2009 (see the point regarding changes in standards and interpretations). Fixed assets classified as designated for sale Fixed assets (groups of fixed assets) are classified by the Company as designated for sale if their balance will more likely be received from a sale transaction than from further use. This condition is only considered to have been met when an asset (asset group) is available in its current state for instant sale, keeping to the normal and customarily acceptable sales conditions, and the conduct of the transaction is highly probable within a year of the classification being changed. Fixed assets classified as designated for sale are valued at the lower of the two values: the balance and the fair market value reduced by the costs of sale. Some fixed assets classified as designated for sale, such as financial deferred income tax assets are valued according to the same accounting principles as were applied by the Company before being classified as fixed assets designated for sale. Fixed assets classified as designated for sale are not subject to depreciation. Employee benefits The liabilities and reserves for employee benefits shown in the balance include: short-term employee benefits for remuneration (including bonuses) and social security contributions, reserves for unused holidays, and Other long-term employee benefits (retirement bonuses) Short-term employee benefits 36 / 132

37 The value of liabilities from short-term employee benefits is established without a discount and shown in the balance as the sum requiring payment. Reserves for unused holidays The Company forms a reserve for the costs of accumulated paid absences, which it must incur due to employees not making use of entitlements, and those entitlements increasing by the balance date. The reserve for unused holidays is a short-term reserve and is not discounted. Retirement bonuses, As per the remuneration system in force in the Company, the employees are entitled to retirement packages. Retirement packages are issued as a once-off payment at the time of retirement. The amount of pension benefits is dependent on the period of employment and the employee's average remuneration. The Company creates reserves for future liabilities from retirement payments in order to allocate to the costs to the periods when employees acquire the rights to these. Current value of these reserves for each balance date is calculated internally. The reserves counted are equal to the discounted payments which will be made in future and affect the period from the balance sheet date. Demographic data and data on employment turnover are based on historical data. Profits and losses from calculating reserves and future employment costs are presented immediately in the profit and loss account. Reserves, liabilities and contingent assets The reserves are created when the Company has an obligation (legal or otherwise) resulting from past events or when it is probable that fulfilment of such obligation will cause outflow of economic benefits and the amount of such obligation can be reliably assessed. The date incurred and the sum requiring regulation may be uncertain. Reserves are created for purposes including: guarantees granted on post-sales servicing of products and services carried out, retirement bonuses, unused holidays bonuses for clients court proceedings and disputes in progress, restructuring, only if the Company is obliged to carry it out due to separate applicable legislation or an agreement has been signed in this matter. Reserves are not formed for future operating losses. Reserves are included in the value of estimated expenditure necessary to fulfil a current obligation, based on the most reliable evidence available on the day the financial statement is prepared, including with regard to risk and degree of uncertainty. In the event that the influence of the value of money is significant at the time, the amount of reserves is established by discounting the expected future cash flow to the current value using the discount rate which reflects current market estimations concerning the value of money at the time and any risk which may be associated with the given liability. If a discounting method had been used, the increase of the reserve resulting from the passing of time is presented as a financial cost. If the Company expects that costs covered by the reserve will be recovered, for instance pursuant to insurance policy, then such recoverable value is recognised as a separate asset component, but only when it is sufficiently certain that the value will be indeed recovered. The value of this asset may not, however, exceed the reserves amount. In the event that it is unlikely that funds will be spent to fulfil a current obligation, the sum of the contingent liability is not included on the balance sheet, apart from contingent liabilities identified during a business 37 / 132

38 combination as part of the allocation of merger costs in accordance with IFRS 3 (see the sub point regarding business combinations). Information on conditional liabilities is presented in the descriptive section of the financial statement in note 24. Possible economically positive influences for the Company which do not yet meet the criteria for being included as assets constitute contingent assets, which are not included on the balance sheet. Information on contingent assets is disclosed in the additional explanatory notes. 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. Deferred charges and accruals Under "Accruals and deferred income" in the balance sheet assets, the Company includes costs paid in advance in connection with future reporting periods. The "Accruals and deferred income" item included in the balance sheet liabilities shows future revenue, including cash received for financing fixed assets, which is settled according to IAS 20 "Government subsidies". Subsidies are only included if there is sufficient certainty that the Company will meet the conditions connected with the given subsidy and that the given subsidy will in fact be received. A subsidy related to a cost item is presented as income proportionally to costs which the subsidy is supposed to compensate. A subsidy financing an asset is gradually disclosed in the profit and loss account as revenue over a series of periods, in proportion to the impairment loss write-offs on that asset. For presentation purposes, the Company does not subtract subsidies from the balance sheet assets, but instead includes subsidies as future period revenue under "Accruals and deferred income". Revenue from sales Revenue from sales is presented as fair market values of payments received or owed and represent receivables for products, goods and services supplied as part of normal business activities, after being reduced by rebates, VAT and other taxes associated with sales (excise tax). Income is presented as a value, at which it is possible for the Company to gain economic profits related to a given transaction and in circumstances in which the income value can be reliably assessed. Sales of goods and products Revenue from the sale of goods and products is recognised if the following conditions are met: The Company has transferred to the purchaser the significant risk and benefits arising from the ownership rights to the goods. The condition is considered to have been met when the Customer is supplied with the goods or products. the revenue can be reliably estimated. it is probable that the Company will acquire financial benefits from the transaction and the costs incurred and those yet to be incurred in connection with the transaction can be reliably estimated. Provision of services Services provided by the Company include in the most part the services provided by the technical departments of the Company to external business partners, utilities resale services (electricity, gas), transport services and rental services. 38 / 132

39 Interest and dividends Interest revenue is presented successively on an accrual basis, according to the effective interest rate method. Dividends are presented when shareholders or stockholders receive a right to them. Operating costs Operating costs are recognised in the profit and loss account in accordance with the revenue and cost accrual basis assumption. The Company presents costs according to the place where they are incurred. Income tax (including deferred tax) The compulsory tax burden consists of: current and deferred income tax which has not been included in other total revenue or directly in capital. The current tax burden is calculated on the basis of the tax result (tax base) for a given financial year. Tax profit (loss) differs from the gross book profit (loss) in connection with the temporary transfer of taxable income, non-tax-deductible costs for other periods excluding costs and revenue which will never be subject to taxation. Tax burdens are calculated based on the tax rate applicable in a given financial year. Deferred tax is calculated using the balance method as a tax which is to be paid or returned in the future based on the differences between the balance values of assets and liabilities, and the relevant tax values used to calculate the tax base. A reserve for deferred tax is formed from all transient gains which are subject to tax, while an asset arising from deferred tax is recognised up to the value at which it is likely that it may reduce future tax profits by the recognised transient losses. An asset or reserve item is not included if the temporary difference arises from the initial recognition of an asset or liability in a transaction which is not a business combination and which has no effect either on the tax result or the book result. The reserve for deferred tax on goodwill which is not subject to depreciation based on tax regulations is not included. Deferred tax is calculated using the tax rates which will be applicable at the moment when the asset item is realised or the reserve settled, taking as its basis the legislation in force on balance day. The value of an asset item from deferred tax is subject to analysis for each balance date, and if it is expected that future tax profits will not be sufficient to realise the asset or part of it, is written off. The Management Board's subjective assessment and uncertainty of the estimates In preparing the financial statement, the Company's Management Board follows its judgement when making numerous estimates and assumptions which affect the accounting principles applied and the values presented for assets, liabilities, revenue and costs. The values actually realised may differ from the Management Board's estimates. Information on estimates and assumptions which are significant for the financial statement is presented below. Economic cycles of fixed assets The Company's Management Board conducts an annual verification of the periods of economic use of fixed assets which are subject to depreciation. On the Management Board considers that the periods of economic use of assets adopted by the Company for purposes of depreciation reflects the expected period in which these assets will bring economic benefits in the future. However the actual period during which these assets will bring economic benefits in the future may differ from the estimates, including due to technical ageing of property. The balance of fixed assets subject to depreciation is presented in notes 4 and / 132

40 Reserves Reserves for warranty repairs The basis for estimating the reserves for future warranty repairs are: the period covered by the guarantee, the historical unit cost of the repair, estimated product reliability, average share of spare parts in the repair cost, profitability of sale of spare parts. The value of the above mentioned variables may change in futures periods, simultaneously influencing the value of reserves. The greatest risk of change to values of reserves for future obligations is that from the repair of washing machines under guarantee on the domestic market. This is connected with the short sales history of this range and the constant work on a definitive improvement in the quality of washing appliances. Reserves for the repair of other ranges, owing to many years of manufacturing, sales and servicing experience, are subject to a smaller risk of inaccurate estimating. Moreover, the estimations of reserves for international guarantee repairs are burdened with currency exchange risks. Reserves for employee benefits The Company's retirement bonuses are calculated using the method developed internally by the Company. The total of reserves for employee benefits as shown in the financial statement is 621,000 PLN (2011: 507,000 PLN). The level of reserves is influenced by assumptions about the discount rate and salary rise index. A fall in the discount rate of 1 p.p. and a growth in the salary rise index of 1 p.p. would lead to an increase in the reserve established on of 58,000 PLN. Assets for deferred tax The probability of settling an asset from deferred tax with future taxed profits is based on the Company's budget approved by the Supervisory Board. If the forecast financial results indicate that the Company will achieve taxable revenue, assets for deferred tax are included in full. Impairment loss of non-financial assets In order to define the value of use, the Management Board estimates the forecast cash flows and rate at which flows are discounted to the current value (see sub-point concerning impairment of non-financial assets). During the calculation of the current value of future flows, assumptions are made regarding the forecast financial results. These assumptions involve future events and circumstances. The values actually realised may differ from the estimates, which may contribute to significant adjustments of the value of the Company's assets in subsequent reporting periods. Error correction and change in accounting principles From January 2012, the Company changed the principles for balance sheet valuation of finished goods and merchandise. By the end of 2011, the goods were valued goods at cost and finished products at the cost of manufacture, which values were approximated by means of record prices adjusted for variations. Starting from 2012, the valuation of both groups of inventories is performed without adjusting them for deviation. Deviations between the fixed record price and the actual prices are recognized immediately in the cost of goods sold and merchandise. The record price is determined based on the planned purchase price/cost of manufacture and will be updated in case of significant deviations. The value of deviations related to comparative periods is deemed by the Company as not essential. 40 / 132

41 1. Operating segments Amica produces heating appliances which includes range cookers, gas and electric hobs, gas-electric free-standing as well as built-in cookers. The Company's commercial activities include mainly trade in refrigeration appliances, washing machines and small household appliances. Starting from 2012, the Company has redefined the business segments in line with its current business strategy. Therefore, the data for the comparable period of the four quarters of prepared in accordance with the previous industry segmentation - were not disclosed. In addition to the segmentation, the revenues relating to trade in materials and the sale of services as well as the costs attributable to such revenue and all other revenues and expenses not directly attributable to segments were disclosed. The geographical segment which supplements the information concerning the Company'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. 41 / 132

42 for the period from 1.01 to Free-standing heating equipment Built-in heating equipment Other heating equipment Goods Other Total for the period from 1.01 to Revenue from external customers, net of sales bonuses Gross profit margin on sales Gross profit margin on sales (%) 26,5% 30,7% 32,2% 23,6% 16,6% 26,3% Operating expenses allocated to the segment Operating sector result Operating result in the segment (%) 20.6% 22.7% 22.6% 9.1% 16.6% 18.2% Result from other operating activities and non-allocated costs Operating result Result from financial activities Gross result Obligatory result burden Net profit / 132

