Issue Prospectus for shares of

Transkrypt

Issue Prospectus for shares of
Located in Legnica
created in relation to the Public Offer of 4 643 130 normal shares to bearer, Series C, excluding rights of current
shareholders to subscription and an application for permission for circulation on the regulated market, for 16 250 960
normal shares to bearer, Series B, no more than 4 643 130 normal shares to bearer, Series C, as well as no more than
4 643 130 rights to shares, Series C.
The Public Offer can be performed only on the territory of the Republic of Poland. This Prospectus cannot be taken as a
trade offer or as a purchase offer outside the borders of Poland. This Prospectus and the securities covered therein have
not been a subject to any registration, approval or notification in any country other than the Republic of Poland, especially
in conformity with the Regulation on prospectus or the American act on securities. Securities covered by this Prospectus
cannot be offered or sold outside the borders of the Republic of Poland (including territories of other member states of the
European Union and the United States of America), unless such an offer or sale can be performed on the territory of a given
country in concordance with law, without the need to fulfill any additional legal requirements. Each investor living or
located outside the borders of the Republic of Poland should get acquainted with Polish legal reulations and legal
regulations of any other country that may apply in the given case.
Investments in securities covered by this Prospectus always have a high level of risk, proper for instruments of capital
market having the share character, risk connected with the activites of the Issuing Party and the environment of activities of
the Issuing Party. A detailed description of risk factors can be found in Part II of the Prospectus ”Risk factors”.
The Offering Party
Financial Advisor
Expert Auditor
Date of Prospectus approval: ........................ 2010 r.
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Rank Progress S.A. – Issue Prospectus
Table of Contents
I. SUMMARY ................................................................................................................................... 14
1. Tele-address data, people responsible for information presented in the Prospectus, level and
structure of company capital ............................................................................................................. 14
2. Basic information on the activity of the Issuing Party .................................................................. 14
3. History and development of the Issuing Party............................................................................... 15
4. Risk factors .................................................................................................................................... 17
5. Information on managing and supervising personnel.................................................................... 18
6. Significant shareholders ................................................................................................................ 18
7. Selected financial data ................................................................................................................... 19
8. Basic elements of development strategy of the Issuing Party and goals of the issue .................... 20
9. Information about conditions of the offer ..................................................................................... 21
II. THE RISK FACTORS ................................................................................................................. 22
1. Risk factors related to the environment of business activity of the Issuing Party ....................... 22
1.1. Risk related to macroeconomical and political situation in Poland .......................................... 22
1.2. Risk of legal regulations change ............................................................................................... 22
1.3. Risk related to instability of the tax system .............................................................................. 23
1.4. Risk related to competition increase ......................................................................................... 23
1.5. Currency rate risk ..................................................................................................................... 23
1.6. Interest rate risk ........................................................................................................................ 23
1.7. Financial problems of the Partnership customers ..................................................................... 23
2. Factors specific for the Issuing Party and its market ................................................................... 23
2.1. Risk related to strategic goals ................................................................................................... 23
2.2. Risk related to the increase of current costs and other costs .................................................... 24
2.3. Risk related to changes in construction costs ........................................................................... 24
2.4. Risk related to dependency of the Partnership on the contractors of construction works ........ 25
2.5. Risk related to the possibility of new grounds acquisition ....................................................... 25
2.6. Risk related to unfavourable ground conditions ....................................................................... 25
2.7. Risk related to land prices drop ................................................................................................ 25
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2.8. Risks accompanying investment implementation..................................................................... 25
2.9. Risk related to administrative decisions ................................................................................... 26
2.10. Risk related to the responsibility for environmental protection .............................................. 26
2.11. Risk related to leaving of people occupying the key positions within the Partnership........... 26
2.12. Risk related to work accidents at contractors.......................................................................... 26
2.13. Risk related to financial leverage ............................................................................................ 26
2.14. Risk related to bankruptcy of the Partnership or of its dependent entities.............................. 27
2.15. Risk related to reprivatisation ................................................................................................. 27
3. Risk factors related to the investment in Offered Shares ............................................................ 27
3.1. Risk related to the possibility of cancellation or waiver of the Public Offer ............................ 27
3.2. Risk related to ineffective Issue of Series C Shares ................................................................. 28
3.3. Risk related to claim of revoking the resolution on the increase of company capital by issuing
Series C Shares .................................................................................................................................. 28
3.4. Risk related to PDA quotation of Series C ............................................................................... 28
3.5. Risk related to refusal of introduction of shares of the Issuing Party to the stock exchange
circulation or to a delay thereof ......................................................................................................... 28
3.6. Risk of indequate dispersion of shares introduced to circulation on the regulated market ...... 29
3.7. Risk related to exclusion of Series B Shares, Series C Shares and Series C PDA from
circulation on the regulated market ................................................................................................... 30
3.8. Risk related to the possibility of suspending circulation of Series B Shares, Series C Shares
and Series C PDA on the GPW ......................................................................................................... 30
3.9. Risk related to fluctuations of quotations of the Issuing Party Shares and Series C PDA ....... 30
3.10. Risk related to the possibility of the ban of start or of the order to stop the Pobulic Offer and
of the ban of start or order to stop the approval of shares for circulation on the regulated market by
the KNF ............................................................................................................................................. 31
3.11. Risk related to violation of legal regulations or to a justified suspicion of violation thereof by
the Issuing Party or by the entities participating in the public offer.................................................. 31
3.12. Risk related to refusal of the annex to the Prospectus ............................................................ 32
3.13. Risk related to subscription for Offered Shares and to subscription payment ........................ 32
3.14. Risk related to prolongation of subscription deadline ............................................................ 32
3.15. Risk related to not fulfilling or violation of duties of the Issuing Party, defined by legal
regulations and by the GPW Status ................................................................................................... 32
3.16. Risk of using sanctions on the Issuing Party by the KNF ....................................................... 33
3.17. Risk of use of other sanctions by the KNF ............................................................................. 34
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III. REGISTRATION DOCUMENT ................................................................................................ 35
1. Responsible people ...................................................................................................................... 35
1.1. The Issuing Party ...................................................................................................................... 35
1.2. Financial advisor....................................................................................................................... 36
1.3. The Offering Party .................................................................................................................... 37
2. Expert Auditors ........................................................................................................................... 38
2.1. Names and addresses of Expert Auditors ................................................................................. 38
2.2. Information on resignations, contract terminations or changes of the Expert Auditor ............. 39
3. Selected financial information ..................................................................................................... 39
4. Risk factors .................................................................................................................................. 40
5. Information on the Issuing Party ................................................................................................. 40
5.1. History and development of the Issuing Party .......................................................................... 40
5.1.1. Legal (statutory) and trade name of the Issuing Party ........................................................... 40
5.1.2. Place of registration of the Issuing Party and its registration number ................................... 40
5.1.3. Date of creation of the Issuing Party ...................................................................................... 40
5.1.4. The Issuing Party’s country of origin the Issuing Party’s office and legal form, legal
regulations which form the basis of the Issuing Party’s activity, county of location (origin), address
and phone number of its statutory office ........................................................................................... 40
5.1.5. History of activity of the Issuing Party .................................................................................. 41
5.2. Investment ................................................................................................................................ 43
5.2.1. Description of investments of the Issuing Party .................................................................... 43
5.2.2. Description of current investments of the Issuing Party ........................................................ 46
5.2.3. Information about the main future investments of the Issuing Party, which have valid
obligations taken by management of the Issuing Party. .................................................................... 47
6. General activity profile ................................................................................................................ 49
6.1. Basic activity ............................................................................................................................ 49
6.1.1. Basic fields and types of activity ........................................................................................... 49
6.1.1.1. Development strategy.......................................................................................................... 49
6.1.1.2. Activity segments ................................................................................................................ 50
6.1.1.3. Organisation of the business activity of the Group ............................................................. 51
6.1.1.4. Main customers ................................................................................................................... 53
6.1.1.5. Current investments of the Partnership ............................................................................... 54
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6.1.1.6. Planned investments of the Capital Group .......................................................................... 56
6.1.1.7. Other future projects ........................................................................................................... 57
6.1.1.8. Land bank ............................................................................................................................ 57
6.1.2. New products and services..................................................................................................... 57
6.2. Main markets and competition of the Issuing Party ................................................................. 57
6.2.1. Market descriptions ................................................................................................................ 57
6.2.2. Sales structure ........................................................................................................................ 61
6.2.3. Competition............................................................................................................................ 62
6.3. Influence of extraordinary factors ............................................................................................ 63
6.4. Dependence of the Issuing Party on patents or licenses, industrial, commercial of financial
contracts or on new production processes ......................................................................................... 63
6.4.1. Commercial contracts ............................................................................................................ 63
6.4.2. Leasing contracts ................................................................................................................... 65
6.4.3. Industrial contracts and new production processes ................................................................ 66
6.4.4. Financial contracts ................................................................................................................. 66
6.4.5. Patents or licences .................................................................................................................. 66
6.5. Declaration of the Issuing Party on its competition position .................................................... 66
7. Organisational structure............................................................................................................... 66
7.1. Short description of the Group of the Issuing Party ................................................................. 66
7.2. List of significant dependent entities of the Issuing Party ........................................................ 67
8. Fixed assets.................................................................................................................................. 67
8.1. Existing or planned, significant, tangible fixed assets, including rented real estates and debts
created on these assets ....................................................................................................................... 68
8.1.1. Significant real estates owned and rented. ............................................................................. 69
8.1.2. Other significats tangible fixed assets .................................................................................... 74
8.1.3. Planned acquisition of tangible fixed assets of the Issuing Party .......................................... 74
8.2. Issues related to environmental protection ............................................................................... 74
9. Review of the operational and financial situation ....................................................................... 74
9.1. Financial situation..................................................................................................................... 75
9.1.1. Financial results ..................................................................................................................... 75
9.1.2. Profitability analysis .............................................................................................................. 75
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9.2. Current result ............................................................................................................................ 76
9.2.1. Information about significant factors, including extraordinary events or rare or new
solutions, significantly influencing the results of current activity, with an indication of the degree, to
which the results have been influenced ............................................................................................. 76
9.2.2. Discussion of reasons of significant changes in net sales or net income of the Issuing Party, if
the financial reports show such changes ........................................................................................... 76
9.2.3. Information about any elements of governmental, economical, fiscal, monetary and political
policy and factors, which had significant influence or which could have directly or indirectly,
significantly influence the current activity of the Issuing Party ........................................................ 77
10. Capital resources........................................................................................................................ 77
10.1. Information about the capital sources ..................................................................................... 77
10.2. Explanations of sources and amount and description of monetary assets flow ...................... 78
10.3. Information about loan needs and financing structure ............................................................ 79
10.3.1. Viability analysis.................................................................................................................. 80
10.4. Information about any restrictions in using capital assets, which had, or which could have
influenced, directly of indirectly, the current activity of the Issuing Party ....................................... 81
10.5. Information about predicted funding sources necessary to implement obligations resulting
from the planned investments of the Issuing Party and planned significant tangible fixed assets .... 82
11. Research and development, patents and licences ...................................................................... 82
11.1. Research and development ..................................................................................................... 82
11.2. Patents, licences and trademarks............................................................................................. 82
11.3. Trademarks ............................................................................................................................. 83
12. Information about tendences ..................................................................................................... 83
12.1. The most significant recent tendences in production, sales and supplies, as well as in costs
and sale prices for the period from the date of last tax year finish until the date of Prospectus
approval ............................................................................................................................................. 83
12.2. Information about any known tendencies, unsure elements, claims, obligations or events,
which are rather sure to influence the perspectives of the Issuing Party at least until the end of
current tax year .................................................................................................................................. 84
13. Result forecasts or estimated results .......................................................................................... 84
13.1. Basic assumptions of forecasts of estimations of the Issuing Party ........................................ 84
13.1.1. Assumptions for estimated results of the Issuing Party ....................................................... 85
13.1.2. Assumptions for financial forecasts, independent from the Issuing Party ........................... 85
13.1.3. Assumptions for financial forecasts dependent on the Issuing Party ................................... 86
13.2. Report of independent accountants or expert auditors on the correctness of financial forecasts
and estimated results preparations ..................................................................................................... 87
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13.3. Forecast of selected financial data and estimated results ........................................................ 88
13.4. Comparability of the results forecast or estimated results with the historical financial
information ........................................................................................................................................ 88
14. Administrative, management and supervisory organs and high-level management personnel . 88
14.1. Data of the memebers of management and supervisory organs and high-level management
personnel, which are significant for the statement that the Issuing Party has proper knowledge and
experience, which allows management of its activity ....................................................................... 88
14.2. Conflict of interests in the administrative, management and supervisory organs and with
high-level managerial staff ................................................................................................................ 96
14.2.1. Contracts and agreements with significant shareholders, customers, suppliers or other
people, which would form a basis of elevation of members of management and supervisory organs
and high-level managerial staff to their positions ............................................................................. 96
14.2.2. Limitations in the field of disposal of securities of the Issuing Party in a specified time,
agreed by the members of management and supervisory organs and high-level managerial staff ... 96
15. Salaries and other benefits ......................................................................................................... 96
15.1. Salaries of members of administrative, management and supervisory organs of the Issuing
Party 96
15.2. Total amount reserved or collected by the Issuing Party or its dependent entities for pension
benefits or other similar benefits ....................................................................................................... 97
16. Practices of administrative, management and supervisory organ .............................................. 97
16.1. End date of the current term of administrative, management and supervisory organ members
and periods, in which these people held their positions .................................................................... 97
16.2. Contracts on services of members of administrative, management and supervisory organs
with the Issuing Party or with its dependent entity, defining benefits paid upon termination of labour
relation ............................................................................................................................................... 97
16.3. Audit Committee and Issuing Party’s Salary Committee ....................................................... 98
16.4. Rules of corporation order ...................................................................................................... 98
17. Employees ................................................................................................................................. 99
17.1. Total number of employees of the Issuing Party, divided according to the form of
employment and functions performed ............................................................................................... 99
17.2. Shares or options owned by the people forming the administrative, management and
supervisory organs ........................................................................................................................... 100
17.3. Participation of employees in the capital of the Issuing Party .............................................. 100
18. Significant shareholders .......................................................................................................... 100
18.1. Information about people other than the members of administrative, management and
supervisory organs, who directly or indirectly have participations in the capital of the Issuing Party
or voting rights requiring registration according to the law of the Issuing Group’s country .......... 100
18.2. Information about other voting rights related to the Issuing Party ....................................... 101
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18.3. Designation of a dominating entity of the Issuing Party or an entity controlling the Issuing
Party 101
18.4. Description of all agreements known to the Issuing Party, the future implementation of which
may cause changes in the methods of control over the Issuing Party ............................................. 101
19. Transactions with dependent entities ....................................................................................... 101
19.1. The period from January 1st, 2009 to the date of Prospectus approval ................................. 102
19.2. 2008 ...................................................................................................................................... 110
19.3. 2007 ...................................................................................................................................... 114
19.4. 2006 ...................................................................................................................................... 117
20. Financial information on assets and credits of the Issuing Party, its financial situation and
profits and losses ............................................................................................................................. 119
20.1. Historical financial information ............................................................................................ 119
20.1.1. Opinion of an independent expert auditor on the study of historical financial informantion
for the General Assembly, the Supervisory Board and the Board of RANK PROGRESS S.A.
(„Issuing Party”) located in Legnica. .............................................................................................. 120
20.1.2. Information about opinions of the expert auditor on particular years presented in this
chapter 121
20.1.3. Historical financial information of the Capital Group of the Issuing Party prepared
according to the ISFR ...................................................................................................................... 121
20.2. Financial information pro forma ........................................................................................... 165
20.3. Financial reports ................................................................................................................... 165
20.4. Study of historical yearly financial information ................................................................... 165
20.4.1. Statement declaring, that historical financial informations have been studied by an expert
auditor 165
20.4.1.1. Opinion of an independent expert auditor on the study of historical financial information
for the General Assembly, Supervisory Board and the Board of RANK PROGRESS S.A. („Issuing
Party”), located in Legnica. ............................................................................................................. 165
20.4.1.2. Opinion of an independent expert auditor for the current year from January 1st to
December 31st, 2008 ........................................................................................................................ 165
20.4.1.3. Opinion of an independent expert auditor for the current year from January 1 st to
December 31st, 2007 ........................................................................................................................ 167
20.4.2. Indication of other information in the Registration Document, which were studied by expert
auditors 169
20.4.2.1. Opinion of an independent expert auditor for the current year from January 1 st to June
30th, 2009170
20.4.3. Source of data included in the financial reports ................................................................. 171
20.5. Date of the newest financial information .............................................................................. 171
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20.6. Mid-year and other financial informaiton i inne informacje finansowe ............................... 171
20.6.1. Opinion of the independent expert auditor on mid-year financial information for the period
from January 1st to June 30th 2009, for the General Assembly, Supervisory Board and Board of
RANK PROGRESS SA („Issuing Party”) located in Legnica ........................................................ 172
20.6.2. Mid-year, short, consolidated financial report of the Rank Progress S.A. Capital Group for
the period from 01.01.2009 to 30.06.2009 together with comparable data for the period from
01.01.2008 to 30.06.2008, prepared according to the ISFR ............................................................ 173
20.7. Dividend policy..................................................................................................................... 191
20.8. Court and mediatory proceedings ......................................................................................... 192
20.8.1. Bankruptcy, settlement, negotiation, agreement, execution or liquidation proceedings
started against the Issuing Party, its Capital Group or against a shareholder owning at least 5% of
shares or of the total number of votes at the General Assembly of the Issuing Party or of a company
from its Capital Group..................................................................................................................... 192
20.8.2. Other proceedings, where the Issuing Party, company from its Capital Group or a
shareholder owning at least 5% of shares or of the total number of votes during the General
Assembly of the Issuing Party or of a company from its Capital Group, is a party in the proceeding
193
20.8.2.1. Court proceedings, where the Issuing Party or a company from its Capital Group is a
party in the proceeding .................................................................................................................... 194
20.8.2.2. Execution proceedings, where the Issuing Party or a company from its Capital Group is a
party in the proceeding .................................................................................................................... 194
20.8.2.3. Proceedings, where the Issuing Party is a shareholder of the Issuing Party or of a company
from its Capital Group, owning at least 5% of shares or of total number of votes during the General
Assembly of the Issuing Party or a company from its Capital Group ............................................. 194
20.8.2.4. Proceedings before the administration organs related to the activity of the Issuing Party or
of the companies from its Capital Group ........................................................................................ 194
20.9. Significant changes in financial or commercial situation of the Issuing Party ..................... 195
21. Additional information ............................................................................................................ 195
21.1. Share capital .......................................................................................................................... 195
21.1.1. Amount of issued capital .................................................................................................... 195
21.1.2. Shares, which do not represent capital ............................................................................... 195
21.1.3. Shares owned by the Issuing Party, other people in the name of the Issuing Party or other
dependent entities of the Issuing Party ............................................................................................ 195
21.1.4. Interchangeable, exchangeable securities or securities with warrants ............................... 195
21.1.5. All purchase rights or obligations related to the target capital or obligations to increase
company capital............................................................................................................................... 195
21.1.6. Capital of any member of the Group, which is a subject of options, or for which it has been
conditionally or unconditionally agreed, that it will become a subject of options .......................... 195
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21.1.7. Historical information about the company capital for the period covered with historical
financial information ....................................................................................................................... 195
21.2. Status..................................................................................................................................... 196
21.2.1. Description of subject and goal of the activity of the Issuing Party................................... 196
21.2.2. Summary of all statements of the Status of the Issuing Party and rules of the Issuing Party
related to the members of management and supervisory organs ..................................................... 197
21.2.3. Description of rights, priviledges and limitations related to shares of the Issuing Party ... 199
21.2.4. Descriptions of actions necessary to change rights of shares owners, with indications of the
rules which are more significant than it is required by the law ....................................................... 201
21.2.5. Description of rules defining the method of calling for ordinary general assemblies of
shareholders and extraordinary general assemblies of shareholders, including the rules of
participation in the assemblies ........................................................................................................ 202
21.2.6. Description of the statements of the Statuts or rules of the Issuing Party, which could case a
delay, postponing or cancellation of control change over the Issuing Party ................................... 204
21.2.7. Indication of statements of the Status or rules of the Issuing Party, if such exist, which
regulate the threshold value of owned shares, which, if exceeded, makes it necessary for the
shareholder to reveal the level of owned shares .............................................................................. 204
21.2.8. Description of conditions placed through powers of Status statements or of rules of the
Issuing Party, which govern capital changes, if this rules are more strict than it is required by law
204
22. Significant contracts ................................................................................................................ 204
22.1. Continued loan contracts ...................................................................................................... 204
22.2. Other loan contracts .............................................................................................................. 214
22.3. Insurance policies ................................................................................................................. 217
22.4. Other contracts ...................................................................................................................... 219
22.5. Contracts signed between the shareholders of the Issuing Party .......................................... 221
22.6. Contracts, where the shareholders or bound entities are a party, in a case, when they are
significant for the Issuing Party or its business activity .................................................................. 221
23. Information of third parties and declarations of experts and declarations on any engagement 221
24. Documents made available for browsing ................................................................................ 222
25. Information on shares of other companies............................................................................... 222
IV. QUOTATION DOCUMENT.................................................................................................... 227
1. Responsible people .................................................................................................................... 227
2. Risk factors, which are significant for securities offered or accepted for circulation ............... 227
3. Basic information ...................................................................................................................... 227
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3.1. Current capital declaration ...................................................................................................... 227
3.2. Declaration on capitalisation and debt .................................................................................... 227
3.3. Interests of persons and legal entities engaged in the issue or in the offer ............................. 230
3.4. Goals of the Public Offer and the description of use of the monetary income ....................... 230
4. Informations on securities offered or approved for circulation ................................................. 231
4.1. Type and group of the Offered Shares and approved for circulation ..................................... 231
4.2. Legal regulations which formed the basis for creation of offered securities or securities
approved for circulation .................................................................................................................. 232
4.3. Indication, if the securities offered or approved for circulation are registered securities,
securities to bearer or if they have a dematerialised form ............................................................... 232
4.4. Currency of the issued securities ............................................................................................ 232
4.5. Rights, including all limitations of these rights, related to the securities and procedures of
execution of these rights .................................................................................................................. 232
4.6. Basis of issue of offered or approved securities ..................................................................... 235
4.7. Predicted date of the new issue ............................................................................................... 239
4.8. Limitations of freedom of securities transfers ........................................................................ 239
4.8.1. Limitations of freedom of securities transfers resulting from the CCC or from the Status of
the Partnership ................................................................................................................................. 239
4.8.2. Act on Circulation of Financial Instruments and Acts on Public Offer ............................... 239
4.8.3. Duty of submission of intentions of concentration, resulting from the Act on Protection of
Competition and Customers ............................................................................................................ 245
4.8.4. Regulation of the Council EC No 139/2004 on the control of concentration of companies 247
4.9. Effective regulations related to mandatory offers of overtake or mandatory purchases and buys
related to securities .......................................................................................................................... 248
4.10. Indication of public overtake offers in relation to the capital of the Issuing party made by
third parties within the last tax year and the current tax year .......................................................... 249
4.11. Taxation of income from dividend and shares sales ............................................................. 249
4.11.1. Income tax from the income by virtue of dividend ............................................................ 249
4.11.2. Income tax from income obtained from sales of shares ..................................................... 250
4.11.3. Tax from civil-legal actions ............................................................................................... 251
4.11.4. Tax from legacies and donations........................................................................................ 252
4.11.5. Responsibility of the payer................................................................................................. 252
5. Information about the offer conditions ...................................................................................... 252
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5.1. Conditions, parameters and predicted schedule of the offer and actions required during
subscription oraz działania wymagane przy składaniu zapisów ..................................................... 252
5.1.1. Offer parameters .................................................................................................................. 252
5.1.2. Offer schedule ...................................................................................................................... 252
5.1.3. Book building....................................................................................................................... 253
5.1.4. Rules of subscription submissions ....................................................................................... 253
5.1.5. Actions through a representative.......................................................................................... 256
5.1.6. Withdrawal or suspension of the offer ................................................................................. 256
5.1.7. Deadline, within which it is possible to withdraw a subscription ........................................ 257
5.1.8. Methods and deadlines provided for payments for shares and supplying shares ................. 257
5.1.9. Description of revealing to the general public informations about the results of the offer,
ineffectiveness of the offer, lack of registration of the company capital increase and methods of
return of payments made ................................................................................................................. 257
5.2. Rules of distribution and allocation ........................................................................................ 258
5.2.1. Intentions of major shareholders and members of management, supervisory and
administrative organs of the Issuing Party, related to participation in the subscription .................. 258
5.2.2. Informations revealed before the allocation......................................................................... 258
5.2.2.1. Transfers between Tranches .............................................................................................. 258
5.2.2.2. Allocation rules – description of subscription reductions and return of overpaid amounts
258
5.2.3. Conditions of offer’s end, the earliest possible end date ..................................................... 259
5.2.4. Procedure of notifying investors about the number of allocated shares with the indication, if
circulation is allowed before this notification is sent ...................................................................... 259
5.3. Price of shares ......................................................................................................................... 260
5.4. Positioning and guarantees (subissue) .................................................................................... 260
6. Approval of securities to circulation and statements related to circulation ............................... 261
6.1. Approval of securities for circulation ..................................................................................... 261
6.2. Regulated markets or equivalent markets, on which the same class of shares are approved for
circulation, as shares offered or approved for circulation ............................................................... 261
6.3. Information about securities being the subject of subscription or positioning at the same time,
or almost at the same time, as created securities, which are a subject of approval for circulation on a
regulated market .............................................................................................................................. 261
6.4. Information about agents in circulation on the secondary market .......................................... 261
6.5. Stabilising actions ................................................................................................................... 261
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7. Information about the owners of securities covered by the sale................................................ 261
7.1. Information about the entities offering shares for sale and numer and type of shares offered by
each of the sellers ............................................................................................................................ 261
7.2. Number and type of securities offered by each of sellers, owners of securities ..................... 261
7.3. Contracts on prohibition of „lock up” type shares sales ......................................................... 262
8. Quotation costs .......................................................................................................................... 262
9. Dilution...................................................................................................................................... 263
10. Additional information ............................................................................................................ 263
10.1. Description of activity scope of the advisors ........................................................................ 263
10.2. Indication of other information in the Quotation Document, which have been studied or
browsed by authorised expert auditors who prepared a report in relation to these ......................... 264
10.3. Information about the expert in the Quotation Document .................................................... 264
10.4. Information obtained from third parties and indication of sources of these information ..... 264
DEFINITIONS AND ABBREVIATIONS ..................................................................................... 265
FORMS AND APPENDICES......................................................................................................... 267
Appendix No 1 – Subscription form for offered shares of Rank Progress S.A................................ 267
Appendix No 2 – Disposal of deposition of Offered Shares of Rank Progress S.A. ....................... 269
Appendix No 3 – Declaration of interest in a purchase of Offered Shares of Rank Progress S.A... 270
Appendix No 4 - List of subscription points accepting subscriptions for shares ............................. 271
Appendix 5 – The Status ................................................................................................................. 272
Appendix 6 – Summary of estimated operates defining market values of real estates ................... 279
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I. SUMMARY
This summary should be understood as an introduction to the Prospectus. Each decision of investment in the Shares of the
Issuing Party offered as per the Prospectus is made each time on the basis of the contents of the entire Prospectus.
An Investor making a claim related to the contents of this Prospectus pays the cost of any potential translation of the Issue
Prospectus into another language, before starting the proceeding in the court. People who prepare this summary, including
each translation of the summary, bear the responsibility only in a case, when this summary causes a misrepresentation, is
inaccurate or contradicts other parts of the Prospectus.
1. Tele-address data, people responsible for information presented in the
Prospectus, level and structure of company capital
Tele-address data of the Issuing Party:
Company: Rank Progress Spółka Akcyjna located in Legnica
Address: ul. Złotoryjska 63 59-220 Legnica
Phone: (+48 76) 746 77 71
Fax: (+48 76) 746 77 70
E-mail: [email protected]
Website: www.rankprogress.pl
People responsible for the Summary:
The following people act on the behalf of the Issuing Party, which is the entity responsible for information included in the
Prospectus:
 Jan Mroczka – Board Chairman,
 Dariusz Domszy – Board Deputy Chairman,
 Mariusz Kaczmarek – Board Member.
Level and structure of company capital:
Share capital of the Issuing Party equals 3.250.192 PLN and it is divided into 32.501.920 Shares, including:
 16.250.960 (sixteen millions two hundred and fifty thousands nine hundred and sixty) registered, priviledged shares,
Series A with nominal value of 10 groszy (ten groszy) each, created on the basis of the resolution on transformation of
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the Issuing Party into a stock company, on October 1 , 2007,
 16.250.960 (sixteen millions two hundred and fifty thousands nine hundred and sixty) normal shares to bearer, Series
B with nominal value of 10 groszy (ten groszy) each, created on the basis of the resolution on transformation of the
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Issuing Party into a stock company, on October 1 , 2007.
Series A shares are priviledged in regard to voting (each share has two votes at the General Meeting). All shares have been
paid. Status of the Issuing Party also predicts creation of a reserve fund and it allows a possibility of creation of targeted
funds (including a targeted funds covering losses of the Company).
The nominal value of each share of the Issuing Party is 0,10 PLN (in words: ten groszy) each.
In the period of 2004 – 2006, the legal predecessor of the Issuing Party acted as a general partnership, as a company named
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Bartnicki, Mroczka E.F. Rank Progress Sp. j., thus, as of January 1 , 2007 as well as of December 31 , 2006, company capital
of the legal predecessor of the Issuing Party did not include any shares. In the period covered by historical financial
information, over 10% of the capital was not paid with assets other than cash.
2. Basic information on the activity of the Issuing Party
The issuing Party is making investments – real estate development within the domestic market, namely, real estate
acquisition and their housing with trade buildings designed for rent or for sale.
The Capital Group of the Issuing Party focuses its current and future activity on implementation of four categories of
investment projects within the real estate market, namely, on housing and renting or sale of the buildings:

