audit report 2011 sample

8/11/2019 Audit Report 2011 Sample

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Audit report

XYZ company

Closing period of the company:01.01.2011 - 31.12.2011

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Stat. Number: 12345678-1234-123-12

Registr. Number: 12-12-123456

No. Description / THUF 31.12.2010 Effect of 31.12.2011

revision

1 A FIXED ASSETS

2 I. INTANGIBLE ASSETS

3 I.1 Capitalized start-up and restructuring costs

4 I.2 Capitalized value of research and development

5 I.3 Concessions, licenses and similar rights and assets

6 I.4 Intellectual p roperty

7 I.5 Goodwill

8 I.6 Advances and prepayments on intangible assets

9 I.7 Adjusted value of intangible assets

10 II. TANGIBLE ASSETS

11 II.1 Land and buildings, rights to immovable

12 II.2 Plant and machinery, vehicles

13 II.3 Other equipment, fixtures and fittings, vehicles

14 II.4 Breeding stock

15 II.5 Assets in course of construction

16 II.6 Payment on account

17 II.7 Adjusted value of tangible assets

18 III. FINANCIAL INVESTMENTS

19 III.1 Long-term participations in affiliated undertakings

20 III.2 Long-term loan to affil iated undertakings

21 III.3 Other long-term participations

22 III.4 Long-term loan to independent undertakings

23 I II .5 Other long-term loans

24 III.6 Securities signifying a long-term creditor relationship

25 III.7 Adjusted value of financial investments

26 III.8 Revaluation of financial investments

27 B CURRENT ASSETS

28 I INVENTORIES

29 I .1 Raw mater ials and consumables

30 I.2 Work in progress, intermediate and semi-finished products

31 I.3 Animals for breeding and fattening, other livestock

32 I.4 Finished products

33 I.5 Goods for resale

34 I.6 Advances and prepayments on inventories

35 I I. RECEIVABLES

36 II.1 Accounts receivable ( trade debtors)

37 II.2 Receivables from affiliated undertakings

38 II.3 Receivables from independent undertakings

39 I I.4 B il ls o f exchange receivab le

40 II.5 Other receivables

41 I I.6 Revaluation of receivables

42 II.7 Positive revaluation of derivativen

43 I II . SECURITIES

44 III.1 Participations in affiliated undertakings

45 I II .2 Other part ic ipa tions

46 III.3 Own shares and own partnership shares

47 III.4 Securities signifying a creditor relationship for trading purposes

48 III.5 Revaluation of securit ies

49 IV. LIQUID ASSETS

50 IV.1 Cash in hand, checks

51 IV.2 Cash at bank

52 C PREPAYMENTS AND ACCRUED INCOME

53 C.1 Accrued income

54 C.2 Defer red costs, expenses

55 C.3 Other de fer red expenses

56 TOTAL ASSETS

2012.

XYZ company

X.Y.

According to the audit report, I hereby confirm:

dr. Sernyi Ivn

ny.sz.: 003607

XYZ company

BALANCE SHEET version A

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Stat. Number: 12345678-1234-123-12



revision

57 D. SHAREHOLDERS EQUITY

58 I. ISSUED CAPITAL

59 including: ownership shares repurchased at face value

60 II. ISSUED CAPITAL UNPAID (-)

61 III. CAPITAL RESERVE

62 IV. ACCUMULATED PROFIT RESERVE

63 V. TIED-UP RESERVE

64 VI . REVALUATION RESERVE

65 VI.1 Reserve from value adjustments

66 VI.2 Revaluation Reserve from the fair value accounting

67 VII. PROFIT OR LOSS FOR THE YEAR

68 E. PROVISIONS

69 E.1 Provisions for expected l iabi li ties

70 E.2 Provisions for future expenses

71 E.3 Other provisions

72 F. LIABILITIES

73 I. SUBORDINATED LIABILITIES

74 I.1 Subordinated liabilities to affil iated undertakings

75 I.2 Subordinated liabilities to independent undertakings

76 I.3 Subordinated liabilities to other economic entities

77 II. LONG-TERM LIABILITIES

78 II.1 Long-term loans

79 II.2 Convertible b onds

80 II.3 Debts on issue of bonds

81 II.4 Investment and development credits

82 I I.5 Other long-term credi ts

83 II.6 Long-term liabilities to affil iated undertakings

84 II.7 Long-term liabilities to independent undertakings

85 II.8 Other long-term l iabi li ties

86 III. CURRENT LIABILITIES

87 III .1 Short -term loans

88 including: convertible bonds

89 III.2 Other short-term credits

90 III.3 Advances received from customers

91 III.4 Accounts payable (trade creditors)

92 III.5 Bil ls of exchange payable

93 III.6 Short-term liabilities to affiliated undertakings

94 III.7 Short-term liabilities to independent undertakings

95 III.8 Other short- term liabil it ies

96 III.9 Revaluation of l iabi li ties

97 III.10 Negative revaluation of derivativen

98 G. ACCRUALS AND DEFERRED INCOME

99 G.1 Deferred income

100 G.2 Accrued costs, expenses

101 G.3 Deferred revenues

102 TOTAL EQUITY AND LIABILITIES

2012.