43 The Company's revenues divided geographically into areas which the Group differentiates according to the location of the external clients are presented below. thousands PLN Country Poland Germany Russian Federation Scandinavia Czech Republic and Slovakia United Kingdom Other countries TOTAL 1,202,198 1,155,425 * Revenues include all activities of the Company, i.e. the products (household appliances), services, materials. 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 In North Europe sales are conducted partly through Gram, a subsidiary of A similar sales model is used in the Czech Republic and Slovakia where sales are conducted through the subsidiary Amica Commerce. Sales on Russian markets is conducted primarily by a subsidiary Hansa. Sales in the United Kingdom and South-Eastern Europe are carried out under agency agreements. All assets of the Amica Wronki are located in Poland, in the Company's registered office. Due to the need for commercial confidentiality, Company does not disclose data on key customers. 43 / 132

44 2. Investments in subsidiaries and affiliated companies Investments in subsidiaries The table below shows investments in subsidiaries. Shares in those entities are evaluated at their purchase price. Headquarters of subsidiary Proportion of share capital Purchase price Cumulative impairmen t loss Purchas e price Amica International Gmbh Germany 100% the Czech Amica Commerce s.r.o. Republic 100% Gram Domestic A/S Denmark 100% Hansa ooo Russia 100% Sidegrove Holdings Ltd. Cyprus 100% Amica Far East Ltd. Hong Kong 100% 0 0 Inteco Business Solutions Sp. z o.o. Poland 80% 8 8 Hotel Olympic Sp. z o.o. Poland 100% AGD Media Sp. z o.o. Poland 100% Nova Panorama Sp. z o.o. Poland 100% Nowe Centrum Sp. z o.o. Poland 100% Amica Marketing Poland 100% Hansa Ukraina ooo Ukraine 100% Total Cumulati ve impairm ent loss Balance of investments The value of investments in subsidiaries is subjected to an annual test for depreciation, or more frequently if depreciation appears to be taking place. In the event that signs of an impairment loss appear, the Company establishes the recoverable value of the investment, which is considered to be the estimated value of use based in discounted future cash flow. Investment in affiliated companies The Company has no share in entities, which meet the definition of associates. 44 / 132

45 3. Intangible assets (including goodwill) The company did not have goodwill on the balance date. The intangible assets used by the Company include trade marks, patents and licences, software, development work it conducts itself and other intangible assets. Intangible assets which by the balance date have not been put into use are presented in the item "Intangible assets in production". as at Goodwill Trademarks, patents and licenses Computer software Costs development work Other intangible assets Intangible assets in production Gross balance Accumulated depreciation and adjustment writeoffs Net balance Reclassified as fixed assets designated for sale. 0 Adjusted net balance Total as at Gross balance Accumulated depreciation and adjustment writeoffs Net balance Reclassified as fixed assets designated for sale. 0 Adjusted net balance / 132

46 Goodwill Trademarks, patents and licenses Computer software Costs development work Other intangible assets Intangible assets in production Total for the period from 1.01 to Net carrying value on Acquisition through merging economic entities 0 Increases (purchase, production, leasing) Sale of subsidiary (-) 0 Decreases (sales, liquidation, adoption as intangible assets) (-) Other changes (reclassification, transfer, etc.) 0 Revaluation to fair value (+/-) 0 Depreciation in accordance with the depreciation plan (-) Depreciation write-offs for liquidated or sold assets Write-offs for impairment loss (-) 0 Reversal of impairment writeoffs 0 Net translation gain (loss) (+/- ) 0 Reclassified as fixed assets designated for sale. 0 Net carrying value on / 132

47 for the period from to Net carrying value on Acquisition through merging economic entities 0 Increases (purchase, production, leasing) Sale of subsidiary (-) 0 Decreases (sales, liquidation, adoption as intangible assets) (-) Other changes (reclassification, transfer, etc.) 0 Revaluation to fair value (+/-) 0 Depreciation in accordance with the depreciation plan (-) Depreciation write-offs for liquidated or sold assets Write-offs for impairment loss (-) 0 Reversal of impairment writeoffs 0 Net translation gain (loss) (+/- ) 0 Reclassified as fixed assets designated for sale. 0 Net carrying value on / 132

48 The most important intangible asset is the cost of the extension of the SAP system to a subsidiary Amica International, whose the carrying value as at amounted to 1,363,000 PLN (2011: 1,558,000 PLN). The remaining depreciation period for this asset is 7 years. The company charges its subsidiary with a fee for use of the configured SAP module. In its business the Company does not use intangible assets whose life cycle is undefined (see point regarding accounting principles). In addition to development expenditure recognized as an increase in intangible assets, in 2012 the Company incurred expenditure on research of 18,000 PLN (2011: 19,000 PLN), which was included in the profit and loss account under "general and administrative expenses" (see note 18). The Company presented data concerning the division of depreciation into the appropriate items on the profit and loss account, including for intangible assets and fixed assets (note on p. 4). As of intangible assets did not constitute collateral on payment of the Company's liabilities. In 2011 the balance of intangible assets constituting collateral on payment of the Company's liabilities was 0 PLN. At the end of 2012 the Company had no contractual liabilities in connection with the purchase of intangible assets. At the end of 2012 the Company had no similar contractual liabilities. In 2008 in positions of intangible assets the company recognised granted CO₂ emission allowances. These rights were granted to the Company in accordance with the Ordinance of the Council of Ministers of on the adoption of the National Allocation Plan for CO₂ Emission Allowances. In accordance with the Ordinance, the Company has obtained the average annual allocation of 11,261 units. The rate for carbon dioxide emissions determined on the basis of a separate Ordinance of the Council of Ministers of on the environmental fees amounted to 0.24 PLN. In accordance with the calculation of the value of the allowances, the Company recognised the position of intangible assets with a value of 10, PLN. The Company makes impairment write-downs of the above allowances in the period for which they were allocated (4 years). In 2012, the Company exercised its entitlement to resale its emission rights and sold its EUA emission rights, earning the revenue in the amount of 54,000 PLN. The Company acquired also the EUR rights for the amount of 8,000 PLN. (PLN) Earnings from the transactions amounted to 46,000 PLN. At the day of balance statement the value of issuance rights was as follows: the gross value of 10,810.56, amortization 10, , and the net value of 0 PLN. Meeting the requirements of Resolution No. 6/05 of the Accounting Standards Committee dated on the adoption of a position regarding "right to emit pollutants", the Company recognises the emissions allowances on the opposite side as accruals and parallel to the depreciation write-downs, it re-books the settlements to other operating income. 48 / 132

49 4. Property, plant and equipment Land Buildings and structures Machines and equipment Means of transport Other tangible assets: Property, plant and equipment in production as at Gross balance Accumulated depreciation and adjustment write-offs Net balance Reclassified as fixed assets designated for sale. 0 0 Adjusted net balance Total as at Gross balance Accumulated depreciation and adjustment write-offs Net balance Reclassified as fixed assets designated for sale. Adjusted net balance / 132

50 structures Machines and equipment Means of transport Other tangible assets: and equipment in production for the period from 1.01 to Net carrying value on Acquisition through merging economic entities Increases (purchase, production, leasing) Sale of subsidiary (-) Decreases (sales, liquidation, adoption as property, plant and equipment) (-) Other changes (reclassification, transfer, etc.) 9 9 Revaluation to fair value (+/-) Depreciation in accordance with the depreciation plan (-) Depreciation write-offs for liquidated or sold assets Write-offs for impairment loss (-) Reversal of impairment write-offs Net translation gain (loss) (+/-) Reclassified as fixed assets designated for sale. Net carrying value on / 132

51 for the period from to Net carrying value on Acquisition through merging economic entities 0 Increases (purchase, production, leasing) Sale of subsidiary (-) 0 Decreases (sales, liquidation, adoption as property, plant and equipment) (-) Other changes (reclassification, transfer, etc.) 0 Revaluation to fair value (+/-) 0 Depreciation in accordance with the depreciation plan (-) Depreciation write-offs for liquidated or sold assets Write-offs for impairment loss (-) 0 Reversal of impairment write-offs 0 Net translation gain (loss) (+/-) 0 Reclassified as fixed assets designated for sale. 0 Net carrying value on / 132

52 Depreciation of intangible assets and property, plant and equipment was included in the following items of the profit and loss account: from to from to Own sales costs General administrative expenses Sales costs Purchase price (production costs) of other assets Others Total depreciation and amortization In 2012 the Company did not establish any impairment loss write offs (2011: 0 PLN). On property, plant and equipment with a balance of 83,742,000 PLN (2011: 60,523,000 PLN) secured the Company's liabilities. Information on liability security is presented in note 7. In 2012 the Company entered into an investment agreements concerning the extension of the Cooker Factory. The contractual amounts of commitments as of the balance sheet date amount to 1,400,000 PLN and 700,000 EUR. 5. Assets in leasing Financial leasing As a lessee, the Company uses property, plant and equipment on the basis of a financial lease. 52 / 132

53 The balance of the assets which are subject to financial leases is as follows: Land Buildings and structures Machines and equipment Means of transport Other tangible assets: Property, plant and equipment in production Total as at Gross balance Accumulated depreciation and adjustment write-offs Net balance as at Gross balance Accumulated depreciation and adjustment write-offs Net balance Future minimum lease payments still to be paid as of the balance day total: 53 / 132

54 Payments from financial leasing agreements paid during the period: up to 1 year from 1 to 5 years more than 5 years total as at Future minimum lease payments Financial costs (-) Current value of future minimum lease payments as at Future minimum lease payments Financial costs (-) Current value of future minimum lease payments / 132

55 The most important financial leases is a group of computer equipment leasing agreements (including primarily PCs and servers) with a total initial value of the leased items of 16,686,000 PLN (2011: 12,386,000 PLN). Computer equipment leasing agreements are concluded in most cases for a period of 4 years, after which the Company has the right to purchase the leased property. The Company will only make use of this entitlement within the scope of selected fixed assets. Interest on the leasing instalments is charged at a variable rate calculated based on WIBOR. Repayment of the leasing instalments is secured by blank bills of exchange. In the period covered by these financial statements no cost of contingent lease fees was recognised. Operating lease As a lessee, the Company does not use property, plant and equipment on the basis of an operating lease. 6. Investment property The investment property includes hotels and sports facilities related to the hotel and sports complex in Wronki at ul. Leśna, sports fields and the property in Wieluń acquired at the bailiff's auction. Changes in the balance during the reporting period were as follows: from to from to Opening balance Acquisition through merging economic entities Acquisition of real estate 3810 Activation of later investment Sale of subsidiary (-) Sale of real estate (-) Other changes (reclassification, transfer, etc.) (+/-) Depreciation Net translation gain (loss) (+/-) Closing balance During the reporting period the Company achieved rent revenue and recognised the following direct costs of maintaining real estate in the separate profit and loss account: from to from to Revenue from rent Direct operating costs affecting: Property bringing in revenue from rent Property which in the given period did not bring in rental income Direct operating costs Investment properties are rented out based on agreements signed for an indefinite period. In 2012, the Company did not enter into any investment agreements under which it would be obliged to purchase property in the future. At the end of 2011 the Company had no similar contractual liabilities. 55 / 132

56 7. Financial assets and liabilities Categories of financial asset and liabilities categories The value of financial assets presented in the balance refers to the following categories of financial instruments defined in IAS 39: 1 loans and receivables (L&R) 5 - financial assets available for sale (AAS) 2 - financial assets at fair value through profit or loss - held for trading (AFV-T) 6 - Hedging derivatives (HD) 3 - financial assets at fair value through profit or loss - initially categorised as evaluated at fair value (AFV-F) 7 - assets outside the scope of IAS 39 (non-ias 39) 4 - investments held to maturity (IHD) 56 / 132

57 *Categories of financial instruments according to IAS 39 (PiN) (AWG-O) (AWG-W) (IUTW) (ADS) (IPZ) as at Fixed assets: Receivables and loans Derivative financial instruments Other long-term financial assets Current assets: 0 Receivables from deliveries and services and other receivables Loans Derivative financial instruments Other short-term financial assets 0 Cash and equivalents (outside IAS39) Total Total financial asset category / 132