large area commercial – service centres,

downtown commercial galleries,

commercial objects – commercial/trade parks,

high profit, short-term investment projects.
Page 14
3. History and development of the Issuing Party
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On August 26 , 1997, the foundation act of the civil law partnership E.F. Rank Progress – General Office of Trade was
created by Jan Mroczka, Andrzej Bartnicki and a third person, this company has been registered in the business activity
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register of the City Council of Legnica on September 2 , 1997. On July 27 , 1998 the act of the civil law partnership has
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been changed, and since then Jan Mroczka i Andrzej Bartnicki have been the only partners. On January 29 , 2001, through
the powers of art. 26 § 4 KSH, the partners – Jan Mroczka i Andrzej Bartnicki – have transformed the civil law partnership
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into a general partnership, created on March 20 , 2001, i.e. after it had been registered in the business entities registry of
the National Court Registry maintained by the District Court of Wrocław-Fabryczna in Wrocławiu, IX Economic Department
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of the National Court Registry, with the number KRS 0000003563. On October 1 , 2007, the partners have made a
resolution on transformation of the „Bartnicki, Mroczka E.F. Rank Progress” Sp. j. partnership into a share company with the
name of Rank Progress S.A. (the authenticated deed created by the notary - Elżbieta Raczkowska-Martyn, having a Notary
o
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Office in Legnicy, rep. A N 11956/07). The transformation became effective on October 10 , 2007, when the decision on
registering the transformed company in the business entities registry of the National Court Registry maintained by the
District Court of Wrocław-Fabryczna in Wrocławiu, IX Economic Department of the National Court Registry, with the
number KRS 0000290520, was made.
Important events within the business activity timeline
1997
Foundation of a civil law partnership E.F. Rank Progress – General Office of Trade bz the partners - Andrzej Bartnicki, Jan
Mroczka and a third person.
1998
The aforementioned, third person leaves the partnership. Since then, Jan Mroczka and Andrzej Bartnicki have been the only
partners.
2000
E.F. Rank Progress – General Office of Trade s.c. starts a close cooperation with TESCO Polska Sp. z o.o. It starts the
construction works of TESCO Commercial Centres in Jelenia Góra, in Zielona Góra and in Bielsko-Biała, as well as
Commercial Centre CASTORAMA in Bielsko-Biała, all on the grounds owned by the partnership.
2001
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On January 29 , 2001, through the powers of art. 26§ 4 k.s.h., the partners, i.e. Jan Mroczka and Andrzej Bartnicki created
the foundation act of the general partnership as a company named „Bartnicki, Mroczka E.F. Rank Progress” Sp. j. Then, on
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March 20 , 2001, the District Court of Wrocław – Fabryczna in Wrocław, IX Commercial Department of the National Court
Registry, has registered the company (partnership) „Bartnicki, Mroczka E.F. Rank Progress” Spółka Jawna, with the number
KRS 0000003563.
Bartnicki, Mroczka E.F. Rank Progress Spółka jawna finishes the implementation part of four large projects – large area
commercial centres:
 TESCO Jelenia Góra Commercial Centre, al. Jana Pawła II, 8 000 sq.m., 1.200 parking places,
 TESCO Zielona Góra Commercial Centre, ul. Energetyków, 8 000 sq.m., 831 parking places,
 TESCO Bielsko-Biała Commercial Centre, ul. Warszawska, 10 000 sq.m., 980 parking places,
 CASTORAMA Bielsko-Biała Commercial Centre, ul. Warszawska, 8 500 sq.m., 650 parking places.
2002
The company/partnership finished the implementation phase of another objects in the large area commercial centres
segment:
 TESCO Ruda Śląska Commercial Centre, ul. 1 Maja, 7 500 sq.m., 550 parking places,
 TESCO Tarnowskie Góry Commercial Centre, ul. Zagórska, 7 350 sq.m., 555 parking places.
Purchase of a real estate located in Legnica at ul. Złotoryjska 63 and start of self-contracted renovation and modernisation
works. This building hosts the current office of the company/partnership.
2003
Bartnicki, Mroczka E.F. Rank Progress Spółka jawna starts a close cooperation with CARREFOUR POLSKA Sp. z o.o.
Page 15
2004
The company/partnership finishes other objects:
 TESCO Głogów Commercial Centre, ul. Piłsudskiego, 5 926 sq.m., 435 parking places,
 CARREFOUR Zielona Góra Commercial Centre, ul. Dąbrówki, 15 142,95 sq.m., 730 parking places.
2005
 CARREFOUR Legnica Commercial Centre, ul. Piłsudskiego, 14 490 sq.m., 860 parking places,
 TESCO Jawor Commercial Centre, ul. Poniatowskiego, 2 000 sq.m., 112 parking places,
 CARREFOUR Kalisz Commercial Centre, ul. Poznańska, 18 359,48 sq.m., 1.120 parking places.
2006
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Several projects were finished, including the 1 stage of construction works of the company’s own Commercial Gallery –
Galeria Piastów in Legnica:
 CARREFOUR Commercial Centre – Galeria Słowiańska, Zgorzelec ul. Jeleniogórska, 18 232,2 sq.m,
 CARREFOUR Tarnowskie Góry Commercial Centre, ul. Kościuszki, 7 457 sq.m.,
 CARREFOUR Zamość Commercial Centre, ul. Lwowska, 13 376 sq.m.,
 CARREFOUR Grudziądz Commercial Centre, ul. Konarskiego, 16 085 sq.m.,
 LEROY MERLIN Kalisz Commercial Centre, ul. Poznańska, 5 600 sq.m.,
 Commercial Gallery „Galeria Piastów” in Legnica – 1st stage, Legnica, ul. Najświętszej Marii Panny, 12 600 sq.m.
The company/partnership changes the location of its office and moves into a renovated tenement house located at ul.
Złotoryjska 63 in Legnica.
2007
The project - CARREFOUR Zielone Wzgórza Commercial Centre, ul. Wrocławska in Białystok, 24 000 sq.m., 860 parking
places was finished.
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October 10 , 2007 – transformation of the „Bartnicki, Mroczka E.F. Rank Progress” Spółka jawna (general) partnership into
the „Rank Progress” Spółka Akcyjna stock company, which has been registered on this day in the National Court Registry
maintained by the District Court of Wrocław-Fabryczna in Wrocław, IX Commercial Department of the National Court
Registry, with the number 0000290520.
2008
The company/partnership finished two important projects:
 Eden Commercial Park,
 2nd stage of the Galeria Piastów Commercial Centre.
Eden Commercial Park
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On May 28 , 2008, EDEN Commercial Park in Zgorzelec was opened. This object is located at ul. Jeleniogórska and it has ca.
8 500 sq.m. of commercial area, the number of parking places is ca. 320, and the number of shops – 25. After the
completion, this object has been sold to „ABERCROMBY” Sp. z o.o.
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2 stage of Galeria Piastów in Legnica
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nd
On October 16 , 2008, the company/partnership has released the 2 stage of Galeria Piastów. Inside the building with
total area of almost 5 000 sq.m., two shops are present: H&M and New Yorker with total area of ca. 3 000 sq.m. and 21 flats
of enhanced standard.
Other objects
The following investments, placed on the areas acquired by the company/partnership, are being finished, and the
company/partnership was responsible for the implementation of formal-administrative procedures for these objects:

CARREFOUR Commercial Centre in Szczecin, 20 800 sq.m.,1 268 parking places,

LEROY MERLIN Commercial Centre next to the CARREFOUR Commercial Centre in Szczecin, 11 500 sq.m.