XYZ company

X.Y.


dr. Sernyi Ivn

ny.sz.: 003607

XYZ company

BALANCE SHEET version A

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Stat. Number: 12345678-1234-123-12



revision

1 1 Net domestic sales

2 2 Net external sales

3 I. NET SALES REVENUE

4 3 Change in stocks of f inished goods and work in progress5 4 Own work capitalized

6 II. OWN PERFORMANCE CAPITALIZED

7 III. OTHER INCOME

8 including: loss in value marked back

9 5 Cost of raw materials and consumables

10 6 Cost of services

11 7 Cost of other service activi ties

12 8 Cost of goods sold

13 9 Cost o f services sold ( in termediated)

14 IV. MATERIAL COSTS

15 10 Wages and salaries

16 11 Other employee benefits

17 12 Contr ibut ions on wages and salar ies18 V. STAFF COSTS

19 VI. DEPRECIATION

20 VII. OTHER OPERATING CHARGES

21 including: loss in value

22 A OPERATING (TRADING) PROFIT

23 13 Dividends and profit-sharing (received or due)

24 including: from affil iated undertakings

25 14 Capital gains on inves tments


27 15 Interest and capital gains on financial investments


29 16 Other interest and similar income (received or due)


31 17 Other income from financial transactions

32 including: revaluation

33 VIII. INCOME FROM FINANCIAL TRANSACTIONS

34 18 Losses on financial investments

35 including: to affil iated undertakings

36 19 Interest payable and similar charges

37 including: to affil iated undertakings

38 20 Losses on shares, securities and bank deposits

39 21 Other expenses on financial transactions

40 including: revaluation

41 IX. EXPENSES ON FINANCIAL TRANSACTIONS

42 B PROFIT OR LOSS FROM FINANCIAL TRANSACTIONS

43 C PROFIT OR LOSS ON ORDINARY ACTIVITIES

44 X. EXTRAORDINARY INCOME

45 XI. EXTRAORDINARY EXPENSES

46 D EXTRAORDINARY PROFIT OR LOSS

47 E PROFIT BEFORE TAX

48 XII. TAX PAYABLE

49 F PROFIT AFTER TAX

50 22 Profit reserves used for dividends and profit-sharing

51 23 Dividends and profit-sharing paid (approved)

52 G PROFIT OR LOSS FOR THE YEAR

2012.

XYZ companyX.Y.


dr. Sernyi Ivn

ny.sz.: 003607

XYZ company

PROFIT AND LOSS STATEMENT - EXPENSES SHOWN ACCORDING TO THEIR NATURE - version 'A'

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To the Owners / Shareholders of XYZ company:

Independent auditors report

Management is responsible for the preparation and fair presentation of financial statements in accordance with the Act on Accounting and the

principles of accounting generally accepted in Hungary, and for such internal control as management determines is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud or error.

We have audited the accompanying financial statements of XYZ company (hereafter 'the Company') for the financial year 2011, which financial

statements include the balance sheet as of 31.12.2011 - where the identical sum of assets and liabilities THUF 0, and the profit of the year

THUF 0 is -, the profit and loss account concerning the period ending on the date mentioned before and the notes disclosure containing thedecisive elements of the accounting policies and other explanatory information.

Report on the financial statements

The management's responsibility for the financial statements

Auditor's responsibility

We conducted our audit in accordance with the Hungarian National Standards on Auditing and also in accordance with Hungarian law and other

legal regulations applicable to the audit.

The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error.

The sum of errors and effects - according to our estimation - not affecting the financial statements essentially is: THUF 0.

Our responsibility is to express an opinion on these financial statements based on our audit.

Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of financial statements that give a

true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the entitys internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion.

The amounts that could not be reconciliated due to a change in the accountant's person and due to the re-opening of the books were booked-off

against the profit/loss of the current year, which harms the principle of continuity and makes the previous achievement of the principle of

The Companys closure of the period-to-date is not documented with an inventory and proofs of the acknowledgement of claims.

We accept the Companys inventories on the basis of the Companys letter of representation.

