OPINION AND REPORT FROM THE AUDIT OF THE FINANCIAL STATEMENTS. for the period: from Jan 1, 2012 till Dec

Transcription

1 OPINION AND REPORT FROM THE AUDIT OF THE FINANCIAL STATEMENTS for the period: from Jan 1, 2012 till Dec SONEL S. A. ul. S. Wokulskiego Świdnica for the Shareholders and Supervisory Board of SONEL S. A.

2 ECAAUXILIUM Seredyński Spółka z ograniczoną odpowiedzialnością, Barbara Szmurło Spółka Komandytowa KRAKÓW, Al. Pokoju 84 EMPLOYER PREPARED BY SONEL S. A. Report and Opinion ul. S. Wokulskiego 11 from the audit of financial statements Świdnica for the period from Jan 1, 2012 to Dec 31, 2012 PREPARED BY DATE Key chartered auditor Monika Aksak- Wąs Reg. no Chartered Auditor Zofia Szczepaniak Reg. no RESPONSIBILITY: ECA AUXILIUM Seredyński Spółka z ograniczoną odpowiedzialnością, Barbara Szmurło Spółka Komandytowa KRAKÓW, Al. Pokoju 84 Certification of the National Chamber of Chartered Auditors No. 3436

3 CHARTERED AUDITOR S OPINION For the Shareholders and the Supervisory Board of SONEL S.A. with the registered office in Świdnica We have audited the enclosed financial statements of SONEL S.A. with the registered office in: Świdnica ul. Stanisława Wokulskiego 11, which comprise: statement of financial position (balance sheet) prepared as of December 31, 2012, which on the side of assets and liabilities shows: PLN thousand total income statement (profit and loss account) for the financial year from January 1 till December 31, 2012 showing the total income sum of: PLN thousand statement of changes in equity capital for the financial year from January 1 till December 31, 2012 showing the increase of equity by: PLN 774 thousand; cash flow statement for the financial year from January 1 till December 31, showing the increase of cash by: PLN thousand additional information and explanatory notes. The entity s Head is responsible for preparing the financial statements and the report on operations in accordance with the currently binding provisions of law. The Head of the entity and members of the Supervisory Board are obliged to ensure that the financial statements and the report on operations meet all the requirements set forth in the law of September 29, 1994 Accounting Act (Dz.U. [journal of laws] of 2009 No. 152, Item 1223, as amended), hereinafter referred to as the Accounting Act. Our responsibility was auditing the enclosed financial statements and expressing, based on the audit, our opinion as to whether the statements are compliant with the applicable accounting principles (policy) and whether they reliably and clearly present, in all material aspects, the assets and finances, as well as the financial result of entity and correctness of the accounting book making the basis for their preparation. We have conducted our audit of the financial statements in accordance with the provisions of: 1) Chapter 7 of the Accounting Act, 2) Polish auditing professional standards issued by the Polish Board of Registered Auditors, 3) provisions of International Standards of Auditing. We planned and conducted the audit in such a manner, as to obtain reasonable assurance and sufficient basis for expressing reliable opinion on the financial statements. The audit in particular

4 included examining the correctness of the accounting principles and significant estimates, verifying, to a considerable extent on a test basis, accounting documents and entries evidencing the amounts and disclosures in the financial statements as well as evaluating the overall financial statement presentation. We are convinced that the review provided us with sufficient basis for a expressing a reliable opinion. In our opinion, the audited financial statements, in all material respects: a) give a true, fair and clear view of matters relevant to the assessment of the Company s assets and financial situation as of December 31, 2012, as well as the financial results for the year from January 1, 2012 till December 31, 2012, b) were prepared in accordance with the International Accounting Standards, International Financial Reporting Standards and the related interpretations announced in the form of regulations of the European Commission, and in the scope not provided for in these standards - in accordance with the requirements of the accounting law and the issued secondary provisions and based on correctly kept accounting books, c) comply in terms of form and contents with the applicable laws and the Company s Charter. The report on the operations is complete, as provided for in the Article 49 item 2 of the Accounting Act and takes into account the requirements set in the Regulation of the Minister of Finance of February 19, 2009 on current and periodic information disclosed by the issuers of securities and on the conditions for regarding as equivalent the information required in the provisions of law of a state which is not an EU Member State (Dz. U. [journal of laws] No. 33, Item 259), and the information included therein, coming from the financial statement, conforms with it. Key chartered auditor carrying out the audit For and on behalf of the entity authorised to auditing the financial statements Monika Aksak-Wąs Reg. no Chartered Auditor Zofia Szczepaniak Reg. no ECA AUXILIUM Seredyński Spółka z o.o, Barbara Szmurło Spółka Komandytowa Aleja Pokoju Kraków NIP REGON tel. (12) Krakow, March 14, 2013

