Annual Report - Amica

Annual Report

A m i c a A n n u a l R e p o r t 2 0 0 7

Introduction

Choice formChoice form

The previous year was also a consecutive year of the increase in export sales. This fact confirms Amica’s ability to generate income and profit even if the situation on the foreign exchange market is unfavorable. I am convinced that we will continue the tendency next year as well.

Starting the cooperation with China suppliers and expanding the product offer by small household appliances were very important events of last year. The expansion on new markets as well as intensive economical programs make us optimistically looking forward the results of 2008.

Jacek Rutkowski

The President of the Management Board of Amica Wronki S.A.

Amica Wronki S.A. achieved better results in 2007 than it did in the previous year. During the last year, we increased the sales by over 80 million PLN and the profit from 6,8 million PLN to 9,2 million PLN. The fourth quarter of the previous year was especially successful as then the net profit increased from the level of 1,1 million PLN to 4,1 million PLN. Although it is a good result, it does not satisfy us entirely. It results from the fact that the effects of the part of the economical activities initiated in 2007 will be observable next year.

Amica invariably stays the unquestionable leader of the Polish market maintaining 16,4% of the market share. This position not only confirms Amica brand power and vitality, but it also affirms the success of the activities undertaken and realized in distribution and product policies in 2007. It is worth emphasizing that the next brand is 6% distant from us.

Ladies and Gentlemen,


Contents

Contents

Introduction ................................................................................1Management Board ....................................................................5Shareholding Structure ...............................................................5Sales in the Polish Market ............................................................7Amica in Export Market ...............................................................9Manufacturing Plants ................................................................11Quality Recognized by Awards ..................................................13The Success of the Company is Ensured by People ....................15Ecology Means Economy ...........................................................17

Brief Assessment of the Situation of Amica Wronki S.A. in 2007 ... 19

Financial Highlights ...................................................................23Independent Auditor’s Opinion .................................................24Balance Sheet ............................................................................28Profit and Loss Account .............................................................30Statement of Changes in Shareholders’ Equity ..........................32Cash Flow Statement ................................................................34

page


Management Board, Shareholding Structure

p a g e 5

In 2007 the Company was managed by the Management Board consisting of:

Jacek Rutkowski – PresidentAndrzej Kadziński – Vice PresidentMichał Nawrocki – Vice PresidentBogdan Gleinert – MemberDariusz Szczypiński – Member (until 21 June 2007)Zbigniew Rogóż – Vice President (from 21 June 2007)

During the reporting period the Supervisory Board worked in the following composition:

Tomasz Rynarzewski – ChairmanMichał Gałecki – Vice ChairmanJarosław Obara – MemberBogna Sikorska – Independent MemberMaciej Wandzel – Independent Member

Shareholders Shares Participation in capital Votes Percentage in voting

Holding Wronki S.A. 3 138 599 35,90% 6 024 549 51,79%

Sidegrove Holdings Ltd. 725 441 8,30% 725 441 6,24%

Others 4 873 460 55,80% 4 881 260 41,97%

TOTAL 8 737 500 100,00% 11 631 250 100,00%


Sales in the Polish Market

p a g e 7

In 2007 Amica noted a considerable increase in the two most dynamically developing segments of the market, which are cooking and dishwashers. In the dishwashers’ segment, the dynamics of the increase in Amica products’ sales was two times higher than the dynamics of the market increase. It enabled increasing of the quantitative market shares to the level of 9,1%, whereas in 2006 it was 6,9%.

When it comes to cooking appliances, also here, despite the high increase rate, Amica managed to top the competition, increasing its shares to the level of 28,4% quantitatively in the whole year 2007. Amica products took both the first and the second places among the three best selling cookers of the year 2007.

The increase in sales in the groups described above was unfortunately accompanied by the weaker sales of

cooling equipment and washing machines which caused the minor decrease in these segments’ market shares.

In the hood market, Amica quantitative market shares increased to the level of 38,1%. It is worth noticing that according to GfK data nine out of ten best selling hoods of 2007 were Amica products.

To sum up, what is worth emphasizing, is the increase in both the sales and the market shares of the most visibly changing segments of 2007 which are washing machines and cooking equipment. What is more, according to the analysts, the increase will continue. Moreover, at the end of 2007, Amica extended its offer to small household appliances like hoovers, kettles, irons and toasters, approaching in some groups 2% of the market shares after two months (according to CECED).

Sales in the Pol ish Market


Amica in Export Market

p a g e 9

Amica income from the export sales was at the level of 171 million Euro in 2007, which meant 10% increase in comparison with the previous year.

