EX-1 3 doc2.txt EXHIBIT 1 Additional Reports of Independent Accountants in respect of certain portions of the Registrant's audited Consolidated Financial Statements as at December 31, 2001 4 [ LETTERHEAD OF PRICEWATERHOUSECOOPERS ] 29th Floor, Philamlife Tower 8767 Pasco de Roxas 1236 Makati City, Philippines Telephone 63(2) 845 2728 Facsimile 63(2) 845 2806 REPORT OF INDEPENDENT ACCOUNTANTS We have audited the accompanying special-purpose standard parent company forms balance sheets of ECI Telecom (Philippines) Inc. as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the accompanying special-purpose standard parent company forms financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom (Philippines), Inc. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America as modified by the instructions received from the parent company as stated in the parent company's "Financial Reporting" procedure. We have audited the segmental statements of income for the year ended December 31, 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended December 31, 2001. /s/ PricewaterhouseCoopers Makati City, Philippines February 4, 2002 5 INDEPENDENT AUDITORS' REPORT ---------------------------- We have audited the accompanying balance sheets of ECI Telecom GmbH, Oberursel, Germany, as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom GmbH, Oberursel, Germany, as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended December 31, 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended December 31, 2001. KPMG January 31, 2002 /s/ KPMG Deutsche Trenkand-Giessellschaft AG -------------------------------------------- 6 BLICK ROTHENBERG ---------------- CHARTERED ACCOUNTANTS 13 YORK GATE, REGENTS PARK, LONDON NW1 4QS TELEPHONE +44(0)20 7486 0111 FAX +44(0)20 7955 6852 EMAIL mail@blickrothenberg.com INDEPENDENT AUDITOR'S REPORT TO THE DIRECTORS OF ECI TELECOM (UK) LIMITED We have audited the accompanying balance sheets of ECI Telecom (UK) Limited as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom (UK) Limited as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Blick Rothenberg ---------------------- 5 February 2002 Blick Rothenberg Chartered Accountants 12 York Gate Registered Auditors (UK) Regent's Park London NW1 4QS United Kingdom 7 [ LETTERHEAD OF PRICEWATERHOUSECOOPERS ] 18th Floor Beijing Kerry Centre 1 Guang Hua Lu Chao Yang District Beijing 100020 People`s Republic of China Telephone +86(10) 6561 2233 Facsimile +86(10) 8529 9000 28 January 2002 KPMG Somekh Chaikin Mr. Guy Anaroni / Mr. Itai Gotlib Certified Public Accountants (Israel) 17 Ha'arba'a St. Post Office 609 Tel Aviv, 61006, Israel REPORT OF INDEPENDENT ACCOUNTANTS We have audited the accompanying special-purpose standard ECI Telecom Ltd. forms (hereafter "the forms") for ECI Telecom Beijing Office expressed in RMB and USD as of and for the year ended December 31, 2001. The forms are the responsibility of ECI Telecom Beijing Office management. Our responsibility is to express an opinion on the forms based on our audit. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the forms are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the forms. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of financial information on the forms. We believe that our audits provide a reasonable basis for our opinion. The accompanying special-purpose standard company forms have been prepared solely to enable ECI Telecom Ltd. to prepare consolidated financial statements and not to report on ECI Telecom Beijing Office as a separate entity. Accordingly, the forms are not intended to present fairly the financial position of ECI Telecom Beijing Office as of December 31, 2001, or the results of its operations or its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. However, in our opinion, based on our audits, the accompanying special-purpose standard company forms for ECI Telecom Ltd. as of and for the year ended December 31, 2000 have been properly prepared, in all material respects, to give the information required to be shown in accordance with the procedures contained in the "Financial Reporting" procedures as instructed by the parent company. /s/ PricewaterhouseCoopers -------------------------- PRICEWATERHOUSECOOPERS Beijing, China 8 YOAV MARK LEWIS B.Com CA FTIA ----------------------------- Chartered Accountant 1. INDEPENDENT AUDITORS' REPORT ------------------------------- We have audited the accompanying balance sheets of ECI Telecom (AUS) Pty