5 REPORT of the independent certified auditor from the audit of financial statements of SONEL S.A. with its registered office in Świdnica ul. Wokulskiego 11 for the financial year from Jan 1, 2012 till Dec 31, 2012 Kraków, March 14, 2013

6 A. General part 1. The entity operates based on the Charter prepared on July 1, 1998 in the form of a notarial deed Rep. no. 1649/98. The entity was incorporated for indefinite period of time. 2. Moreover, the entity holds the following documents certifying its operations: a) current entry to the register of entrepreneurs in the National Court Register maintained in the Regional Court for Wrocław-Fabryczna in Wrocław, 9 th Commercial Division under the RRS number: of February 10, b) tax identification number NIP assigned by Treasury Office in Świadnica and NIP UE PL Currently, entity declares income earned in Dolnośląski Treasury Office. c) identification number Regon , confirmed on May 30, 2008 by the Statistical Office in Wrocław. d) carries out the activity at the area of Wałbrzyska Special Economic Zone INVEST-PARK based on the permit no. 97 of September 12, The core subject of activity of the entity, as specified in the Charter and entry to the relevant register, is: - Production of electronic measurement instruments, - Provision of services in the scope of SMT surface assembly of electronic elements. 4. The governing and supervisory bodies of the entity are the following: a) The Management Board appointed by the authorised body running the business of the entity based on employment contracts entered into for indefinite period of time by the Supervisory Board: President of the Management Board Krzysztof Wieczorkowski since September 22, 2001 Vice-President Jan Walulik since April 1, 2001 As of the day of audit, the composition of the Management Board did not change. b) The Supervisory Board, in which the term of office of a member lasts not more than 5 years and the mandate expires the latest on the day of convening the Meeting of Shareholders approving the financial statements for the last full financial year, as of the balance-sheet day comprised: Chairman of the Supervisory Board Member of the SB Member of the SB Member of the SB Member of the SB Andrzej Diakun Andrzej Kasperek Maciej Posadzy Mirosław Nowakowski Stanisław Zając

7 As of the end of audit, the composition of the Supervisory Board did not change. 5. The chief accountant of the entity is Magdalena Andrzejewska, who is employed in the entity. 6. The subject of the audit is the financial statements of a self-contained entity which does not incorporate organisational entities which prepare independently financial statements, signed by the Management Board (all members), signed by the person preparing it, that is the Financial Director Tomasz Hodyj and the Chief Accountant Magdalena Andrzejewska, including: Statement of financial position (balance sheet) as of Dec 31, 2012 showing total assets and total liabilities of: PLN thousand Total income statement (profit and loss account) for the financial year from January 1, 2012 till December 31, 2012, showing the net profit of: PLN thousand Statement of changes in equity capital for the financial year from January 1, 2012 till December 31, 2012, showing the increase in equity by: PLN 774 thousand; Cash flow statement for the financial year from January 1, 2012 till December 31, 2012 (prepared using indirect method) showing the decrease in cash by: PLN thousand; Additional notes and information. 7. Equity capital is the following (in PLN thousand): Specification As of the balance-sheet As of the balance-sheet day for 2012: day for 2011: Equity capital (fund) Share capital Supplementary capital Other reserve capital Profit (loss) of previous years Net profit (loss) The shares of the Company have been publicly listed since the year The share capital amounts to PLN thousand and is divided into ordinary shares of the face value of PLN 0.10 each. Share capital includes: S series ordinary bearer shares, B series ordinary bearer shares, C series registered ordinary shares D series ordinary bearer shares, E series ordinary bearer shares. The aforesaid amount of the share capital has been shown:

8 a) at the amount entered to the register of entrepreneurs, pursuant to the Article 36 Clauses 1 and 2 of the Accounting Act, b) according to the share register maintained as required in the Article 341 of the Code of Commercial Companies, c) is fully paid-in in cash, according to the Articles 306 and 309 of the Code of Commercial Companies, d) correspond to the amount specified in the Article 308 of the Code of Commercial Companies, In the audited financial year, there was no change in the stated capital. 7. For the sake of realisation of purposes listed in the points 3 and 4, the entity employed on average 209 persons in the audited financial year, and the preceding year 209 too (full-time-equivalents). 8. Pursuant to the resolution of the Supervisory Board no. 3/RN/ of March 16,2012 to the obligatory, in light of the Article 64 of the Accounting Act, audit of the financial statements for the financial year in line with the Article 66 Item 4 of the Accounting Act the auditing entity ECA AUXILIUM SEREDYŃSKI Spółka z o.o. Barbara Szmurło Spółka Komandytowa with the registered office at the address Kraków, Al. Pokoju 84 entered under the number 3436 to the register of entities authorised to auditing the financial statements by the National Chamber of Statutory Auditors. 9. The present audit, pursuant to the agreement no. 3/2012 (3/2013) of April 19, 2012 signed under the resolution in the point 8, was carried out in the registered office of the entity and beyond in the period from January 1, 2013 till January 25, 2013 (stocktaking and interim audit) and from February 10, 2013 till March 14, 2013 (audit). 10. Both the auditing entity and the chartered auditor carrying out the audit Monika Aksak-Wąs (reg. no. 9446) and the chartered auditor Zofia Szczepaniak (reg. no. 9475) participating in the audit, declare that they remain independent from the audited entity, as provided for in the Article 56 Clauses 3 and 4 of the Act of May 7, 2009 on chartered auditors and their Self-Governing Bodies, the entities authorized to auditing the financial statements and on public supervision (Dz. U. [journal of laws] of 2009 no. 77 Item 649 of 2000, as amended). No auxiliary staff participated in the audit. 11. The financial statements for the preceding year was audited by Eliks Audytorska Sp. z o.o. Grupa Finans-Serwis from Wrocław, registered under the number 269. The chartered auditor Wojciech Gąsior issued the opinion without reservations. The financial statements for the year 2011 was approved by the General Meeting of Shareholders of Sonel S.A. in the resolution no. 6/ r of May 29, Pursuant to the Resolution no. 7/ r of the General Meeting of Shareholders of Sonel S.A., the net profit for the year 2011 at the amount of PLN thousand has been distributed in the following manner:

9 a) PLN thousand was laid out on payment of dividend to the Shareholders of SONEL S.A., which is PLN 0.40 gross per share; b) PLN 468 thousand was allocated to the reserve capital. 12. The approved financial statements for the year preceding the audited period was: a) Pursuant to the Article 69 of the Accounting Act, submitted with the accompanying documentation in the Regional Court for Wrocław-Fabryczna in Wrocław, 9 th Commercial Division of the National Court Register on June 5, b) Pursuant to the Articles 69 and 70 of the Accounting Act was on June 1, 2012 sent for publication. Published in Monitor Polski B no of August 22, c) Pursuant to the Article 27 of the Act of February 15, 1992 submitted in Dolnośląski Treasury Office on June 1, Pursuant to the Article 67 of the Accounting Act, the entity made available to the chartered auditor the maintained books of account and documentation constituting the basis for their drawing up and granted information necessary for issuing the opinion of the chartered auditor on the audited financial statements. There were no limitations as to the scope of the audit. 14. Moreover, the Head of the entity, pursuant to the Article of the Accounting Act, submitted as of the date of completion of the audit a written statement regarding, among others: a) completeness, correctness and reliability of the financial statements submitted for audit as well as the complementary report on operations, b) disclosure in the additional information all the liabilities corresponding to the balance sheet day c) non-occurrence of other economic events having impact on the quantitative and qualitative information resulting from the financial statements.