58 (PiN) (AWG-O) (AWG-W) (IUTW) (ADS) (IPZ) as at Fixed assets: Receivables and loans Derivative financial instruments 0 Other long-term financial assets Current assets: 0 Receivables from deliveries and services and other receivables Loans Derivative financial instruments Other short-term financial assets 0 Cash and equivalents (outside IAS39) Total financial asset category The value of financial liabilities presented in the consolidated balance refers to the following categories of financial instruments defined in IAS 39: 1 - financial liabilities at fair value through profit or loss - held for trading (LFV-T) 4 - Hedging derivatives (HD) 2 - financial liabilities at fair value through profit or loss - initially categorised as 5 - liabilities outside the scope of IAS 39 (non-ias evaluated at fair value (LFV-F) 39) 3 - financial liabilities valued at amortised cost (LAC) 58 / 132

59 *Categories of financial instruments according to IAS 39 (ZWG-O) (ZWG-W) (ZZK) (IPZ) (outside IAS39) Total as at Long term liabilities: Credit, loans and other debt instruments Financial leasing Derivative financial instruments 0 Other liabilities 0 Short term liabilities: 0 Liabilities from deliveries and services and other liabilities Credit, loans and other debt instruments Financial leasing Derivative financial instruments Liabilities reclassified as items for sale 0 Total financial liabilities category / 132

60 *Categories of financial instruments according to IAS 39 (ZWG-O) (ZWG-W) ZZK (IPZ) (outside IAS39) Total as at Long term liabilities: Credit, loans and other debt instruments Financial leasing Derivative financial instruments Other liabilities 0 Short term liabilities: 0 Liabilities from deliveries and services and other liabilities Credit, loans and other debt instruments Financial leasing Derivative financial instruments Liabilities reclassified as items for sale 0 Total financial liabilities category / 132

61 Receivables and loans For purposes of balance sheet presentation, the Company differentiates receivables from loans (IFRS 7.6). In the long-term section, receivable and loans are presented as a single item in the balance. In the short-term section, in accordance with the requirements of IAS 1, the Company presents receivables from deliveries and services and other receivables separately. The balance sheet items from the receivables and loans class are shown on the table below. Disclosures relating to receivables are included in note Fixed assets: receivables Loans , ,00 Receivables and long-term loans , ,00 Current assets: Receivables from deliveries and services and other receivables Loans Short-term receivables and loans Receivables and loans, including: Receivables (note 10) Loans (note 7) Loans granted are recognised according to the depreciated cost based on the effective interest rate. The balance of loans considered as a reasonable approximation of the fair value (see note 7 in the section on fair value). As at loans granted in PLN with a carrying value of 8,004,000 PLN bore interest at an interest rate based on the WIBOR3M or WIBORM1M indicator increased by 1.5% mark-up. The Company also provided an interest free loan to its subsidiary Amica Commerce (12,451,000 PLN) as the conversion of accounts receivable to the loan. This loan was recognised in the accounts at amortized cost (9,119,000 PLN) and the difference between nominal value and the value of adjusted purchase price increased value of the shares in the Company held by Amica Wronki. The value of the loan on the balance date amounted to 7,966,000 PLN. In addition, the Company granted an interest-free loan to its subsidiary, Hotel Olympic Sp. z o o in the amount of 3,400,000 PLN. This loan has been recognised in the accounts at amortized cost in the amount of 2,672,000 PLN. The difference between the nominal value and the value of the adjusted purchase price of 728,000 PLN increased the value of the shares in the Hotel Olympic held by Amica Wronki SA. At the day of balance statement the value of the interest-free loan was 2,240,000 PLN. The repayment deadlines for the loans are between 2013 and The Company did not have loans in foreign currencies as of the balance sheet date. 61 / 132

62 Change in carrying amount of loans, including the impairment loss of their value, is as follows: Gross Value from to from to Opening balance Acquisition of economic entities Sum of loans granted during period Conversion of receivables into loans Interest calculated according to the effective rate Repayment of loans with interest (-) Disposal of subsidiaries (-) Other changes Gross closing value Impairment loss write-offs Opening balance Write-offs recognised as costs for the period Reversed write-offs recognised as revenue for the period (-) Write-offs utilised (-) Other changes Closing balance of write-offs due to impairment loss 0 0 Closing balance The Company did not perform any impairment loss write-offs on loans, as there was no reason to perform such action. Derivative financial instruments The Company uses derivative instruments to minimise the translation risk for the currencies in which some sales and purchase transactions are conducted. Most of the derivative instruments were designated by the Company as cash flow and fair value hedges in accordance with the requirements of IAS 39 (Derivative hedging instruments). The other derivative instruments, although from the economic side they safeguard the Group against currency translation risk, do not constitute formal hedges in the understanding of IAS 39, and are thus treated as instruments for trading (trade derivatives). 62 / 132

63 All derivative instruments are valued at their fair market value, established based on data from the market (exchange rates, interest rates) Fixed assets: Trade derivatives 0 0 Hedging derivatives 774 Long-term derivatives Current assets: Trade derivatives 0 0 Hedging derivatives Short-term derivatives Assets - derivatives Long term liabilities: Trade derivatives Hedging derivatives Long-term derivatives Short term liabilities: Trade derivatives Hedging derivatives Short-term derivatives Liabilities - derivatives / 132

64 Trade derivatives The individual classes of non-effective and trade derivatives are presented in the table below: As at the Company held no commercial instruments. Transaction nominal value in currency Balance of instruments* Realisation date as at (thousands) Financial assets Financial liabilities from to as at Total trade derivatives - CIRS (Currency Interest Rate Swap) Contracts EUR+CHF EUR, CHF * fair market value Total trade derivatives Effects of trade derivatives on the financial result are shown later in this note. Hedging derivatives The individual classes of cash flow hedging instruments are presented in the table below: 64 / 132

65 Balance of instruments* Realisation date as at Transaction nominal value in currency (thou.) Financial assets Financial liabilities from to EUR forward contracts CNY forward contracts USD forward contracts CZK forward contracts GBP forward contracts IRS (Interest Rate Swap) Contracts Total hedging derivatives as at EUR forward contracts EUR Options USD forward contracts GBP forward contracts IRS (Interest Rate Swap) Contracts Total hedging derivatives * fair market value The Company expects that all the planned transactions for which the hedge accounting is applied will be conducted. 65 / 132

66 In 2012, the Company recognised in other total revenue a profit of 19,919,000 PLN net (2011: a loss of 4,341,000 PLN) from the revaluation of cash flow and fair value hedging instruments. Revaluation reserve capital from the revaluation of cash flow hedging instruments on stood at - 5,961,000 PLN net (2011: 13,958,000 PLN). Revaluation capital from the revaluation of cash flow hedging instruments which was transferred to the financial result due to the realisation of the hedged item was recognised in the following items in the profit and loss account: from to from to Revenue Revenue from sales Other operating revenue Financial revenue Total revenue Costs Operating costs Other operating costs Financial costs Total cost Effect on financial result In addition, in 2012 the Company recognised a sum of 2,708,000 PLN (2011: loss of 2,219,000 PLN) in the profit and loss account for inefficiency in cash flow and fair value hedges. Other financial assets The Company presents the following investments within other financial assets: Short-term assets Long-term assets Investments held to maturity Treasury debt securities Commercial debt securities Other Investments held to maturity Financial assets available for sale Shares in stock-exchange listed companies Stock, shares in non-stock-exchange listed companies Debt securities Other Financial assets available for sale Financial assets at fair value through profit or loss Shares in stock-exchange listed companies Debt securities Investment fund units Other Financial assets at fair value through profit or loss Other financial assets, total / 132

67 Assets available for sale The are no public companies in the Company's portfolio of shares. The Company evaluates stocks and shares in companies not listed on stock exchange at the purchase price due the lack of possibility to reliably estimate their fair market value. The merger of Amica Wronki and Sidegrove (the merged company) was registered by a Polish registry court on 28 August Following this decision, Amica Wronki included net assets of Sidegrove into the ledgers of Amica Wronki, and eliminated any and all transactions between merging companies. The table below presents the results of this operations for Amica Wronki: Balance sheet item Value in thousands PLN Assets Long-term financial assets shares in affiliated companies Other assets 54 Liabilities Supplementary capital Financial result for the year excluding goodwill Goodwill is charged to profit or loss for the current year Liabilities Credit, loans and other debt instruments The value of credit, loans and other debt instruments included in this financial statement is presented in the table below: Current Liabilities Long term liabilities Financial liabilities valued at amortised cost Credit in credit account Current account overdraft Short-term loans Long-term loans 0 Debt securities Credit, loans and other debt instruments in total Financial liabilities valued at amortised cost The Company does not include any instruments from the credit and loans class as financial instruments to be valued as a fair market value by the profit and loss account. All credit, bank loans and other debt instruments are recognised according to the depreciated cost based on the effective interest rate. The fair value of credit, loans and other debt instruments included in the financial statement is presented in note 7. Information regarding the type and scope of risk to which the Company is exposed from the credit, loans and other debt instruments taken out is presented in the table below (see also note 24 concerning risk): 67 / 132

68 Liabilities from bank loans as at Amica Wronki SA Item BANK CONTRACTED AMOUNT AMOUNT ON THE DAY CREDIT REPAYMENT DEADLINE INTEREST HEDGING Type of hedging TYPE OF CREDIT 1 KREDYT BANK SA PLN PLN WIBOR O/N + bank's mark-up registered pledge on goods inventories, cession of liabilities receivables inventory of goods workingcapital credit 2 BRE BANK SA PLN 0,00 PLN WIBOR O/N + bank's mark-up cession of liabilities receivables workingcapital credit 3 Deutsche Bank Polska SA PLN 0,00 PLN WIBOR O/N + bank's mark-up registered pledge on inventories inventory of materials workingcapital credit 4 BOŚ S.A PLN PLN (single lump sum) WIBOR 3M + BANK'S MARKUP Mortgage fixed assets workingcapital credit 5 BOŚ S.A PLN PLN quarterly on (from to final instalment ) WIBOR 3M + BANK'S MARKUP registered pledge on fixed assets fixed assets investment credit 6 BOŚ S.A PLN PLN quarterly at (from to final instalment ) WIBOR 3M + BANK'S MARKUP registered pledge on fixed assets fixed assets investment credit 7 BOŚ S.A PLN 0,00 PLN WIBOR 1 M + BANK'S MARKUP cession of liabilities receivables workingcapital credit 8 Bank Millennium S.A PLN 0,00 PLN WIBOR 1M + BANK'S MARKUP registered pledge on inventory of goods and workingcapital 68 / 132

69 goods and materials materials credit 9 Bank Millennium S.A PLN PLN quarterly at (from to last instalment ) WIBOR 3M + BANK'S MARKUP registered pledge on fixed assets fixed assets investment credit 10 Bank Millennium S.A PLN PLN quarterly at (from to last instalment ) WIBOR 3M + BANK'S MARKUP registered pledge on fixed assets fixed assets investment credit 11 SGB Bank S.A PLN PLN WIBOR 3 M + BANK'S MARKUP registered pledge on inventories of finished goods, cession of liabilities Finished products receivables workingcapital credit HSBC Bank Polska S.A. Bank Handlowy w Warszawie S.A PLN 0,00 PLN PLN 0,00 PLN Total credits PLN PLN WIBOR 1M + BANK'S MARKUP WIBOR 1M + BANK'S MARKUP registered pledge on inventories of materials, registered pledge on inventories inventory of materials inventory of materials workingcapital credit workingcapital credit 69 / 132