Ltd, as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom (AUS) Pty Ltd, as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. [Signature] /s/ Yoav Mark Lewis ------------------------ [Date] 01/02/2002 Suite 501, Level 5, 35 Spring Street Bondi Junction, NSW 2022, POBox 800 Bondi Junction NWW 1355, Fax 02 9389 9091 Phone 02-8383 4400 info@yoav.com.au 9 HOBERMAN, MILLER, GOLDSTEIN & LESSER, P.C. CERTIFIED PUBLIC ACCOUNTANTS 226 WEST 26TH STREET NEW YORK, NY 10001-6785 (212) 463-0900 FAX (212) 691-6452 ---------------------------------------------------------------------- INDEPENDENT ACCOUNTANTS' REPORT To Lightscape Networks Ltd. We have audited the accompanying special-purpose standard parent company forms, which include balance sheet information of Lightscape Networks, Inc. as of December 31, 2001, and the related income statement, changes in shareholder's equity and cash flow information for the year then ended, all expressed in U.S. dollars, as well as the accompanying related notes (hereinafter "the Forms"). These forms are the responsibility of the Company's management. Our responsibility is to express an opinion on these Forms based on our audit. The accompanying Forms have been prepared solely to enable Lightscape Networks, B.V. to prepare consolidated financial statements and not to report on Lightscape Networks, Inc. as a separate entity. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Forms are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Forms. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the forms. We believe that our audits provide a reasonable basis for our opinion. We were unable to obtain sufficient evidence regarding the issuance of capital stock and stock options of the Company including stock based compensation, if any. The accompanying Forms do not include all of the financial statement disclosures required by accounting principles generally accepted in the United States of America. In our opinion, except for the omission of the information discussed in the preceding paragraph, and except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to examine evidence regarding the issuance of capital stock and stock options of the Company, the Forms referred to above present fairly, in all material respects, the financial position of Lightscape Networks, Inc. as of December 31, 2001, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. This reported is intended solely for the information and use of Lightscape Networks, B.V. and its auditors in the preparation of the consolidated financial statements, and should not be used for any other purposes. /s/ Hoberman, Miller, Goldstein & Lesser, P.C. ---------------------------------------------- January 14, 2002 10 [ LETTERHEAD OF LEO JEGARD & ASSOCIES ] 23, rue du Clos d'Orleans F 94120 Fontenay sous Bois Tel.: 01 48 73 69 91 Fax: 01 48 75 40 43 Ek-mail: bienvenue@jegard.com Leo JEGARD Marie-Therese JEGARD Francois JEGARD Jena-Pierre LAGAY Franck NACCACHE Pierre-Bernard WILLOT Experts Comptables Diplomes Commissaires aux Comptes 1. INDEPENDENT AUDITORS' REPORT ------------------------------- We have audited the accompanying balance sheets of ECI TELECOM sarl FRANCE as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ECI TELECOM sarl France as of December 31, 2001 and 2000 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. PIERRE BERNARD WILLOT INDEPENDENT PUBLIC ACCOUNTANT February 5, 2002 /s/ Pierre Bernard Willot ------------------------- 11
[ KPMG LOGO ] KPMG Auditores Independentes Mail address Office address Central tel 55 (11) 3067.3000 Caixa Postal 2467 R. Dr. Renato Paes de Barros, 33 Fax National (11) 3079.3752 01060-970 Sao Paulo SP 04530-904 Sao Paulo SP International 55 (11) 3079.2916 Brasil Brasil
1 INDEPENDENT AUDITORS' REPORT TO ECI TELECOM LTD. We have audited the accompanying special purpose standard parent company forms balance sheet of ECI Telecom do Brasil Ltda. (hereinafter "the Company") as of December 31, 2001, and the related statements of income, for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, except that the omission of the cash flow statement and the statements of changes in shareholders' equity from the financial statement stated above results in an incomplete presentation, the special-purpose standard parent company forms balance sheet referred to above present fairly, in all material respects, the financial position of ECI Telecom do Brasil Ltda. as of December 31, 2001, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in