According to the opinion of the audit the application of the market valuation of investments and securities is inconsistent with the provisions of

the Accounting Act.

The security of the bills of exchange is unknown.

Lacking the individual records for the business year we were only able to assess the correctness of the portfolio using approximating methods.

The sanctions resulting from not meeting (due to termination of related activities) the requirements of previously claimed and received subsidies

cannot be determined properly.

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Due to its negative proprietary capital, the Company is in a situation of liquidation. Its activities cannot be assessed according to the principle of

going concern.

The reconciliation of the balances of open own account and consignment transactions that have not been realized financially by the date of the

preparation of the report is lacking, therefore there is no adequate basis for the qualification of the portfolio.

We were unable to ascertain the open positions of accounts receivables and accounts payable (including the open items with affiliated

undertakings) using audit methods.

The buyer-supplier account reconciliation and the tangible assets inventory for the year-to-date are unknown.

In our opinion the disclosure of . information cannot be omitted from the financial statements.

The cash inventory stock is verified by certification issued by the owner and the management.

We were unable to check the material tax relationships, correct settlement and annual review of the Company in the closing documentation.

In respect of , the Company has no system of record keeping which our audit could have made use of when supervising the

implementation of the principles of accounting.

The data provided by the Company during the closing is not comprehensive. On the basis of the Companys letter of representation the missing

closing disclosure has been accepted due to the use of other auditing methods.

The claim value of the lawsuits ongoing against the Company is THUF . The final outcome of these cases cannot be established at the

present time. The Company has created no provisions whatsoever to cover possible future liabilities.

The valuation of the inventories according to the state of readiness is your estimation, we could not form an own opinion on this issue.

The completeness of the Companys asset and liability portfolio has been accepted on the basis of the letter of representation.

We have accepted the establishment of the market values applied in the financial statements on the basis of the opinion of the management

and an external expert commissioned by the management. On the basis of the methodology applied in the valuation of assets and goodwill and

the results of the expert opinion we are unable to formulate an opinion regarding the validity of the market values featured in the financial

Due to the re-entry of the Companys vouchers into the books, the principle of continuity has been violated. In respect of the rebooked periods,

the effects of possible further corrective items are unknown at the time of the conclusion of the audit. The settlement of the tax corrections due to

the rebooking will be performed after the conclusion of the audit.

We were unable to ascertain the valuation and existence of the end-of-year inventories using auditing methods.

The closing values for the year 2010 were accepted as the opening values for 2011 according to Hungarian laws, with the correction of the profit

reserve and the settlement of unknown items.

We do not have any information on the market value of the immovables.

We were unable to ascertain the existence of opening items.

The differences resulting from stock-taking in connection with the non-available balances of the opening items were booked out against the

accumulated profit reserve.

We have not participated in the physical inventory taking at the end of the business year, as this occurred prior to the issue of our mandate to

perform the audit. Due to the nature of the Companys records we were also unable to ascertain the inventory quantities and so the balance

sheet value using other audit methods.

We have accepted the establishment of the market values applied in the financial statements on the basis of the opinion of the management

and an external expert commissioned by the management. The comparative market valuation method and the market price were not available

to us to assess the value of the investments. We were unable to formulate an opinion on the veracity of the market values entered into the

financial statements on the basis of the methodology applied in the valuation of assets and goodwill and the results of the expert opinion,

especially as regards the THUF ......... market value of the active capital consolidation difference (goodwill).

The audit did not participate in the year end physical inventory taking. Due to the nature of the Companys records we were also unable to

ascertain the inventory quantities and so the balance sheet value using other audit methods.

The shareholders' equity is 0,00 per cent of the issued capital. The loss on the Company's capital is continuous. In order to continue theactivities - according to the provisions of the Act on Business Associations - a decision has to be made to settle the Company's capital.

The Company's own capital is negative. According to the Act on Business Assiciations a decision has to be made to settle the capital.

The financial settlement of open trade debtors from previous years (THUF ) has not been realized until the preparation of our report. No loss

in value has been accounted in connection with these items.

The purchase of the immovables shown among the assets in course of construction by holding up the proprietary right is a legal transaction, that

has some unrealized points so its presentation among the tangible assets is uncertain, it is according to the audit unjustified.

The balance confirmation of loans / credits shown among the long term liabilities are not known.

According to the estimations of the audit the loss in value of the receivables could significantly exceed the loss in value (THUF ...) accounted by

the Company's estimations.

We have accepted the settlement of the inventories, the revenues in connection with the inventories and the state of readiness on the base of

the statements of the Company's management. The audit could not form an own opinion on this issue.