70 Financial liabilities to be measured as a fair market value by the profit and loss account On balance date, the Company had no financial liabilities measured as a fair market value by the profit and loss account. Collateral on payment of liabilities The Company's liabilities from credit, loans and other debt instruments and from financial leasing are covered by payment collateral. On the following Company assets (at carrying value) constituted collateral on payment of liabilities: Mortgage or pledge on fixed assets Cession of liabilities Appropriation of current assets Total securities on the Group's assets In addition to these forms of collateral, loan agreements impose additional requirements for the Company that must be met for a period of credit, such as maintaining certain financial ratios at a given level such as for example, debt / EBITDA ratio. Information on the fair value of financial instruments The Company did not establish a fair value of stocks and shares of stock exchange unlisted companies due to the difficulty in reliably assessing their fair value. Stocks and shares in stock exchange unlisted companies included in the category of financial assets available for sale are valued at purchase price taking impairment loss into consideration (see note 7) The fair value is defined as the sum for which a given asset could be exchanged, and liability executed, under market conditions between well informed, interested and unconnected parties. In the case of financial instruments for which there exists an active market, their fair value is established based on parameters from the active market (sale and purchase prices). In the case of financial instruments for which there is no active market, the fair price is established according to evaluation techniques, with initial data of the model used at a maximum level being variable and coming from active markets (exchange rates, interest rates, etc.). With reference to the assets and financial liabilities which, in accordance with the Company's accounting policy, have been included at fair value, additional information on the valuation method and levels of fair value is presented below. The Company did not assess the fair value of receivables and liabilities from deliveries and services - their balance is considered by the Company to be a reasonable approximation of fair value. 70 / 132

71 Additional information on methods of valuing financial instruments included on the balance sheet at fair value The table below presents the financial assets and liabilities measured by the Company at fair value, categorised at a defined level in the fair value hierarchy: level 1 - listed prices (unadjusted) from active markets for identical assets and liabilities, level 2 - initial data for valuation of assets and liabilities, other than prices noted as part of level 1, observable based on variables from active markets, level 3 - initial data for valuation of assets and liabilities, not established based on variables from active markets. Class of financial instrument Level 1 Level 2 Level 3 Total fair market value as at Assets: Shares in stock-exchange listed companies 0 Stock, shares in companies not listed on stock exchange* 0 Trade derivatives 0 0 Hedging derivatives Debt securities at fair value 0 Total assets Liabilities: Trade derivatives (-) 0 0 Hedging derivatives (-) Loans at fair value (-) 0 Liabilities, total (-) Net fair value as at Assets: Shares in stock-exchange listed companies 0 Stock, shares in companies not listed on stock exchange* 0 Trade derivatives 0 0 Hedging derivatives Debt securities at fair value 0 Total assets Liabilities: Trade derivatives (-) Hedging derivatives (-) Loans at fair value (-) 0 Liabilities, total (-) Net fair value / 132

72 * This item does not include stocks and shares valued at purchase price, as reliable determination of fair value is not possible. During the reporting period there were no significant transfers between levels 1 and 2 of the fair value of instruments. The derivative instruments displayed in the table above are currency, interest and currency/interest instruments valued using a model with market parameters, i.e. currency exchange rates and interest rates (level 2). Reclassification The Company did not reclassify any financial assets which would cause a change in the principles for valuing these assets between the fair value and the purchase price or according to the depreciated cost method. Exclusion from the balance sheet On the Company did not possess any financial assets whose transfer did not qualify for exclusion from the balance sheet. 8. Assets and reserves for deferred tax Assets for deferred income tax affected the financial statement as follows: Opening balance: Deferred income tax assets Deferred income tax reserve Deferred tax per opening balance Changes in the period affecting: Profit and loss account (+/-) Other total revenue (+/-) Settlement of mergers of economic entities Others (including net translation gain (loss) ) Deferred tax per opening balance, including: Deferred income tax assets Deferred income tax reserve / 132

73 Assets and reserves from deferred income tax: Change: From transient differences Opening balance profit and loss account other comprehensive income settlement of mergers Closing balance as at Assets: Intangible Fixed Assets 0 Property, plant and equipment Investment property 0 Derivative financial instruments Inventory Receivables from provision of deliveries and services Construction contracts 0 Other assets Liabilities: 0 Liabilities from employee benefits Reserves for employee benefits Other reserves Derivative financial instruments Liabilities from deliveries and services 0 0 Credit, loans and other debt instruments Other liabilities 0 0 Others: 0 0 Unsettled tax losses 0 0 Total as at Assets: Intangible Fixed Assets 0 0 Property, plant and equipment Investment property Derivative financial instruments Inventory Receivables from provision of deliveries and services Construction contracts Other assets Liabilities: Liabilities from employee benefits Reserves for employee benefits Other reserves Derivative financial instruments Liabilities from deliveries and services Credit, loans and other debt instruments Other liabilities Others: Unsettled tax losses Total The company established assets and tax reserves for all currency translation losses and gains. On the balance statement date the company did not have any unsettled tax losses (2011: 0 PLN). 73 / 132

74 Income tax with reference to each item of other comprehensive income is presented as follows: from to from to Gross Tax Net Gross Tax Net Other total revenue: Revaluation of fixed assets Financial assets available for sale: profit (loss) recognised during the period as other comprehensive income sums carried over to the financial result 0 0 Cash flow hedging instruments profit (loss) recognised during the period as other comprehensive income sums carried over to the financial result sums recognised in the initial value of hedged items 0 0 Currency translation differences from valuation of companies operating abroad 0 0 Currency translation differences transferred to the financial result - disposal of foreign subsidiaries 0 0 Share in total other income of companies evaluated by the equity method 0 0 Total / 132

75 9. Inventory The following inventory items are recognised in the company's financial statement: Materials Semi-finished products and production in progress Finished products Goods Total balance of inventory Change in the inventory impairment loss as at Creation Reversal As at Materials Semi-finished products and production in progress 0 Finished products Goods The carrying value of inventory write-downs together As at Creation Reversal as at Materials Semi-finished products and production in progress 0 Finished products Goods The carrying value of inventory write-downs together Change in inventory impairment losses (write-downs on inventory, which is difficult to sell and write-downs on inventory to be sold below the purchase price or manufacture cost), increased in 2012 value of operating revenue of the profit and loss account to the sum of 4,051,000 PLN. In 2011, the change in wrote-down on inventory difficult to sell or to be sold below the purchase price or manufacture cost added to other operating income to 688,000 PLN. On inventory with a balance of 78,368,000 PLN (2011: 99,727,000 PLN) secured the Company's liabilities. 75 / 132

76 10. Receivables from deliveries and services and other receivables. Trade receivables and other receivables recognised by the Company under the class of receivables and loans are as follows: Long-term receivables: Sums received (deposits) from construction service contracts Other deposits Other receivables Allowance for uncollectible accounts (-) Long-term receivables 0 0 Short-term receivables: Financial assets (IAS 39): Receivables from provision of deliveries and services Allowances for uncollectible accounts from deliveries and services (-) Net receivables from provision of deliveries and services Receivables from disposal of fixed assets Sums received (deposits) from construction service contracts Other deposits Other receivables Allowance for other uncollectible financial accounts (-) Other net financial receivables Financial receivables Non-financial assets (other than IAS 39): Receivables from tax and other benefits Receivables from income tax Prepayments and advances Other non-financial receivables Allowances for non-financial uncollectible accounts (-) Non-financial receivables Short-term receivables, total The balance of receivables from deliveries and services is considered by the Company as a reasonable approximation of the fair value (see note 7). 76 / 132

77 The Company performed an evaluation of receivables with regard to their depreciation in accordance with the applied accounting policy (see sub point c in the point "Basis for preparation and accounting principles"). Allowance for uncollectible accounts, which in 2012 were charged to other operating costs in the profit and loss account stood at: with regard to long-term receivables - 0 PLN (2011: 0 PLN), with regard to short-term financial receivables 1,017,000 PLN (2011: 2,120,000 PLN). Changes in allowance for uncollectible accounts during the period covered by the financial statement are shown in the tables below. Allowance for short-term financial uncollectible accounts (i.e. from deliveries and services and other financial receivables): od do od do Opening balance Write-offs recognised as costs for the period Reversed write-offs recognised as revenue for the period (-) Write-offs utilised (-) Allowance related to acquired receivables, created in correspondence with the balance sheet accounts Other changes (net translation gain (loss) ) Closing balance Further analysis of the credit risk on receivables, including an analysis of the age of receivables not covered by an impairment write-off, are shown in note 24. On inventory with a balance of Company's liabilities. 22,439,000 PLN (2011: 54,091,000 PLN) secured the In order to improve the liquidity ratio, the Company uses full factoring, and the value of receivables sold on the balance day) is 81,516, 000 PLN. (2011: 72,797, 000 PLN). The value of receivables sold on was excluded from the assets, while some of these receivables i.e. 8,124,000 PLN (2011: 10,697,000 PLN) relating to factoring party's own contribution remains in the balance sheet. Total expenditure from factoring of clients and suppliers (including interest and commissions) amounted to 5,529,000 PLN (2011: 3,578,000 PLN). 77 / 132

78 11. Cash and equivalents Cash in bank in PLN accounts Cash in bank in foreign currency accounts Cash in hand Short-term deposits Others Cash and equivalents (total) On cash with a balance of 10,000 PLN (2011: 6,631,000 PLN) was limited in its disposal due to fixed term deposits. For the purpose of drawing up the cash flow account the company classifies cash in the manner adopted for presentation in the balance sheet. 12. Fixed assets designated for sale and discontinued activities On balance day the Company did not own any business which would be required to be shown as discontinued This is also the reason why the result for discontinued activities is not shown in the account. Assets and liabilities included in the group held for sale reported in the financial statements for the previous year have been presented in the Company's assets and liabilities, as they did not meet the definition of components for sale as of the balance sheet date. 13. Shareholders' Equity Stated capital On the Company's stated capital stood at 15,551,000 PLN (2011: 15,551,000 PLN) consisting of 7,775,273 shares (2011: 7,775,273) with a nominal value of 2 PLN each. All share were paid in full. A series shares in the Company have been issued, which are registered preference shares, each share is entitled to 2 (two) votes, as well as B series shares which are ordinary bearer shares. A series and B series shares participate in the dividend on equal principles. In relation to certain preference A series shares, as mentioned above, this has expired. Changes in the number of shares during the period covered by this financial statement result from the following transactions with the owners: from to from to Shares issued and paid in full: Number of shares at start of period Share issue in connection with realising an option (share payment scheme) Issuance of shares Share redemption (-) Number of shares at end of period including own shares / 132

79 At the balance sheet date the Company held treasury shares acquired under the share redemption program in the amount of 137,803 units (2011: 62,463 units). Information on the shares redemption programme is included in the Note no Share payment schemes No motivation schemes have been implemented in the Company which involve employees acquiring options exchangeable for Company shares Revaluation of equity capital recognised on the balance sheet, which existed or arose during the hyperinflation period IAS29,24 requires entities which have conducted business during periods of hyperinflation ( in Poland) to convert components of equity capital using the general index of prices commencing from the start of the period of hyperinflation, or from the moment when this capital was introduced (if it was introduced later). An analysis of the periods and reasons for the emergence of the equity capital allows the following conclusions to be made. The item of equity capital which is subject to the regulations of IAS29.24 is part of the initial capital which arose from: -the transformation of foundation funds of the state company into the initial capital of a singlepartner limited Treasury company, formed on (bought up the following year by private capital and then transformed into a public limited company). The amount of the foundation fund of the then company, allowing for the currency devaluation, was 490,000 PLN. After recalculating using the price index for the period this value grows to a total of 2,409,000 PLN. -the increase in the value of initial capital in the limited company, registered on , to a sum of 4,150,000 PLN. After recalculating using the price index for the second half of 1996 this value grew to a total of 4,563,000 PLN. In total, the estimated value of the adjustment increasing the value of the initial capital due to revaluation of equity capital in accordance with IAS29.24 would be 2,332,000 PLN, reducing the opposite side profit/loss for previous years. Management considers that including the above mentioned correction in the financial statement could be misleading for users of the report, particularly in a situation where the correction affects events from over a decade ago, and the financial results from that era would be divided before the date when the present report was drawn up. For this reason, Management has decided not to include the hyperinflation correction in the explanatory notes to the financial statement. The remaining equity capital components either resulted from profits kept over or were introduced after the hyper-inflationary period. 79 / 132