Amica generated almost half of the export sales (45%) in the Eastern market. The Company sells there its products mainly under Hansa own brand. The turnover in the region increased by 9%. It was connected with the increase in sales in Russia and Ukraine, where Amica achieved the turnover 14% and 51% respectively more then in 2006.

When it comes to the Northern and Western regions, their share in export sales in 2007 was respectively: 18% and 26%. The turnover on the north decreased by 7% in comparison with the previous year. It happened mainly

due to resigning from unprofitable promotion action in Sweden and Norway. Amica reported 9% in sales in the West (mainly on the German market)

Amica is successful in extending the sales network in Czech Republic (the increase in 2007 by 47%) and in South-Eastern Europe countries (Romania, Bulgaria, Serbia and Hungary) where the turnover increased by 82% in comparison with 2006. Amica value of sales in the British market is almost four times higher than last year.

In the period described above, Amica put its products on the Italian market, where they will be offered under Gram brand which belongs to the Company.

Amica in Export Market


Manufacturing Plants

p a g e 1 1

Today, thanks to the comprehensive investment projects, the Cooker Plant uses in its production process the most modern solutions available in the market. The system of management and organization of work assures the best quality and high efficiency in production of freestanding cookers – gas, electric, gas and electric ones, as well as built-in cookers and ovens. Over fifty years of experience give us the knowledge of what is important to our customers.

All kinds of gas, electric and ceramic hobs as well as built-in hobs are produced in the Cooktop Plant. Amica is the first one to have manufactured built-in kitchen appliances in Poland. As the market pioneers, we possess the greatest knowledge and experience in this area.

Since its beginning, the Refrigerator Plant has been constantly improving its efficiency. We introduced the organizational changes which allowed for considerable improvement of productivity and quality of our products. The product range of cooling equipment manufactured is quite varied – fridge freezers, refrigerators and freezers of all kinds. Thanks to fully equipped production technology, our products are environmentally friendly and comply with all, even the strictest, European Community standards.

The Washing Machine Plant is one of the most advanced facilities of this type in Europe. Its fully automated production process managed entirely by a computer system guarantees high efficiency and precise product quality control. A wide range of slim and classic washing machines is manufactured here – from technologically simple appliances to the advanced ones aimed at the most demanding clients.

Manufacturing Plants

coo

kers

coo

kto

ps

refr

iger

ato

rsw

ash

ing

mac

hin

es


Quality Recognized by Awards

p a g e 1 3

A brand is the biggest value which a company possesses. It is usually the cap of the long-lasting process of both building the awareness and gaining customers’ trust. That is why each prize obliges and motivates in order not to lose this trust. Amica remembers about it every day as the high quality of the products is the necessary condition of the market success today.

In the survey of household appliances’ users’ satisfaction on the Polish market, Amica has got a golden statuette and the Most Trusted Brand title in Household Appliances’ category. This is especially precious as Amica has got the title for the sixth time and many respondents declare that they eagerly recommend our products to others. The prize confirms that the number of customers satisfied from Amica appliances increases every year. The high quality was the most frequently chosen indicator among many deciding about brand’s choice. Personal experience connected with a brand as well as a relation between the value and the price of the products were on consecutive positions.

When it comes to the price, Amica has been the most trusted brand for years. Amica appliances are bought by those who perceive themselves as honest and

practical people. The sources of Amica market success are most of all the functionality of the offered products and rational equipment with the relation to the price. Amica is the Polish brand, the one that is close to a domestic consumer and his or her needs. Our experience shows that they do not differ much from the needs of consumers on the other European markets.

Amica brand is also among Superbrands so the brands from B2B sector which are estimated as the best in Business Superbrands Poland 2007 ranking. This prize means that Amica has a strong position, belongs to the mostly recognizable brands and is appreciated by the specialists not only in consumers’ category, but also in a category B2B. In this context it is worth reminding that Amica received also the Economy Prize of the President of Poland for the best Polish enterprise, Teraz Polska Emblem of Quality, the Polish Quality Award and Złoty Grosz Award.

The success reflected in the above is accompanied by strong position among the prestigious group of the biggest Polish enterprises, the biggest exporters and the high rank on the list of the most valued Polish brands.

Qual ity Recognized by Awards


The Success of the Company is Ensured by People

p a g e 1 5

A number of things decide about a given company superiority on the market, however human resources constitute basic decisive value. Achieving better and better results and strengthening company position on the market are the effects of our employers’ skills and commitment.