According to the opinion of the audit the principle of continuity does not prevail concerning the data of the accumulated profit reserve of theprevious years and that of the current year.

The amounts of trade debtors according to the general ledger and to the analytics show a difference.

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The financial statements provide together with the above mentioned restrictions a true and fair view of the financial and earnings position of XYZ

company as of 31.12.2011.

The title of the debts (THUF ) shown among the liabilities is not settled.

The Company's accounting and tax practice, that handles the specialities of movie-making not uniformly, bears hidden burdens.

The booking of the tax liabilities and tax expenses is not connected to the financial settlement of taxes in the system of double entry bookkeping;

the tax liabilities of the current period has to be booked - independently from financial settlement - at the end of each period.

We have audited the financial statements of XYZ company, including the various components and items and accounting and bookkeeping

documents, in due observation of the national accounting standards. Based on our findings we are satisfied that the financial statements - due to

the (possible) effects of matters discussed in the basis of adverse opinion paragraph - has not been drawn up in accordance with the provisions

of the Act on Accounting and the general principles of accounting.

Opinion

Adverse Opinion

The financial statements does not provide a true and fair view of the financial and earnings position of XYZ company as of 31.12.2011.

Without qualifying our opinion we would like to request your attention to inform you, that this auditors report was prepared for the agenda of the

annual general meeting of the chief governing body of the Company, which is about to discuss the financial statements, and so it does not

contain the effect of those decisions that will be made by the general meeting concerning the financial statements! Based on the information

received from you, there were no such significant events between the end of our audit (the date of our report) and the annual general meeting of

the chief governing body that could effect the valuation on the balance sheet date.


documents, in due observation of the national accounting standards.Based on our findings we are satisfied that the financial statements have

been drawn up in accordance with the provisions of the Act on Accounting and the general principles of accounting.

The market values that were taken into consideration at the valuation of the financial statements were presented - on the basis of the

estimations of the management and to the letter of representation - according to the generally accepted valuation principles. The auditor could

not form an own opinion about these values.

The financial statements provide a true and fair view of the financial and earnings position of XYZ company as of 31.12.2011.

The aim of the valuations applied in the financial statements is to measure the prices between the parties on the market but not the estimation of

the prices to be applied in liquidation conditions or through forced sales. The fact that the markets got inactive increases the risk involved in the

fair valuation and decreases its reliability, nevertheless our audit cannot be take the fact as its starting point that the prices of inactive or non-

liquid markets are going to be long lasting. Based on the aforementioned according to the accounting policies of the Company losses in value

Without qualifying our opinion we would like to request your attention to inform you, that due to widely known economic conditions the

Companys market conditions were significantly changed, and that increases the risk of the application of the principle of going concern. The

inactive markets increase the risk of the accounting of unexpected significant losses in value, depreciations, the financing could be more difficult

and more expensive, the forced sale of goods could lead to the realization of previously not calculated significant losses.

Basis for Adverse Opinion


documents, in due observation of the national accounting standards. Based on our findings we are satisfied that the financial statements except

with the (possible) effects of the issues mentioned in the basis of qualified opinion paragraph have been drawn up in accordance with the

provisions of the Act on Accounting and the general principles of accounting.

-...

Qualified Opinion

Emphasis of Matter

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The Company has resolved to transform its incorporation and merge into LTD.

The Company has resolved to wind up without legal successor and perform final settlement.

The shareholders of the Company have issued a statement (a simple guarantee) warranting the repayment of the debts of .. LTD at the

end of the business year.

Without qualifying our opinion we would like to request your attention to inform you, that due to widely known economic conditions the

Companys - like all the other companies' - market conditions were significantly changed. The changed market conditions increase the risk

involved in the fair valuation and decrease its reliability, nevertheless our audit cannot be take the fact as its starting point that these changes in

the markets are going to be long lasting. Based on the aforementioned according to the accounting pol icies of the Company possible

revaluations can only be accounted with the knowledge of long-term market tendencies.

The results of analyzing the data of the financial statements (especially: .) show that the principle of going concern could be

in danger in the future.

Without qualifying our opinion we would like to request your attention to inform you, that this auditors report was prepared for the agenda of the

annual general meeting of the chief governing body of the Company, which is about to discuss the financial statements, and so it does not

contain the effect of those decisions that will be made by the general meeting concerning the financial statements.

The own equity is 0,00 per cent of the issued capital. The loss on the Company's capital is continuous.

Other legal regulations prescribe further disclosure duties.

During the current business year, the Company terminated its activities, its utilization has begun.