80 14. Employee benefits Cost of employee benefits from to from to Salary costs Cost of Social Security contributions Cost of share payment schemes Costs of future benefits (reserves for retirement bonuses) Other (OSH, trainings, Company's social benefit fund etc.) Total cost of employee benefits No motivation schemes have been implemented in the Company which would involve employees being paid in shares in the Company Liabilities and reserves from employee benefits Total liabilities and reserves from employee benefits shown on the balance sheet include: Short-term employee benefits: Short-term liabilities and reserves Liabilities from remuneration Liabilities from social security Reserves for unused holidays Long-term liabilities and reserves Short-term employee benefits Other long-term employee benefits Reserves for anniversary awards Reserves for retirement bonuses Other reserves Other long-term employee benefits Total liabilities and reserves from employee benefits / 132

81 The following items affected the state of other long-term employee benefits: Reserves for other long-term employee benefits retirement anniversary awards bonuses, total for the period from 1.01 to Opening balance Changes recognised in profit and loss account Costs of present and past employment Interest costs Actuary profits (-) and losses (+) Changes not affecting the profit and loss account Benefits paid (-) Increase through merging economic entities Other changes (net translation gain (loss) ) Current reserve value on for the period from to Opening balance Changes recognised in profit and loss account Costs of present and past employment Interest costs Actuary profits (-) and losses (+) Changes not affecting the profit and loss account Benefits paid (-) Increase through merging economic entities Other changes (net translation gain (loss) ) Current reserve value as at Current reserve value was recognised based on the Company's internal evaluation. The following assumptions were made in evaluating benefits (see also the point concerning uncertainty of estimates - sub point c of "Basis for preparation and accounting principles"): Discount rate 4% 4% Predicted salary increase factor 2% 1% 81 / 132

82 15. Other reserves The value of reserves included in the financial statement and changes to these during specific periods was as follows: Short-term reserves Long-term reserves Reserves for bonuses Reserves for warranty repairs Reserves for salaries and holiday leave Reserves for retirement bonuses Other reserves Total other reserves bonuses warranty repairs Reserves for: Remuneration and holidays retirement bonuses, other titles total for the period from 1.01 to Opening balance Increase in reserves recognised as costs for the period Dissolution of reserves 0 recognised as revenue for the period (-) Use of reserves (-) Increase through merging 0 economic entities Other changes (net 0 translation gain (loss) ) Reserves as of for the period from to Opening balance Increase in reserves recognised as costs for the period Dissolution of reserves recognised as revenue for the period (-) Use of reserves (-) Increase through merging 0 economic entities Other changes (net 0 translation gain (loss) ) Reserves as at / 132

83 The largest reserve by value is that for warranty repair costs. This reserve, totalling 15,507,000 PLN (2011: 14,967,000 PLN), was included by the Company in the financial statement for 2012 because of the Company's obligation to cover the cost of repairs of products under guarantee for two years after their sale date. The reserve is updated monthly, as a result of changes to the number of products sold under warranty, among other factors. 16. Liabilities from deliveries and services and other liabilities. The Company has no long-term liabilities from supplies and services or other long-term liabilities. Short term liabilities: Financial liabilities (IAS 39): Liabilities from deliveries and services Liabilities from the purchase of fixed assets Other financial liabilities Financial liabilities Non-financial liabilities (other than IAS 39): Liabilities form tax and other benefits Prepayments and advances received for deliveries 5 5 Liabilities from remuneration Other non-financial liabilities Non-financial liabilities Short-term liabilities, total The balance of liabilities from deliveries and services is considered by the Company as a reasonable approximation of the fair value (see note 7). 17. Deferred charges and accruals Short-term accruals Long-term accruals Assets - deferred charges and accruals Rent 0 0 Other costs paid in advance Assets - deferred charges and accruals, total Liabilities - deferred charges and accruals Subsidies received Revenue for future periods Other deferred charges and accruals 3 Liabilities - deferred charges and accruals, total The Company obtained a subsidy from the Ministry of Economy and Labour to finance the purchase of fixed and intangible assets. The benefit from the subsidy is included in accordance with the depreciation period of 83 / 132

84 the assets subject to the subsidy. In 2012 the Company recognised operating revenue of 439,000 PLN for this (2011: 854,000 PLN). 18. Operating revenue and costs Costs by type 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 producing goods sold Internal cost of goods and materials sold Other remaining operating revenue Other operating revenue bonuses received on purchases subsidies to fixed assets reimbursement of international VAT payments compensation received income from additional warranty dissolved reserves surplus on inventory leasing of investments other items / 132

85 18.3. Other operating costs Other operating costs replacement of faulty equipment shortages and damage grants compensation for former employees inventory scrapping penalties and fines registered receivables subsidies recognised as revenue of previous periods - depreciation and tax on fixed property and longterm investments costs associated with closing the production of refrigerators and washing machines other operating costs The reason for increase in the costs associated with scrapping of inventory was the implemented project aimed to reduce indexes characterized by low production volume and low profitability. One of the results was a structured process of phasing out of the indexes from production and final scrapping of materials, resale of stock or transfer thereof to the inventory of spare parts. The impact of inventory scrapping costs on the financial result in 2012 was to a great extent offset by the reversal of provisions created in previous years. The positive effect of this year's result achieved by the Company due to write-offs of provisions is noticeable in other operating income - revaluation of non-financial assets. 85 / 132

86 19. Financial revenue and costs Financial revenue from to from to Interest revenue regarding financial instruments valued by their fair market price by the financial result Cash and equivalents (investments) Loans and receivables Debt securities held to maturity Interest revenue regarding financial instruments valued by their fair market price by the financial result Profits from the evaluation of financial instruments measured as a fair market value by the profit and loss account: Trade derivatives Hedging derivatives Derivative instruments closed as ineffective Shares in stock-exchange listed companies Debt securities Investment fund units Profits from the evaluation of financial instruments measured as a fair market value by the profit and loss account: Currency translation gains (losses) (+/-): Cash and equivalents Loans and receivables Financial liabilities valued at amortised cost Currency translation gains (losses) (+/-) Profit on the sale of financial assets held for sale Dividends on financial assets available for sale Reversal of allowance for uncollectible accounts and loans Reversal of impairment write-offs on the value of investments held to maturity Interest on financial assets covered by impairment write-off Other financial revenue Total financial revenue The Company does not have any financial assets or liabilities from the category initially categorised as at fair value through financial result. Profits and losses shown from the evaluation and settlement of financial instruments measured as a fair market value by the profit and loss account refer entirely to financial instruments allocated for trading. Figures for the year 2012 presented in this table differ from the financial income included in the statement of comprehensive income by the amount of 5,820,000 PLN i.e. changes in valuation and exercise of hedging financial instruments measured at fair value. In the statement of comprehensive income, these figures have an impact on the balance of other financial costs. 86 / 132

87 19.2. Financial costs from to from to Interest costs regarding financial instruments not valued by their fair market price by the financial result Liabilities from financial leasing agreements Credit in credit account Current account overdraft Loans Debt securities Interest from factoring receivables Liabilities from deliveries and services and other liabilities Interest costs regarding financial instruments not valued by their fair market price by the financial result Losses from the evaluation and realisation of financial instruments measured as a fair market value by the profit and loss account Trade derivatives Hedging derivatives Derivative instruments closed as ineffective Shares in stock-exchange listed companies Debt securities Investment fund units Losses from the evaluation and realisation of financial instruments measured as a fair market value by the profit and loss account Currency translation gains (losses) (+/-): Cash and equivalents Loans and receivables Financial liabilities valued at amortised cost Currency translation gains (losses) (+/-) Losses from the sale of shares in subsidiaries 0 Allowance for uncollectible accounts and loans Impairment write-offs on the value of investments held to maturity Impairment write-offs on the value of financial assets available for sale Other financial costs Total financial costs The evaluation and settlement of derivatives mainly affects the Company's operating revenue and costs, which is shown in note 7, in the sub point referring to hedging instruments. 87 / 132

88 20. Income tax from to from to Current tax: Tax settlement for the reporting period Adjustment of the tax burden for previous periods -873 Current income tax Deferred tax: Appearance and reversal of transient differences Settlement of unused tax losses Deferred tax Comprehensive income tax Adjustments to income tax are calculated according to the 19% rate from the pre-tax result with income tax shown in the profit and loss account are as follows: from to from to Pre-tax result Tax rate used by the Company 0,19 0,19 Income tax at the rate of Income tax adjustments from: Differences reducing the tax base Differences increasing the tax base Use of previously unrecognised tax losses (-) Deduction of previous years' losses Exclusions Deduction from income Income tax base Current income tax Adjustment of the tax burden for previous periods (+-) -873 Change in deferred tax Income tax (current and deferred) Effective tax rate applied 20.54% 18.73% Information on income tax included in the report on comprehensive income is presented in note 8. The Company has no conditional liabilities regarding income tax, such as those connected with unsettled disputes with the fiscal authorities. 88 / 132

89 21. Profit per share and dividends paid Earnings per share (EPS) The profit per share is calculated by dividing the consolidated net profit for company shareholders by the weighted average of number of ordinary shares in a given period. When calculating both the basic and diluted profit (loss) per share, the Company uses the amount of net profit (loss) to the entity's shareholders, i.e. there is no diluting effect influencing the profit (loss) achieved. The Company did not note any transactions which would affect the dilution of capital. A calculation of the basic and diluted profit (loss) per share along with the adjustment of the average weighted diluted number of shares is presented below. from to from to Number of shares used as a denominator in the formula Weighted average number of shares Value of diluting factors 0 0 Diluted weighted average number of shares Continued activities Net profit (loss) on continued activities Basic earnings (loss) per share (PLN) Diluted earnings (loss) per share (PLN) Discontinued activities Net profit (loss) on discontinued activities Basic earnings (loss) per share (PLN) 0 0 Diluted earnings (loss) per share 0 0 (PLN) Continued and discontinued activities Net profit (loss) Basic earnings (loss) per share (PLN) Diluted earnings (loss) per share (PLN) Dividends In 2012, the did not pay dividends. 22. Transactions with affiliates and subsidiaries Entities affiliated with the Company include key management staff, subsidiaries subject to consolidation and subsidiaries excluded from consolidation, as well as other affiliated entities among which the Company includes entities controlled by the owners of the Company. The major entities affiliated with the Company include: 89 / 132

90 Consolidated subsidiaries: Amica International GmbH, Gram a/s, Hansa Rosja, Hansa Ukraina, Amica Commerce sro, Hotel Olympic Sp. z o.o., Inteco Business Solutions Sp. z o.o., Amica Far East Ltd, Nova Panorama Sp. z o.o, Nowe Centrum Sp. z o.o., Amica Marketing Sp. z o.o. Entities affiliated by key personnel: Stowarzyszenie Kultury Fizycznej (Physical Culture Association), Holding Wronki S.A., KKS Lech Poznań, Marcelin Management Sp. z o.o., Fundacja Amicis (Foundation Amicis), Invesco Sp. z o.o. Key staff of Amica Wronki (members of management) Unsettled accounts of receivables and liabilities are usually settled in cash or they are offset. Information on contingent liabilities regarding affiliates is presented in note Transactions with key management staff The Company considers members of the management board as key management staff. Apart from payment of salaries, the Company did not conduct any transactions with key staff members. Detailed information on the Company Management Board's remuneration is presented in note 28. The Company did not grant any loans to key staff members during the period covered by the financial statement Transactions with affiliates and subsidiaries associated by capital and by key personnel. Name of the subsidiary Revenues from core business Cost of core business Holding Wronki SA Inteco KKS LECH Poznań Hotel Olympic Sports club Amica International Amica Marketing Gram Domestic Amica Commerce sro Sidegrove Holdings Ltd Hansa Sp. z o.o AGD Media Sp. z o.o Ares Sp. z o.o Nova Panorama Sp. z o.o Nowe Centrum Sp. z o.o Amica Far East Invesco Sp. z o.o Marcelin Sp. z o.o Fundacja Amicis (Amicis Foundation) Total / 132