10 B. Economic and financial analysis The economic and financial analysis of the entity was conducted based on the results achieved in the years Balance sheet analysis Assets (in PLN thousand) Change No. Specification % % amount % amount % amount % 2012/ / A. Fixed assets Intangible and legal I. assets II. Tangible fixed assets (610) 98.0 (2 505) 92.2 III. Long-term receivables 1. from affiliated entities IV. Long-term investments a) in affiliated entities Long-term V. prepayments and (7) 98.8 (15) 97.1 accruals B. Current assets (424) I. Inventory (2 933) II. Short-term receivables Receivables from 1. affiliated entities III. Short-term investments a) in affiliated entities Short-term IV. prepayments and (30) 82.3 accruals Total assets

11 Liabilities (in thousand) No. Specification Change amount % amount % amount % % % 2012/ / A. Equity capital (fund) I. Share capital (fund) Called up share capital II. (negative value) Own participation III. (shares) (negative value) Supplementary capital IV. (fund) V. Revaluation capital (fund) (493) Other reserve capital VI. (fund) Profit (loss) of previous VII. years VIII. Net profit (loss) Net profit write-off in IX. accounting year (negative value) Liabilities and liability B. reserves I. Liability reserves II. Long-term liabilities Towards affiliated entities III. Short-term liabilities (493) Towards affiliated entities IV. Accruals and deferrals Total liabilities

12 Profit and loss account (in PLN thousand) No. Specification Change amount % amount % amount % % % 2012/ / A. Core activity Net income on sales 1. and equivalent, including: 2. Own cost of sales Profit/loss on sales (373) B. Other operating activity Other operating 1. income Other operating costs (598) Profit/loss on 3. operating activity 353 (567) (62.3) Profit/loss on C. operations (A3+B3) D. Financial activity 1. Financial income (619) Financial costs (408) 28.4 Profit/loss on financial 3. activity (130) 36.1 (211) 25.9 E. Extraordinary events 1. Extraordinary profits 2. Extraordinary loss Result of 3. extraordinary events Gross profit (loss) F. (C+D3+E3) Income tax Other obligatory 2. decreases of profit (27) (30) (113) (31.7) (increases of loss) G. Obliagatory encumbrances - total Net profit (loss) (F-G) Total incomes ~ Costs in total

13 2. Ratio analysis 2.1 Profitability ratios. Profitability ratios safe ratio indicator Return on assets (ROA) net financial result x 100 total assets 5-8 % 8.52% 8.32% 6.79% Net return Return on equity (ROE) net financial result x 100 total incomes net financial result x 100 equity Adjusted Return on Assets net profit + (interest income tax on interest) x 100 total assets Financial leverage Return on equity adjusted return on assets positive rate is positive effect, whilst negative rate is the effect of financial bludgeon" Return on Investments (ROI) gross profit + interest on long-term debt x 100 equity + long-term liabilities 3-8 % 12.32% 12.61% 12.50% % 10.13% 9.76% 7.72% - % 8.53% 8.32% 6.79% positive rate % 1.59% 1.43% 0.93% % 10.35% 10.08% 7.93% 3.2 Financial liquidity ratios Financial liquidity ratios safe ratio indicator Acid-Test Ratio current assets trade receivables above 12 months short-term liabilities - short-term liabilities above 12 months x-fold