The basis of the valuation of a stock are the audited or non-audited financial statements of the enterprise embodying the right inherent in the

stock. The supervision of this is beyond the scope of our audit, therefore the compiler of such reports bears responsibility for them.

Liquidation/final settlement proceedings have been initiated against a major strategic partner of the Company. The Company has lost its

We have accepted the establishment of the estimated market values applied in the financial statements on the basis of the opinion of the

management and an external expert commissioned by the management.

The immovables, that are not in the books, bear hidden reserves

Like all other estimations these also have a high amount of basic uncertainty.

The characteristic of the estimated market values is that they were not established on a perfect and efficient market at real and identic

transactions, but they are a result of valuation calculations based on estimations concerning the future.

The utilization (rent, sale) of the immovables shown under tangible assets is uncertain. It could be therefore reasonable - based on future

information - to reclassify these immovables to the inventories.

The risk of the valuation-estimations is especially high in the case of the Company because the data of the present or past do not contain the

estimations of the cash flow of the future used at the valuation.

The reasons for the repeated disclosure of the financial statements of are

No badwill was accounted at the purchase of the participation shown in the books of the Company

If all the unsure items listed in our qualified opinion were accounted to the profit / loss of the year (items / THUF), the Company would loose

significant part of its wealth, its own equity would be THUF

This report was issued because the financial statements audited on . contained an error corrupting the true and fair view and had to be

The revaluation reserve of the previous years () was booked-off in the amount of THUF

The Zrt. came into existence as the successor of ......................... Kft., so the balance sheet and the P&L statement does

not contain any opening balances. The earnings of the current year contain the data beginning from .........................................

We would like to remind you that we issued our report, because the company has changed the balance sheet day. The P & L statement

contains only the profit of ... month(s), so it can not be compared to the data shown in the previous year.

The fair valuation is no longer necessary because the Company is no longer part of a consolidation.

Other Matter

Without qualifying our opinion we request your attention to inform you that the Company has not prepared a business report.

The financial statements of the Company for the year 2010 were audited by xxx, who issued in his / her auditor's report dated on xx.xx.xxxx an

unqualified opinion supplemented with remarks requesting the owners' attention / a qualified opinion.

The financial statements of the Company for the year 2010 have not been audited.

Management is responsible for the preparation of the business report in accordance with the Act on Accounting and the principles of accounting

generally accepted in Hungary.

The auditor issued a qualified report because

We have conducted the audit of the business report of XYZ company as of 31.12.2011.

Our work with respect to the business report was limited to the assessment of the consistency of the business report and the financial

statements, and did not include a review of any information other than that drawn from the audited accounting records of the Company.

Our responsibility as well is to assess the consistency of the business report and the financial statements.

The business report of XYZ company for the year 2011 is in conformity with the data of the financial statements of XYZ company for the year

2011.

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Budapest,

2012.

We would like to remember you that pursuant to the provisions of the act on bussiness associations the managing director has to prepare a

written statement towards the members' meeting that the payment (monetary and non-monetary allowances too) wont endanger the liquidity of

the company and the interest of the creditors. The managing director's resoponsibility for the damage resulting from payments without this

written statement or from false statements happens according to the general regulations valid for executive officers. The managing director is

obliged to send the statement within 30 days to the court of registration.

We have involved the effect of the decision on dividend made by the annual meeting in our report.

Audit Service Kft.

The financial statements were accepted by the general meeting on -.

Registered audit company

Registered auditor

dr. Sernyi Ivn dr. Sernyi Ivn

ny.sz.: 003607

This opinion is inseparable part of the financial statements of the company named above.

Any kind of manipulation of this opinion or any kind of abuse of this opinion with the help of false data will invalidate the opinion and could have

a legal supervisory procedure as a consequence!

ny.sz.: 001030

1022 Budapest, Bimb t 3.

Budapest,

We issued our auditor's report on 2012. from the financial statements that were presented to the annual general meeting of the

Company, and the effects of the subsequent events were only audited until that day.

-

(The printed version of the auditor's report was signed.)

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0 THUF

0 THUFN/A

0 THUF

0,00

0,00

0,00

No.9 account class

No.5 account class

No.8 account class

0,00

0,00

Balance sheet profit

Dividend Payment

No.3 account class

0,00No.1 account class

No.2 account class

0,00

0,00

0,00

0,00

0,00

0,000,00

Max. value of dividend payment:

- financial problems due to capital supply,

- loss of market; inner risks due to change in the strategy,

- significant off-the-book charges.

- significant faults due to delay of payments,

0,00

0,00

Significant off the book charges:

Our working relations, the processing of information received are reflected in our working documents, nevertheless we call

your attention to the fact that the responsibility rests on you for keeping without any subsequent changes the original

documents.