Commercial Gallery next to the CARREFOUR Commercial Centre in Szczecin, 11 250 sq.m.
2009
The company/partnership finishes two large investments:
 Twierdza Commercial Centre in Kłodzko,
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
rd
3 stage of Galeria Piastów in Legnica.
Twierdza Commercial Centre
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On March 10 , 2009, Leroy Merlin mall is opened, on March 25 , 2009 Carrefour food mall is open, and on April 4 , 2009 the commercial gallery itself. The entire object, with the total area of almost 22 800 mkw, hosts over 50 shops, restaurants
and services, it also has a parking lot for over 700 cars.
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On April 24 , 2009, another and the last stage of Galeria Piastów was finished, its area of ca. 31 000 sq.m. The first stage,
with the total area of ca. 12 600 sq.m. was finished in the autumn of 2006. The autumn of 2008 was the time the second
stage was opened, its area being 4 654 sq.m., with its two-floor area rented by such names as H&M and New Yorker, and in
the upper floors, 21 flats of enhanced standard were built. After the construction works of the entire site have ended,
Galeria Piastów in Legnica is an area of ca. 35 500 sq.m. of total area and over 24 000 sq.m. of rented area, including a
multiplex cinema and a parking lot for 400 cars of the customers of the Commercial Centre.
Other objects:

Carrefour GALERIA ZDRÓJ Commercial Centre in Jastrzębie Zdrój
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On August 21 , 2009, Carrefour GALERIA ZDRÓJ Commercial Centre in Jastrzębie Zdrój was opened, with the total area
of ca. 23 513 sq.m., ca. 500 parking places. This object was built on a parcel bought by Carrefour from Rank Progress
S.A. The company/partnership has performed formal-administrative works related to this investment.,

Pasaż Grodzki Commercial Gallery in Jelenia Góra
On April 13th 2009, a dependant partnership – Rank Müller Jelenia Góra Sp. z o.o., started construction works of the
„Pasaż Grodzki” Commercial Gallery, with commercial area of ca. 5 800 sq.m. and a total area of ca. 10 500 sq.m. This
object is located in the very centre of Jelenia Góra, at the junction of Grodzka and Jasna streets. Predicted time of
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completion for this investment is the 4 quarter of 2010.,

Tęcza Gallery in Kalisz
In 2009, the Company/Partnership has obtained permission for building a commercial gallery named „Galeria Tęcza” in
Kalisz. This object will be located in the centre of the town, at the junction of 3 Maja Street and Plac Nowy Rynek, at
the site of „Tęcza” supermarket. The total area of the object is predicted to be ca. 33 750 sq.m., and the commercial
area to be ca. 17 470 sq.m., number of parking places ca. 400, predicted number of shops – ca. 90. Predicted time of
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completion for this investment is the 2 quarter of 2011.
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On December 9 , 2009, the Issuing Party has finished issuing bonds. 24 760 1-year normal bonds to bearer, Series A, were
isuedm with a nominal value and issue price of 1 000 PLN each, with a total nominal value of 24 760 000 PLN.
4. Risk factors
Risk factors related to environment of the business activity of the Issuing Party:
 risk related to the makroeconomical and political situation in Poland,
 risk of changes to legal regulations,
 risk related to instability of the tax system,
 risk related to increase of competition,
 exchange rates risk,
 interest rates risk,
 financial problems of the customers of the Partnership.
Risk factors specific for the Issuing Party and its sector:
 risk related to strategic goals,
 risk related to increase of operational costs and other costs,
 risk related to changes in cost of construction works,
 risk related to dependency of the Partnership on the contractors of construction works,
 risk related to potential acquisition of another land parcels,
 risk related to unfavourable land conditions,
 risk related to drop of land prices,
 risk accompanying the implementation of investments,
 risk related to administrative decisions,
 risk related to responsibility for the environmental protection,
 risk related to leaving of employees occupying the key positions within the Partnership,
 risk related to accidents during work done by the contractors,
 risk related to financial leverage and securities on assets of Issuing Party,
 risk related to bankruptcy of the Partnership or its dependant entities,
 risk related to reprivatisation,
 risk related to the lack of audit committee
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
nd
risk related to the resolution of the general partnership dated June 22 , 2007, on the application of MSR/MSSF to
consolidated financial reports
Risk factors related to investment in Offered Shares:
 risk related to possibility of revoking or waiver of the Public Offer,
 risk of not coming of the issuing of Series C Shares into effect,
 risk related to claims of reversal of the resolution on raising the company capital by issuing Series C Shares,
 risk related to share quotations of PDA Series C,
 risk related to refusal of introduction of the Issuing Party’s shares to the stock exchange or a delay of this introduction,
 risk of insufficient dispersion of the shares being introduced to regulated market circulation,
 risk of excluding Series B Shares, Series C Shares and PDA Series C from regulated market circulation,
 risk related to possibility of suspending the circulation of Series B Shares, Series C Shares and PDA Series C at GPW,
 risk related to fluctuation of shares quotations for the Issuing Party’s Shares and PDA Series C,
 risk related to possibility of forbidding the start of the Public Offer, or of the order of holding the Public Offer as well as
the possibility of forbidding the Shares from, or of the order of holding the Shares from being accepted for a market
circulation, regulated by KNF,
 risk related to violation or a justified suspicion of a violation of legal regulations by the Issuing Party or by the entities
participating in the Public Offer,
 risk related to refusal to approve the Annex to the Prospectus,
 risk related to subscription and payment of subscription for the offered shares,
 risk related to prolonging the period in which the subscriptions are accepted,
 risk related to not fulfilling or violating the duties, defined by legal regulation and GPW rules, by the Issuing Party,
 risk of sanctions use by the KNF, on the Issuing Party,
 risk of other sanctions use by the KNF.
5. Information on managing and supervising personnel
The Board
The following members constitute the Board:
Supervisory Board
The following members constitute the Supervisory Board:
 Andrzej Bartnicki – Supervisory Board Chairman,
 Jakub Górski – Supervisory Board Deputy Chairman,
 Paweł Puterko – Supervisory Board Member,
 Piotr Kowalski – Supervisory Board Member,
 Łukasz Kurdyś – Supervisory Board Member.
6. Significant shareholders
As of the date of the Prospectus approval, the significant shareholders of the Issuing Party are as follows:
Table: Shares owned by the members of directorial and supervisory bodies of the Issuing Party.
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N of shares
% of the capital
N of votes
Shareholder
Vote %
Jan Mroczka
8 125 480
25,00%
16 250 960
33,33%
Andrzej Bartnicki
8 125 480
25,00%
16 250 960
33,33%
Source: The Issuing Party
Table: Shares owned indirectly by Jan Mroczka and Andrzej Bartnicki as of the date of Prospectus approval.
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N of shares
% of the capital
N of votes
Shareholder
Vote %
MB Progress Capital Limited
28,05%
13 674 185
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45,07%
13 674 185
MB Progress Capital Limited is an investment company located in Nicosia on Cyprus, the only shareholders of which are Jan
Mroczka i Andrzej Bartnicki (50% of shares each), thus the shares of the Issuing Party owned by MB Progress Capital Limited
are indirectly owned by Jan Mroczka and Andrzej Bartnicki.
Tablel: Other significant shareholders of the Issuing Party as of the date of the Prospectus approval.
o
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Shareholder
N of shares % of the capital
N of votes
Vote %
28,05%
13 674 185
42,07%
13 674 185
7. Selected financial data
These selected financial data have been prepared on the basis of studied, historical, financial data of the Capital Group Rank
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Progress S.A. for the period of 2006 – 2008, as well as mid-year financial data for the period from January 1 , 2009 to June
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30 , 2009, containing comparable financial data prepared for the period from January 1 , 2008 to June 30 , 2008,
prepared according to International Standards of Financial Reporting.
Table. Selected financial data (in thousands of PLN).
st
1 half of 2009
Details
st
1 half of 2008
2008
2007
2006
Net income from sales
97 517
46 730
105 256
62 351
56 409
Sales result
18 662
5 887
38 560
23 852
16 955
Operational activity result + depreciation
(EBITDA)
122 263
4 845
54 083
29 749
111 036
Operational activity result (EBIT)
121 137
4 299
52 719
28 872
110 605
Gross result
97 883
5 500
5 115
52 802
110 422
Net result
79 102
4 815
4 836
48 969
92 459
2,43
0,15
0,15
1,51
2,84
*
0,15
0,15
1,51
2,84
Assets, total
666 449
541 960
541 960
301 430
216 352
Fixed assets
534 453
376 765
376 765
180 396
138 602
Current assets, including
131 996
165 195
165 195
121 034
77 750
101 198
133 540
133 540
91 111
58 720
26 945
25 540
25 540
24 968
14 460
3 853
6 115
6 115
4 955
2 495
216 524
134 319
134 319
128 933
105 640
3 250
3 250
3 250
3 250
3 250
Liabilities, total
449 925
407 641
407 641
172 497
110 712
Long-term liabilities, including
254 025
160 727
160 727
93 399
36 802
206 695
137 250
137 250
71 246
16 992
195 900
246 914
246 914
79 098
73 910
144 480
103 194
103 194
14 447
30 957
Flow of monetary assets from the operational
activity
-37 723
-17 772
-19 926
-18 724
-10 410
Flow of monetar assets from the investment
activity
-39 184
-37 926
-109 756
-18 729
-28 504
Net profit per share (in PLN)
Diluted net profit per share (in PLN)
-supplies
-active debts and other assets
-monetary assets
Equity
-share capital
By virtue of loans
Short-term liabilities, including
by virtue of loans
2,13
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Flow of monetary assets from the financial
activity
74 645
52 134
130 842
39 913
29 134
Net monetary assets flow, total
-2 262
-3 564
1 160
2 460
-9 781
Monetary assets at the beginning of the period
6 115
4 955
4 955
2 495
12 276
Monetary assets at the end of the period
3 853
1 391
6 115
4 955
2 495
Source: Issuing Party
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*) net diluted income per share at the end of the 1 half of 2009 was determined under the assumption that issuing of a
maximum amount of Series C Shares has taken place. For other periods presented in the table above, this factor takes into
account only the number of issued shares.
8. Basic elements of development strategy of the Issuing Party and goals of the
issue
Basic elements of development strategy
The strategy foresees development within the real estate market, which is advantageous for shareholders, business
partners and for local communities. The core of this strategy is long-term trust of all entities engaged in implementation of
each project.
Thanks to gained knowledge and experience, the Issuing Party has specialised in designing and construction of large area
commercial objects and commercial galleries, as well as commercial parks in medium size cities.
Besides product diversification, the Group of the Issuing Party also maintains a geographical diversification. The list of cities,
where the Group of the Issuing party has finished, peforms or plans to implement its projects in all segments of its activity,
is as follows: Stargard Szczeciński, Białystok, Grudziądz, Kalisz, Zamość, Bielsko Biała, Katowice, Jastrzębie Zdrój, Dąbrowa
Górnicza, Opole, Wrocław, Legnica, Jelenia Góra, Kłodzko, Zgorzelec, Skarżysko-Kamienna, Świdnica, Jarosław, Krosno,
which form a proof that this strategy is implemented with consequence.
In order to execute the investment plans, the Group of the Issuing Party assumes that it will obtain capital from the capital
market by issuing shares. Estimated value of planned financial expenses on investments of the Group of the Issuing Party is
expected to equal 500,1 mln PLN in the period of 2010-2012. Besides the assets obtained from issuing shares, the other
part of investment expenses will come from own assets of the Issuing Party, combined with bank loans. In particular, it is
planned that the Issuing Party will reinvest up 90% of net income from the following years of business activity. Developer
projects can be found among the investments planned by the Group of the Issuing Party.
Goals of the Issue
The main condition of the Public Offer is to obtain funds, which will allow the Issuing Party to implement its planned
strategy and to expand its current activity. The Issuing Party plans to earmark the net income from the issue of new Shares
for:

Increasing the capital in its target companies, which will use thus obtained assets to cover their own contribution to
the investment projecst implemented by the Capital Group,

Supplementation of own contribution to the Galeria Piastów investment in Legnica,

Payment of current loan obtained from BZ WBK S.A.
The Issuing Party provides a maximum period in which the obtained assets are about to be used as 9 months from the date
the assets arrive at the Partnership. The Partnership Board anticipates to obtain a net amount of up to 51 mln PLN from the
Issue of Series C Shares, with the assumption that all Offered Shares are obtained by the Investors at the maximum price.
The Issuing Party plans to use income from the Issue as follows:
Table: Goals of the Issue of Series C Shares.
Investment expenditures
Company implementing
the investment
1
"Galeria Tęcza" Commercial Gallery in Kalisz
E.F. Progress I Sp. z o.o.
2
„Twierdza” Commercial Centre in Zamość
3
"Pasaż Grodzki" Commercial Gallery in Jelenia Góra
4
5
6
"Twierdza II" Commercial Park in Kłodzko
„Galeria Świdnicka” Commercial Gallery in Świdnica
"Galeria Piastów" Commercial Gallery in Legnica
E.F. Progress III Sp. z o.o.
Rank Müller Jelenia Góra
Sp. z o.o.
E.F. Progress VII Sp. z o.o.
E.F. Progress VI Sp. z o.o.
Rank Progress S.A.
o
N
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Amount
(in thousands of
PLN)
23 000
14 000
2 000
4 000
6 000
2 000
Total
51 000
These projects have been classified according to their implementation priority.
Information on financial and technical parameters of aforementioned projects, Numbers 1-5, as well as information on total
expenses on particular investments can be found in p. 6.1.1.5 Part III of the Prospectus, „Registration Document”.
o
Information related to the investment N 6 i.e. „Galeria Piastów” in Legnica have been presented in p. 5.1.7 and 8.1 Part III
of the Prospectus, „Registration Document”.
The value of spendings on investment planned by the Issuing Party for the 2010-2012 period equals 500,1 mln PLN in total,
and the total amount would be spend on investments in commercial objects.
The assets for funding the investment projects planned for the 2010-2012 period, described in p. 5.2.2., 5.2.3 and 8.1.3 Part
III of the Prospectus, „Registration Document” will come from:

Issue of New Shares – 49 mln PLN;

Monetary income from current activities and investments– 52,9 mln PLN;

Bank loans – 398,2 mln PLN.
The Issuing Party assumes, that the amount of debt funding in funding of all planned development projects will constitute
about 70%.
The investment goals presented above and spending on these investments are to be executed independently of each other.
The Issuing Party plans to implement these goals during the 2010-2012 period. In the opinion of the Issuing Party, the
assets obtained by issuing New Shares, complemented with debt financing and own assets from current activities and
investments will be enough to reach the goals of the Issue.
If the final amount of assets obtained by issuing New Shares will be lower than expected by the Board of the Issuing Party,
then the spendings on implementation of issuing goals will be additionally funded from other sources (own assets of the
Issuing Party, bank loans or leasing), and even if these funds would be insufficient, then the period of investment
program will be prolonged.
As of the date of Prospecuts approval, the Issuing Party does not expect the goals of the Issue to be changed. If it turns
out, however, that implementation of planned investments will be impossible or ineffective because of any reasons, the
Board of the Issuing Party does not reject the possibility of assets transfer between the aforementioned goals of the
Issue of Series C Shares or of implementation of other investments. Any potential changes regarding assets transfers wil
be made by the virtue of a resolution of the Board of the Issuing Party and immediately announced to the general
public. If the resolution on assets transfer would be made before the Series C Shares enter stock circulation, an
appropriate information will be given to the general public, also by making an annex to the Prospectus available (which
is to be approved by the KNF). This annex will be announced to the general public in the same way as the Prospectus.
9. Information about conditions of the offer
Offer parameters
According to this Prospectus, the offer contains 4.643.130 Offered Shares, including:

within Institutional Investor Tranche – to obtain 3.714.504 Series C Shares of nominal value 0,10 PLN each,

within Open Tranche – to obtain 928.626 Series C shares of nominal value 0,10 PLN each.
On the basis of this Prospectus, the Issuing Party wants to obtain a permission to introduce for circulation in the regulated
market:

16.250.960 normal shares to bearer, Series B of nominal value 0,10 PLN each,

no more than 4.643.130 normal shares to bearer, Series C of nominal value 0,10 PLN each,

no more than 4.643.130 rights to normal shares to bearer, Series C.
The offer schedule
Purchase Declaration Deadline:
from May 21 , 2010 to May 25 , 2010, until 14.00 (2pm)
Public Subscription Start:
May 27 , 2010
Accepting subscriptions for Offered Shares:
from May 27 , 2010 to May 31 , 2010
Public Subscription Deadline:
May 31 , 2010
Planned allocation of Offered Shares:
Up to 6 working days after the deadline of public subscription
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The Issuing Party holds the right to change the aformentioned dates. In case of a change of Public Offer deadline and the
deadline of subscription for Offered Shares, an appropriate message will be announced to the general public, by making an
updating announcement. This announcement will be made available for the general public in the same way this Prospectus
was published, before the changed date. In the case of „book-building” deadline change, the appropriate information will
be given to the general public in the aformenetioned way, no later than the moment the „book-building” process starts.
If any change of the aforementioned deadlines significantly affects the evaluation of Offered Shares, an appropriate
message will be announced to the general public before the end of the modified deadline, by making available an annex to
this Prospecuts, approved by the KNF.
After the start of the subscription, the Issuing Party holds the right to extend the subscription period in a case, when the
total number of Offered Shares contained in subscriptions will be less than the number of Offered Shares contained in the
Public Offer. This prolonged period cannot be longer than three months from the start date of the Public Subscription. In a
case of change of the subscription period, an appropriate message will be announced to the general public, by making
available an annex to this Prospecuts, approved by the KNF. This annex will be made available for the general public in the
same way this Prospectus was published. Prolongation of subscription period can take place only in the vailidity period of
the Prospectus. In the case of a change of Offered Shares allocation date, an appropriate message will be announced to the
general public as an update message, no later than the Offered Shares allocation date. The update message will be made
available for the general public in the same way this Prospectus was published.
Book building
Before the start of the Public Offer, marketing actions will be performed, which are known as the „book-building” process.
The „book-building” process is related to both tranches, in which the Shares are offered.
As a result of this actions, a „demand book” for Offered Shares will be created. The results of demand „book building” in
both tranches will be used during the determination of Issue price of the Offered Shares.
Purchase declarations which do not contain:

number of shares expressed as multiples of 10 shares,

number of shares being at least 100,

price within listed price range,

price approximated to 0,01 PLN,

other data listed in the Purchase Declaration form,
will be treated as invalid.
The price range, in which Purchase Declaration during the „book-building” phase will be accepted is from 10,77 to 12,00
PLN per share. The maximum Issue price of Offered Shares is 12,00 PLN and it cannot be lower than the nominal price of a
share.
II. THE RISK FACTORS
1. Risk factors related to the environment of business activity of the Issuing Party
1.1.
Risk related to macroeconomical and political situation in Poland
The income of the Partnership as a whole is related to its activity on the domestic market and thus it indirectly depends on
factors resulting from the general, macroeconomic situation of Poland, such as unemployment levels, economic growth
rate or inflation rate. Perturbations on international financial markets have influenced the economic situation in Poland. A
decline in national economic growth rate has been noted, along with depreciation of PLN related to foreign currencies. The
aforementioned macroeconomic tendencies have influenced and can influence the financial status of the Partnership.
All future unfavourable changes of one or more aforementioned factors, especially worsening of the condition of Polish
economy, currency crisis or public finance crisis, can unfavourably influence the financial results and financial situation of
the Partnership.
1.2.
Risk of legal regulations change
Changes of fegal regulations or different interpretations of the low form a specific risk. Incoherence, lack of uniform
interpretation of the law or frequent novelisations carry a huge risk in business activity, especially in the field of ground
acquisition and execution of construction investments. The potential changes, especially related to the industrial activity
regulations, environmental regulations, labour law and social insurances changes, commercial law (including partnership
law and laws regulating the rules of capital market), can lead in a direction which causes negative influence on the activities
of the Partnership. Polish law is still in the adaptation phase, a result of Polish accession to the European Union. Changes in
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legal regulations related to this process can influence the legal environment of business activities, including that of the
partnership.
One of the effects of European Union expansion is the need to bring the Polish law to the state of concordance with
European legislation. Many acts have been changed and European law regulations are still implemented; these modify
existing administration and court procedures and the laws regulating business activitiy, eg. added value tax rates. Bringing
new regulation of economic market into effect can also lead to interpretation problems, incoherent court decisions,
unfavourable interpretations assumed by the public administration organs, etc.
The aforementioned circumstances can have negative effect on the activity, financial conditions or results of the
Partnership.
1.3.
Risk related to instability of the tax system
The tax system in Poland is characterised by a relative instability. Potential, unexpected changes to the business activity
related taxes can have a negative effect on the investment and development activity of the Partnership. Besides, there is a
risk that the new tax regulations will make the consumer market and the companies less eager to buy real estates.
1.4.
Risk related to competition increase
The market, in which the Partnership resides, is characterised by a high, and still increasing, level of competition. After
Polish accession to the EU, almost all significant European development-investment companies have started their activity,
especially those with Irish, English and Dutch capital. This phenomenon has significantly contributed to the sharp increase
in competition. The Partnership limits this risk by strengthening its position within current markets, eg., by adding objects
such as commercial parks to the existing commercial sites.
Additionally, the Partnership may encounter a strong competition even at the stage of ground identification and
acquisition. This fact can lead to a sharp increase of ground prices, thus it can negatively influence the return rate of
implemented construction investmsnts.
In order to limit the risk related to competition, the Partnership constantly performs analyses of the real estate market as
well as analyses of competition activity. The Partnership also has the policy of parcel acquisition, assuming their competent
and cautious evaluation.
1.5.
Currency rate risk
A significant part of contracts signed by the Partnership, including rental contracts and loan contracts, is paid with Euro.
Although loan contracts are signed in Euro only then, when in the opinion of the Board they are a natural security of
fluctuations of rental income denominated in Euro from the investments financed by these loans, one cannot exclude, that
currency rate changes in relation to the zloty can have a significant influence on the results of the Partnership. In the period
of a significant rise in currency rates, this rise can also positively influence sales income, but also a significantly negative
effect on the financial status or results of the Partnership. In the period of significant currency rate drops, this drop can
unfavourably influence sales income, but it can also positively influence the financial situation or results of the Partnership.
Such instability of the result is limited by the Partnership in the way which is described above, as well as with proper
security strategies, agreed with the institution financing a particular project.
On the day of Prospectus’ approval, a dependent comapny of the Partnership - E.F. Progress V Sp. z o.o., has a futures
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contracted sale of 3.299.554,80 Euro, with the sale rate of 3,5150 PLN/Euro, execution deadline May 31 , 2010.
1.6.
Interest rate risk
The Partnership widely uses rated external financing sources, such as bonds, construction loans, investment loans, current,
non-renewable loans, current revolving loans, loans for capital release from finished investments and loan lines in current
account, both in Euro and in PLN. As a consequence, the Partnership is subjected to the risk of variation in interest rates of
these debt securities, which have a variable interest rates. In order to limit this risk, the Partnership will perform strategies
agreed with financial institutions, leading to limiting this risk, eg. by the use of derivatives to change variable interest rates
to fixed interest rates.
1.7.
Financial problems of the Partnership customers
Perturbations on financial markets and economic slowdown can have a negative influence on financial viability, business
activity or financial situation of the Partnership ucstomers, especially entities renting the commercial real estate owned by
the Partnership and its dependent companies, as it can have a negative influence on the activity, financial and material
situation or the results of the Partnership.
2. Factors specific for the Issuing Party and its market
2.1.
Risk related to strategic goals
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The Partnership cannot assure that it will reach its strategic goas. The markets, on which the Partnership is active, are
subjected to constant changes, the direction and intensity of which depend on many factors. Thus, the future position on
the market, material status, as well as income and profits of the Partnership depend on its ability to design and implement
a long term strategy as well as on the conditions and trends of the market. Making any missed decisions resulting from a
wrong judgement or the inability to adapt to the everchanging market conditions can have negative influence on the results
of the Partnership. In order to minimize this risk, the Partnership tries to analyse all key factors for the choice of strategy,
both a short term and a long term on, so it is possible to define the direction and intensity of market environment changes
as precisely as possible.
2.2.
Risk related to the increase of current costs and other costs
Current costs and other costs of the Partnership can increase with no simultaneous increase of turnover. The factors which
can cause the current costs and other costs to rise, may include the following:

inflation,

increase of taxes and other civil-legal duties,

legal regulation changes (eg. environmental changes, S&H, labour law and administration law changes) or changes in
government policies, which increase the cost of conformity to such laws or policies,

increase of financing costs, especially interest rate increases, bank profits increase, currency rates,

increase of other financial costs, including effects of changes in currency rates and losses on financial securities,

increased cost of external services, especially construction-related services,

prolonging effects of financial crisis, which can negatively influence the financial condition of recipients of Partnership
services, including entites renting commercial real estates owned by the Partnership and its dependent companies,

bidding strength of potential, commercial real estate renting entities, which causes an increase of finishing costs in
commercial facilities or, alternatively, an increase of participation in the costs of finishing the facilities, paid by the
renting entities.
The aforementioned factors can have a significant, negative influence on the activity, material and financial situation and
results of the Partnership.
In order to limit the risk related to the increase of financing cost, the Partnership constantly follows the market situation
and applies financial instruments, which protect from unfavourable changes in currenct rates and in loan interest rates. The
risk of increase of other costs under the control of the Partnership, including subcontractors’ services, is limited, eg. by the
application of bidding procedures. The Partnership constantly monitors recipients of its products and services and takes
actions which cause the debts to be regularly paid back.
2.3.
Risk related to changes in construction costs
The Partnership has signed, and will sign in the future, contracts with construction works contractors – for the
implementation part of investment and development projects. The costs of such projects can change, due to:

Increase of construction materials prices,

Deficit of construction materials on the market,

Change of project scope and changes in architectural project,

Increase of employment cost in the case of qualified labour force,

Lack of qualified labour foce and costs related to its recruitment,

Increase of general contractors’ prices,

Inflation,

Lack of work execution by the contractors within specified timeframes and in a standard acceptable for the
Partnership,

Changes of foreign currency rates,

Availability of financing sources and their cost,

Law changes causing the necessity of adherence to higher standards and new construction-related requirements.
Despite a drop tendency seen in the last 6 months in the field of construction works prices, which were caused by the
financial crisis and the drop of demand for construction works related to the crisis, the Partnership estimates that in the
future, a significant rise in construction works prices can follow because Poland and Ukraine were given the honour to host
European Football Championship - Euro 2012. This fact, in combination with the end of the financial crisis can lead to a
significant increase of demand for construction materials. Besides, due to construction of infrastructure related to the Euro
2012 organisation, i.e. roads, stadiums, hotels, etc., demand for construction workers (both qualified and unqualified) can
increase. This fact may cause a sharp increase of construction works prices.
It has to be pointed out, that each significant rise of costs and delays in completion of investment or development projects
can negatively influence the financial viability of the Partnership or it can cause a drop of net increase of the Partnership
assets value.
In order to limit the risk of construction works price increase, the Partnership constantly follows market tendencies, and the
contracts being signed have parameters adjusted according to the situation on the market, as this helps to limit the
fluctuations of construction works prices..
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2.4.
Risk related to dependency of the Partnership on the contractors of construction works
As it implements its investment, the Partnership uses specialised construction works companies as the contractors. The
Partnership holds a constant supervision over the construction works performed, it cannot guarantee, however, that the
contracted works will be performed by the contractors in a proper way and within the specified timeframe. Any delays in
works and anomalies of the works may cause the investment completion to be delayed, thus causing a cost increase. The
policy used by the Partnership includes limiting these risks by signing general contractory contracts only with renown
contractors of construction works.
2.5.
Risk related to the possibility of new grounds acquisition
The successful development of activities and profitability of the Parntership depend especially on:

The ability to acquire good grounds at competitive prices,

Financial reserves for gronds acquisition,

Proper management of these reserves.
The ability to fulfill the aforementioned assumptions depends in a large extent on the condition of real estate market in
Poland. Acquisition of grounds for investment and development projects in Poland can be difficult because of the following
reasons:

Competition on thr real estate market,

Unwillingness of the banks to finance acquisition of grounds for commercial objects,

Time-consuming process of obtaining administrative permissions,

Lack of local plans of ground management plans,

Limited availability of land with proper infrastructure.
The Partnership cannot guarantee, that currently negotiated grounds acquisition for investment and development projects
will be succesful. These facts can have a significant influence on the activity, financial status or the results of the
Partnership.
In order to limit the aforementioned risk, the Partnership has created a land bank for future investment and development
projects and it has developed an internal expansion department, which is responsible for acquisition of real estates for new
investments.
2.6.
Risk related to unfavourable ground conditions
When it acquires grounds for investment and development projects, the Partnership performs a technical analysis of the
ground being obtained. However, because of limitations of this analysis, one cannot exclude that during project
implementation the Partnership encounters unforeseen factors, which can cause delays or increase the cost of preparing
the ground for the construction works, eg. ground waters, instability of lower ground layers and the need of its
replacement, terrain shape and archaeological finds. These factors can have a significant influence on the costs of
implementation of the given investment of development project, or even to render the project impossible in its planned
shape. This can have a negative influence on the timeframe of project implementation, and this in turn may have adverse
effects on the financial results of the Partnership.
2.7.
Risk related to land prices drop
Following a common practice within this field, the Partnership owns a land bank. Acquisition of grounds for this bank covers
the very acquisition itself, as well as signing pre-initial sales contracts. The Partnership owns a land bank and it has signed
some pre-initial sales contracts. Once a year, the Partnership reevaluates its investment grounds to the fair value, with the
effects of reevaluation noted in its account of gains and losses. A sudden drop of land prices will cause the value of land
alreadz owned by the Partnership to drop, and, depending on the market conditions, acquisition of grounds above the
market price of the land or a loss of prepayments, which can have a negative effect on the financial status or the results of
the Partnership.
2.8.
Risks accompanying investment implementation
Investments of the Parntership are burdened with many risks, during the predesign preparatory phase, during the design
phase, agreements with network gestors and building construction, which can include:
 Changes in media supply conditions (lengthening of a track eg. of an electric line),
 Change of road access reconstruction scale,
 Necessity to introduce changes to the products and to obtain permission from the renting entities and administration
organs,
 Inability to obtain construction permissions of housing conditions and area management plan,
 Delays in completion of construction works,
 Costs exceeding the costs assumed in the budget, caused by unfavourable weather conditions (eg. a long and frosty
winter),
 Bankruptcy of contractors or subcontractors,
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Worker disputes at contractors or subcontractors,
Lack of materials or cosntruction equipment,
Accidents,
Unforeseen technical or real difficulties (eg. high level of ground waters, inadequate ground capacity and
archaeological findings),
Disputes and court proceedings related to the implemented investments, which may force the Partnership to pay
some benefits, eg. resulting from the guarantee of performing construction works,
Lack of possibility to obtain persmissions enabling a building(s) release for use or other necessary permissions,
Changes in legal regulations on ground usage, etc.
Whenever one of the above events happens, it may cause delays in investment completion, thus also an increase of the
implementation costs, blockade of assets invested in ground acquistion, and in some cases – it can make impossible to
finish the projects.
Each of these circumstances can have in turn a significant negative effect on the activity, financial condition or results of the
Partnership. In order to minimize the aforementioned risk, the Partnership performs technical and legal analyses of grounds
acquired for future investment and development projects.
2.9.
Risk related to administrative decisions
The Partnership cannot guarantee that particular permissions, approvals or agreements required for current or future
investments obtained by the Parntership, or that any current or future permissions, approvals or agreements will not be
revoked.
The inability to obtain such permissions, approvals or agreements or revoking thereof may negatively influence the ability
of the Partnership to perform or to finish current or new development or investment projects. It can have a serious
negative effect on the activity, financial status and results of the Partnership.
2.10. Risk related to the responsibility for environmental protection
According to the Polish law, the entities using grounds, on which hazardous substances or other contaminations are
present, can be obliged to clear the ground or to pay penalties for the contamination, or have the responsibility executed in
some other ways. The assessement of risk of reparation claims, of costs of recultivation and administrative penalties
payment is an important element of legal and technical analysis performed by the Partnership as a part of ground
acquisition for future investments. However, we cannot exclude a possibility, that the Partnership will be obliged to pay the
reparations, administrative penalties or recultivation costs resulting from environmental pollution of the grounds owned by
the Partnership. It can have a significant adverse effect on the activity, financial status or results of the Partnership. In order
to minimize this risk, the Partnership performs technical and legal analysis of grounds acquired for future investment and
development projects, aimed to potential risks related to the responsibility for environmental protection.
2.11. Risk related to leaving of people occupying the key positions within the Partnership
The Partnership depends on the people occupying managerial positions, especially on the Board members. People present
in the Partnership Board have vast experience gained on the Polish real estate market and experience in Partnership
management. If any of the Board members had left, it would have negatively influenced the ability of the Partnership to
perform its activities, which in turn could influence its activity, financial status of the results. The Partnership intends to
limit this risk by introducing managerial options or other instruments of rewarding for the managerial personnel in order to
keep the people occupying the key positions within the Partnership.
2.12. Risk related to work accidents at contractors
Eventhough the Partnership usually is not directly responsible for work accidents, which can happen at contractors
performing construction works at the construction sites of the Partnership, such accidents may cause delays of investment
or development projects, thus they may also cause a cost increase of their implementation. It can have a significant impact
on the activity, financial status or results of the Partnership. In order to limit this risk, the Partnership signs such constracts
with the contractors, which guarantee a timely completion of the works under the condition of high penalty clauses.
2.13. Risk related to financial leverage
In order to finance its activities, the Partnership uses loans. The Partnership cannot guarantee, that it will be able to pay the
interest and to fulfill other obligations resulting from the loan contracts. If the Partnership is not be able to obtain
additional funding according to its expectations, it might be forced to change its strategy, limit its growth and refinancing of
subject obligations. If the Partnership will not be able to refinance such obligations, the payments may become wholly or
partially and immediately executable and the Partnership may need to sell some of its assets in order to pay these
obligations. It may have a significant, unfavourable effect on the activity, material or financial status of the Partnership or
on its results. In order to minimize this risk, the Partnership constantly monitors debt levels and the possibilities of loan
obligations regulation.
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2.14. Risk related to bankruptcy of the Partnership or of its dependent entities
In the case of Partnership’s bankruptcy, its financial, investment and commercial creditors will be entitled to satisfy their
credit from the assets of the Partnership. If the dependent entities are bankrupt, then the creditors will be entitled to use
their guarantees. A huge part of the Partnership’s real estates, a part of its current and future credits, as well as some
shares of dependent entites form the financial security of the Partnership and its dependent entities and it is encumbered
with mortgages or other security measures. In the case of Partnership’s bankruptcy (or of its dependent entity) it is highly
probable that a large part of its assets will be spent on satisfying the claims of the creditors, thus the ability of the
Partnership to generate income will be severely limited. In order to limit this risk, the Partnership constantly monitors its
financial viability and time flow of executable payments and credits and it takes the actions of time and amount adjustment
of income with monetary income in order to minimize the risk of the Partnership’s bankruptcy.
2.15. Risk related to reprivatisation
As a consequence of nationalisation, introduced in Poland after World War II, many real estates owned by people or legal
entities were acquired by the Treasury of the State, and often the law was violated. As a part of economic transformation
after the 1989, many expropriated owners of the real estates or their legal successors have taken legal steps in order to
regain lost estates or to obtain reparations. Not all reprivatisation claims are regulated by law, however. According to the
effective regulation, real estate ex-owners or their legal successors can apply to the public administration organs for a
decision revoking the nationalising decision. Therefore it cannot be excluded, that in the future claims to the real estates
acquired by the Partnership will be raised. This fact can have a negative influence on the financial situation and results of
the Partnership. In order to limit this risk, before the ground is acquired, the Partnership tries to study all matters related to
the probability of raising a reclamation claim.
2.16. Risk related to the lack of audit committee
th
th
On June 6 , 2009, the Act of May 7 , 2009, on experts and their self-governing bodies, entities approved for studying
o
financial reports and on public supervision (Dz. U. 2009, N 77, pos. 649) went into effect, according to which, an audit
committee should be included in the structures of an Issuing Party of securities approved for circulation on a regulated
market of a EU member state, which consists of at least 3 members, elected from the Supervisory Board members. At least
one member of the audit committee should meet requirements specified in the aforementioned Act and should be
qualified in accounting or financial revision. Currently, no audit committee is present in the structures of the Issuing Party
and no member of the Supervisory Board meets the requirements defined in the said Act. Because of the above, the Issuing
Party shall recommend an election of a Supervisory Board member who meets these requirements and an election of an
audit committee during the next General Assembly.
2.17. Risk related to the resolution of the general partnership of June 22nd, 2007, on the
application of MSR/MSSF to consolidated financial reports
nd
On June 22 , 2007, the partners of the general partnetship – the legal predecessor of the Issuing Party – by taking into
account their intention of transforming the general partnership into a stock partnership, and later – an application for
approval of share circulation on a regulated market managed by the Stock Exchange in Warsaw and an application for
approval of an issue prospectus by the Financial Supervision Committee (KNF) related to the public offer of shares, made a
resolution on preparing consolidated financial reports according to MSR/MSSF. The resolution was made before the
transformation of legal form of the Issuing Party from a general partnership into a stock parntership and before the
resolution on approval of Issuing Party’s shares for circulation on a regulated market took place. Because of the above,
there is a risk, which does not generate any negative financial effects on the Issuing Party, especially related to tax
obligations, that the accounting policy applied by the Issuing Party, related to the standards used for preparation of
consolidated financial reports of the Issuing Party for the years 2007 and 2008, can be improper. An expert studying these
consolidated financial reports gave a positive opinion based on his studies. In order to minimize this risk factor, an
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Extraordinary General Assembly, calling upon a resolution mentioned in the introduction, made a resolution on April 13 ,
2010, on the application of MSR/MSSF for consolidated financial reports of the Issuing Party Capital Group, including
consolidated financial reports for 2009.
3. Risk factors related to the investment in Offered Shares
3.1.
Risk related to the possibility of cancellation or waiver of the Public Offer
The General Assembly can make a resolution on cancellation of Series C Shares offer or on waiver of the Series C Shares
offer before the Issue Prospectus is published and it can can make a resolution on withdrawal of Series C Shares offer after
the Issue Prospectus is published, because of important reasons.
These reasons, among others, may be classified as important:
 Sudden changes in economic or political situation of the country, region or world, which could not be foreseen before
the subscriptions were started and which could have a significant negative effect on the implementation of the Offer
or on the activity of the Issuing Party,
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