14 Cash Ratio current assets inventory short-term deferrals trade receivables above 12 months short-term liabilities trade liabilities above 12 months Current ratio short-term investments short-term liabilities trade liabilities above 12 months Raceivables to payables ratio trade receivables trade liabilities 1.0 x-fold x-fold x-fold Turnover ratios Turnover ratios safe ratio indicator Inventory turnover (in days) decreasing in ratio days X average inventory x 365 days Net income on sales of products, goods and materials Debtors ratio (in days) average trade receivables x 365 net income on sales of products, goods and materials Days payable (outstanding) average trade liabilities x 365 net income on sales of products, goods and materials Assets leverage Net income on sales of products, goods and materials total assets no. of days comparabl e zip 18 no. of days comparabl e zip 17 in days in days X X 2.0 zł/zl The analysis of the structure and dynamics of balance sheet items confirms the good financial standing of the audited entity. In the audited period, there was an increase in the value of assets and liabilities as compared to the preceding year by PLN thousand. The structure of assets did not change much the share of fixed assets in total assets amounted to 63.4%, in the preceding year amounted to 61.8%, and the share of current assets in the total assets decreased from 38.2% to 36.6%. The equity rose by PLN 774 thousand to the value of PLN thousand. At the same time, there was an increase in liabilities and reserves by PLN thousand to the value of PLN thousand, which results from the increase in accruals and deferrals due to projects in making. This way, the share in liabilities and reserves structure rose from 14.8% to 15.9%. Constant capital fully covers the fixed assets, and part of current assets is financed from constant capital. Working capital is at positive level and amounts PLN thousand, compared to PLN thousand in the preceding year. In the scope of financial results, there was an increase in income on sales by PLN thousand, that is by 7% compared to the preceding year. At the same time, there was an increase in the costs of sold products, goods and materials by PLN thousand, that is by 9.1% compared to the preceding year. The costs of sales increased by PLN 510 thousand, whilst overhead dropped by PLN 369 thousand. As a result of that, in the audited year the entity generated profit on sales of PLN thousand, compared to profit of the preceding year of PLN thousand. The return on sales amounted to 12.3% and did not change significantly compared to previous years. The return on assets improved compared to the preceding year and amounted to 8.5%. The return on equity, which has decisive importance for the assessment of allocation of capital, because it illustrates the profitability of the capital invested in the Company by its shareholders, improved and in the audited year amounted to 10.1%.

15 Liquidity ratios are at good level. The inventory turnover was 82 days (in the preceding year it was 86 days). The collection period (for receivables) amounted to 71 and rose by 7 days compared to the preceding year. The days payable were 36 and decreased by one day compared to the preceding year Overview of other indicators Indicators for horizontal and vertical analysis of the balance sheet. Preliminary balance sheet analysis safe ratio indicato r Golden balance sheet rule (equity + long-term reserves) x 100 Fixed assets Golden balance sheet rule II short-term external capital x 100 Current assets Golden financial rule equity x 100 external capital Net assets value Total assets total liabilities Fixed assets to total assets ratio fixed assets x 100 total assets % % % % % 28.31% 29.61% 25.62% above 100 % % % % upward ratio PLN % 63.36% 61.84% 66.15% Noteworthy is the Golden balance sheet rule, because the ratio higher than 100 indicates good financing of fixed assets with equity and contributes to financial stability of the entity. Worth attention is also the Fixed assets to total assets ratio, which exceeds 60% of assets. In the span of three years, there was an increase of net assets value, that is net assets corresponding to the value of contributed and generated equity, which contributes to financial stability of the entity. Summing up, the key indicators characterising the entity s operation prove that its financial standing is good and stable. 4. The entity s potential for continuing business operations in the year following the audited year (in significantly the same scope). The Head of the entity, in the Additional Information, Chapter II point 6 states that the financial statements were prepared with the assumption of going concern and that at the moment of preparing the financial

16 statements, no circumstances posing threat to going concern came to his attention. The reviews and proofs of the audit indicate that the view of the entity s Head that its operation in the subsequent 12 months in relation to the year 2012 should not be significantly reduced as regards the scope is adequate. C. Detailed part 1. The correctness of the applied accounting system and functioning of the internal control system a) The audited entity has the accounting documentation meeting the basic requirements set in the Article 10 of the Accounting Act of September 29, 1994 (that is Dz. U. [journal of laws] No 152/2009, Item 1223, as amended). b) Pursuant to the Resolution of the General Meeting of Shareholders of June 30, 2008, the Company has since January 1, 2009 applied the accounting principles in accordance with IAS/IFRS. In the documentation for the accounting principles, the allowed principles of assets and liabilities valuation and determining the financial result were correctly adopted. In the additional information, the adopted principles of assets and liabilities valuation and determining the financial result were correctly presented. There have been no significant divergences found from the adopted principles of assets and liabilities valuation and determining the financial result. c) The entity has, within the frames of the accounting principles documentation, the company chart of accounts and other regulations stemming from the requirements of the Article 10 of the Accounting Act. The accounting books include the elements resulting from the Article 13 of the Accounting Act. They are run in computer technology, based on Impuls software developed by BPSC. The accounting books are kept in the registered office of the audited entity. The organisation of accounting booking ensures the completeness of presentation of economic operations. d) The evidencing of economic operations does not rise any significant questions. The audited entity has the accounting documents flow instruction, ensuring the correct and timely registering of economic operations. e) The results of the examining of accounting books and accounting proofs underlying the entries therein, carried out for the assessment of the financial statements, as well as interrelations between the data in the accounting books with the audited financial statements, let us regard the accounting books as generally meeting the correctness condition. The stocktaking of assets and liabilities, carried out in the scope, on dates and with the frequency set forth in the Accounting Act, can be regarded as correct, and no divergences were found out. The stocktaking included the following items of assets: Components of assets as of Notes - materials Continuous inventory method - finished and semi-finished products - production ib making cash on hand Continuous inventory method