the United States of America. January 28, 2002 /s/ Jeremy Taylor ----------------- Jeremy Taylor Partner 12 [ DELOITTE & TOUCHE LOGO ] Denetim Serbest Mali Musavirlik A.S. Irah Caddesi 33/4 06700 Gaziosmanpasa-Ankara Turkiye Tel: (312) 427 62 35 Fax: (312) 427 62 02 www.deloitte.com.tr TO THE BOARD OF DIRECTORS ECI TELECOM LTD. ANKARA INDEPENDENT AUDITORS' REPORT 1. We have audited the accompanying special-purpose balance sheet presented on standard parent company forms of ECI Telekom Limited Sirkety ("ECI Turkey" or the "Company"), a Turkish Limited Company, as of 31 December 2001, and the related statements of income, changes in shareholders' equity and cash flows for the year then ended, all expressed in Turkish Liras and U.S. dollars (U.S.$), as well as the accompanying related notes presented on standard company forms and expressed only in U.S. dollars (hereinafter - "the forms"). These forms are the responsibility of the Company's management. Our responsibility is to express an opinion on "the forms" and attached financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US-GAAS). Those require that we plan and perform the audit to obtain reasonable assurance about whether the forms are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the forms. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial information on the forms. We believe that our audit provides a reasonable basis for our opinion. 3. We have been appointed as independent auditors of the Company in the year 2002 and were unable to attend the physical verification of assets (cash, inventory) at 31 December 2001. It was not practicable to satisfy ourselves as to the existence of these assets by alternative procedures. Moreover, any error in year-end inventory quantities would also affect cost of goods sold. 13 4. As of the date of this report, ECI Turkey has not finalized the closing of its statutory accounts and has not prepared its final statutory financial statements as of December 31, 200l. Accordingly, the financial statements prepared on standard Company forms are based on a provisional trial balance in Turkish lira and certain out of book entries, and translated into U.S. dollars. Therefore, the reporting financial statements do not contain any adjustments that might have been noted had our audit been performed on the Company's final statutory financial statements. The Company management does not expect any material changes. 5. The accompanying Parent Company forms have been prepared solely to enable the Parent Company to prepare the consolidated financial statements and not to report on ECI Telekom Limited Sirkety as a separate entity. Accordingly, the forms are not intended to present fairly the financial position of the Company as of December 31, 2001, or the results of its operations or its cash flows for the year then ended as a stand-alone entity in conformity with accounting principles generally accepted in the United States. 6. Because of the current business conditions, ECI Telecom Israel, the Parent Company is in the process of reaching a decision as to the discontinuation of the operations of ECI Telecom Limited Turkey in the year 2002. As of the audit date, the timing of this operation is still uncertain. The accompanying financial statements do not include a provision for discontinuation costs and in all other respects the financial statements are prepared on a going concern basis. 7. The Company purchases equipment from ECI Wireless Systems Ltd. using loans granted by the ECI Wireless Systems Ltd. which is located in Israel. The amount of loan granted in 2001 amounts to USD 3,139,960. According to Turkish Tax Legislation, loans originated abroad are subject to Resource Utilization Fund at a rate of 6%. However, the Company has neither declared nor paid this fund for the transactions that occurred in 2001. 8. In our opinion, based on our audit, except for such adjustments as may be necessary in respect of the matters discussed in the paragraphs above, the accompanying forms referred to above have been prepared in all material respects to give the information required to be shown in accordance with the "Financial Reporting" procedures as instructed by the Parent Company and do not require adjustment. In addition, these forms are in conformity with generally accepted accounting principles in the United States as modified by the instructions received from the Parent Company as stated in the aforementioned "Financial Reporting" procedure. 