In Amica we care for systematic skills’ improving and constant development, so we have organized the Comprehensive Personnel Development Program which enabled us to perform trainings, workshops and language courses matching different needs. Strategic attitude to the issues connected with development enabled us to obtain the funds from the European Social Fund. We are preparing for the another edition of the program, in which we will propose the cycle of trainings for the senior management, relating to strategy implementing. What is more, we also plan to

extend junior management skills and extend the knowledge of other employers making them able to achieve more and more ambitious goals.

There has been many serious changes on the labor market lately. It stops being focused on an employer and becomes more employee-oriented. Following the changes, we evaluated positions and managed to create a modern salary system which is aligned with our company business needs and which takes market practice into account.

We pay special attention to two programs which are the Academy of Success and the Academy of Designers as they enable us to develop our business partners’ professional competence. Performed trainings and workshops widely contribute to strengthening the competitive position of our company.

The Success of the Company is Ensured by People


Ecology Means Economy

p a g e 1 7

Thanks to the close contact with the surrounding nature (unique forest series – Puszcza Notecka), the Company has been aware of its influence on the natural environment since always. Our ecological policy assumptions that we realized consequently, enabled us to implement the ISO 14001 Environmental Management Certificate in 1997. Today it is an important element of the Integrated Management System. Environmental aspects identified in particular processes are the basement for both goal setting and working on yearly environmental programs.

In Amica, we care for the nature on each stage of creating and using a product starting from designing, through production and the exploitation of a product, to its disposal.

DesigningWe implement the environmental-friendly solutions already at the designing stage by using proper materials and components, which makes us satisfying the EU norms concerning ecology which are still changing. What we did for instance was eliminating materials dangerous for our health, with the accordance to RoHS union directive.

ProductionThanks to using modern technologies and implementing environmentally-friendly solutions in the production process, we reduced the amount of

water and energy and limited the amount of sewage and waste. In the Refrigerator Factory there is a sewage treatment plant working in the closed arrangement which enables us using all the retrieved water in a technological process. The surface preparing technology which does not use phosphates (nano ceramics) is also used and enables reducing the amount of energy and the number of chemicals.

ExploitationWe increase the number of A and A+ energy-efficient products in our production all the time. They have become standard on the market and they are more and more searched by household appliances’ users.Thanks to that, the exploitation of the product is cheaper and more environmental- friendly.

RecyclingAll Amica products are made of materials which enable both the recycling and the disposal of a product after using it. In this range Amica obeys WEEE EU directive.

Eco-educationCaring for the natural environment also means increasing the social awareness of the environmental protection problems. Knowing that, Amica has been organizing systematical trainings on the ecological safety for its employees since 2007.

Ecology Means Economy


Brief Assessment of the Situation of Amica Wronki S.A. in 2007

p a g e 1 9

The Supervisory Board of Amica Wronki S.A. hereby presents a brief assessment of the Company’s situation according to the rules of corporate governance and on the basis of the Management Board Report on its Activities in 2007, the Financial Statements for the financial year 2007, as well as the Independent Auditor’s Opinion on the Financial Statements of Amica Wronki for the financial year 2007 drawn up by HLB Frąckowiak i Wspólnicy Sp. z o.o. with its registered seat in Poznań.

BRIEF ASSESSMENT OF THE SITUATION OF AMICA WRONKI S.A. IN 2007

In 2007 Amica market surrounding was characterized by qualities which influenced its activities in different directions. An unquestionably positive phenomenon was the unusual dynamics of household appliances demand increase on the domestic market which enabled the increase in sales by 17,9% in comparison with the previous year and created opportunities for the increase in Amica products sales as well. At the same time, the tendencies and phenomena in the economy which appeared, similar to the ones in 2006, negatively influenced the process of increasing the Company activity effectiveness and worsened competition conditions. The prices of raw materials, materials and rough products necessary for production processes were still at the high level, increasing

production costs. The appreciation process of PLN in relation to the European value and American dollar increased bringing pressure on decreasing the profitability of the export sales. The weakening of these currencies value against PLN simultaneously contributed to cheaper import creating convenient conditions for the appliances’ direct importers into the domestic market. The phenomenon of enlarging the production power in the existing household appliances’ factories in our country as well as proposing new investments in the branch by the biggest European and world producers operating in Poland, which occurred in previous years, could be observable in 2007 too, causing the sharpening of competition struggle for shares in given market segments.