17 f) The results of the examining of accounting books and accounting proofs underlying the entries therein, carried out for the assessment of the financial statements, as well as interrelations between the data in the accounting books with the audited financial statements, let us regard the accounting books as generally meeting the correctness condition. The stocktaking of assets and liabilities, carried out in the scope, on dates and with the frequency set forth in the Accounting Act, can be regarded as correct, and no differences were found out. g) The chartered auditor, as a result of review, carried out to a considerable extent on a test basis, ascertained that accounting documents were controlled. In the course of the audit of the financial statements we found out that the internal control procedures are applied consistently, which reduces the risk of nonconformities in the scope of complete and correct disclosure, evidencing and verifying of, in particular: h) inflows and outflows of materials, products and services and the corresponding invoices, - inflows and outflows of financial resources, - calculating and paying out the remunerations for work done, - settlement of receivables and liabilities and their updating. i) The audit of internal control was conducted on a test basis, in the scope related to the financial statements and in order to design audit procedures appropriate in given circumstances and not in order to express an opinion on the effectiveness of internal control. j) It was not meant to disclose any possible irregularities or weaknesses of the system. In the audited samples, no major nonconformities were identified in the internal control system, and the auditors concluded that the control system works correctly.

18 3.1. Assets selected items: Fixed assets In the audited year, the net value of fixed assets constitutes 63.4% of total assets. a) Intangible and legal assets amount to PLN thousand and include: Content Costs of finished development works R&D works in progress other intangible and legal assets Gross value Opening balance Increases Decreases Closing balance Depreciation and impairment write-off Opening balance Increases Decreases Closing balance Net value on OB Net value on CB Total The costs of finalized development (R&D) works are depreciated in the period of expected useful life (the planned life cycle of the product) after the completion of works. R&D works are related primarily to core product line, that is meters. Other intangible and legal assets include computer software licenses. b) Tangible fixed assets amount to PLN thousand and include: Content Land Buildings, premises and civil engineering structures Machines and equipment Means of transport Other fixed assets Gross value Opening balance Increases Decreases Closing balance Depreciation Opening balance Increases Decreases Closing balance Net value on OB Net value on CB Total

19 Opening Closing Content Increases Decreases balance balance Fixed assets in making A significant component of fixed assets is the real property in Świdnica in 11 Wokulskiego Street and in Wrocław in 10 Stargardzka Street. Fixed assets as of December 31, 2012 were stocktaken. The depreciation rates and methods are set by the entity in accordance with the expected period of technical and economic usability Inventory Inventory has the value of PLN thousand, share of 13.3% in total assets, and include: No. Name Balance sheet value 1 Materials Semi-finished products and products in making Products (finished products) Advances on deliveries 105 Total The stocks of finished products are measured for each production order separately, based on incurred direct costs, increased by settled indirect costs related to production processes. Impairment write-offs are built up for the assortments whose stock is excessive or slow-moving. In the financial year, revaluation write-off was built-up at the amount of PLN 101 thousand. The total value of revaluation write-offs is PLN 982 thousand Short-term receivables Short-term receivables amount to PLN thousand, constitute 13.9% of total assets, and include: - trade receivables PLN thousand - against taxes, subsidies, customs dues, social and health insurance and other benefits PLN 525 thousand - Other PLN 65 thousand Short-term trade receivables were confirmed as of October 31, Trade receivables till March 5, 2013 were settled in 84.0%.