91 Name of the subsidiary Trade receivables Trade liabilities Holding Wronki SA Inteco KKS LECH Poznań AGDMedia Klub Sportowy Hotel Olympic Amica International Amica Marketing Gram Domestic Amica Commerce Amica Far East Sidegrove Holdings Ltd Hansa Sp. z o.o Ares Sp. z o.o Fundacja Amicis Marcelin Sp. z o.o Invesco Sp. z o.o Nova Panorama Sp. z o.o Nowe Centrum Sp. z o.o TOTAL There were no allowances for uncollectible accounts from subsidiaries and affiliates, and thus no costs for this item were included in the profit and loss account. In 2012 the Company granted subsidiaries loans totalling 6,251,000 PLN (2011: 5,169,000 PLN). In addition, the Company converted receivables from related parties to a loan in the amount of 6,677,000 PLN. The balance of loans to related parties at amounted to 18,219,000 PLN ( year: 11,014,000 PLN). The greatest loan by value is interest-free loan granted to a subsidiary Amica Commerce, which will be repaid in instalments (the last instalment in 2018). The value of the loan: 12,451,000 PLN; valuation of the loan as adjusted acquisition price at the balance date: 7,965,000 PLN. In addition to the values shown in the tables, the positions of liabilities to related parties also include advances received from Amica Marketing Sp. z o o to a total amount of 5,700,000 PLN. The loans were of short-term type, and interest calculated on these items was 68,000 PLN on the balance date. 91 / 132

92 23. Contingent assets and liabilities The value of contingent liabilities according to the situation at the end of individual periods (including those affecting affiliates) is as follows: To subsidiaries The contract of surety for Deutsche Bank S.A. for an amount of 500,000 EUR Corporate contract of surety for HSBC for the amount of 4,000,000 USD Corporate contract of surety for HSBC for the amount of 500,000 EUR Corporate contract of surety for HSBC for the amount of 4,000,000 USD Corporate contract of surety for HSBC for the amount of 500,000 EUR Surety on payment of liabilities Corporate contract of surety for Deutsche Bank for the amount of 300,000 EUR Corporate contract of surety for Deutsche Bank for the amount of 300,000 EUR To other entities: Surety on payment of liabilities Guarantees granted Guarantees granted on construction service contracts Corporate contract of surety for Deutsche Bank for the amount of 3,000,000 EUR The contract of a corporate surety for Deutsche Bank Polska S.A. for an amount of 500,000. EUR The contract of a corporate surety for Deutsche Bank Polska S.A. for an amount of 5,000,000. EUR Corporate contract of surety for Deutsche Bank for the amount of 3,000,000 EUR 92 / 132

93 Disputed and judicial matters Disputed and judicial matters involving the Tax Office Other contingent liabilities Reserves for used electrical and electronic equipment. 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 section 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 the cost of disposal 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 arising from these rules are implemented by the Company through an agreement signed with Biosystem Elektrorecykling S.A. As a result of executing this agreement, in 2012 the Company incurred costs related to arranging and the recovery of waste equipment in the amount of 2,831,000 PLN (in 2011 the amount was 3,161,000 PLN) 93 / 132

94 A presentation of the main proceedings being conducted by courts, the appropriate authority for arbitration or public administration bodies is outlined below. item Parties to the proceedings 1. vs Krzysztof Nowak Kalmex Hurt-Detal Date claim made / debts declared Subject of the litigation Document reference Value of the subject of litigation for payment IX GNC 845/10 148, PLN Court / Bailiff Regional Court in Poznań, 9th Commercial Division Amica Wronki joined the proceedings conducted jointly with other creditors to secure the inheritance and inventory. Bailiff appointed to draw up an inventory has drawn up a list, and the Law Office has requested a copy. As determined upon the court hearing the case files, the Court Bailiff by the virtue of the decision of appointed an expert to evaluate the debtor's real property at ul. Ostrowska in Poznan, Os. Oświecenia in Poznan and in Sieraków. The court investigating the case requested the Court Bailiff on to report on the performed activities. The dates of and were designated for taking the inventory at ul. Gostyńska and Głogowska. As of , the Bailiff has not prepared a list of inventory, whereas the Court sent a reminder to the bailiff. At the same time, there is pending a case for declaration of inheritance after the late K. Nowak by the City of Poznan. The first auction of the debtor's movable property (including home appliances and bicycles) has already been held - the bailiff managed to obtain the amount of PLN from the auction. On , an application was made to establish a second date for sale at Bailiff auction. Bailiff prepares a description and evaluation of the property. 2. Amica vs J&R Plastic sp. z o.o The case for payment IX GNc 650/11 119, PLN Regional Court in Poznań, 9th Commercial Division The lawsuit was filed on 8 July The court issued a payment order. The defendant objected to the order for payment. Law Office filed a reply to the objection. At the first hearing, the defendant consented to conduct the mediation and then withdrew the consent by an official letter. The hearing scheduled for 12 March 2012 the District Court for Wrocław Fabryczna, pursuant to the decision of , declared the defendant's bankruptcy by liquidation of the debtor's assets. Based on the consultation with the receiver, the law firm established that the liquidated assets would cover only the cost of the bankruptcy proceedings. 3. vs GERO Sp. z o.o. for payment I Nc 428/11 1,487, PLN Regional Court in Poznań, 1st Civil Division On 28 May 2010 an order was sent to redeem the bill. The debtor does not redeem the bill. Action was prepared. Lawsuit was filed and an order issued in writ proceedings. The debtor filed objections, but they were not yet delivered to the Law Office. Amica has decided not to establish a security, since it has a mortgage on the debtor's property. Gero filed a complaint against the court decision regarding the cancellation of the payment order. A copy of the complaint was received by the Registry on , the law firm filed a reply to the complaint. On , the Court of Appeal in Poznan issued a decision to dismiss the complaint against the defendants. The court set the date for the hearing as at On 27 September 2012, due to the on-going settlement talks, a mutual petition of all the parties was issued requesting that the proceedings be stayed. Pursuant to the decision of 1 October 2012, the Regional Court in Poznań stayed the proceedings. 13 September 2011 payment by Amica Wronki of the remuneration District Court in IX GC 745/11 909, PLN and for the delivered goods and the effectiveness of Poznań, 9th 94 / Kazimierz Kobierski vs.

95 March 2012 the representation filed by Amica on settling the claimed receivables against the liabilities of Amica Wronki as a compensation for improper performance of a contract by the Plaintiff. Commercial Division At the request of Amica filed against the payment order in the case IX GC 322/12, the actions were combined in order to be resolved jointly (pursuant to the ruling of 9 May 2012). Currently, both cases are conducted under the reference number IX GC 745/11. On 29 June 2012, another hearing was held. The date for the next court hearing was set for 12 and 19 June 2013, The case is pending. Association for Protection of Consumer and Citizen Rights vs. 09 May 2011 Recognition of the provisions of the legal notice regarding the prohibited contractual clauses published on Amica Wronki's website XVII AmC 1698/ District Court in Warsaw, 17th Division of the Competition and Consumer Protection Court. On 30 May 2012, the Competition and Consumer Protection Court issued a decision providing in accordance with the requests specified in the suit. On 10 July 2012, lodged an appeal against the aforesaid decision, challenging it in its entirety. The Court of Appeal has not yet scheduled the hearing. On 6 February 2013, the Court of Appeal in Warsaw dismissed the appeal of Amica. Application was submitted for the preparation and delivery of the judgement with the substantiation in writing, with the aim of possible revocation. No judgment was served with justification. vs. Vanta sp. z o.o. sp. k. 14 February 2013 The awsuit for the payment of compensation for damage in transportation of 302 washing machines. 109, PLN District Court in Poznań, 9th Commercial Division On 14 February 2013 petition for the payment of compensation was sent the Regional Court in Poznań. On April 2, 2013, a letter pertaining to the case was sent. Court hearing date was set for 13 June / 132

96 Composition and bankruptcy proceedings 1. Melgaz - A. Pogorzelczyk, A. Barłożek General Partnership for payment XII GUp 92/09 2,779, District Court in Szczecin 12th Commercial Division 18 May 2009 bankruptcy of the company was announced. As at 19 June 2009, AWSA claimed its receivables. Bankruptcy proceedings are under way. Amica Wronki S.A.'s liability was included in full (2,779, PLN) on the list of liabilities in category 4. In a ruling of 21 December 2009 the Judge Commissioner approved the list of creditors submitted by the receiver on 03 November In the present case, the final proposal for the distribution of the bankruptcy estate is being awaited. 2. Amica Wronki vs Domar Bydgoszcz S.A. in liquidation bankruptcy for payment V GUp 20/09, V GU 98/09 1,254, PLN - main duty, 55, PLN - interest Judge Commissioner Artur Fornal, District Court in Bydgoszcz, D15th Commercial Department, Gisela Eckert-Kurczewska, trustee in bankruptcy The claim was reported to the bankruptcy assets. The claim follows from invoices and corrective invoices, issued by a creditor to the bankrupt entity for sale and supply of home appliances. A debt is secured by a promissory note issued by "Domar-Bydgoszcz" in the amount of 1,292, PLN. Pending case * Criterion for referring cases to the court was the value of the dispute over 100,000 PLN. 96 / 132

97 24. Risk affecting financial instruments The Company is exposed to many risks connected with financial instruments. The Company's financial assets and liabilities as presented by category in note 7 "Risks to which the Company is exposed", are: market risks including currency translation risk and interest rate risk, credit risk and cash flow risk The following targets are priorities in the risk management process: hedging short- and long-term cash flows, stabilising the fluctuations in the Company's financial result, achieving the assumed financial forecasts by fulfilling the budget targets, achieving a rate of return on long-term investments and obtaining optimum sources for financing investment activities. The Company does not conclude transactions on financial markets for speculative purposes. On the economic side, the transactions are intended to hedge against certain risks. In addition, some of the derivative instruments were formally designated by the Company as security on the cash flow in accordance with the requirements of IAS 39 (Hedging derivatives). The influence of the applied hedge accounting on the items in the profit and loss account and other total revenue is presented in note 7. Below are presented the most significant risks to which the Company is exposed Market risk Analysis of sensitivity to currency translation risk The exposure of the Company to currency translation risk results from foreign sales and purchase transactions conducted mainly in EUR, CNY, GBP, CZK and USD. To minimise the currency translation risk, the Company concludes currency forward contracts. The Company monitors currency income and expenditure. The Company entered into forward contracts to sell and purchase currency in order to secure appropriate exchange rate. 97 / 132

98 The Group's financial assets and liabilities other than derivatives denominated in foreign currency, calculated as PLN at the closing rate for the balance day, are as follows: as at Financial assets (+): Loans 7 Receivables from deliveries and services and other financial receivables. Value expressed in currency (thousands): Note EUR USD GBP CZK DKK CNY RUB EXCHANGE RATES Value after conversion Derivative financial instruments 7 Other financial assets Cash and equivalents Financial liabilities (-): Credit, loans and other debt instruments 7 Financial leasing 5 Derivative financial instruments 7 Liabilities from deliveries and services and other financial liabilities. Total exposure to currency translation risk Value expressed in currency (thousands): Value after Note EUR USD GBP CZK DKK CNY RUB conversion EXCHANGE RATES as at Financial assets (+): Loans 7 Receivables from deliveries and / 132