Sudden change in economic or legal environment of the Issuing party which could not be foreseen before the
subscriptions were started and which could have a significant negative effect on the current activity of the Issuing
Party,
Sudden change in financial, economic or legal state of the Issuing Party, which would have or could have a negative
effect on the activity of the Issuing Party and which could not be foreseen before the subscriptions were started,
Other circumstances which would render implementation of the Offer impossible or harmful for the interests of the
Issuing Party or the Investors.
In a case of potential waiver from the implementation of the Offer during its implementaion, return of assets paid by the
Investors will be performed by the method specified by the Investor in the Subscription Form, within 14 days after the
Issuing Party’s announcement of Offer waiver. The return of the aforementioned amounts will be done „as is”, with no
interests or reparations.
In a case of potential cancellation of Offer implementation, a proper announcement will be given to the general public, by
making an annex to this Prospectus accessible, which has to be approved by KNF. This annex will be given to the genereal
public in the same way the Prospectus was published.
The Offer is not planned to be suspended.
3.2.
Risk related to ineffective Issue of Series C Shares
The Issue of Series C Shares may not come into effect, if:
1) at least 1 Series C Share is not subscribed and properly paid, as regulated by the rules defined in the Prospectus,
2) the Board does not submit a resolution on increasing company capital by issuing Series C Shares to the proper register
Court within 12 months from the date of Prospectus’ approval and not later than one month from the date of
allocation of Series C Shares,
3) a decision of the register Court refusing to register the increase of company capital by issuing Series C Shares comes
into effect.
The registration of the increase of company capital by issuing Series C Shares by the Court depends also on the submission
of a statement defining the amount of the increase of company capital by issuing Series C Shares covered by valid
subscriptions by the Board. This statement, according to art. 310 CCC in conjunction with art. 431 § 7 CCC, should define the
amount of company caital after the public subscription for Series C Shares is finished, within the limits defined in the
resolution on the increase of company capital by Issuing Series C Shares. If the Board does not submit the aforementioned
statement or if the statement is incorrect, it would render the registration of company capital increase impossible, thus the
Issue of Series C Shares would not take place.
If the Issue of Series C shares does not take place, the refund of payments made for Series C Shares will be done within the
timeframe and rules described in p. 5.1 of the Prospectus. The Investors are reminded that the refund will not include any
interest rates and reparations.
3.3.
Risk related to claim of revoking the resolution on the increase of company capital by issuing
Series C Shares
According to art. 422 CCC, a resolution of the General Assembly which contradicts the Status or the good manners and
threatens the interests of the Partnership, or which is made with the goal of harming a shareholder, can be claimed as a
claim of revoking the resolution, made against the Partnership. Additionally, art. 425 CCC allows to charge a resolution of
the General Assembly with a claim of making such a resolution ineffective. The Partnership has taken all necessary actions
in order to secure the concordance of resolutions on the increase of company capital by issuing Series C Shares with the
law, the Status, good manners and the interest of the Partnership. The Partnership cannot guarantee, however, that no
aforementioned claims will be made.
3.4.
Risk related to PDA quotation of Series C
The Issuing Party intends to introduce PDA of Series C Shares to the GPW as soon as possible. However, there is a risk, that
because of procedural reasons, PDA of Series C will not be introducted to stock exchange circulation at all, which would
mean, that the investors cannot dispose of allocated securities on the stock exchange before the date of introduction of
Series C Shares to the GPW.
The investors are reminded, that if the Issue does not take place during the PDA of Series C circulation, the Investors will be
refunded only with the issue price for each PDA, according to the rules described in p. 5.1 of the Prospectus, without any
interest rates or reparations. It might mean, that the Investors who will have PDA of Series C purchased at GPW at a price
which is higher then the issue price of Offered Shares, that they suffer losses.
3.5.
Risk related to refusal of introduction of shares of the Issuing Party to the stock exchange
circulation or to a delay thereof
Page 28
Introduction of Rights to Series C Shares, and then – to the Offered Shares and Series B Shares – to the stock exchange
circulation, requires the following decisions to be obtained:
 KDPW decision about accepting Rights to Series C Shares, Offered Shares and Series B Shares for depositon and
granting them with a code,
 Stock Exchange Board decision on approval of Rights to Series C Shares, Offered Shares and Series B Shares for stock
exchange circulation,
 Decision of Register Court on registration of the Issue of Series C Shares (in the case of introduction of Offered Shares
and Series B Shares to stock exchange circulation),
 Stock Exchange Decision on introduction of Rights to Series C Shares, and later – Offered Shares and Series B Shares –
to stock exchange circulation.
According to §2 of the Resolution of the Minister of Finances on October 14th, 2005, on detailed conditions which must be
met by the official stock quotation market and the entities issuing shares to this market (Dz. U. 2005, N o 206, pos. 1712) a
company managing the official stock quotation market should assure, that only those shares are approved for circulation on
this market, which meet the following requirements:
1) They have been accepted for circulation on a regulated market,
2) Their disposal is not limited,
3) All issued shares of a given type have been included in an application to a proper organ of the company managing the
official stock quotation market,
4) The product of number of shares included in their application and their market price, and if that price cannot be
defined – own capital of the Issuing Party, equal (in zlotys) at least 1 000 000 Euro
5) At the date of application submission, such a dispersion of shares included in the application exists, that it assures a
flow of shares.
On the other hand, according to § 3 of the aforementioned Resolution, shares are accepted for circulation on the official
quotation market, if:
1) The company issuing shares has announced, according to the rules specified in separate regulations, financial reports
with an opinion of an entity approved for their analysis, for at least three years preceeding the date of application
submission, or
2) It is backed by a justified interest of the company or of the investors, and the company has announced to the general
public, in a way specified in separate regulations, information which allow the investors to estimate the financial and
economical state of the company and risks related to purchase of shares included in the application.
A delay or a refusal from any of the decision making entities may cause a disturbance or interruption of introduction of
Shares or Rights to Shares of the Issuing Party to the stock exchange circulation.
Additionally, according to § 11 of GPW Status, the Stock Exchange Board can revoke to resolution on accepting securities
for stock exchange circulation, if within 6 months from the date of the resolution, the application for introduction of these
securities to stock exchange circulation is not submitted.
3.6.
Risk of indequate dispersion of shares introduced to circulation on the regulated market
One of the criteria which have to be met by shares, in order to accept them for circulation on the official quotation marker
th
is the dispersion share, which allows their flow. According to the resolution of the Minister of Finances on October 14 ,
2005 on detailed conditions which must be met by the official stock quotation market and the entities issuing shares to this
o
market (Dz. U. 2005, N 206, pos. 1712), a dispersion assures shares flow, if the investors (where each of them holds no
more than 5% of the total GA votes), hold: (a) at least 25% of the company’s shares included in the application or (b) at
least 500 000 of the company’s shares with total value in zlotys not less than 17 mln Euro, according to the last issue price
o
th
or a sale price. According to the resolution N 14/1220/2009 of the Supervisory Board of GPW dated May 20 , 2009, on the
change of GPW Status, which came into effect on the same day, that in a case of approval of shares for stock exchange
circulation, these shares should also meet the following requirements: (a) the product of all shares of the issuing party and
the prognosed market prices of these shares, and if a determination of this price is impossible – own capital of the issuing
party, should equal (in zlotys) at least 5 000 000 Euro, (b) the shareholders (each of which is entitled to less than 5% of the
votes during a General Assembly of the Issuing Party), should hold at least 15% of shares included in the application for
approval for stock exchange circulation and 100 000 of shares included in the application for approval for stock exchange
circulation with a value of at least 1 mln Euro, calculated according to the last sale price or issue price.
There is a risk that Series C Shares will not be approved for stock market circulation, because of the possibility of ownership
structure formation and of market value of the Issuing Party’s shares in a way which does not meet the criteria listed in the
o
resolution N 14/1220/2009 of the GPW Supervisory Board.
If the conditions for approval for circulation on the main market are not met, the Issuing Party will submit proper
applications for approval for introdcution of the securities on the parallel market.
Page 29
We also have to note, according to the opinion of the Stock Board Exchange regarding detailed conditions of approval and
th
introduction of some financial instruments to the stock exchange, dated September 12 , 2006, the decisions regarding the
application of Issuing Parties for approval and introduction of rights to new issue shares and to existing shares are made
after a detailed analysis, including in particular the amount and the structure of the offer, ownership structure, possible sale
bans and other circumstances related to the application. Because of the above, one has to take into account the possibility
of introduction of existing shares to the quotations taking place not earlier than the registration of the increase of company
capital.
3.7.
Risk related to exclusion of Series B Shares, Series C Shares and Series C PDA from circulation
on the regulated market
One cannot be absolutely sure, that the shares of the Issuing Party will not be subjected to such a condition in the future.
Currently there are no reasons to expect such a turn of events. If the Issuing Party does not fulfill its duties, orders and bans
forced or provided in specific regulations of the Act on Public Offers or of the Resolution on the Prospectus, or if it does not
fulfill them properly, the KNF can:
a) Made a decision of excluding the securities from the regulated marked circulation, for a specific period or
permanently, or
b) Give a penalty of up to 1.000.000 PLN (taking into account the financial situation of the entity subjected to the
penalty), or
c) Use both aforementioned sanctions simultaneously.
Additionally, according to art. 20 p. 3 of the Act on Circulation, the company managing the regulated market excludes
securities or other financial instruments specified by the KNF (on the request of KNF) then, if their circulation significantly
threatens proper functioning of the regulated market or circulation security on this market, of if it violated the interests of
the investors.
According to § 31 of the GPW Status, the GPW Board excludes financial instruments from the stock exchange circulation, if:
(i) their disposability has become limited, (ii) on the request of KNF submitted according to the regulations of the Act on
Circulation, (iii) in a case when their dematerialisation is revoked, or (iv) in a case of their exclusion from circulated on the
regulated market by the proper supervisory organ. Besides, the GPW Board can exclude financial instruments from the
stock exchange circulation according to § 31 p. 2 of the GPW Status.
One cannot be absolutely sure, that such situation will not take place in the future in the case of Shares. Currently, there
are no reasons to expect such a turn of events.
3.8.
Risk related to the possibility of suspending circulation of Series B Shares, Series C Shares
and Series C PDA on the GPW
The Stock Exchange Board can, on the basis of § 30 p. 1 of the Stock Exchange Status, suspend the circulation of Issuing
Party Shares for the period of up to three months:
 If an application of the Issuing Party has been submitted,
 If it decides, that it is required by the interests and security of the circulation participants,
 If the Issuing Party violates GPW rules.
According to § 30 p. 2 of the Stock Exchange Status, the Stock Exchange Board suspends shares circulation for the period of
up to one months on the request of KNF submitted according to the regulations of the Act on Circulation. According to art.
20 p. 2 of the Act on Circulation, in a case, when the circulation of particular securities or other financial instruments is
performed in circumstances indicating a risk of threatening proper functioning of the regulated market or of the security of
circulation on this market, or of threatening the interests of investors, the company managing the regulated market
suspends the circulation of these intstruments on the request of the KNF, for a period of up to one month.
On the basis of art. 96 p. 1 of the Act on Offer, the right of temporal or permanent exclusion of shares from the stock
exchange circulation belongs also to the KNF, in a case when the duties of the Issuing Party referred to by art. 96 p. 1 of the
Act on Offer are not fulfilled or are not fulfilled properly. The KNF consults the GPW before making such decisions.
3.9.
Risk related to fluctuations of quotations of the Issuing Party Shares and Series C PDA
The price of Shares in the Public Offer should not constitute a solid base for conclusions regarding their quotations after the
end of the Public Offer.
Quotations of the Shares and Series C PDA may undergo large fluctuations because of many events and factors, which
cannot be influenced by the Issuing Party. Such events and factors should include, eg. changes of financial results of the
Issuing Party, changes in profitability estimations made by the analysts, comparison of perspectives of different branches of
economy, changes in legal regulations influencing the situation of the Issuing Party and the general condition of the
economy.
Page 30
Stock exchange markets occassionally experience large fluctuations of prices and circulation volumes, which can also have a
negative influence on the market price of Shares or Series C PDA. In order to optimise the return rate, the investors may be
forced to make long-term investments in the Shares, since the Shares may be inappropriate as short-term investments.
The approval of Shares and Series C PDA for circulation on the GPW should not be interpreted as a guarantee of their flow.
In a case, when a proper turnover level will not be reached or maintained, it can have a negative effect on the viability and
prices of Shares or Series C PDA. Even if the proper flow level of Shares and Series C PDA is reached, the market price of
Shares can be lower than the Issue Price/Sale Price.
3.10. Risk related to the possibility of the ban of start or of the order to stop the Public Offer and
of the ban of start or order to stop the approval of shares for circulation on the regulated
market by the KNF
According to art. 16 and 17 of the Act on Public Offer, in a case of violation or a justified suspicion of violation of law related
to the public offer, the subscription or the sales performed on the basis of this offer or related to the application of the for
permission or introduction of securities for circulation on the regulated market on the territory of the Republic of Poland by
the issuing party, the introducing party or other entities participating in this offer in the name or on the order of the Issuing
Party, or in a case of a justified suspicion that such a violation can take place, the KNF can:
a) Order to ban the start of a public offer, a subscription or sale, or to stop them, or order to stop the
application for approval or introduction of securities to the circulation on a regulated market, for a period of
no longer than 10 working days,
b) Order to ban the start of a public offer, a subscription or sale, or to stop them, or order to stop the
application for approval or introduction of securities to the circulation on a regulated market, or
c) Publish, (at the expense of the Issuing Party) an information about an action violating the law, related to the
public offer, the subscription or sale or to application for approval or introduction of securities to the
circulation on a regulated market.
The KNF may apply means provided in point b) and c) above more than one time in relation to the public offer, the
subscription or sale or to application for approval or introduction of securities to the circulation on a regulated market.
One also has to note that according to art. 18 of the Act on Public Offer, the KNF may apply means listed in art. 16 or 17,
also in a case when it can be concluded from the contents of documents or information submitted to the KNF or released to
the general public, that:
a) The public offer, the subscription or sales of the securities made on the basis of this offer or their approval
for circulation on the regulated market wouls significantly violate the interests of the investors,
b) There are hints, which according to the law may lead to legal cessation of the Issuing Party,
c) The activity of the Issuing party was or is perfromed with a striking violation of legal regulations and this
violation can significantly infuence evaluation of securities of the Issuing Party or which may lead to legal
cessation or bankruptcy of the Issuing Party according to the law, or
d) The legal status of the securities is not concordant with law, and according to these regulations there is a risk
that these securities are acknowledged as invalid or having a legal defect influencing their evaluation.
If the KNF is notified by a proper organ of a country assuming that the Issuing Party, which has the Republic of Poland as its
country of origin, or a financial institution acting in the public offer in the name or on the order of such Issuing Party
violates the law effective in this country, related to the public offer or to approval for circulation on the regulated market
on the basis of Issue Prospectus approved by the KNF, the KNF can:
a) Order the Issuing Party to stop violating the legal regulations on the territory of this country or
b) Apply means defined in art. 16 or art. 17.
3.11. Risk related to violation of legal regulations or to a justified suspicion of violation thereof by
the Issuing Party or by the entities participating in the public offer
According to art. 16 of the Act on Public Offer, in a case of violation or a justified suspicion of violation of law related to the
public offer, the subscription or the sales performed on the basis of this offer by the Issuing Party, the introducing party or
other entities participating in this offer in the name or on the order of the Issuing Party, or in a case of a justified suspicion
that such a violation can take place, the KNF can order to ban the start of the public offer, the subscription or sales or to
stop them for a period of up to 10 working days or to ban the start of the public offer, the subscription or sales or to stop
them, or publish (at the expense of the Issuing Party or the introducing party) an information about an action violating the
law, related to the public offer, the subscription or sale. The KNF may apply multiple means listed in the above sentence,
related to the public offer, the subscription or sales.
In a case of violation or a justified suspicion of violation of law related to the application for approval or introduction of
securities to circulation on the regulated market by the Issuing Party, the introducing party or other entities participating in
this offer in the name or on the order of the Issuing Party, or in a case of a justified suspicion that such a violation can take
place, the KNF can order, on the behalf of art. 17 of the Act on Offer, to ban approval or introduction of securities to
Page 31
circulation on the regulated market for a period of up to 10 working days or to ban approval or introduction of securities to
circulation on the regulated market and publish (at the expense of the Issuing Party or the introducing party) an
information about an action violating the law, related to approval or introduction of securities to circulation on the
regulated market. The KNF may apply multiple means listed in the above sentence, related to approval or introduction of
securities to circulation on the regulated market.
One also has to note that according to art. 18 of the Act on Public Offer, the KNF may apply means listed in art. 16 or 17,
also in a case when it can be concluded from the contents of documents or information submitted to the KNF or released to
the general public, that the public offer, the subscription or sale of securities or approval thereof for circulation on the
regulated market would pose a significant threat to the interests of the Investors, creation of the Issuing Party took place
with a serious violation of effective legal regulations, or the legal status of the securities contradicts the law.
One cannot entirely exclude that such a risk exists, which is related to the Public Offer covered in this Prospectus and
related to the application for approval o introduction of the securities to circulation on the regulated market.
3.12. Risk related to refusal of the annex to the Prospectus
According to art. 51 p. 4 of the Act on Offer, the KNF may refuse the annex to the Prospectus in a case when its form or
contents do not conform to the requirements specified in legal regulations. By refusing the annex to the Prosceptus,the
KNF orders to ban the start of the Public Offer, to stop it or to hold the introduction of securities to the circulation on the
regulated market on the GPW na on the basis of Issue Prospectus related to the securities covered by this offer or covered
an approval for circulation.
3.13. Risk related to subscription for Offered Shares and to subscription payment
The Issuing Party reminds the Subscribers that the Subscribers are responsible for all consequences resulting from an
inappropriate filling in the Offered Shares subscription form, including lack of shares allocation.
Additionally, lack of payment for Offered Shares within the specified timeframe or an incomplete payment results in lack of
Offered Shares allocation.
3.14. Risk related to prolongation of subscription deadline
According to the Prospectus’ contents, the Board of the Issuing Party holds the right to extend the subscription deadline if
the total number of Offered Shares covered by subscriptions will be lower than the total number of Offered Shares, but this
deadline cannot be later that three months from the starting date of the Public Offer, it also cannot be later than the
validity date of the Prospectus. This causes a risk of monetary assets freeze for the investors, who will have made payments
for Offered Shares.
3.15. Risk related to not fulfilling or violation of duties of the Issuing Party, defined by legal
regulations and by the GPW Status
In a case, when the Issuing Party does not fulfill its duties or fulfills the duties inappropriately – the duties are specified in
the Act on Offer, art. 14 p. 2, art. 15 p. 2, art. 37 p. 4 and 5, art. 38 p. 1 and 5, art. 39 p. 1, art. 42 p. 1, art. 44 p. 1, art. 45,
art. 46, art. 47 p. 1, 2 and 4, art. 48, art. 50, art. 51 p. 4, art. 52, art. 54 p. 2 and 3, art. 56 i 57, art. 58 p. 1, art. 59, art. 62 p.
2, 5 and 6, art. 63, art. 64, art. 66 and art. 70 does not execute, or inadequately execute the order specified in art. 16 p 1,
violates the order specified, in art. 16 p 2, or does not fulfill its duties or fulfills the duties inappropriately – the duties are
specified in art. 22 p. 4 and 7, art. 26 p. 5 and 7, art. 27, art. 29-31 and art. 33 of the Regulation (WE) 809/2004 of the
Commitee, the KNF can: make a decision about temporal or permanent exclusion of securities from the regulated market,
or force a monetary penalty of up to 1 mln PLN, taking into account the specific financial situation of the entity, or apply
both sanctions simultaneously.
According to art. 20 p. 3 of the Act on Offer, the company managing the regulated market excludes securities or other
financial instruments specified by the Committee on the request of the Commitee in a case, when their circulation poses a
serious threat to the regulated market funcitoning or a security of circulation on this market, or causes a violation of the
interests of investors.
According to § 31 of the GPW Status, the GPW Board excludes financial instruments from the stock exchange circulation, if:
(i) their disposability has become limited, (ii) on the request of KNF submitted according to the regulations of the Act on
Circulation, (iii) in a case when their dematerialisation is revoked, or (iv) in a case of their exclusion from circulated on the
regulated market by the proper supervisory organ. Besides, the GPW Board can exclude financial instruments from the
stock exchange circulation according to § 31 p. 2 of the GPW Status.
According to § 31 p. 2 of the GPW status, the Board of the Stock Exchange can exclude the securities of the Issuing Party
from the stock exchange circulation, if, e.g.:
 If the securities no longer meet the requirements spcified in the GPW Status,
 If the Issuing Party repeteadly violates the rules of the Stock Exchange,
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