20 Foreign trade receivables were valuated as of the balance sheet day at the average NBP currency exchange rate. Short-term receivables were reduced by revaluation write-offs at the amount of PLN 65 thousand. Revaluation write-offs are built up based on individual analysis and include doubtful receivables. Receivables from taxes, subsidies, customs dues, social and health insurance and other benefits are mainly VAT tax receivables carried forward to next periods. Other receivables mainly include settlements with employees, costs of medical subscriptions and security deposits Short-term investments. This item has total value of PLN thousand, 9.3% share in assets, cash in bank and on hand, in Polish zlotys and in foreign currencies. No. Name Balance sheet value 1 cash on hand 18 2 Foreign currency on hand 4 3 Bank accounts in PLN Bank accounts in foreign currencies, including: 481 Foreign currency accounts in Euro 409 Foreign currency accounts in USD 72 Deposits in PLN 385 Total As of December 31, 2012, cash on hand was stocktaken and cash at bank accounts was confirmed in writing. Cash in foreign currencies was valuated at NBP average currency exchange rate. Cash in deposits was disclosed with interest as of the balance sheet day Liabilities selected items: Equity has the value of PLN thousand and share of 84.1% in total liabilities. The audited entity prepared complete statement of changes in equity. In the share capital item, share capital of PLN thousand was disclosed.

21 Share issue face value in PLN number of shares value of shares in PLN thous A series ordinary bearer shares B series ordinary bearer shares C series ordinary registered shares D series ordinary bearer shares E series ordinary bearer shares Total The supplementary capital amounts to PLN thousand and 41.9% in total liabilities and results from the generated profits and surplus of share issue price of D and E series reduced by costs of a/m share issue over their face value. In the financial year, the supplementary capital did not change. Reserve capital amounts to PLN thousand and 31.3% in total liabilities and includes capital from distribution of financial result. The Reserve capital rose by PLN 468 thousand. Profit carried forward from previous years (transition to IAS) results from the remaining not settled difference between the net profit disclosed in the financial statements for the year 2008, prepared in accordance with the Accounting Act and net profit disclosed in the profit and loss account for the year 2008, prepared in accordance with IFRS/IAS and amounting to PLN 371 thousand. Net financial result of the financial year was determined based on the correct economic events disclosed in the accounting books and in terms of amounts corresponds to the financial result disclosed in the total income statement (profit and loss account). The disclosed amount is PLN thousand Reserves built up by the entity amounting to PLN thousand and 2.3% share in total liabilities include (in PLN thousand): 1. Provision for deferred income tax Provision for old-age pensions and similar 345 long-term reserve (for pension benefits) short-term reserve (for holiday leaves) Other reserves long-term reserve for warranty repairs short-term reserve (for bonuses, future claims, other costs) 413

22 Sonel S.A. w Świdnicy - Raport z badania sprawozdania finansowego za 2012 r. The reserve for deferred tax was built-up applying 19% rate of CIT and results from the existence of positive temporary differences, which in the future will contribute to increase of tax assessment basis. Other short-term reserves include provisions for future claims, bonuses for distributors, employees and the Management Board Liabilities a) Long-term liabilities at the amount of PLN 206 thousand are in connection with the liability from a contract of lease entered into by the Company. b) Short-term liabilities at the amount of PLN thousand constitute 9.4% of total liabilities and include primarily (in PLN thousand): c) other financial liabilities (from leasing) 205 d) trade liabilities, maturing: up to 12 months of which liabilities in foreign currency (foreign) e) prepaid deliveries 36 g) against taxes, customs, insurance and other payments h) against remuneration 707 i) Other 29 Trade liabilities till March 5, 2013 were settled in 91.6%. Foreign trade liabilities were valuated as of the balance sheet day at the average NBP currency exchange rate. Liabilities against taxes, subsidies, customs, social and health insurance and other benefits include: Specification As of the balancesheet day for Corporate Income Tax (CIT) 8 - Personal Income Tax (PIT) VAT tax Social insurance premiums PFRON 3 Total 1 485