14 9. This report is intended solely for the information and use of the parent company and its auditors in the preparation of the consolidated financial statements, and should not be used for any other purpose. Ankara, 24 January 2002 /s/ Denetim Serbest Mali Musavirlik A.S. ---------------------------------------- Denetim Serbest Mali Musavirlik A.S. Member Firm of DELOITTE TOUCHE TOHMATSU 15 [ LETTERHEAD OF GOLDSTEIN LEWIN & CO. ] INDEPENDENT AUDITOR'S REPORT ---------------------------- To the Board of Directors ECI Telecom, Inc. and Subsidiary Fort Lauderdale, Florida We have audited the accompanying consolidated balance sheets of ECI Telecom, Inc. and subsidiary as of December 31, 2001 and the related statements of operations, shareholder's deficit and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom, Inc. and subsidiary, as of December 31, 2001, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. The Company is a member of a group of affiliated entities and, as more fully described in notes 2 and 4 to the accompanying consolidated financial statements, is dependent on the Parent for working capital funding. /s/ Goldstein Lewin & Co. ------------------------- Boca Raton, Florida January 29, 2002 1900 NW Corporate Blvd E-300 Boca Raton, Florida 33431 Tel (561) 994-5054 FAX (561) 241-0071 16 [ LETTERHEAD OF GOLDSTEIN LEWIN & CO. ] INDEPENDENT AUDITOR'S REPORT ---------------------------- To the Board of Directors ECI Telecom-NGTS, Inc. and Subsidiary Fort Lauderdale, Florida We have audited the accompanying consolidated balance sheets of ECI Telecom-NGTS, Inc. and subsidiary as of December 31, 2001 and the related consolidated statements of operations, shareholder's deficit and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom-NGTS, Inc. and subsidiary, as of December 31, 2001, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The Company is a member of a group of affiliated entities and, as more fully described in notes 2 and 4 to the accompanying consolidated financial statements, is dependent on the Parent for working capital funding. /s/ Goldstein Lewin & Co. ------------------------- Boca Raton, Florida January 26, 2002 1900 NW Corporate Blvd E-300 Boca Raton, Florida 33431 Tel (561) 994-5054 FAX (561) 241-0071 17 [ MAZARS LOGO ] ---------------------------------------------------------------------------- MAZARS PAARDEKOOPER HOFFMAN Board of Directors ECI Telecom Ltd. P.O. Box 3083 PETAH TIKVA 49130 Israel Amsterdam, January 28, 2002 213845/011RB/JdB Dear Sirs, We have audited the accompanying balance sheets of ECI Telecom Holdings B.V. as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom Holdings B.V. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. Yours sincerely MAZARS PAARDEKOOPER HOFFMAN /s/ Jacques Noach ----------------- Drs. J.D.G. Noach RA (Jacques.noach@mazars.nl) Queens Towers - Wilheminatoren - Delflandlaan 1, Postbus 7266-1007/G, Amsterdam Tel 020 20 60 500 FAX 020 64 051 amsterdam@mazars.nl 18 [ MAZARS LOGO ] ---------------------------------------------------------------------------- MAZARS PAARDEKOOPER HOFFMAN Board of Directors ECI Telecom Ltd. P.O. Box 3083 PETAH TIKVA 49130 Israel Amsterdam, January 22, 2002 002286/003RB/JdB Dear Sirs, We have audited the accompanying balance sheets of Kermadec Telecom B.V. as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kermadec Telecom B.V. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. Yours sincerely MAZARS PAARDEKOOPER HOFFMAN /s/ Jacques Noach ----------------- Drs. J.D.G. Noach RA (Jacques.noach@mazars.nl) Queens Towers - Wilheminatoren - Delflandlaan 1, Postbus 7266-1007/G, Amsterdam Tel 020 20 60 500 FAX 020 64 051 amsterdam@mazars.nl 19 [ MAZARS LOGO ] ---------------------------------------------------------------------------- MAZARS PAARDEKOOPER HOFFMAN Board of Directors ECI Telecom Ltd. P.O. Box 3083 PETAH TIKVA 49130 Israel Amsterdam, January 22, 2002 005369/003RB/JdB Dear Sirs, We have audited the accompanying balance sheet of Inovia Telecoms B.V. as of December 31, 2001, and the related statements of income, retained earnings, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Inovia Telecoms B.V. as of December 31, 2001, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. Yours sincerely MAZARS PAARDEKOOPER HOFFMAN /s/ Jacques Noach ------------------- Drs. J.D.G. Noach RA (Jacques.noach@mazars.nl) Queens Towers - Wilheminatoren - Delflandlaan 1, Postbus 7266-1007/G, Amsterdam Tel 020 