In connection with the business report:

Our work in connection with the business report has come down only to related data and does not include other information

that is based on accounting records of the Company which have not been audited before.

- from which: approved dividend in current year:

In our conclusions:

Exceeding our task to prepare the financial statements but as an integral part of our job we call your kind attention to the

followings:

The provision for guarantees and forward liabilities, future expenses is based on the data supplied by the management. Its

possible surplus liabilities, not settled legal background can be fraught with additional risk, it could have hidden liabilities.

0,00

0,00

0,00

0,00

Audited balance sheetHUF Closing of the company

31.12.2011

The economic activity of the company has been carried out in conformity with Hungarian regulations.

- operational inherent losses,

Balance sheet footing

No.4 account class

Our report contains our observations, remarks and the confirmation of the result has been fulfilled in accordance with these

findings. We are of the opinion that:

The closing is done according to the going concern. According to the statements of the management there are no

substantial:

The conduct of affairs at the company has covered the economic events and contained the documentation of its

0,00

Capital position, ratio of equity/issued capital :

Phenomena, significant off the book items:

The problems that we have disclosed and reported towards you should be settled by you. You should also consider the

things written in our advisory letters.

There was no local control concerning the stock of accounts receivables/liabilities, and this is fraught with risk.

Of the year-end stock rotation time analysis has not been done, consequently possible frozen stocks were not revealed or

devaluated.

Risks:

Denomination

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31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.12.2011

actual actual actual actual actual

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0,00% 0,00% 0,00% 0,00% 0,00%

0,00% 0,00% 0,00% 0,00% 0,00%

0,00% 0,00% 0,00% 0,00% 0,00%

Shareholders equity

The owners loan is a balancing item, its interest in case of affiliated means other income. The source of the amount of the

loan was not verified.

Due to lack of statements, prescribed data supply by the management:.

The tax content of the accounts have to be revalued according to the gradation.

The permanent correspondence to the liabilities regulated in the Act on Business Associations need to be enforced.

We would like to remember you that pursuant to the provisions of the act on bussiness associations the managing directorhas to prepare a written statement towards the members' meeting that the payment (monetary and non-monetary

allowances too) wont endanger the liquidity of the company and the interest of the creditors. The managing director's

resoponsibility for the damage resulting from payments without this written statement or from false statements happens

according to the general regulations valid for executive officers. The managing director is obliged to send the statement

within 30 days to the court of registration.

Important datas

Denomination / THUF

Proposals:

The administration of the share book is carried out by the management, the legal representatives, we were not able to

assess individual control.

Differences between marketable and audited value of investments/securities can carry hidden charges.

The values of unsettled tax and other liabilities, their reconciliation with the tax authorities is a task due in 2012, the

settlement can carry hidden charges (penalty, fine, other).

The stock of cash in hand is supported by reconciliation, certified by the management or owners.

The checking, settlement of the tax current account analytical accounts ledger must be fulfilled.

The proper accounting is objected in many cases.

Issued, unpaid capital THUF 0.

Profit or loss for the year

Working capital

We kindly request you to make the necessary decisions concerning the phenomena disclosed and inform us on their

execution. From our side we are at your disposal to contribute to the settlement of these questions.

Important datas

The newly accounted and corrected values in some years are based on the owners and management information, re-

accounting. Their content have been received, non-credible. No supervisory control were made according to the re-

accounting.

Capital/equity

Return on Equity

Liabilities/Capital

Total Assets

Net sales revenue

31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.12.2011

Shareholders equity Net sales revenue Profit or loss for the year Working capital Total Assets

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Budapest,

2012.

ny.sz.: 001030

Audit Service Kft.

Registered audit company Registered auditor

ny.sz.: 003607

dr. Sernyi Ivn

1022 Budapest, Bimb t 3.

31.12.2007 31.12.2008 31.12.2009 31.12.2010 31.12.2011

Capital/equity Return on Equity Liabilities/Capital

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Company name: XYZ company

Address: 1111 Budapest, Egy utca 1.

Date of completion: 2012.

Letter of Representation

The present Letter of Representation of XYZ company (the Company) is issued in relation to the audit of the annual financial

statements (balance sheet - where the identical sum of assets and liabilities THUF 0, and the profit of the year THUF 0 is - profitand loss statement, supplement, jointly referred to as financial statement) of 31.12.2011.

a.) for the compilation of the annual financial statement from data registered and maintained according to the provisions of Act C.