99 services and other financial receivables. Derivative financial instruments 7 Other financial assets Cash and equivalents Financial liabilities (-): 11 Credit, loans and other debt instruments 7 Financial leasing 5 Derivative financial instruments 7 Liabilities from deliveries and services and other financial liabilities Total exposure to currency translation risk / 132

100 Below is an analysis of the sensitivity of the Company's financial result in 2012 and other comprehensive income with regard to the Company's financial assets and liabilities and fluctuation of the EUR to PLN, CNY to PLN and GBP to PLN rates. Comparable data for 2011 contain the analysis of the sensitivity of the Company's financial result and other comprehensive income with regard to the Company's financial assets and liabilities and fluctuation of the EUR to PLN, CNY to PLN and USD to PLN rates. In 2012, fluctuations in the USD-PLN were not relevant to the Company. The analysis of the sensitivity assumes a rise or fall in the EUR/PLN, CNY/PLN and GBP/PLN rates by 10 % compared to the closing rate for a particular balance sheet day. It should be taken into consideration that currency derivatives compensate for the exchange rate fluctuations, and it is thus assumed that risk exposure affects financial instruments owned by the Company on particular balance sheet days, and is adjusted by the item in derivatives Currency fluctuations Currency fluctuations Effect on other comprehensive income: CNY EUR GBP total CNY EUR GBP total Rise in exchange rate 10% Fall in exchange rate -10% Currency fluctuations Currency fluctuations Effect on other comprehensive income: CNY EUR USD total CNY EUR USD total Rise in exchange rate 10% Fall in exchange rate -10% Exposure to currency translation risk changes over the year depending on the volume of transactions conducted in that currency. However, the above analysis of this vulnerability can be considered representative of the Company's exposure to currency risk. Analysis of sensitivity to interest rate risk Interest rate risk management is concentrated on minimising fluctuations in interest flow from financial liabilities charged at a variable interest rate. The Company is vulnerable to interest rate risks in connection with the following categories of financial liabilities: credits and bonds financial leasing. The characteristic features of the above instruments, including interest payable at a variable or fixed rate, is presented in notes 7 and 10. Below is an analysis of the sensitivity of the Company's financial result and other total revenue with regard to potential fluctuation of the interest rate by 10% up or down compared to the average interest rate applied for the calculation at The calculation was made based on a change to the average interest rate during 100 / 132

101 the period by (+/-) 10% and with regard to financial liabilities vulnerable to interest rate changes, i.e. with interest payable at a variable rate. Rate Effect on financial result: Effect on other comprehensive income: fluctuation Rise in interest rate 10% Fall in interest rate -10% Analysis of sensitivity to other market risks Credit risk The Company's maximum exposure to credit risk is defined by the balance of the following financial assets: Note Loans Receivables from deliveries and services and other financial receivables Derivative financial instruments Debt securities 7 Investment fund units 7 Other classes of other financial assets Cash and equivalents Total exposure to credit risk Information in respect of guarantees and sureties is included in Note 23 The Company constantly monitors clients' and debtors' arrears in making payments, by analysing credit risk on an individual basis or within specific classes of assets defined by credit risk (resulting from the branch, region or structure of the customer). As well as this, the Company's credit risk management includes insuring receivables and the insurance limit is decided by the limits of the customer's available credit. The Company's Management Board believes that the above assets which are not in arrears and are covered by a write-off for impairment loss for particular balance sheet days should be considered assets with good credit quality. For this reason the Company has not set safeguards and other additional elements for improving the credit conditions. An analysis of receivables as the most important asset category exposed to credit risk from the point of view of arrears, and the age structure of current receivables is presented in the tables below: 101 / 132

102 Current Overdue Current Overdue Short-term receivables: Receivables from deliveries and services and sale of fixed assets Allowances for uncollectible accounts from deliveries and services (-) Net receivables from provision of deliveries and services Other financial receivables Allowance for other uncollectible accounts Other net financial receivables Financial receivables Current short-term receivables: D&S receivables* Other financial receivables D&S receivables* Other financial receivables up to 1 month from 1 to 3 months from 3 to 6 months from 6 to 12 months over a year Current financial receivables D&S receivables* Other financial receivables D&S receivables* Overdue short-term receivables: up to 1 month from 1 to 3 months from 3 to 6 months from 6 to 12 months over a year Current financial receivables *Receivables from deliveries and services Other financial receivables With regard to receivables for deliveries and services, the Company is not exposed to credit risk due to a single major partner or group of partners of a similar nature. On the basis of the historical tendencies in payment 102 / 132

103 arrears, overdue receivables not covered by a write-off do not show a major worsening of quality - most of them are of less than a month and there are no doubts as to their collectability. Credit risk on cash and equivalents, market stocks and financial derivatives is considered negligible due to the high reliability of the entities which are party to the transactions, mainly banks. Impairment write-offs for financial assets exposed to credit risk are described in detail in notes 7 and Cash flow risk The Company is exposed to liquidity loss risk, i.e. loss of the ability to settle financial liabilities on time. The Company manages liquidity risk by monitoring payment times and demand for cash in the field of servicing short-term payments (current transactions monitored in weekly periods) and long term demand for cash on the basis of cash flow forecasts updated monthly. Cash demand is compared to the available sources of acquiring assets (in particular by assessing the ability to acquire financing in the form of credit) and confronted with investments of free cash. 103 / 132

104 On the balance date, the Company's financial liabilities were divided as follows by payment times: Note Short-term: 1 to 3 years Long-term: 3 to 5 years more than 5 years Balance of liability as at Credits Loans Debt securities Financial leasing Derivative financial instruments Liabilities from deliveries and services and other financial liabilities Liabilities reclassified as items for sale 0 Total exposure to liquidity risk as at Credits Loans Debt securities Financial leasing Derivative financial instruments Liabilities from deliveries and services and other financial liabilities Liabilities reclassified as items for sale 0 Total exposure to liquidity risk On the balance date, the Company's current short-term liabilities were divided as follows by payment times: Liabilities D&S* Other financial liabilities Other financial liabilities Liabilities D&S* Current short-term liabilities (except interest liabilities): up to 1 month from 1 to 3 months from 3 to 6 months from 6 to 12 months 15 over a year 395 Financial liabilities *liabilities from deliveries and services The analysis of commitments in terms of retention in the following table: 104 / 132

105 Current Overdue Current Overdue Short-term liabilities (except interest liabilities): Liabilities from deliveries and services Other financial liabilities Short-term liabilities, total / 132

106 In addition, on particular balance sheet days the Company had free credit limits in its current accounts for the following sums: Credit limits granted Overdraft used in current account Free credit limits in current account Capital management The Company manages capital in order to ensure ability to continue its operations and to ensure the expected level of turnover for the shareholders and other entities with an interest in the Company's financial condition. The Company monitors capital levels on the basis of the balance of equity capital decreased by capital from hedging derivatives securing the cash flow. The Company calculates the ratio of capital to total financing sources based on this. In addition, to monitor its debt servicing ability, the Company calculates the debt (i.e. liabilities from leases, credit, loans and other debt instruments, net of cash) to EBITDA (result from operating activities adjusted by depreciation costs) ratio. Debt to EBITDA at Amica Wronki Capital Group is monitored by the banks as the control element contained in the loan agreements. According to the agreements, this ratio cannot exceed a value of 3. The Company is not subject to any external capital demands. During the period covered by these financial statements, the indexes presented above are as follows: Capital: Shareholders' Equity Subordinated loans received from the owner 0 Capital from valuation of hedging instruments securing cash flows (-) Capital Total sources of financing: Shareholders' Equity Credit, loans and other debt instruments Financial leasing Total sources of financing Ratio of capital to total financing sources EBITDA Profit (loss) on operating activities Depreciation EBITDA Debt: Credit, loans and other debt instruments Financial leasing Debt Cash and cash assets Debt to EBITDA ratio / 132

107 26. Significant events during fiscal year Listed below are items affecting assets, liabilities, equity, net income, or cash flows which occurred during the reporting period: On the General Shareholders' Meeting of Amica Wronki SA adopted a Share Buyback Programme in order to redeem them. The Company will purchase no more than 10% of the share capital by The General Shareholders' Meeting has allocated 150m PLN for the share buyback programme and this will be financed from own resources. The company carries out a share buyback in line with aforementioned programme. As at the date hereof, 137,803 shares were purchased. On 27 October 2011, the Management Board of Amica Wronki adopted a resolution on granting the consent to initiate a procedure aimed at a cross-border merger with Sidegrove Holdings Ltd. (acquired company) and (acquiring company). The purpose of the merger was to increase (in line with the adopted strategy) the Group's performance by reorganization of its internal structure, in particular by eliminating non-operating and redundant entities generating unjustified expenses. On December 22, 2011 Extraordinary General Shareholders' Meeting of Amica Wronki SA adopted a resolution to consent to cross-border merger with Amica Wronki Sidegrove Holdings Ltd. The merger of Amica Wronki and the Company was registered by a Polish registry court on 28 August Following this decision, Amica Wronki included net assets of Sidegrove into the ledgers of Amica Wronki, and eliminated any and all transactions between merging companies. The result of this operation is presented in Note 7, Financial assets and liabilities. On 30 November 2011, the Company entered into an agreement with Kostrzyn-Słubice Special Economic Zone. At the same time, on the same day, the Company has been authorized to conduct business activity at Kostrzyn-Słubice Special Economic Zone. The Company intends to operate in the specified SEZ and exercise the tax advantages it is entitled to. On December 10, 2012 by the decision of the Ministry of Economy the date of final settlement of investments was changed to 30 September In order to achieve the tax optimization, the Company is obliged to incur minimal capital expenditure of 45,632,000 PLN and increase the existing employment. The maximum amount of eligible expenditure to be incurred in the investment amounts to 68,448,000 PLN. On , the new subsidiary Hansa Ukraine ooo was registered, having its registered office in Ukraine. Amica Wronki holds 100% equity of the Company. This company is of commercial nature and is expected to contribute to the expansion into eastern markets, especially in Ukraine. The company's capital was fully paid in Events after the balance date After there were no events that required recognition in the financial statements for the year 2012 and would have a major influence on the financial statements. 107 / 132

108 28. Other information SHARE CAPITAL OWNERSHIP STRUCTURE Number of shares Number of voting rights Nominal value of shares Share of capital as at Holding Wronki S.A % Noble TFI S.A.* % ING OFE* % Quercus TFI S.A.*/** % Other shareholders % Total % as at Holding Wronki S.A % Noble TFI S.A % ING OFE % Quercus TFI S.A % Other shareholders % Total % *Data indicated based on the content of the notifications received by the Company from its Shareholders, and drawn up under Article 69 of the Public Offering Act of July 29, **On 14 February 2013, Quercus Towarzystwo Funduszy Inwestycyjnych Spólka Akcyjna, acting on behalf of the managed investment funds Quercus Parasolowy SFIO, Quercus Absolute Return and Quercus Absolutnego Zwrotu FIZ (hereinafter jointly as "Funds") submitted a notice issued pursuant to Article 69 of the Act of 29 July 2005 on public offering ( ), on decrease of the Funds' shareholdings in the Company a decrease in the overall number of votes at the General Meeting of below the threshold of 5%, as a result of the sale of shares on a regulated market on 14 February As of 15 February 2013, the Funds held jointly 467,602 (four hundred and sixty seven thousand six hundred and two) shares of the Company, which accounted for 6.01 % (six point zero one percent) of the Company's share capital. The shares held entitled to 467,602 (four hundred and sixty seven thousand six hundred and two) votes at the Amica Wronki S.A.'s General Meeting, which accounted for 4,38% (four point thirty eight percent) of the overall number of votes at the General Meeting. 108 / 132