In the conditions described above, the Company achieved net profit higher than last year. The level of the net profit was 8 million PLN and was higher than the last year’s by 16,9%. The difference in financial results is even bigger when it comes to gross profit, which value for 2007 (12,8 million PLN) is higher by 35% in comparison with the previous year. The remaining profit categories presented in the Profit and Loss Account are also higher than last year. Sales gross profit was higher by 14,2%, sales profit by 43% and the operational activity profit crossed the analogical category in 2006 by 22,7%. The Company

Ladies and Gentlemen,


Brief Assessment of the Situation of Amica Wronki S.A. in 2007

achieved the results realizing the altogether income from products, goods and materials’ sales at the level of 1,18 billion PLN and showing the 7,5% dynamics against last year’s income value. When it comes to export, it also increased in 2007, by 10% in comparison with the disposal value in 2006. Its altogether value was 171 million euro, which is the Company’s total income value. On the domestic market, the Company maintained the position of the leader achieving 16,4% market share.

The financial results, which are more profitable than in 2006, enabled the Company to improve profitability ratios. It concerns all of them, so return on assets ratio, return on equity ratio, gross sales profitability ratio, net sales profitability ratio and operating profitability ratio. Their level has shown the growing tendency since 2005. The activity financing ratio, the overall debt ratio and the debt-equity ratio have improved as well. In this regard, the unprofitable tendency from 2006 in comparison with 2005, seems to be reversed. The unprofitable phenomenon is the maintenance of the overall liquidity ratio and the fast illiquidity ratio below the desired value.

Both the internal and external dangers appearing last year and influencing the possibility of realizing the set strategic goals and the planned financial results, may also negatively influence the Company’s activity this

year. Amongst the external factors, we should list above all the growing PLN value against Euro which is continuously causing the export sales profitability decrease. High prices of raw materials and materials used in the production process are still increasing and influencing production costs. When it comes to internal factors, we should consider the market shares’ decrease in two segments of the Company production which are cooling and washing machines. The Supervisory Board, during its yearly work, dealt with all the essential aspects of the Company operating and functioning, including the risk areas and shapes, both internal and external. The Management Board systematically analyzed and reviewed given risk areas, as well as explored the internal control information and made appropriate decisions.

With the view of the Company’s long-term activity, we can enumerate the signs, phenomena and the qualities of the Company’s activity which occurred in 2007 and which are the basis of an optimistic vision of the Company’s further development. It should be considered that a number of them appeared again and starts to gain a character of a long-term tendency which will be present in 2008 as well:

1. dynamic development of export observable for years which value increase by 100 million Euro against 2000. The tendency confirms the high

p a g e 2 1

international competitiveness of the Company products and creates good prospects for the further expansion onto both old and new foreign markets;

2. the consequent safety policy, especially against the influence of the exchange rate changes onto the financial results as the Company became net exporter as a result of the systematic increase of sales. Using the exchange rate risk protection enables the Company to neutralize the negative influence of Polish currency appreciation on the Company financial results;

3. efficient and disciplined Company finances management entailing its safe and stable functioning;

4. the diversification of sales structure as a result of implementing small household appliances which sales contribute to high profitability. The Company plans to extend the assortment of products and increase the shares in this market segment;

5. consequent and systematic implementation of economical programs aiming at deceasing operating costs, especially production costs by decreasing the material costs;

6. consequent maintenance of innovation product policy and efficient implementation of new products in particular household appliances market segments should strengthen the Company competitive position;

7. giving strategic value to the implemented brand management policy aiming at comparing their values in volume sphere and the value of sales;

8. systematic improving of our personnel qualifications contributing to the improvement of effectiveness and work efficiency in the Company.

The tendencies and phenomena presented above constitute essential basement and simultaneously an opportunity for the further development of the Company.

Wronki, 13.05.2008

for the Supervisory Board of Amica Wronki S.A.

Tomasz Rynarzewski

The Chairman of the Supervisory Board


Financial Highlights

p a g e 2 3

2007 2006 2005

Income from Sales 1 182 443 1 099 783 1 036 583

Operating Profit 27 297 22 248 16 011

Gross Financial Result 12 802 9 464 2 441

Net Financial Result 8 000 6 842 928

Average Annual Employment 2 413 2 269 2 236

Financial Highl ights

Shareholders’ Equity (PLN ‘000) 2007 2006

Shareholders’ Equity (PLN ‘000) 326 365 311 508

Initial capital 17 475 17 475

Own Shares -23 227 -23 288

Reserve Capital 313 863 313 237

Revaluation Reserve 10 254 3 557

Profit Brought Forward – -6 315

Net Profit 8 000 6 842

Fixed assets (as at 31.12.2007) Value (PLN ‘000)

Land 4 143

Buildings 136 942

Plant & Machinery 124 183

Means of Transportation 6 245

Other Fixed Assets 40 388

Total 311 901


Independent Auditor’s Opinion

To the Shareholders o Amica Wronki Spółka Akcyjna.