23 Sonel S.A. w Świdnicy - Raport z badania sprawozdania finansowego za 2012 r. Tax and social insurance liabilities were paid out till the end of completion of the audit. Liabilities due to remuneration were paid out. other liabilities include insurance policies and settlements with employees Deferrals amounting PLN thousand constitute 3.9% of total liabilities and pertain to deferred income. They include grants received for the projects realised by the Company. Accruals and deferrals are disclosed in the balance sheet divided into: - long-term accruals and deferrals of PLN thousand - short-term accruals and deferrals of PLN 211 thousand The Company receives funding for the realisation of the project covering development and implementation of a new range of products for electrical and environmental metering, based on the contract signed with Polish Agency for Enterprise Development Total income statement (profit and loss account) selected items: The company prepares profit and loss account in multiple-step variant. The income on core activity of PLN thousand were in all material aspects correctly disclosed in the audited year s accounts and include primarily: Net income on sale of products (substantive in PLN thou 2012/2011 structure types of operations) meters and accessories % - assembly services % - other services % Net income on sales of products, in total, including: % a) domestic share of 69.2% % b) export share of 30.8% % Net income on sales of goods and materials % Total income on core activity % Operating costs at the amount of PLN thousand reflect in all material aspects the actual course of the carried out economic operations.

24 Other operating income pertain mainly to the settled grant, lease services, reimbursement of taxes. Other operating costs pertain mainly to built up reserves, fees for promisory notes granted. Financial income includes receivable and received interest. Financial costs are composed mainly from surplus of currency exchange loss over gain, financial donations and bank interest and commission. As from May 2008, the audited entity has benefited from tax exemption due to generating incomes from economic activity in INVEST-PARK Wałbrzyska Special Economic Zone. 4. Audit of other constituents of the financial statements Cash flow statement for the financial year. Cash Flow Statement was prepared reliably using indirect method and in correspondence to the balance sheet and profit and loss account as well as books of account and it shows increase in cash by PLN thousand. No. Change (+ / -) Amount in PLN A. of net cash on operating activity at the amount of B. of net cash on investment activity at the amount of (6 880) C. of net cash on financial activity at the amount of (3 939) D. of net cash, total (A.+/-B.+/-C.) E. Balance sheet change of cash Net cash is impacted by positive flow on operating activity at the amount of PLN thousand, negative flow on investment activity at the amount of PLN thousand, as a result of expenditures on R&D works disclosed in intangible and legal assets, as well as negative flow on financial activity at the amount of PLN thousand, mainly resulting from payment of dividend. Cash flow on operating activity after adjusting by depreciation of PLN thousand continues to stay at positive level, which shows that the entity generated funds in core activity for the development. 24

25 4.2 Statement of changes in equity capital in the financial year. The entity completely and reliably disclosed the items that have impact on the increase of equity by PLN 774 thousand, in accordance with the balance sheet and books of account Additional Information. Additional Information was prepared correctly and contains the required scope of data and explanations Management Report on the operations of the entity. The report on operations for the financial year meets the requirements of the Article 49 Section 2 of the Accounting Act of September 29, 1994, and the information and data contained there conform with the data in the audited financial statements and books of account. The report on the operations takes into account the requirements set in the Regulation of the Minister of Finance of February 19, 2009 on current and periodic information disclosed by the issuers of securities and on the conditions for regarding as equivalent the information required in the provisions of law of a state which is not an EU Member State (Dz. U. [journal of laws] No. 33, Item 259), and the information included therein, coming from the financial statement, conforms with it Violation of law. As a result of the procedures used in the audit of the financial statements for the financial year no significant violation by the entity of the provisions of laws and regulations in force was found out that would impact the financial statements. 4.6 Events after the balance sheet day. The chartered auditor certifies that between the balance sheet day of December 31, 2012 and the date of completion of the audit, there were no significant economic events which would have had impact on the annual financial statements and profit in the balance sheet, whilst taking into account the relevant statement made by the Management Board on march 14,

26 5. Summary. The summary of the outcome of the audit is contained in the opinion of the chartered auditor, which constitutes a separate document, as required in the Accounting Act. This report contain 22 pages numbered and initialled by the chartered auditor. Key chartered auditor carrying out the audit For and on behalf of the entity authorised to reviewing the financial statements Monika Aksak-Wąs Reg. no Chartered Auditor Zofia Szczepaniak Reg. no ECA AUXILIUM Seredyński Spółka z o.o, Barbara Szmurło Spółka Komandytowa Aleja Pokoju Kraków NIP REGON tel. (12) Krakow, March 14,