109 28.1. Remuneration of members of the Company's Management Board The total value of remuneration and other benefits for members of the Company's Management Board was: In Amica Wronki: In subsidiaries Remuneration Other benefits Post-employment benefits Remuneration Other benefits Post-employment benefits Total Period from to Jacek Rutkowski Wojciech Antkowiak Wojciech Kocikowski Tomasz Dudek Marcin Bilik Total Period from to Jacek Rutkowski Andrzej Kadziński Wojciech Antkowiak Wojciech Kocikowski Marcin Bilik Tomasz Dudek Total Other information on key management personnel, including on loans, is presented in note / 132

110 28.2. Remuneration of members of the Company's Supervisory Board. The total value of remuneration and other benefits for members of the Company's Supervisory Board was: In Amica Wronki: In subsidiaries Remuneration Other benefits Post-employment benefits Remuneration Other benefits Post-employment benefits Total Period from to Tomasz Rynarzewski Bogna Sikorska Jarosław Obara Wojciech Kochanek Piotr Sawala Grzegorz Golec Total Period from to Tomasz Rynarzewski Bogna Sikorska Jarosław Obara Wojciech Kochanek Piotr Sawala Grzegorz Golec Total / 132

111 28.3. Remuneration for the entity authorised to examine financial statements. The auditor conducting the examination and review of the Group's financial statements is Grant Thornton Frąckowiak Sp. z o.o. Sp. komandytowa The auditor's remuneration from individual entitlements was: from to from to Examining annual financial statements Reviewing financial statements Fiscal consultancy Other services Total Employment Average employment in the Company divided into individual professional groups, and employee turnover were as follows: from to from to Administrative employees Shop floor workers Total Changes in the number of employees in 2012 are show in the table below from to from to Opening balance Number of employees hired Number of employees sacked (-) Closing balance / 132

112 29. Approval for publication The financial statement prepared for the year ending 31 December 2012 (along with comparative data) was approved for publication by the Company's Management Board on 24 April Signatures of all Members of the Board Date Full name Position Signature 24 April 2013 Jacek Rutkowski President of the Board 24 April 2013 Wojciech Antkowiak Vice President of the Management Board responsible for Trade and Marketing 24 April 2013 Marcin Bilik Vice President of the Management Board responsible for Operational Affairs 24 April 2013 Wojciech Kocikowski Vice President of the Management Board responsible for Finance 24 April 2013 Tomasz Dudek Vice President of the Management Board responsible for Purchasing and Logistics Signature of the person responsible for the drawing up of the financial statement mentioned: Date Full name Position Signature 24 April 2013 Alina Jankowska- Chief Accountant/Commercial Brzóska Proxy 112 / 132

113 THE REPORT MANAGEMENT OF AMICA WRONKI S.A. ON THE ACTIVITIES OF AMICA WRONKI S.A. for I. Key information 1. According to figures from GfK Polonia, in 2012 Amica's sales reached a value of over 617 million PLN and was lower by 8.6% when compared with The value of export sales amounted to 664 million PLN. High sales growth to the east reaching 29% (expressed in EUR). 3. The total revenue of the Company amounted to m PLN, which is over 4% more than last year. 4. The increase in gross profitability on sales by 2.3 pp 5. Debt-to-assets and debt-to-equity ratios were improved. 6. Increase in the operating profit by 4% up to 53.6 million PLN. 7. Improving the gross result by 2.9m PLN II. Commentary on market conditions Domestic sales in 2012* Market Sale of large household appliances in Poland in 2012 reached a value of over 4,715 million PLN and was 5.3% higher compared to Positive growth in the market was noticeable primarily in built-in appliances - the entire segment increased by 14.1% year-to-year. The increase was first and foremost the result of an increased demand for cookers and fitted ovens (+14.2%) as well as hobs (+13.7%). The sales of fitted dishwashers (+16.4%) and built-in refrigerators (+18.4%) also increased. The market for free-standing equipment also recorded increases, however the dynamics was significantly lower than in the case of built-in appliances (the entire FS category increased by almost 1%). The largest increase was recorded for two key categories of FS equipment: FS refrigeration segment (by 2.2%) and washing machines (by 5.1%). Free-standing cookers (a decrease by 10% year-to-year) and free-standing dishwashers (dynamics: - 1.3%) attracted less customer interest. To sum up, the market of household appliances in 2012 was growing very strong. This greater dynamics of BI appliances indicates that Poles are more and more eager to buy built-in appliances instead of free-standing equipment. This is particularly true for heating appliances and dishwashers. Amica According to the figures provided by GfK Polonia, the sales of Amica's products on the Polish market exceeded the value of 617 million PLN and was lower by 8.6% year-to-year. In the category of built-in equipment, Amica recorded positive sales growth, which is mainly due to an increase in the category of cookers and built-in ovens (+7%) as well as hobs (+2%). Increase in sales was accompanied by the introduction in the fourth quarter on the Polish market of a new line of innovative ovens - Amica Smart, which have been very well received by consumers. Another category with very good sales results were hoods - with sales increase by 3% and an increase in the market share by 0.2pp to 29.3%. Lower sales were recorded for built-in dishwashers and built-in refrigerators - a decrease in both categories by over 20%. 113 / 132

114 In the segment of free-standing appliances, Amica recorded negative sales (-14.9%). The drop in sales was mainly due to far lower performance in front-loading washing machines (drop in sales of over 27%) and freestanding refrigerators (down by nearly 24%). However, in a key market segment for Amica i.e. free standing heating equipment, Amica has improved its market share by 1.4 percentage points and maintained the leader position in this category. * Data for the period from January to December concerning the market in large household appliances based on GFK Polonia and our own estimates. Foreign sales of the Company in 2012 In 2012, foreign sales of Amica reached a value of over 664m PLN and was 7.6% higher compared to the same period of the preceding year. The Russian market had the largest share of the Company's foreign sales in the period. The sales achieved on the market accounted for 48% of the foreign sales. The sales in this market are effected primarily through Hansa, and to a lesser extent through direct supplies from Amica Wronki SA to customers. Hansa's sales in the region increased in comparison with the previous year by 30.5%. In the key strategic market segment (heating equipment), the turnover was higher by 32% compared to The second largest sales market during the analysed period was the German market managed by Amica International. Turnover achieved in this market accounted for 21% of foreign sales of the Company and was higher by 5.5% when compared to the same period last year. The greatest growth dynamics was in cooker hoods and free-standing cookers, whose sales rose by 10% and 9% year-on-year respectively. Microwave ovens also recorded a significant increase (8%). The share of the Scandinavian market, where sales are carried out under the Gram brand, in the total 2012 international sales amounted to over 9.9%. Compared with the previous year, the turnover in this region declined by 8%. The largest negative deviation was observed in the segment of heating equipment and dishwashers. As in the Russian market, in addition to distribution by its subsidiary, the company also sells directly to its customers. Amica Commerce operating on the Czech and Slovak market, constituted 5% of the Group's export sales. The turnover achieved by the Company in 2012 was lower by 2.6% compared Especially noteworthy is the development of two product categories, namely heating appliances (+6%) and cooker hoods (+11%). The Group's other foreign sales generated by AWSA (Southern European countries, the UK, other countries) directly to customers in other markets is about 15% of the Company's foreign sales. The company is steadily increasing sales in Ukraine and in the countries of South Eastern Europe. Total sales on these markets increased by 37% and 7% respectively. In 2012 the Company also commenced sale operations in France. DIRECT SALES CUSTOMERS 114 / 132

115 III. FINANCIAL RESULTS 1. Profit and loss account Change in thousands PLN Dynamics % Revenue from sales of products, goods materials and services (thousands PLN) % Gross profit on sales (thousands PLN) % EBITDA (thousands PLN) % Operating profit (thousands PLN) % EBIT (thousands PLN) % Profit before tax (thousands PLN) % Net profit (thousands PLN) % Long-term liabilities (thousands PLN) % Short-term liabilities (thousands PLN) % Equity capital allocated to shareholders of the Parent Company % (thousands PLN) Stated capital (thousands PLN) % Weighted average of number of ordinary shares (number of shares) % Profit per ordinary share (PLN) % In 2012, achieved more than billion PLN revenue (+4% YTY). In terms of sales structure trends, a decrease in sales volume in the domestic market should be noted. described in detail in the section on the sales. Lower sales in Poland were offset by higher sales in export markets (mainly in Russia, Germany, Ukraine). Export dynamics measured in PLN amounted to +7%, while in EUR to nearly +9%. In 2012, the gross sales profit amounted to 316 million PLN and was 38 million PLN higher than in the preceding year. The higher gross sales profit stems from higher sales and improved profitability (by 2.3 pp). The increase in profitability was caused mainly by (1) cost savings in the manufacture of products, (2) an increase in sales of heating equipment, (3) increase of sales to eastern markets (4) price increases in selected markets. A decline in manufacturing costs was mainly due to lower prices of steel (about 8% YTY, on average) and the implementation of a number of pro-savings projects, including the insourcing of selected components. In the first half of 2012, EBIT was 61.6 million PLN, which was higher by 0.8 million PLN than in the corresponding period of the preceding year. It should be further noted that in 2012 the result of Amica Wronki includes the cost of PLN 19.6 million attributable to the license fee for AMICA trademark, while in 2011 the figure was only 3.6 million PLN. This expense is a consequence of the transfer of the trade mark value to the subsidiary, Amica Marketing Sp. z o.o., which was held in the preceding year (the value of the in-kind contribution amounted to 241,536,000 PLN). The purpose of the transaction was to create the Amica brand management centre within Amica Marketing. Therefore the costs of sales increased due to costs of the trademark (19.6 million PLN). In addition, the Company incurred higher costs of marketing activities, which in total translated into higher general administrative expenses. The result for financial activities is at a level similar to previous year. At the same time it should be noted that the Company paid less interest on debt by 3 million PLN. Earnings per share amounted to 5.00 PLN compared to 4.73 PLN the year earlier. 2. Structure of revenue (thousands of PLN) The company focuses on developing sales of heating equipment. As the result these products constitute more than 70% of the total sales. The remaining 23% of sales are goods. The largest group among the goods are refrigerators, washing machines and dishwashers. The remaining 7% of revenue comes from other activities such as the sale of materials, spare parts and services. 115 / 132

116 2012 sales structure according to product range 7% 23% 47% 7% 16% Sprzęt grzejny wolnostojący Sprzęt grzejny pozostały Pozostałe Sprzęt grzejny do zabudowy Towary Free-standing heating equipment Built-in heating equipment Other heating equipment Goods Other. Domestic sales is conducted through a network of wholesale distributors located throughout the whole country. The collaboration between the company and wholesale distributors is regulated by distribution agreements specifying, among others, payment deadlines, payment methods, conditions for granting bonuses. Among all the distributors a group of five companies stand out which account for more than 60% of domestic sales. These are: Neonet SA Euro SA Terg Mix-Electronics Domex Sandomierz All the above-mentioned entities are not affiliated. Amica support its distribution network through organising different promotional activities such as: Common radio commercials, newspaper commercials, advertising on municipal transport vehicles, promotions and retail sales outlets, etc In the structure of export sales it was only Amica International and Hansa OOO which exceeded the 10% threshold. The above-mentioned entities are affiliated companies. For more detailed commentary on the sales please refer to the part dedicated to market situation. 3. Salaries and information concerning employment of members of the management. Total gross salaries in 2012 were 88.1 m PLN. Taking into account average annual employment of 1,966 employees, average salary in the company was 3,735 PLN per month and was higher by 7.7% than in the previous year. The company does not operate any profit sharing or motivation schemes based on the company capital, bonds or subscription warrants. Individual salaries of each of the Member of the Board are presented in note 28 of Financial Statement. 4. Purchasing The global value of materials, goods and services purchased in 2012 was 1,164 million PLN, of which a domestic purchases were made to the sum of 720 million PLN, which constitutes 62% of total purchases, while important purchases were made to the sum of 444 million PLN constituting 38% of total purchases. The biggest domestic suppliers for the Company are: ArcelorMittal, Hart-Sm Żary, Ciarko Sanok. No supplier exceeded 10% threshold of the Company's sales. 116 / 132