We have audited the accompanying financial statements of “Amica Wronki Spółka Akcyjna” (the Company) with its registered office in Wronki, ul. Mickiewicza 52 comprising the following:wbalance sheet as at December 31, 2007, with the

balance sheet total of PLN 886 907 thousand (in words: eight hundred eighty six million, nine hundred and seven),

wprofit and loss account for the period from January 1, 2007 to December 31, 2007, with a net profit of PLN 8 000 thousand (in words: eight million),

wstatement of changes in equity for the period from January 1, 2007 to December 31, 2007, with an increase in equity of PLN 14 857 thousand (in words: 14 million eight hundred fifty seven),

wcash flow statement for the period from January 1, 2007 to December 31, 2007, with a cash outflow of PLN 9 963 thousand (in words nine million nine hundred sixty three)

wadditional notes concerning the adopted accounting standards and the other explanatory notes.

The Management Board of the Company is responsible for the preparation and reliable presentation of these financial statements in accordance with the adopted accounting policy. This responsibility includes: designing, implementing and maintaining the internal control relevant to the preparation and reliable presentation of financial statements, selecting and applying appropriate accounting policies and making accounting estimates which are appropriate in given circumstances.

Our responsibility was to audit the accompanying financial statements and express our opinion based

on the audit whether these financial statements are reliable and transparent in all material aspects necessary to asses the financial standing of the Company and its financial result, and whether they have been prepared on the basis of correctly maintained account books.

We executed our audit of the accompanying financial statements in accordance with:wthe provisions of Chapter 7 of the Accounting Act of

September 29, 1994 (uniform text: Journal of Laws of 2002, No. 76, item 694, as amended) (the Accounting Act),

w the auditing standards issued by the National Chamber of Statutory Auditors in Poland.

We planned and executed our audit in such a manner as to obtain a reasonable assurance that the audited financial statements are free from material misstatements. The audit was largely based on a random examination of evidence supporting the amounts and disclosures include in the audited financial statements. The audit also included the assessment of the accounting policies used by the Company’s Management Board and significant estimates made by the Company’s Management Board as well as the evaluation of the overall presentation of the financial statements. In our opinion the audit carried by us has provided a reasonable basis for expressing an opinion of the financial statements.

The financial statements of the Company for the previous year ending on December 31, 2006, was audited last year. We issued qualified opinion concerning those financial statements as to the lack of possibility to confirm the trade receivables amounting to PLN 37 018 thousand from a debtor in bankruptcy in respect of which the Company had a number of collaterals.

In the trade receivables item of the balance sheet the Company reported receivables of PLN 34 293 thousand from debtors in bankruptcy. The Company has a number of collaterals in place for the above receivables which are disclosed in the notes to the financial statements.

p a g e 2 5

We cannot confirm their effectiveness because the process of enforcing collaterals is complex and still pending: therefore, we cannot determine whether the value of receivables reported in the Company’s financial statements for which no revaluation write-off was made presents their recoverable amount. If all collaterals owned by the Company turned out to be ineffective, the Company’s net financial result for 2006, after taking into account the deferred tax, would be lower by PLN 31 253 thousand and the net financial result for 2007, after taking into account the deferred tax, would be higher by PLN 2 300 thousand.

Without further qualifying our opinion as to the correctness and reliability of these audited financial statements, we draw attention to the following issues:w present reliably and transparently all information

vital to the assessment of the Company’s financial position as at December 31, 2007 as well as its financial result for the financial year from January 1, 2007 to December 31, 2007,

wwere prepared, in all material aspects, correctly, i.e. in accordance with the accounting principles (policy) arising from the International Accounting Standards, the International Financial Reporting Standards and their related interpretations published in the form of Regulations of the European Commission, in the scope which is not provided for in these Standards – in accordance with the provisions of the Accounting Act and its executory provisions, and on the basis of correctly maintained account books,

wcomply with the laws affecting the content of the financial statements and the provisions of the Company’s articles of association.

Without further qualifying our opinion as to the correctness and reliability of these audited financial statements, we draw attention to the following issue:w The Company’s Management Board presented in

note 2.2 to the financial statements the influence of the hyperinflation adjustment related to the shareholders’ equity carried out pursuant to the

requirements set in IAS 29 “Financial Reporting in Hyperinflationary Economies” on the structure of the shareholders’ equity and informed about the reasons of not including this hyperinflation adjustment in the accompanying financial statements. The above calculation influences the structure of the shareholders’ equity but it does not change its total value.

We have read the Management Board Report on the Company’s business operations for the period from January 1, 2007 to December 31, 2007. In our opinion the Report fulfils all material requirements of Article 49 clause 2 of the Accounting Act and the provisions of the Regulation of the Minister of Finance off 19 October 2005 on the current and periodical information that is passed on by issuer of securities. Disclosures included in this Report derived from the financial statements audited by us are consistent with them.