2000 (the Accounting Act),

b.) for the Companys accounting,

a.) all transactions,

b.) deals and

To enable the assessment of the conformity of the financial statements with Act C. 2000 (the Accounting Act) we confirm, to the

best of our knowledge and belief given to you in connection with your audit of the Companys financial statements:

1. We acknowledge our responsibility:

2. We acknowledge that it is our duty to establish and maintain an internal accounting controlling system that provides adequate,

though not full guarantees against illegal or irregular actions and errors.

3. We have disclosed to you fully, comprehensively and veraciously the summary of the audited year's

a.) no willful negligence on the part of the Company management or those employees who hold key positions in the Companys

administrative processes,

b.) no willful negligence on the part of those employees who could have a significant influence on financial data,

c.) for the conformity of the annual financial statement with Act C. 2000 as well as the actual state of affairs,

d.) and for the reliability of the financial statements depiction of the Companys net assets and the veracity of the depiction of the

Companys financial status.

4. We have provided you with all financial records and related data and have informed you about all transactions that may affect

the financial statements, thus, especially:

a.) decisions of the owners and the management, understandings and relationships between the owners,

g.) out-of-Balance Sheet liabilities, rights, pending suits, disputed or doubtful affairs.

b.) the unique/extraordinary occurrences of the year-to-date,

c.) extraordinary contractual agreements related to the exercise of claims and settlement of liabilities,

c.) no feedback of significant impact from the regulatory authorities during reconciliations indicating the incompleteness or non-

compliance of financial statements and reports.

5. There has been:

c.) business occurrences

d.) further informations with bearing on the Companys asset-financial-profit situation with separate explanatory notes.

d.) distinction between business and non-business occurrences and transactions,

e.) limitations and constraints, rights and advantages in the financial statement,

f.) market information, depreciations, plans regarding the continuation of the business,

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Signature of company's representative


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c.) that are not part of accounting, but impact the asset-financial-income situation,

c.) agreements concluded with financial institutions, including limitations on the balance of financial assets, overdraft or othersimilar agreements;

d.) that have a significant and decisive role in the explanation of the impact of undertaking of right and obligations during the year

after the end of the year.

9. In respect of the compilation of the report we declare the following:

6. We are not aware of:

b.) any breaches against the law or possible illegal actions or misdemeanors whose results:

a.) any irregularities committed with the complicity of the management of employees of the Company with a key role in

accounting or any other irregularities committed by other employees that could significantly influence the balance sheet report,

a.) we have exercised during, but not in respect of the year-to-date,

- should be reflected in the balance sheet,

- should necessitate the making of provisions,

- or should be published in the supplement to ensure veracity.

b.) preemptive stock purchase options or similar agreements, reserve of stocks for options, surety, transformation or to meet any

other criteria;

7. We have provided you with all information in respect of the transactions listed below:

a.) debts and claims toward parties that are in affiliated relationship, including sales, acquisitions, transfers, loans, leasing and

guarantee agreements;

In the case of purchased inventories whose book value was higher than their market value on the balance-sheet date, we have

calculated depreciation.

e.) Claims towards buyers and other claims subsisting on the balance.-sheet date are claims made in good faith that have been

established on or before the balance sheet date.

f.) All cash and bank accounts, other properties and assets are represented in the accounting date report. The Company has

lawful title on the assets in its property represented in the balance-sheet and supplement.

g.) All liabilities of the Company are represented in the accounting date report. The Company has no unenforced claims or

liabilities.

We have not received any notifications from the authorities about any breaches against the statutory provisions of financialrecords or the incompleteness thereof that would have had a significant effect on the balance sheet report.

The Company has met all its contractual obligations whose omission would have had a significant effect on the balance sheet

report.

d.) In keeping with the Accounting Act we have valuated own production at production cost. The book value of own production isnot in excess of the market value known on the balance-sheet date and the expected sales price.

In the case of own production where the book value was higher than their market value on the balance-sheet date and the

expected sales price, we have calculated depreciation.

b.) In keeping with the Accounting Act we have valuated invested financial assets at purchase price. We are not aware of any

facts that would necessitate the calculation of depreciation over invested financial assets.

b.) we have corrected after the end of the year-to-date during the course of auditing work,

8. We have separately provided you with information that:

d.) agreements about the repurchase of previously sold assets.

a.) We have valuated intangible and tangible assets according to the Accounting Act at purchase value, deducting the

depreciation established on the basis of the useful life of such assets.

c.) In keeping with the Accounting Act we have valuated purchased inventories at purchase price. The book value of purchased

inventories is not in excess of the market value known on the balance-sheet date.