20 60 500 FAX 020 64 051 amsterdam@mazars.nl 20 [ MAZARS LOGO ] ---------------------------------------------------------------------------- MAZARS PAARDEKOOPER HOFFMAN Board of Directors ECI Telecom Ltd. P.O. Box 3083 PETAH TIKVA 49130 Israel Amsterdam, January 22, 2002 005368/003RB/JdB Dear Sirs, We have audited the accompanying balance sheet of Lightscape Networks B.V. as of December 31, 2001, and the related statements of income, retained earnings, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lightscape Networks B.V. as of December 31, 2001, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. Yours sincerely MAZARS PAARDEKOOPER HOFFMAN /s/ Jacques Noach ----------------- Drs. J.D.G. Noach RA (E-mail: jacques.noach@mazars.nl) Queens Towers - Wilheminatoren - Delflandlaan 1, Postbus 7266-1007/G, Amsterdam Tel 020 20 60 500 FAX 020 64 051 amsterdam@mazars.nl 21 [ MAZARS LOGO ] ---------------------------------------------------------------------------- MAZARS PAARDEKOOPER HOFFMAN Board of Directors ECI Telecom Ltd. P.O. Box 3083 PETAH TIKVA 49130 Israel Amsterdam, January 22, 2002 005370/003RB/JdB Dear Sirs, We have audited the accompanying balance sheet of ECI NGTS B.V. as of December 31, 2001, and the related statements of income, retained earnings, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ECI NGTS B.V. as of December 31, 2001, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. Yours sincerely MAZARS PAARDEKOOPER HOFFMAN /s/ Jacques Noach ----------------- Drs. J.D.G. Noach RA (Jacques.noach@mazars.nl) Queens Towers - Wilheminatoren - Delflandlaan 1, Postbus 7266-1007/G, Amsterdam Tel 020 20 60 500 FAX 020 64 051 amsterdam@mazars.nl 22 [ MAZARS LOGO ] ---------------------------------------------------------------------------- MAZARS PAARDEKOOPER HOFFMAN Board of Directors ECI Telecom Ltd. P.O. Box 3083 PETAH TIKVA 49130 Israel Amsterdam, January 22, 2002 005371/002RB/JdB Dear Sirs, We have audited the accompanying balance sheet of Enavis Networks B.V. as of December 31, 2001, and the related statements of income, retained earnings, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Enavis Networks B.V. as of December 31, 2001, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. Yours sincerely MAZARS PAARDEKOOPER HOFFMAN /s/ Jacques Noach ----------------- Drs. J.D.G. Noach RA (Jacques.noach@mazars.nl) Queens Towers - Wilheminatoren - Delflandlaan 1, Postbus 7266-1007/G, Amsterdam Tel 020 20 60 500 FAX 020 64 051 amsterdam@mazars.nl 23 [ MAZARS LOGO ] ---------------------------------------------------------------------------- MAZARS PAARDEKOOPER HOFFMAN Board of Directors ECI Telecom Ltd. P.O. Box 3083 PETAH TIKVA 49130 Israel Amsterdam, January 28, 2002 213845/007RB/JdB Dear Sirs, We have audited the accompanying balance sheets of ECI Telecom B.V. as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ECI Telecom B.V. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the reporting package. In our opinion, the segmental statement of income present fairly, in all material respects and conformity with accounting principles generally accepted in the United States of America, the results of its operations by segments for the year ended 31 of December 2001. Yours sincerely MAZARS PAARDEKOOPER HOFFMAN /s/ Jacques Noach ----------------- Drs. J.D.G. Noach RA (E-mail: jacques.noach@mazars.nl) Queens Towers - Wilheminatoren - Delflandlaan 1, Postbus 7266-1007/G, Amsterdam Tel 020 20 60 500 FAX 020 64 051 amsterdam@mazars.nl 24 [ LETTERHEAD OF PRICEWATERHOUSECOOPERS ] PricewaterhouseCoopers 22nd Floor Prince`s Building Central Hong Kong Telephone (852) 2289 8888 Facsimile (852) 2810 9888 INDEPENDENT AUDITOR'S REPORT TO ECI TELECOM LTD. (HEREINAFTER "THE PARENT COMPANY") ISRAEL We have audited the accompanying balance sheets of ECI TELECOM (HK) LIMITED ("the Company") as of December 31, 2001 and 2000, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. We have audited the segmental statements of income for the year ended 31 of December 2001 as presented in note YTD of the financial statements. In our opinion, the segmental statement of income presents fairly, in all material respects and in conformity with accounting principles generally accepted in the United States of America, the results of the Company's operations by segments for the year ended December 31, 2001. /s/ PricewaterhouseCoopers -------------------------- PricewaterhouseCoopers CERTIFIED PUBLIC ACCOUNTANTS Hong Kong, 28 January 2002 25