Elżbieta Grześkowiak

Statutory Auditor No. 5014/2578

Cecylia Pol

The President of the Management Board HLB Frąckowiak I Wspólnicy Sp. z o.o., Poznań, ul. Plac Wiosny Ludów 2 The entity is registered to audit financial statements by the National Chamber of Statutory Auditors; Reg. No. 238 Statutory Auditor No. 5282/782

Poznań, April 16, 2008.


p a g e 2 7

Balance Sheet

Profit and Loss Account

Statement of Changes in Shareholders’ Equity

Cash Flow Statement

D e c e m b e r 3 1 s t , 2 0 0 7 ( P L N ’ 0 0 0 )

Balance Sheet

ASSETS 31.12.2007 31.12.2006I. Fixed assets 461 839 419 768

1. Intangible assets, of which: 19 354 15 975

– goodwill

2. Tangible fixed assets 346 789 327 773

3. Long-term receivables

3.1 Due from related undertakings

3.2 Due from other undertakings

4. Long-term investments 88 527 68 400

4.1 Investment immovable property 22 101 2 067

4.2 Financial assets available for sale 64 566 60 478

a) In related undertakings: 60 685 60 233

– shares in subordinated undertakings valued by equity method

b) in other undertakings 3 881 245

4.3 Loans 1 719 5 714

4.4 Other long-term investments 141 141

5. Long-term prepayments and accruals 7 168 7 620

5.1 Deferred income tax assets 7 168 7 620

5.2 Other prepayments and accruals

II Current assets 425 068 477 667

1. Stock 118 642 126 848

2. Short-term receivables 278 997 315 138

2.1 Due from related undertakings 58 062 70 076

2.2 Due from other undertakings 220 935 245 062

3. Short-term investments 23 825 35 157

3.1 Short-term financial assets 23 825 35 157

a) in related undertakings 8 551 16 687

b) in other undertakings 9 621 2 796

c) Cash and other monetary assets 5 653 15 674

3.2 Other short-term investments

4. Short-term prepayments and accruals 3 604 524

III Long-term assets classified as held for sale 3 750

Total assets 886 907 901 185

p a g e 2 9

LIABILITIES 31.12.2007 31.12.2006I. Shareholders’ equity 326 365 311 508

1. Initial capital 17 475 17 475

1.1 Called up share capital (negative figure)

1.2 Own shares (negative figure) -23 227 -23 288

1.3 Reserve capital 313 863 313 237

1.4 Revaluation reserve 10 254 3 557

1.5 Other capital reserves

1.6 Profit (loss) brought forward -6 315

1.7 Net profit (loss) 8 000 6 842

1.8 Write-offs from net profit during the financial year (negative figure)

II. Liabilities and reserves 560 542 589 177

1. Reserves for liabilities 55 005 42 394

1.1 Reserves for deferred income tax 17 114 14 831

1.2 Reserves for pensions and similar benefits 585 505

a) long-term 585 505

b) short-term

1.3 Other reserves 37 306 27 058

a) long-term 3 987 5 202

b) short-term 33 319 21 856

2. Long-term liabilities 111 272 114 735

2.1 Due to related undertakings

2.2 Due to other undertakings 111 272 114735

3. Short-term liabilities 377 410 427 219

3.1 Due to related undertakings 37 317 34 048

3.2 Due to other undertakings 340 094 393 171

4. Accruals 16 855 4 829

4.1 long-term 15 372 4 476

4.2 short-term 1 483 353

III. Liabilities directly associated with long-term assets classified as held for sale 500

Total liabilities 886 907 901 185

Book value 349 589 334 796

Number of shares (in units) 8 737 500 8 737 500

Book value per share (in PLN) 40,01 38,32

Diluted number of shares (in units)

Diluted book value per share (in PLN)

Profit and Loss Account

D e c e m b e r 3 1 s t , 2 0 0 7 ( P L N ’ 0 0 0 )

31.12.2007 31.12.2006I. Net income from sale of products, goods and materials, of which: 1 182 443 1 099 783