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- all off-balance-sheet liabilities (e.g. mortgage, leasing fee, bills of exchange issued to cover liabilities, guarantees extended) that

have an impact on the assessment of the asset situation of the Company.

i.) The Company has no other liabilities to be accrued or published or other profits/losses. The balance sheet report and the

supplements appropriately contain the following:

- Transactions of affiliated undertakings and the claims and liabilities in connection with them, including sales, purchases, loans,transfers, leasing.

h.) The balance-sheet report and the supplements contain:

- all items that are required for the veracious depiction of the Companys assets situation and the results of its activity as provided

for by the Accounting Act,

- all items stipulated by other laws and regulations governing the Company, as well as

- marketable financial assets

- other financial liabilities

- The verbal or written guarantees extended by the Company, it's subsidiary, the director or officers of the Company.

- Cession agreements with financial institutions agreements about the limitation of the cash or overdraft on the bank account or

similar agreements.

- Agreements about the repurchase of previously sold assets.

j.) We are not aware of any substantial debts or claims that would have a significl impact on our Companys financial situation.

10. If we have used fair valuation, the we declare the following:a.) The fair valuation of financial assets and liabilities have been depicted and published in conformance with the Accounting Act.

b.) The fair values of assets and liabilities published in the manner stipulated by the Accounting Act reflect our best estimates of

fair value.

- Agreements outside of the normal course of business.

e.) We confirm that we have reviewed all financial assets and liabilities open on the balance sheet date and have classified them

into one of the following groups as per Articles 59/A-59/F of the Accounting Act:- trading financial assets and liabilities

- investments to be held until maturity

- loans and claims generated by the business company

c.) The valuation methods and significant assumptions employed to establish fair value were used consistently and appropriately.

d.) The valuation methods and assumptions reflect our intentions and capabilities regarding the measures to be taken by the

Company that are relevant to the definition and publication of fair value.

- on the formal documentation the Companys risk management objectives and strategy related the hedge and,

- on the formal documentation to the initial and ongoing measurement of efficiency.

11. There exist no unenforced claims against the Company that could not have been enforceable according to the opinion of our

attorney.

and have recorded them at fair value, depreciated purchase or pur. value, as appropriate for the given category.

The classification of financial assets to be held until majority reflects our intention and capacity to hold these securities until

maturity.

f.) We have accounted derivatives and hedge transactions in conformance with the Accounting Act

- on the formal documentation of the hedge link,

12. Accounting records forming the basis of financial information reflect the transactions of our Company and its affiliates (if any)

exactly and reliably and in appropriate detail.

13. Our Company has appropriate legal title over all assets in our possessions; apart from the mortgage published these are not

encumbered in any other way.

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Company seal:

Including - among others:

14. We are in compliance with all our contractual obligations whose non-performance could have a significant impact on financial

statements.

15. There have been no occurrences following the balance-sheet date as would necessitate the correction of financial stat.

There are no transactions in the bookkeeping vouchers provided to us and their underlying economic content or in the

Companys operation that would indicate the existence of things sourcing from criminal activities.

We declare, furthermore, that no such things which are a result of criminal acts have appeared or been used during our business

activity.

18. We have understood, processed and provided all topics requested from us on the basis of the audit work program and thedocumentation and information list.

22. We declare that the definition of the qualifications substantial and significant was carried out at our discretion; the audit

does not extend over the establishment of the entire sphere of market values.

16. There have been no legal breaches or misdemeanors whose impact could be reflected in the financial reports prepared

according to Act C., 2000, On Accounting.

17. We are familiar with the provisions of Act On Money Laundering, and know of its regulations and interpretation.

- documents embodying property rights,

- dematerialized securities as well.

The tax authority is within its rights to oversee the Companys records. According to the Act on Accounting, the auditors report

does not guarantee that the Tax authority will accept it without correction or that it is free from all errors.

24. The method of establishment, magnitude and monitoring of warranty and expected liabilities are the results of our Companys

calculations and empirical data.

25. We hereby declare that the report is the result of our cooperation with the audit; we agree with its contents and confirm that

our plans and assessments are both formally and substantially identical to those laid down in the accounting report.

19. We confirm that our data processing system is a technologically closed system.

20. We have corrected and rectified all problems uncovered by the internal controlling system and have separately certified and

provided all unprocessed items.

23. We have made the Companys amortization policy and have implemented in practice the principles of the calculation of

margins and the management of valuation write-backs. It is our responsibil ity to ensure the updated status of accounting

regulation.

21. We confirm that pursuant to Section 46. (3) of the Act on Accounting the Company has reconciled its accounting

registrations with the real situation.

26. The market values in the financial statement were presented according to the generally accepted valuation principles.

audit report 2011 sample

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