On a request of the Issuing Party,
If the Issuing Party has been declared bankrupt or if a court dismisses a bankruptcy claim because of lack of asstes of
the Issuing Party, which could cover the cost of the proceeding,
If it decides, that it is required by the safety and interests of the circulation participants,
If a decision on joining the Issuuing Party with other entity, its division or transformation is made,
If no stock transactions on the securtity of the Issuing Party has been made within the last three months,
If the Issuing Party starts activities forbidden by effective regulations,
If a liquidation process for the Issuing Party has been started.
Additionally, if the Issuing Party does not fulfill its duties, orders and bans forced or provided in specific regulations of the
art. 157 and 158 of the Act on Offers or resulting from the legal regulations made on the basis of art. 160 p.5 of the Act on
Offer, or if it does not fulfill them properly, the KNF can:
1) Make a decision of excluding the securities from the regulated marked circulation or
2) Give a penalty of up to 1.000.000 PLN, or
3) Make a decision of excluding the securities from the regulated marked circulation, for a specific period or
permanently, at the same time applying the penalty specified in p. 2.
In the existing cases, the Investor can have limited possibility to circulate the Issuing Party shares. One cannot be absolutely
sure that such a situation will not happen in the future in the case of Issuing Party shares. Currently, there are no reasons to
expect such a turn of events.
3.16. Risk of using sanctions on the Issuing Party by the KNF
According to art. 16 and 17 of the Act on Public Offer, in a case of violation or a justified suspicion of violation of law related
to the public offer, the subscription or the sales performed on the basis of this offer or related to the application of the for
permission or introduction of securities for circulation on the regulated market on the territory of the Republic of Poland by
the issuing party, the introducing party or other entities participating in this offer in the name or on the order of the Issuing
Party, or in a case of a justified suspicion that such a violation can take place, the KNF can:
1) Order to ban the start of a public offer, a subscription or sale, or to stop them, or order to stop the application for
approval or introduction of securities to the circulation on a regulated market, for a period of no longer than 10
working days, or
2) Order to ban the start of a public offer, a subscription or sale, or to stop them, or order to stop the application for
approval or introduction of securities to the circulation on a regulated market, or
3) Publish, (at the expense of the Issuing Party) an information about an action violating the law, related to the public
offer, the subscription or sale or to application for approval or introduction of securities to the circulation on a
regulated market.
The Commitee can use multiple means defined in p. 2) and 3) above in relation to the particular public offer, the
subscription or sale, or to the application for approval or introduction of securities to the circulation of the regulated
market.
According to art. 18 of the Act on Public Offer, the KNF may apply means listed in art. 16 or 17, also in a case when it can be
concluded from the contents of documents or information submitted to the KNF or released to the general public, that:
 The public offer, the subscription or sales of the securities made on the basis of this offer or their approval for
circulation on the regulated market wouls significantly violate the interests of the investors,
 There are hints, which according to the law may lead to legal cessation of the Issuing Party,
 The activity of the Issuing party was or is perfromed with a striking violation of legal regulations and this violation can
significantly infuence evaluation of securities of the Issuing Party or which may lead to legal cessation or bankruptcy of
the Issuing Party according to the law, or
 The legal status of the securities in not concordant with law, and according to these regulations there is a risk that
these securities are acknowledged as invalid or having a legal defect influencing their evaluation.
It is stressed in art. 53 of the Act on Offer, that if a marketing action is peformed, the contents of all marketing materials
must unequivocally stress, that:
 The materials have only a marketing or advertising purposes,
 That an Issue Prospectus has been, or will be published,
 Places, where the Issue Prospectus is, or will be available.
It is stressed in art. 53 of the Act on Offer, that if a marketing action is pefromed, the contents of all marketing materials
must unequivocally stress, that:
 The materials have only a marketing or advertising purposes,
 That an Issue Prospectus has been, or will be published,
 Places, where the Issue Prospectus is, or will be available.
Page 33
Information published within the marketing action should be identical to the information presented in the Issue Prospectus
made available to the general public, or with the information which are required to be published in the Prospectus on the
behalf of the Act of of the 809/2004 regulation, if the Issue Prospectus has not been made publicly available yet, they also
cannot confuse the Investors in regard to the sitiuation of the Issuing Party and to the evaluation of securities.
If the aforementioned rules turn out to be violated, the KNF can:
 Hold the start of the marketing action or stop it for a period of up to 10 working days, in order to remove the
discrepancies, or
 Ban the marketing action, if the Issuing Party does not remove the discrepancies specified by the KNF within 10
working days, or if the contents of the marketing and advertising materials violates regulations of the Act, or
 Publish (at the expense of the Issuing Party) an information about an illegal conduct of the marketing action, indicating
violations of the law.
If the KNF states any violations of the aforementioned duties, it can also place a penalty of up to 250 000 PLN on the Issuing
Party.
On the basis of art. 96 p. 1 of the Act on Offer, if the Issuing Party does not fulfill or inadequately fulfills the duties specified
in a catalogue present in the art. 96 p. 1 of the Act on Offer, the KNF may use the following sanctions:
 Make a decision of excluding the securities of the Issuing Party from the circulation on GPW or
 Give a penalty of up to 1.000.000 PLN, taking into account the financial situation of the Issuing Party, or
 Use both sanctions simultaneously.
According to art. 96 p. 13 of the Act on Offer, if the Issuing Party would not fulfill or would inappropiately fulfill its duties
specified in art. 10 p. 5 of the Act on Offer (related to informing the KNF about the finish of subscription for Series C Shares
or about the approval of Series C Shares for circulation on the GPW) and in art. 65 p. 1 of the Act on Offer (related to
submitting summaries of secret, current and periodic information), the KNF can use a penalty of up to 100 000 PLN.
3.17. Risk of use of other sanctions by the KNF
According to art. 97 p. 1 of the Act on Offer, everyone who:
 Purchases or disposes of securities, violating the bans specified in art. 67,
 Does not fulfill the information duty specified in art. 69 on time or fulfills this duty with violation of conditions
specified in those regulations,
 Exceeds the specified total vote limit without fulfilling conditions listed in art. 72-74,
 Does not fulfill conditions specified in art. 76 or 77,
 Does not announce or does not perform a timely announcement, or does not fulfill the obligation of timely shares
disposal in the cases specified in art. 73 p. 2 or 3,
 Does not announce a call or does not perform a timely call, in the cases specified in art. 74 p. 2 or 5,
 Does not announce a call or does not perform a timely call, in the case, specified in art. 90a p. 1,
 Does not introduce necessary changes or complements in the call’s contents or does not reveal explanations regarding
this contents, against the demand specified in art. 78,
 Does not make a timely payment of difference in share price defined in art. 74 p. 3,
 Proposes a price lower than defined on the basis on art. 79 in the call specified in art. 72-74 or art. 91 p. 6,
 Directly or indirectly purchases or obtains shares, while violating art. 77 p. 4 sp. 1 or 3, or art. 88a,
 Purchases own shares while violating the mode, deadlines and conditions specified in art. 72-74, art. 79 or art. 91 p. 6,
 Performs a forced purchase contrary to the rules stated in art. 82,
 Does not compensate the demand specified in art. 83,
 Does not grant the Auditor for Special Cases with access to the documents or refuses to give explanations, against the
obligation specified in art. 86 p. 1,
 Does not fulfill the duty specified in art. 90a p. 3,
 Performs an act specified in p. 1-11a, acting in the name or in the interest of a legal entity or an organisation without
legal entity.
The KNF can give a penalty of up to 1 mln PLN, as a decision made after a proceeding.
According to art. 99. P. 1 of the Act on Offer, who openly offers securities purchase without the approval of issue
prospectus required by the act or of the Issue Prospectus, or without having the identity of information contained in Issue
Prospectus with information required from an issue prospectus confirmed, or revealing the issue prospectus or the Issue
Prospectus to the general public or to the interested Investors, is subjected to a fine of up to 1 000 000 PLN, or is sentenced
for up to 2 years, or is subjected to both these sanctions at once. Everyone, who openly offers purchase of securities or
makes the offer in a way other, than the public offer, is subjected to the same penalty. Who performs the aforementioned
act, acting in the name or in the interest of a legal entity or an organisation without a legal entity, is subjected to a fine of
Page 34
up to 1 000 000 PLN, or is sentenced for up to 2 years, or is subjected to both these sanctions at once. In less important
cases, the offender is subjected to a fine of 250 000 PLN.
III. REGISTRATION DOCUMENT
1. Responsible people
1.1.
The Issuing Party
Company: Rank Progress Spółka Akcyjna located in Legnica
Address: ul. Złotoryjska 63 59-220 Legnica
Phone: (+ 48 76) 746 77 71
Fax: (+ 48 76) 746 77 70
Website: www.rankprogress.pl
The following people act in the name of the Issuing Party as the entity responsible for the information contained in this
Prospectus:
Declarations of people acting in the name of the Issuing Party
We hereby declare, that according to the best of our knowledge and with proper care taken in order to provide such
conditions, all information contained in this Prospectus are true, reliable and in accord with the real state of affairs and that
no information, which could influence its importance, have been omitted.
Page 35
……………………………..
Jan Mroczka
Board Chairman
1.2.
……………………………..
Dariusz Domszy
Board Deputy Chairman
….…………………………..
Mariusz Kaczmarek
Board Member
Financial advisor
Company: PROFESCAPITAL Sp. z o.o.
Address: 50-069 Wrocław, ul. Ofiar Oświęcimskich 15
Phone: (+48 71) 782 11 60
Fax: (+48 71) 782 11 61, 62
Website: http://www.profescapital.pl
People acting in the name of the entity preparing this Prospectus
The following people act in the name of the Financial Advisor, which is the entity responsible for preparation of this
Prospectus:


Paweł Puterko – Board Chairman,
Szczepan Czyczerski – Board Deputy Chairman.
The PROFESCAPITAL Financial Advisor participated in the preparation of the following parts of the Prospectus: Part I
„Summary” p.: 1-8; Part II „Risk factors” p.: 1 and 3 in Part III „Registration Document” p.: 2, 3, 6.2.1, 9, 10, excluding p.:
10.4, 12 excluding p. 12.1, 23, 24 and of Part IV „Quotation Document” p.: 2, 3.3 , 9, 10.
Declaration of people acting in the name of the Financial Advisor
PROFESCAPITAL Sp. z o.o. declares, that according to the best of our knowledge and with proper care taken in order to
provide such conditions, all information contained in these part of the Prospectus, which have been prepared with
Page 36
participation of PROFESCAPITAL Sp. z o.o. are true, reliable and in accord with the real state of affairs and that no
information, which could influence its importance, have been omitted.
……………………………..
Paweł Puterko
Board Chairman
1.3.
The Offering Party
Company: Dom Maklerski IDM Spółka Akcyjna located in Kraków
Address: 31-041 Kraków, Mały Rynek 7
Phone: (+48 12) 397 06 00
Fax: (+48 12) 397 06 01
Website: http://www.idmsa.pl
The following people are authorised to act in the name of the Offering Party, which is the entity responsible for the
information contained in the Prospectus:
 Grzegorz Leszczyński – Board Chairman,
 Rafał Abratański – Board Deputy Chairman,
 Piotr Derlatka – Procurator,
 Jarosław Żołędowski – Procurator.
The Offering Party participated in preparation of the following parts of the Prospectus:
 Summary (Offer conditions),
 Information on offer conditions (Part IV p. 5),
 Approval of securities for circulation and agreements related to the approval for circulation (Part IV p. 6).
Declaration of people acting in the name of Dom Maklerski IDMS.A.
Page 37
We hereby declare, that according to the best of our knowledge and with proper care taken in order to provide such
conditions, all information contained in the aforementioned parts of the Prospectus prepared by the Offering Party are
true, reliable and in accord with the real state of affairs and that no information, which could influence its importance, have
been omitted.
……………………………..
Rafał Abratański
……………………………..
Piotr Derlatka
Procurator
2. Expert Auditors
2.1.
Names and addresses of Expert Auditors
Company: HLB Sarnowski & Wiśniewski Sp. z o.o.
Address: 61 – 478 Poznań, ul. Bluszczowa 7
Phone: (+48 61) 834 54 20
Fax: (+48 61) 834 54 21
Website: http://www.sw-audit.pl
This entity is registered in the list of entities entitled to study financial reports, managed by the National Chamber of Expert
Auditors, with the number 2917.
Dariusz Sarnowski has perfromed studies in the name of HLB Sarnowski & Wiśniewski Sp. z o.o., he is an expert auditor
registered by the National Chamber of Expert Auditors in the list of entities entitled to study financial reports, with the
number 10200/7527.
HLB Sarnowski & Wiśniewski Sp. z o.o. has:
 Performed a study of consolidated financial reports of the Issuing Party created according to the International
st
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Standards of Financial Reporting for the current years ending on December 31 , 2007 and December 31 , 2008 and
has given an opinion on these reports,
 Performed a study of historical consolidated financial information of the Capital Group of the Issuing Party, created
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according to the International Standards of Financial Reporting (ISFR) for the current years ending on December 31 ,
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2006, December 31 , 2007 and December 31 , 2008 and has given an opinion on these information,
 Performed a study of mid-year, short consolidated financial report of the Capital Group of the Issuing Party, created
st
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according to the International Standards of Financial Reporting (ISFR) for the period from January 1 , to June 30 ,
2009 and has given an opinion on these reports,
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

Performed a study of mid-year, short consolidated financial information of the Capital Group of the Issuing Party,
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created according to the International Standards of Financial Reporting (ISFR) for the period from January 1 , to June
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30 , 2009 and has given an opinion on these information,
Performed confirmation works on forecasts of the results of the Issuing Party and has generated a report related to
the presented assumptions and forecasts.
The Issuing Party did not create and did not subject consolidated financial reports for 2006 to the studies, because on the
th
basis of art. 51 p. 1 of the Act of September 29 , 1994 on accounting, it had no obligation to do so. However, the
Prospectus inculdes historical financial informations of the Group of Issuing Party for the 2006-2008 period, made according
to the International Standards of Financial Reporting (ISFR), which contain consolidated comparison data of the legal
predecessor of the stock partnership, i.e. „Bartnicki, Mroczka E.F. Rank Progress” Spółka jawna, for the year 2006.
2.2.
Information on resignations, contract terminations or changes of the Expert Auditor
No changes of the Expert Auditor have taken place.
3. Selected financial information
The selected financial information have been prepared on the basis of studied historical financial information of the Capital
Group of Rank Progress S.A. for the 2006 – 2008 period, as well as mid-year financial information for the period from
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January 1 , 2009 to June 30 , 2009, containing comparable financial data prepared for the period from January 1 2008 to
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June 30 , 2008, created in accordance with the International Standards of Financial Reporting.
Table. Selected financial information (in thousands of PLN).
st
1 half of 2009
Details
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1 half of 2008
2008
2007
2006
Net income from sales
97 517
46 730
105 256
62 351
56 409
Sales result
18 662
5 887
38 560
23 852
16 955
Current activitiy result + depreciation (EBITDA)
122 263
4 845
54 083
29 749
111 036
Current activity result (EBIT)
121 137
4 299
52 719
28 872
110 605
Gross result
97 883
5 500
5 115
52 802
110 422
Net result
79 102
4 815
4 836
48 969
92 459
2,43
0,15
0,15
1,51
2,84
*
0,15
0,15
1,51
2,84
Assets total
666 449
541 960
541 960
301 430
216 352
Fixed assets
534 453
376 765
376 765
180 396
138 602
Current assets, including
131 996
165 195
165 195
121 034
77 750
101 198
133 540
133 540
91 111
58 720
26 945
25 540
25 540
24 968
14 460
3 853
6 115
6 115
4 955
2 495
216 524
134 319
134 319
128 933
105 640
3 250
3 250
3 250
3 250
3 250
Debts total
449 925
407 641
407 641
172 497
110 712
Long-term debts, including
254 025
160 727
160 727
93 399
36 802
By virtue of loans
206 695
137 250
137 250
71 246
16 992
Short-term debts, including
195 900
246 914
246 914
79 098
73 910
By virtue of loans
144 480
103 194
103 194
14 447
30 957
-37 723
-17 772
-19 926
-18 724
-10 410
Net profit per share (in PLN)
Diluted net profil per share (w PLN)
-reserves
-active debts and other assets
-monetary assets
Own capital
-share capital
Flow of monetary assets from current activity
2,13
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Flow of monetary assets from investment
activity
-39 184
-37 926
-109 756
-18 729
-28 504
Flow of monetary assets from financial activity
74 645
52 134
130 842
39 913
29 134
Net monetary flow total
-2 262
-3 564
1 160
2 460
-9 781
6 115
4 955
4 955
2 495
12 276
3 853
1 391
6 115
4 955
2 495
st
*) The diluted net profit per share at the end of the 1 half of 2009 was determined under assumption, that a maximum
number of Series C Shares has been issued. For other periods presented in the table, this factor includes only the number of
issued shares.
4. Risk factors
Risk factors related to business activity of the Issuing Party and its environment have been described in Part II of the
Prospectus, „Risk factors”.
5. Information on the Issuing Party
5.1.
5.1.1.
History and development of the Issuing Party
Legal (statutory) and trade name of the Issuing Party
The Issuing Party acts as Rank Progress Spółka Akcyjna. The Party can use an abbreviated name, i.e. Rank Progress S.A.
5.1.2.
Place of registration of the Issuing Party and its registration number
The Issuing Party is registered in the National Court Register – Business Register on the basis of a decision of the District
Court of Wrocław-Fabryczna in Wrocław, IX Economic Department of the National Court Register, with the KRS number:
0000290520.
5.1.3.
Date of creation of the Issuing Party
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On October 1 , 2007, the partners have made a resolution on a transformation of the Bartnicki, Mroczka E.F. Rank Progress
Sp. j. partnership into a stock partnership with the name of Rank Progress S.A. (authenticated deed created by the notary
o
Elżbietę Raczkowską-Martyn, manager of the Notary Office in Legnica, rep. A N 11956/07). The transformation took place
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on October 10 , 2007, when the decision on registering the transformed partnership in the business register of the
National Court Register managed by the District Court of Wrocław-Fabryczna in Wrocław, IX Economic Department of the
o
National Court Register, with the KRS N of 0000290520 was made. The Issuing Party has been created as a permanent
entity.
5.1.4.
The Issuing Party’s country of origin the Issuing Party’s office and legal form, legal regulations which
form the basis of the Issuing Party’s activity, county of location (origin), address and phone number
of its statutory office
The Issuing Party is located in Legnica and it acts as a stock partnership.
The country of location of the Issuing Party is the Republic of Poland.
The Issuing Party acts on the basis of the Code of Commercial Companies and other effective regulations.
Legal regulations which form the basis for the activity of the Issuing Party
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been changed, and since then Jan Mroczka i Andrzej Bartnicki have been the only partners.
Bartnicki, Mroczka E.F. Rank Progress Sp. j. located in Legnica has been created as a result of transformation of the
aforementioned civil law partnership into a general parntership through the powers of art. 26 § 4 CCC, and this
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transformation took place on March 20 , 2001 and since that date, the Issuing Party has been a subject to the Code of
Commercial Companies.
Currently, the Issuing Party performs its activities on the basis of the Code of Commercial Companies and of the regulations
of its Status. Additionally, since the date of introduction of the Issuing Party’s share to circulation on the regulated market,
the Issuing Party’s activity will also become subject to regulations of capital market functioning.
Page 40
The Issuing Party’s official location and IT data
The Issuing Party’s address is as follows: ul. Złotoryjska 63 59-220 Legnica.
The telephone number of the statutory location of Issuing Party is as follows: (+48 76) 746 77 71
5.1.5.
History of activity of the Issuing Party
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nd
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been changed, and since then Jan Mroczka i Andrzej Bartnicki have been the only partners. On January 29 , 2001, through
the powers of art. 26 § 4 CCC, the partners – Jan Mroczka i Andrzej Bartnicki – have transformed the civil law partnership
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into a general partnership, created on March 20 , 2001, i.e. after it had been registered in the business entities registry of
the National Court Registry maintained by the District Court of Wrocław-Fabryczna in Wrocławiu, IX Economic Department
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of the National Court Registry, with the number KRS 0000003563. On October 1 , 2007, the partners have made a
resolution on transformation of the „Bartnicki, Mroczka E.F. Rank Progress” Sp. j. partnership into a share company with the
name of Rank Progress S.A. (the authenticated deed created by the notary - Elżbieta Raczkowska-Martyn, having a Notary
o
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Office in Legnicy, rep. A N 11956/07). The transformation became effective on October 10 , 2007, when the decision on
registering the transformed company in the buesiness entities registry of the National Court Registry maintained by the
District Court of Wrocław-Fabryczna in Wrocławiu, IX Economic Department of the National Court Registry, with the
number KRS 0000290520, was made.
Important events within the business activity timeline
1997
Foundation of a civil law partnership E.F. Rank Progress – General Office of Trade bz the partners - Andrzej Bartnicki, Jan
Mroczka and a third person.
1998
The aforementioned, third person leaves the partnership. Since then, Jan Mroczka and Andrzej Bartnicki have been the only
partners.
2000
E.F. Rank Progress – General Office of Trade s.c. starts a close cooperation with TESCO Polska Sp. z o.o. It starts the
construction works of TESCO Commercial Centres in Jelenia Góra, in Zielona Góra and in Bielsko-Biała, as well as
Commercial Centre CASTORAMA in Bielsko-Biała, all on the grounds owned by the partnership.
2001
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On January 29 , 2001, through the powers of art. 26§ 4 c.c.c., the partners, i.e. Jan Mroczka and Andrzej Bartnicki created
the foundation act of the general partnership as a company named „Bartnicki, Mroczka E.F. Rank Progress” Sp. j. Then, on
th
March 20 , 2001, the District Court of Wrocław – Fabryczna in Wrocław, IX Commercial Department of the National Court
Registry, has registered the company (partnership) „Bartnicki, Mroczka E.F. Rank Progress” Spółka Jawna, with the number
KRS 0000003563.
Bartnicki, Mroczka E.F. Rank Progress Spółka jawna finishes the implementation part of four large projects – large area
commercial centres:
 TESCO Jelenia Góra Commercial Centre, al. Jana Pawła II, 8 000 sq.m., 1.200 parking places,
 TESCO Zielona Góra Commercial Centre, ul. Energetyków, 8 000 sq.m., 831 parking places,
 TESCO Bielsko-Biała Commercial Centre, ul. Warszawska, 10 000 sq.m., 980 parking places,
 CASTORAMA Bielsko-Biała Commercial Centre, ul. Warszawska, 8 500 sq.m., 650 parking places.
2002
The company/partnership finished the implementation phase of another objects in the large area commercial centres
segment:
 TESCO Ruda Śląska Commercial Centre, ul. 1 Maja, 7 500 sq.m., 550 parking places,
 TESCO Tarnowskie Góry Commercial Centre, ul. Zagórska, 7 350 sq.m., 555 parking places.
Page 41
Purchase of a real estate located in Legnica at ul. Złotoryjska 63 and start of self-contracted renovation and modernisation
works. This building hosts the current office of the company/partnership.
2003
Bartnicki, Mroczka E.F. Rank Progress Spółka jawna starts a close cooperation with CARREFOUR POLSKA Sp. z o.o.
2004
 TESCO Głogów Commercial Centre, ul. Piłsudskiego, 5 926 sq.m., 435 parking places,
 CARREFOUR Zielona Góra Commercial Centre, ul. Dąbrówki, 15 142,95 sq.m., 730 parking places.
2005
 CARREFOUR Legnica Commercial Centre, ul. Piłsudskiego, 14 490 sq.m., 860 parking places,
 TESCO Jawor Commercial Centre, ul. Poniatowskiego, 2 000 sq.m., 112 parking places,
 CARREFOUR Kalisz Commercial Centre, ul. Poznańska, 18 359,48 sq.m., 1.120 parking places.
2006
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Several projects were finished, including the 1 stage of construction works of the company’s own Commercial Gallery –
Galeria Piastów in Legnica:
 CARREFOUR Commercial Centre – Galeria Słowiańska, Zgorzelec ul. Jeleniogórska, 18 232,2 sq.m,
 CARREFOUR Tarnowskie Góry Commercial Centre, ul. Kościuszki, 7 457 sq.m.,
 CARREFOUR Zamość Commercial Centre, ul. Lwowska, 13 376 sq.m.,
 CARREFOUR Grudziądz Commercial Centre, ul. Konarskiego, 16 085 sq.m.,
 LEROY MERLIN Kalisz Commercial Centre, ul. Poznańska, 5 600 sq.m.,
 Commercial Gallery „Galeria Piastów” in Legnica – 1st stage, Legnica, ul. Najświętszej Marii Panny, 12 600 sq.m.
The company/partnership changes the location of its office and moves into a renovated tenement house located at ul.
Złotoryjska 63 in Legnica.
2007
The project - CARREFOUR Zielone Wzgórza Commercial Centre, ul. Wrocławska in Białystok, 24 000 sq.m., 860 parking
places was finished.
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October 10 , 2007 – transformation of the „Bartnicki, Mroczka E.F. Rank Progress” Spółka jawna (general) partnership into
the „Rank Progress” Spółka Akcyjna stock company, which has been registered on this day in the National Court Registry
maintained by the District Court of Wrocław-Fabryczna in Wrocław, IX Commercial Department of the National Court
Registry, with the number 0000290520.
2008
The company/partnership finished two important projects:
 Eden Commercial Park,
 2nd stage of the Galeria Piastów Commercial Centre.
Eden Commercial Park
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On May 28 , 2008, EDEN Commercial Park in Zgorzelec was opened. This object is located at ul. Jeleniogórska and it has ca.
8 500 sq.m. of commercial area, the number of parking places is ca. 320, and the number of shops – 25. After the
completion, this object has been sold to „ABERCROMBY” Sp. z o.o.
nd
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nd
On October 16 , 2008, the company/partnership has released the 2 stage of Galeria Piastów. Inside the building with
total area of almost 5 000 sq.m., two shops are present: H&M and New Yorker with total area of ca. 3 000 sq.m. and 21 flats
of enhanced standard.
Other objects
Page 42
The following investments, placed on the areas acquired by the company/partnership, are being finished, and the
company/partnership was responsible for the implementation of formal-administrative procedures for these objects:

CARREFOUR Commercial Centre in Szczecin, 20 800 sq.m.,1 268 parking places,

LEROY MERLIN Commercial Centre next to the CARREFOUR Commercial Centre in Szczecin, 11 500 sq.m.
 Commercial Gallery next to the CARREFOUR Commercial Centre in Szczecin, 11 250 sq.m.
2009
The company/partnership finishes two large investments:
 Twierdza Commercial Centre in Kłodzko,
 3rd stage of Galeria Piastów in Legnica.
Twierdza Commercial Centre
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On March 10 , 2009, Leroy Merlin mall is opened, on March 25 , 2009 Carrefour food mall is open, and on April 4 , 2009 the commercial gallery itself. The entire object, with the total area of almost 22 800 mkw, hosts over 50 shops, restaurants
and services, it also has a parking lot for over 700 cars.
rd
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On April 24 , 2009, another and the last stage of Galeria Piastów was finished, its area of ca. 31 000 sq.m. The first stage,
with the total area of ca. 12 600 sq.m. was finished in the autumn of 2006. The autumn of 2008 was the time the second
stage was opened, its area being 4 654 sq.m., with its two-floor area rented by such names as H&M and New Yorker, and in
the upper floors, 21 flats of enhanced standard were built. After the construction works of the entire site have ended,
Galeria Piastów in Legnica is an area of ca. 35 500 sq.m. of total area and over 24 000 sq.m. of rented area, including a
multiplex cinema and a parking lot for 400 cars of the customers of the Commercial Centre.
Other objects:
 Carrefour GALERIA ZDRÓJ Commercial Centre in Jastrzębie Zdrój
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On August 21 , 2009, Carrefour GALERIA ZDRÓJ Commercial Centre in Jastrzębie Zdrój was opened, with the total area
of ca. 23 513 sq.m., ca. 500 parking places. This object was built on a parcel bought by Carrefour from Rank Progress
S.A. The company/partnership has performed formal-administrative works related to this investment.,
 Pasaż Grodzki Commercial Gallery in Jelenia Góra
On April 13th 2009, a dependant partnership – Rank Müller Jelenia Góra Sp. z o.o., started construction works of the
„Pasaż Grodzki” Commercial Gallery, with commercial area of ca. 5 800 sq.m. and a total area of ca. 10 500 sq.m. This
object is located in the very centre of Jelenia Góra, at the junction of Grodzka and Jasna streets. Predicted time of
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completion for this investment is the 4 quarter of 2010.,
 Tęcza Gallery in Kalisz
In 2009, the Company/Partnership has obtained permission for building a commercial gallery named „Galeria Tęcza” in
Kalisz. This object will be located in the centre of the town, at the junction of 3 Maja Street and Plac Nowy Rynek, at
the site of „Tęcza” supermarket. The total area of the object is predicted to be ca. 33 750 sq.m., and the commercial
area to be ca. 17 470 sq.m., number of parking places ca. 400, predicted number of shops – ca. 90. Predicted time of
nd
completion for this investment is the 2 quarter of 2011.
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On December 9 , 2009, the Issuing Party has finished issuing bonds. 24 760 1-year normal bonds to bearer, Series A, were
issued, with a nominal value and issue price of 1 000 PLN each, with a total nominal value of 24 760 000 PLN.
5.2.
5.2.1.
Investment
Description of investments of the Issuing Party
1. Non-material and legal values.
In 2010, until the date of Prospectus approval, the Group of the Issuing Party made no expenses on non-material and legal
values.
In 2009, expenses of the Capital Group of the Issuing Party on non-material and legal values totalled 25 400,00 PLN, and
they were related to a purchase of four additional user licenses for the Microsoft Dynamix AX computer program.
In 2008, expenses on non-material and legal values totalled 416 750,78 PLN, whereas the expenses related to the
implementation of the Microsoft Dynamics AX program totalled 411 294,00 PLN, with the rest being a purchase amount of
other software.
In 2007, the Partnership started its first preparation and design works on implementation of the integrated IT system
Microsoft Dynamics AX and they had been covered with expenses equal to 105 990,00 PLN. Additionally, expenses on
purchase of software were made, totalling 13 069,26 PLN.
In 2006 the Parnership purchaes software with the final value of 2 832,62 PLN. All expenses on non-material and legal
values were covered with own assets.
Page 43
2. Tangible fixes assets (excluding investment real estates)
In 2010, until the date of Prospectus approval, expenses of the Capital Group of the Issuing Party on tangible fixed assets
totalled 24 573,76 PLN.
In 2009, expenses of the Capital Group of the Issuing Party on tangible fixed assets totalled 902 886,07 PLN (including
164 136,03 PLN spent by E.F. Progress V Sp. z o.o.), including the following significant expenses:
 296 230,65 PLN, namely a leasing-financed purchase of a car,
 267 747,63 PLN, namely expenses on the purchase of LED display along with sound system and lighting system,
financed by leasing,
 38 573,99 PLN, namely expenses on the purchase of a scissor jack for the intentional company E.F. Progress V Sp. o.o.,
financed by leasing,
 56 779,70 PLN, namely expenses on the purchase of a car for the intentional company E.F. Progress V Sp. z o.o.,
financed by leasing.
All other expenses were covered by own assets.
In 2008, expenses of the Capital Group of the Issuing Party on tangible fixed assets totalled 1 917 523,03 PLN, including the
following significant expenses:
 1 783 898,49 PLN, namely expenses on the purchase of seven cars, financed by leasing.
All other expenses were covered by own assets.
 592 023,68 PLN – expenses on the purchase of a Caterpillar excavator, financed by leasing,
 558 002,15 PLN – expenses on the purchase of 7 cars, including 6 cars valued at 529 119,64 PLN in total, financed by
leasing,
 135 145,00 PLN – expenses on the smoke exhaust system,
 124 614,10 PLN – expenses on the purchase of a hydraulic Niftylift jack, financed by leasing.
All these expenses were covered with own assets and external assets – as noted in the text above.
 1 018 053,37 PLN, namely expenses on the purchase of three cars, financed by leasing,
 expenses of 190 971,33 PLN on the modernisation of a tenement house in Legnica at ul. Złotoryjska.
All these expenses were covered with own assets and external assets – as noted in the text above.
3. Investment real estates.
In 2010, until the date of Prospectus approval, expenses of the Capital Group of the Issuing Party on investment real estates
totalled 30 530 474,61 PLN, including the following significant expenses:
 12 732 180,21 PLN, namely expenses related to implementation of the „Galeria Tęcza” investment in Kalisz (dependent
company E.F. Progress I Sp. z o.o.),
 2 939 820,67 PLN, namely expenses related to a project of future commercial gallery in Świdnica (intentional company
E.F. Progress VI Sp. z o.o.),
 4 523 181,30 PLN, namely expenses related to implementiation of the Twierdza II Commercial Park in Kłodzko
(intentional company E.F. Progress VII Sp. z o.o.)
 8 982 704,38 PLN, namely expenses related to implementation of the Pasaż Grodzki investment in Jelenia Góra
(intentional company Rank Müller Jelenia Góra Sp. z o.o.).
 1 275 380,46 PLN, namely expenses related to preparation of implementation of future commercial centre in
Skarżysko-Kamienna
In 2009, expenses of the Capital Group of the Issuing Party on investment real estates totalled 71 193 103,25 PLN, including
the following significant expenses:
 24 193 365,48 PLN, namely expenses related to the 3rd construction (expansion) stage of Galeria Piastów in Legnica,
80% of this investment was financed using a loan granted by the Bank Zachodni WBK S.A.,
 1 875 045,18 PLN, namely expenses related to preparations of investment implementation - Galeria Twierdza in
Zamość (intentional compant E.F. Progress III Sp. z o.o.),
 13 367 340,21 PLN, namely expenses related to construction of Twierdza Commercial Centre in Kłodzko (intentional
company E.F. Progress V Sp. z o.o.), 80% of this investment was financed using a loan granted by the Bank Zachodni
WBK S.A.,
 3 499 493,42 PLN, namely expenses related to a project of future commercial gallery in Świdnica (intentional company
Page 44



4 753 287,59 PLN, namely expenses related to implementiation of the Twierdza II Commercial Park in Kłodzko
(intentional company E.F. Progress VII Sp. z o.o.)
13 665 436,429 PLN, namely expenses related to implementation of the Pasaż Grodzki investment in Jelenia Góra
(intentional company Rank Müller Jelenia Góra Sp. z o.o.)
5 568 529,19 PLN, namely expenses related to implementation of „Galeria Tęcza” investment in Kalisz (intentional
company E.F. Progress I Sp. z o.o.).
In April 2009, two large objects have been finishedm these objects being a part of investment real estate:
 3rd stage of Galeria Piastów in Legnica, which resulted in a commercial complex with total area of ca. 35 500 sq.m.
Rental area of the commercial part is ca. 24 000 sq.m. and it is used by 110 renting parties. Within the complex there is
a multiplex with area of ca. 2 500 sq.m. and a bowling hall, ca. 700 sq.m.,
 Twierdza Commercial Centre in Kłodzko with total useful area of ca. 23 600 sq.m., with rental area of ca. 20 340 sq.m.
Twierdza Commercial Centre in Kłodzko consists of the proper gallery with rental area of ca. 7 000 sq.m. and malls Leroy Merlin with area of ca. 8 100 sq.m. and Carrefour with area of ca. 5 400 sq.m.
In 2008, expenses of the Capital Group of the Issuing Party on real estates totalled 149 215 849,64 PLN, where the
significant expenses are as follows:
 73 248 889,45 PLN, namely expenses related to the 2nd and 3rd construction stage of Galeria Piastów in Legnica, 80% of
this investment was financed using a loan granted by the Bank Zachodni WBK S.A.,
 294 469,10 PLN, namely expenses related to preparations of Galeria Twierdza Zamojska investment implementation in
Zamość (intentional company E.F. Progress III Sp. z o.o.),
 8 194 301,00 PLN, namely expenses related to acquisition of ground for future implementation of a large area
commercial object in Stargard Szczeciński (intentional company E.F. Progress IV),
 58 447 138,24 PLN, namely expenses related to the construction of Twierdza Commercial Centre in Kłodzko
(intentional company E.F. Progress V Sp. z o.o.), 80% of this investment was financed using a loan granted by the Bank
Zachodni WBK S.A.
 411 120,00 PLN, namely expenses related to the project of future commercial gallery in Świdnica (intentional company
 845 489,00 PLN, namely expenses related to implementation of the Pasaż Grodzki investment in Jelenia Górza
(intentional company Rank Müller Jelenia Góra Sp. z o.o.).
In 2007, expenses of the Capital Group of the Issuing Party on real estates totalled 31 656 506,15 PLN, where the significant
expenses are as follows:
 10 686 318,03 PLN, namely expenses on the purchase of real estate in Kłodzko for the future Commercial Centre
Twierdza, where the 8 933 120,00 PLN amount was financed using a loan granted by the ING Bank Śląski S.A.,
 7 192 692,69 PLN, namely expenses related to the 2nd and 3rd stage of expansion of Galeria Piastów in Legnica,
 6 025 690,66 PLN, namely expenses on the purchase of real estate belonging to an obsolete brewery in Legnica, where
the Partnership plans an investment in an office-living space building, with 75% of the expenses financed with a loan
granted by the BZ WBK S.A.,
 5 930 551,38 PLN, namely expenses on ground purchases for the future implementation of 2 nd and 3rd expasion stage
of Galeria Piastów in Legnica, with 75% of the expenses financed with a loan granted by the BZ WBK S.A.,
 1 821 253,39 PLN, namely expenses on the construction of Galeria Piastów in Legnica located at ul. Najświętszej Marii
Panny 6.
In 2006, expenses of the Capital Group of the Issuing Party on real estates totalled 25 496 776,55 PLN, where the significant
 20 372 956,55 PLN - namely expenses on the construction of Galeria Piastów in Legnica located at ul. Najświętszej
Marii Panny 6, with the amount of 18 888 117,17 PLN financed by an investment load granted by the BZ WBK S.A.,
 5 123 820,00 PLN – namely expenses on the ground purchase at ul. Grodzka in Legnica for the future implementation
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of the 2 stage of expansion of Galeria Piastów in Legnica.
4. Long-term financial assets.
In 2010, until the date of Prospectus approval, expenses of the Partnership on the long-term financial assets totalled
2 610 000,00 PLN where the significant expenses are as follows:
 expenses of 660 000,00 PLN on shares of the E.F. Progress II Sp. z o.o. company, located in Legnica,
 expenses of 150 000,00 PLN on shares of the E.F. Progress III Sp. z o.o. company, located in Legnica,
 expenses of 200 000,00 PLN on shares of the E.F. Progress VI Sp. z o.o. company, located in Legnica
 expenses of 1 600 000,00 PLN on shares of the E.F. Progress VII Sp. z o.o. company, located in Legnica
In 2009, expenses of the Partnership on the long-term financial assets totalled 11 625 071,05 PLN where the significant
 expenses of 5 712 663,18 PLN on shares of the E.F. Progress I Sp. z o.o. company, located in Legnica,
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