– from related undertakings 300 980 298 776

1. Net income from sale of products 1 017 856 967 036

2. Net income from sale of goods and materials 164 587 132 747

II. Costs of products, goods and materials sold, of which: 969 470 913 218

– to related undertakings 263 712 249 935

1. Cost of manufacture of products sold 836 367 806 479

2. Value of goods and materials sold 133 103 106 739

III. Gross profit (loss) on sales 212 973 186 565

IV. Selling costs 69 024 68 583

V. Overheads 109 598 93 957

VI. Profit (loss) on sales 34 351 24 025

VII. Other operating income 15 466 15 317

1. Profit on sale of non-financial fixed assets 4 320

2. Subsidies 80 649

3. Other operating income 11 066 14 668

VIII. Other operating costs 22 520 17 094

1. Loss on sale of non-financial fixed assets 190

2. Revaluation of non-financial fixed assets 11 057 1 475

3. Other operating costs 11 463 15 429

IX. Profit (loss) on operating activities 27 297 22 248

X. Financial income 10 984 5 591

1. Dividends and profit sharing, of which:

– from related undertakings

2. Interest, of which: 5 597 833

– from related undertakings 1 470 725

3. Profit on sale of investments

4. Revaluation of investments

5. Other 5 387 4 758

XI. Financial costs 25 479 18 375

1. Interest, of which: 17 299 16 064

– to related undertakings

2. Loss on sale of investments

3. Revaluation of investments

4. Other 8 180 2 311

p a g e 3 1

31.12.2007 31.12.2006XII. Gross profit (loss) 12 802 9 464

XIII. Income tax 4 802 2 622

1. Current amount 3 586 788

2. Deferred amount 1 216 1 834

XV. Net profit 8 000 6 842

Net profit (loss) (annualized) 8 000 6 842

Weighted average number of ordinary shares (in units) 8 737 500 8 737 500

Profit (loss) on one ordinary share (in PLN) 0,92 0,78

Diluted weighted average number of ordinary shares (in units)

D e c e m b e r 3 1 s t , 2 0 0 7 ( P L N ’ 0 0 0 )

Statement of Changes in Shareholders’ Equity

31.12.2007 31.12.2006I. Shareholders’ equity at the beginning of the period 311 508 306 909

a) Changes of adopted accounting principles (policy)b) Adjustments for basic errors -2 954I.a. Shareholders’ equity at the beginning of the period (opening balance) 311 508 303 955

1. Shareholders’ equity at the beginning of the period 17 475 17 4751.1. Changes in initial capital

a) increase (as a result of) b) decrease (as result of)

1.2 Initial capital at the end of the period 17 475 17 4752. Called up initial capital at the beginning of the period

2.1 Changes in called up capitala) increase (as a result of)b) decrease (as result of)

2.2 Called up initial capital at the end of the period3. Own shares at the beginning of the period -23 288 -23 288

3.1 Changes in own shares 61a) increase (as a result of)b) decrease (as result of) 61

– sale and exchange of Amica shares 613.2 Own shares at the end of the period -23 227 -23 288

4. Reserve capital at the beginning of the period 313 237 308 9104.1 Changes in reserve capital 626 4 327

a) increase (as a result of) 7 718 4 327– distribution of profits (above the minimum statutory value) 6 842 3 882– sale of fixed assets 876 445

b) decrease (as result of) -7 092– transferring profit and loss from previous years -7 092

4.2 Reserve capital at the end of the period 313 863 313 2375. Revaluation reserve at the beginning of the period 3 557 -1 273

– change of accounting principles– adjustments for basic errors

5.a. Revaluation reserve at the beginning of the period (opening balance) after the reconciliation of comparative data 3 557 -1 273

5.1 Changes in revaluation reserve 6 697 4 830a) increase (as a result of) 8 314 4 832

– SWAP revaluation 4 832– hedging instruments 8 314– revaluation of long-term financial assets– other

b) decrease (as result of) 1 617 2– hedging instruments (tax postponed) 1 617 2– revaluation of long-term financial assets

5.2 Revaluation reserve at the end of the period 10 254 3 557

p a g e 3 3

31.12.2007 31.12.20066. Other reserves at the beginning of the period

– changes of accounting principles– basic errors

6.a. Other reserves at the beginning of the period (opening balance) after the reconciliation of comparative data6.1 Changes in other reserves

a) increase (as a result of)b) decrease (as result of)

6.2 Other reserves at the end of the period7.1 Profit (loss) brought forward at the beginning of the period 527 5 085

a) changes of adopted accounting principlesb) adjustments for basic errors -2 954

7.2 Profit (loss) brought forward at the beginning of the period, after the reconciliation of comparative data 527 2 131

7.3 Profit brought forward at the beginning of the period 6 842 5 085a) changes of adopted accounting principles (policy)b) adjustments for basic errors -2 954

7.4 Profit brought forward at the beginning of the period, after adjustments 6 842 2 131 Changes in profit brought forward -6 842 -3 590

a) increase (as a result of) 292– distribution of profit brought forward– other – adjustment of reserves from revaluation 292

b) decrease (as result of) 6 842 3 882– reclassification to reserve capital 6 842 3 882

8.4 Profit brought forward at the end of the period -1 4598.5 Loss brought forward at the beginning of the period -6 315

a) changes of adopted accounting principles (policy)b) adjustments for basic errors

8.6 Loss brought forward at the beginning of the period after the reconciliation of comparative data -6 315

a) increase (as a result of) -876 -4 856– SWAP and sale of fixed assets -4 856 – bringing forward to reserves connected with the sale of fixed assets -876

b) decrease (as result of) 7 191– deferred on the update of the fixed assets’ sale’s evaluation 99– previous years’ loss transfer to reserve capital 7 092

8.7 Loss brought forward at the end of the period 0 -4 8568.8 Profit (loss) brought forward at the end of the period 0 -6 315

9. Net result 8 000 6 842a) Net profit 8 000 6 842b) Net lossc) Write-offs from profit

II. Shareholders’ equity at the end of period 326 365 311 508

D e c e m b e r 3 1 s t , 2 0 0 7 ( P L N ’ 0 0 0 )

Cash Flow Statement

31.12.2007 31.12.2006A. Cash flows from operating activities

I. Net profit 8 000 6 842

1. Income tax 4 802 2 622

2. Profit before tax 12 802 9 464

II. Total adjustments 56 382 -16 940

1. Amortization and depreciation 33 240 33 947

2. Foreign exchange gains (loses) -1 184 197

3. Interest and profit sharing (dividends) 16 063 15 499

4. Profit (loss) on investment activities -4 320 413

5. Change in provisions 10 328 -5182

6. Change in stock 8 206 -26 244

7. Change In receivables 43 236 -72 128

8. Change in short-term liabilities, except from loans and credits -37 509 45 020

9. Change in prepayments and accruals -3 102 -383

10. Other adjustments -8 220 -4 868

11. Income tax paid -356 -3 211

III. Net Cash flows from operating activities (I+/II) – indirect method 69 184 -7 476

B. Cash flows from investing activitiesI. Inflows 13 477 9 079

1. Sale of intangible assets and tangible fixed assets 931 385

2. Sale of investment in immovable property and intangible assets 3 531 2 960

3. From financial assets, of which: 836 266

a) in related undertakings 836 266

– sale of financial assets

– dividends and profit sharing

– repayment of long-term loans

– interest 103

– other financial inflows 163

b) in other undertakings

– sale of financial assets

– dividends and profit sharing

– repayment of long-term loans

– interest

– other financial inflows

4. Other investment inflows 8 179 5 468

p a g e 3 5

31.12.2007 31.12.2006II. Outflows -50 283 -43 434

1. Acquisition of intangible assets and tangible fixed assets -41 401 -28 551

2. Investments in immovable property and intangible assets

3. For financial assets, of which: -390 - 155

a) in related undertakings -390 - 155

– acquisition of financial assets - 155

– granted long-term loans

b) in other undertakings

– acquisition of financial assets

– granted long-term loans

4. Dividends and other profit sharing paid to minority

5. Other investment outlays -8 491 -14 728

III. Net cash flows from investing activities (I-II) -36 806 -34 355

C. Cash flows from financial activitiesI. Inflows 455 480 498 416

1. Net inflows from issue of shares and other equity instruments and additional payments to equity

2. Credits and loans 47 985 60 699

3. Issue of debt securities 393 995 433 089

4. Other financial inflows 13 500 4 628

II. Outflows -497 821 -457 923

1. Acquisition of own shares

2. Dividends and other payments to shareholders

3. Outflows under distribution of profit other than payments to shareholders

4. Repayment of credit and loans -64 637 -47 853

5. Redemption of debt securities -410 282 -390 670

6. Other financial liabilities

7. Payments under finance lease contracts -4 532 4 234

8. Interest -18 370 -15 166

9. Other financial outflows

III. Net cash flows from financial activities (I-II) -42 341 40 493

D. Net cash flows, total (A.III+/-B.III+/-C.III) -9 963 -1 338

E. Change in cash and cash equivalents, of which: -10 020 -1 327

Change in cash and cash equivalents due to foreign exchange gains/loses 57 10

F. Cash and cash equivalents at the beginning of the period 15 633 16 971

G. Cash and cash equivalents at the end of the period, of which: 5 671 15 634

– with limited transferability 19 468

www.amica.com.pl

Amica Wronki S.A., ul . Mickiewicza 52, 64-510 Wronki tel . +48 67 25 46 100, fax +48 67 25 40 320

Documents

Annual Report - Amica