expenses of 3 372 500,00 PLN on shares of the E.F. Progress II Sp. z o.o. company, located in Legnica,
expenses of 100 000,00 PLN on shares of the E.F. Progress III Sp. z o.o. company, located in Legnica,
expenses of 786 000,00 PLN on shares of the E.F. Progress IV Sp. z o.o. company, located in Legnica,
expenses of 298 696,58 PLN on shares of the E.F. Progress V Sp. z o.o. company, located in Legnica,
expenses of 1 000 000,00 PLN on shares of the E.F. Progress VI Sp. z o.o. company, located in Legnica,
expenses of 300 000,00 PLN on shares of the E.F. Progress VII Sp. z o.o. company, located in Legnica
Simultaneously, the dependent company E.F. Progress II Sp. z o.o. had expenses totalling 3 654 000,00 PLN on the shares of
Rank Müller Jelenia Góra Sp. z o.o. located in Jelenia Góra.
In 2008 expenses of the Partnership on the long-term financial assets totalled 37 729 335,05 PLN where the significant
 expenses of 1 000 000,00 PLN on shares of the E.F. Progress II Sp. z o.o. company, located in Legnica,
 expenses of 17 552 962,13 PLN on shares of the E.F. Progress III Sp. z o.o. company, located in Legnica,
 expenses of 1 820 000,00 PLN on shares of the E.F. Progress IV Sp. z o.o. company, located in Legnica,
 expenses of 16 848 990,32 PLN on shares of the E.F. Progress V Sp. z o.o. company, located in Legnica.
Simultaneously, the dependent company E.F. Progress II Sp. z o.o. had expenses totalling 200 000,00 PLN on the shares of
Rank Müller Jelenia Góra Sp. z o.o. located in Jelenia Góra.
In 2007 expenses of the Partnership on the long-term financial assets totalled 2 009 165,37 PLN, which was the result of
increase of company capital of the dependent company of the Partnership– E.F. Progress V Sp. z o.o. This increase was
made with a contribution, namely ownership rights of a real estate. The Partnership has obtained shares in the newly
increased company capital, as a return for the subject contribution.
In 20086 expenses of the Partnership on the long-term financial assets totalled 316 666,00 PLN, where the significant
 expenses of 53 046,00 PLN on the purchase of 100% shares in the Gazeta Piastów Śląskich Sp. z o.o. company, located
in Legnica,
 expenses of 52 724,00 PLN on obtaining 100% of shares of the E.F Progress I Sp. z o.o. company, located in Legnica,
 expenses of 52 724,00 PLN on obtaining 100% of shares of the E.F Progress II Sp. z o.o. company, located in Legnica,
 expenses of 52 724,00 PLN on obtaining 100% of shares of the E.F Progress III Sp. z o.o. company, located in Legnica,
 expenses of 52 724,00 PLN on obtaining 100% of shares of the E.F Progress IV Sp. z o.o. company, located in Legnica,
 espenses of 52 724,00 PLN on obtaining 100% of shares of the E.F Progress I Sp. z o.o. company, located in Legnica.
5.2.2.
Description of current investments of the Issuing Party
In July 2009 a dependent company has started construction works on the site of Pasaż Grodzki in Jelenia Góra. This object is
contracted by the Rank Müller Jelenia Góra Sp. z o.o. company, 54% of its shares is indirectly owned by the Issuing Party.
Pasaż Grodzki is being built im the very centre of Jelenia Góra, at the junction of Jasna and Grodzka streets, and Erbud S.A
company is the general contractor. Pasaż Grodzki will be a few-floor building with a total area of about 10 000 sq.m.,
including rental area of ca. 5 800 sq.m. The predicted number of renting parties is 35. This object will also have an
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underground parking lot for about 70 cars. The predicted time the investment will be finished, is the 4 quarter of 2010.
Total budget of the investment is ca. 44,8 mln PLN, with external funding of ca. 70%.
The dependent company - E.F. Progress VII Sp. z o.o. started in October, 2009 ground works on the construction site of
Twierdza II Commercial Park in Kłodzko, next to the existing Twierdza Commercial Centre. Erbud S.A. is the general
contractor of this investment. Twierdza II Commercial Park will be one-level object with a total area of about 11 000 sq.m.,
including rental area of ca. 10 900 sq.m. Planned number of renting parties is 11. This object will also have a parking lot for
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about 420 cars. The predicted time the investment will be finished, is the 4 quarter of 2010. Total budget of the
investment is ca. 29,8 mln PLN, with external funding of ca. 70%.
The dependent company E.F. Progress I Sp. z o.o. started in November, 2009 ground works on the construction site of
Galeria Tęcza in Kalisz, in the place of existing „Tęcza” commercial site, next to the main promenade of the town. The P.B.
Cezbed Sp. z o.o. company is the general contractor. Galeria Tęcza will be a few-floor site with a total area of about 33 750
sq.m., including rental area of ca. 17 470 sq.m. The predicted number of renting parties is ca. 90. This object will also wave
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an internal parking lot for about 400 cars. The predicted time the investment will be finished, is the 2 quarter of 201a.
Total budget of the investment is ca. 113,0 mln PLN, with external funding of ca. 70%.
At the break of May and June 2010, the dependent company E.F. Progress III Sp. z o.o. shall start works on the construction
site of „Galeria Twierdza” w Zamościu. Erbud S.A. company is the general contractor „Galeria Twierdza” will be a site with a
total area of 31 400 sq.m. The predicted number of rental parties is ca. 80. The site will also have a parking lot for ca. 850
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cars. The predicted date of release of this object for use is the 1 quarter of 2011. The total budget of the investment totals
ca. 126,2 mln PLN, with external funding of ca. 70%.
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Below current (started) of the Issuing Party are presented, where construction or design works have started and where
administrative procedures necessary for building commercial objects have been started, namely:
Table: Current investments of the Issuing Party.
Commercial object
Start of construction
works
th
4 quarter of 2010
th
2 quarter of 2011
st
1 quarter of 2011
th
4 quarter of 2011
rd
4 quarter of 2010
rd
2 quarter of 2012
"Twierdza II" Commercial Park in
Kłodzko
4 quarter of 2009
Commercial Gallery "Galeria Tęcza" in
Kalisz
4 quarter of 2009
Commercial Centre „Twierdza
Zamojska” in Zamość
1 quarter of 2010
Commercial Gallery „Galeria
Świdnicka” in Świdnica
4 quarter of 2010
Commercial Gallery "Pasaż Grodzki" in
Jelenia Góra
3 quarter of 2009
Commercial Centre in Jarosław
3 quarter of 2011
Commercial Centre in Krosno
Start of exploitation
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4 quarter of 2011
Predicted rental area (sq.m.)
th
10 900
nd
17 470
st
23 684
th
14 378
th
5 800
nd
23 000
th
16 811
4 quarter of 2012
Źródło: Emitent
All aforementioned investments are implemented on the territory of Poland. Sources of funding for the aforementioned
investments are described in chapter 10.5, Part III of the Prospectus „Registration Document”.
5.2.3.
Information about the main future investments of the Issuing Party, which have valid obligations
taken by management of the Issuing Party.
As of the date of approval of the Issue Prospectus, the Partnership Board has made valid obligations related to future
investments, by the virtue of projects presented below:
1. Obligation against the town of Kalisz.
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On the basis of statement dated September 11 , 2007, the Partnership has obliged to build an underground parking lot fro
at least 250 parking places for cars and to manage the public surface ground in a form and using rules specified in a
separate agreement, with the parking lot constructed on a parcel located in Kalisz, Plac Nowy Rynek, owned by the town of
Kalisz. The condition of implementation of the aforementioned obligation is a cessation of the subject real estate by the
town for the Partnership with lending it for construction purposes. Once the parking lot is completed, the ground wil be
returned by the Parntership, in exchange for using the parking lot by the customers of the Commercial Centre Galeria
„Tęcza”, constructed by the Partnership. This investment is about to be implemented within 18 months after the cessation
of the subject parcel by the town, for the Partnership. The cessation of subject parcel for the Issuing Party has not taken
place yet. Additionally, as it is judged by the Issuing Party, this cessation will not take place before 2012. The Issuing Party
also cannot exactly evaluate costs of the subject investment as of the date of Prospectus approval, however, The Issuing
party expects the costs not to exceed 7 500 000 PLN.
2. Obligation of the Partnership against JA-WA Morgaś, Ostasz Spółka Jawna in Zamość.
th
On January 27 , 2007 the Partnership have signed a cooperation contract with the JA-WA Morgaś, Ostasz Spółka Jawna z
company, located in Zamość. The subject contract has been signed in order to define rules of joint implementation of the
economic goal, which is management of real estates located in Zamość, at Kilińskiego and Przemysłowa streets by
constructing a commercial object with an area of about 35 000 sq.m. Within this contract, the Partnership jas obliged to
purchase a number of real estates located in Zamość, including some indirectly owned by JA-WA Morgaś, Ostasz Spółka
Jawna, and to construct an object on these parcels.
Additionally, once an effective approval for the use of the constructed object is obtained, the Partnership has obliged to
pass onto its partner 30% of shares of the intentional company created for the purposes of the subject investment or to pay
its partner its proper profit, i.e. 30% of the market value of the object, minus any expenses of the Partnership, related to
this investment. According to the judgment of the Issuing Party, profits from the subject investment will total ca. 95 mln
PLN, thus the profit part to be paid to JA-WA Morgaś, Ostasz Spółka Jawna, will be equal to ca. 28,6 mln PLN.
3. Obligation of the Partnership against the H.M. Prosper Hildebrand Morgaś Spółka Jawna
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On May 14 , 2008, the Partnership has signed a cooperation contract with the H.M. Prosper Hildebrand Morgaś Spółka
Jawna company, located in Zamość („Partner”). The subject contract has been signed in order to define rules of joint
implementation of the economic goal, which is management of real estates located in Skarżysko-Kamienna by construction
a multifunction object (commercial-service-office) („Object”). Within the contract, the Parties have obliged to e.g.:
implementation of the joint project and obtaining a common profit with the following proportions 67,00% - the
Partnership, 33,00% - the Partner. Additionally, the Parntership has obliged, e.g. to purchase real estates located in
Skarżysko Kamienna with a total area of ca. 5,5 ha and to bring these real estates as a contribution to a specifically created
limited liability company („Company”). The Partner has obliged, e.g. to help and to cooperate with the Partnership in the
purchase of the real estate and to transfer rights from pre-initial contracts already signed, related to the real estates, where
the Object is about to be located.
Within 60 days from the date the of legal permission for using the constructed Object, by the virtue of payment for the
actions, the Partnership will pay the Partner a proper amount, equal to 33% of the profit from the investment, or it wil
transfer on the Partner 33% of shares of the intended company, but in this situation, the Partner is obliged to return 33% of
the Partnership’s costs related to the investment.
In 2009, both Parties have made a mutual decision on sale of the said real estate to an operator of food or construction
products hypermarket network, thus the Parties have mutually searched for an entity interested in the purchase of this real
estate. According to Annex 1 to the said contract, the Parnter was entitled to 33% of profits from sale of the said real
estate, which was estimated by the Issuing Party at ca. 8,4 mln PLN, thus the amount the Partner is entitled to shall amount
ca. 2,8 mln PLN.
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On February 24 , 2010 the Parties have terminated the said contract. At the same time, by virtue of payment for serviced
provided by the Partner during the contractual time, i.e. especially for help in acquisition of real estates covered by the
Contract advisory services, participation in the modification procedure of the local spatiadl development plan for the real
estate and for participation in negotiations related to purchases of real estates covered by the Contract, the Issuing Party
obliged to pay a net salary of 1 100 000 PLN to the Partner. This salary shall be paid in 4 terms, i.e. 150 000 PLN net has
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already been paid, 450 .000 PLN net will be paid by May 25 , 2010, 300 000 PLN net will be paid within 14 days from the
date the l.s.d.p. for the real estates covered by the Contract comes into effect, and the remaining 200 000 PLN net will be
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paid by December 31 2012. The Parties have freed each other from all other obligations.
4. Obligations agains Erbud S.A. related to the implementation of „Pasaż Grodzki” investment in Jelenia Góra.
On 29.06.2009, the Rank Muller Jelenia Góra Sp. z o.o. company (50% of its shares are indirectly owned by the Partnership),
has signed a general contractor contract with Erbud S.A. for Pasaż Grodzki in Jelenia Góra, together with the external road
layout. The value of the contract was set as 32 000 000 PLN, net. The investment encompasses construction of an uptown
gallery, where about 35 shops of leading trademarks will be placed, along with a parking lot with 70 parking places.
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Acording to the contract, the object is to be ready for release for further works of the renting parties by July 1 . 2010. The
Parties have decided, that the amount of stipulated penalties cannot exceed 10% of the stipulated net salary of the
contractor.
5. Obligations against Erbud S.A. related to the implementation of „Retail Park” investment in Kłodzko.
On 29.06.2009 r. the E.F. Progress VII Sp. z o.o. company (100% of its shares is owned by the Partnership), has signed a
general contractor contract with Erbud S.A. for a commercial-service object „Retail Park” in Kłodzko. The value of the
contract was set as 16 000 000 PLN, net. The investment encompasses construction of a commercial park with a total rental
area of about 10 500 sq.m., where 8 large shops of leading trademarks will be placed, along with a multiplex. According to
the contract, the construction works have started in December 2009, and the commercial hall is about to be released to the
renting parties within 4 months after the conclusion of the on-site works, while the multiplex cinema is about to be
released to the renting party within 6 months after the conclusion of the on-site works. Additionally, the Parties have
agreed that the amount of stipulated penalties cannot exceed 10% of the stipulated net salary of the contractor.
6. Obligations against P.B Cezbed Sp. z o.o. related to the implementation of Commercial-Service Centre „Galeria Tęcza”
in Kalisz.
On 28.10.2009, Cezbed Sp. z o.o. has signed a general contractor contract with E.F. Progress I Sp. z o.o. company (100% of
its shares is owned by the Partnership), for a Commercial-Service Centre „Galeria Tęcza” in Kalisz. The value of the contract
totals 69 700 000 PLN, net. According to the contract, the object has to be constructed in the period between 4.11.2009
and 15.03.2011, when the acceptance procedure starts, with the end of the construction works, allowing works of the
Renting Parties (together with the supply area) to be started will take place no later than on 15.12.2010 , and contraction of
the external road layout will take place no later than on 15.03.2011. Both Parties have agreed that the amount of stipulated
penalties cannot exceed 10% of the stipulated net salary of the contractor, however, if the deadline of object
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implementation (i.e. May 30 , 2011) is exceeded, then the amount of calculated stipulated penalits cannot exceed 20% of
the total salary of the contractor. Both Parties have reserved the right to claim reparations exceeding the amounts of
stiuplated penalties, according to general regulations in this matter. If the contract is waivered because of reasons, for
which the Contractor is responsible, then the contractor will pay the stipulated penalty, equal to 10% of its net salary, to
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the Ordering Party. If the contract is waivered because of reasons, for which the Ordering Party is responsible, then the
Ordering Party will pay the stipulated penalty, equal to 10% of its net salary, to the Contractor.
7. Obligation of E.F. Progress III Sp. z o.o. against the President of the City of Zamość
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On the basis of an agreement dated February 17 , 2010, E.F. Progress III Sp. z o.o. (a dependent company of the Issuing
Party), because of the planned construction works of the Galeria „Twierdza” site located at ul. Kilińskiego in Zamość, it has
made an obligation to the President of the City of Zamość (as the roads’ manager) to modify the road layout related to the
aforementioned investment. Within the scope of the said agreement, E.F. Progress III Sp. z o.o. has obliged to construct the
required roads (within the scope of the agreement), to prepare the construction plans and designs, to obtain grounds from
the owners of the real estates included in the road system modifications plan, if necessary, and to give the Road Manager a
guarantee and warranty for the works performed. E.F. Progress III Sp. z o.o. has also obliged to execute the said works no
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later than March 31 , 2011, and then – to return them (for free, with all appropriate documentation) to the City Roads
Management in Zamość.
As of the date of Issue Prospectus approval, the Issuing Party evaluates the costs of the said investment to total ca. 2 000
000 PLN.
8. Obligations against Erbud S.A. related to the implementation of „Galerii Twierdza” investment in Zamość
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On April 26 , 2010 E.F. Progress III Sp. z o.o., 100% of shares of which are held by the Partnership, has signed a general
contractorship contract with Erbud S.A. for „Galeria Twierdza” in Zamość, including external roads layout. The value of the
contract was set at 47 000 000 PLN net. The investment includes constuction works of a commercial gallery with area of ca.
31 400 sq.m., including road layout, where about 80 shops will be located, together with a parking lot for 850 cars.
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According to the contract, the site is to be ready on February 15 , 2011.
6. General activity profile
6.1.
6.1.1.
Basic activity
Basic fields and types of activity
The Issuing Party performs an investment – development activity on the domestic market, which is obtaining real estates
(grounds) and housing them with commercial objects destined for rent or for sale.
The Isssuing Party executes its activity with a Capital Group, on its own and through the intended companies. It is mainly
resulting from the requirements of banks financing the development projects of the Capital Group of the Issuing Party.
During the implementation of projects within the field of real estate market, the banks require that financing of the
investment projects is made by the companies intended for specified projects, as it allows to minimize the investment risk.
The activity subject of the aforementioned company should be limited to activities related to ownership and management
of the real estate, there are also limits regarding the employment in such a company. The rental contracts signed are longterm contracts and they guarantee the companies a stable income. The real estates must have their legal status regulated
and the object itself should have high technical standard.
Such a construction allows a separation of monetary flow related to a given project from monetary flows related to other
projects along with a higher level of financial leverage when financing a project, thus a higher level of bank loans available
to the intentional company than to its shareholders. Additionally, bankruptcy of the intentional company as a result of
project failure does not mean the bankruptcy of its shareholders.
The Capital Group of the Issuing Party focuses its current and future activity on implementation of four categories of
investment projects within the real estate market, namely – construction and rental or sale of the objects:

Large area commercial – service centres,

Uptown commercial galleries,

Commercial objects – commercial parks,

Highly profitable, short-term investment projects.
6.1.1.1. Development strategy
The strategy predicts development on the real estate market with profits for the shareholders, business partners and local
communities. The basis of this strategy is the long-term trust in the range of all entities engaged in the implementaion of
each project.
Thanks to knowledge and experience gained, the Issuing Party has specialised in design and construction of large area
commercial objects and commercial galleries and parks in medium-size cities.
Besides the product diversification, the Group of the Issuing Party also manages a geographic diversification. The list of
cities, where the Group of the Issuing Party has implemented, implements, or plans to implement its products in all segmets
Page 49
of activity: Stargard Szczeciński, Białystok, Grudziądz, Kalisz, Zamość, Bielsko Biała, Katowice, Jastrzębie Zdrój, Dąbrowa
Górnicza, Opole, Wrocław, Legnica, Jelenia Góra, Kłodzko, Zgorzelec, Skarżysko-Kamienna, Świdnica, Jarosław, Krosno,
which is a proof of consequence in implementation of this strategy.
In order to reach the investment goals, the Group of the Issuing Party assumes that capital will be obtained via shares issue.
Estimated value of planned financial investment expenses of the Group of the Issuing Party for the period of 2010-2012 will
total 500,1 mln PLN. The other part of expenses on investment, except for the capital obtained via shares issue, will come
from own assets and bank loans. Particularly, it is planned, that the Issuing Party will reinvest 90% of its net profit obtained
in each following business year. Development projects are also present among the investments planned by the Group of
the Issuing Party.
6.1.1.2. Activity segments
1.
Large area commercial – service centres.
Implementation of projects in the field of large area commercial – service centres includes real estate purchases,
implementation of design and administration procedures, supervision of implementation and object sales. The Partnership
has performed or is performing such activities for network operators of shopping markets, such as Tesco, Castorama, Leroy
Merlin,, Makro Cash and Carry. Since 2004, the Partnership is the main parnter of the Carrefour network in Poland. In the
period of 2001 – 2009, the Capital Group of the Issuing Party has release for use 21 comercial centres of this type, with total
area of ca. 263 tys. mkw. The objects were as follows:

TESCO Commercial Centre, Jelenia Góra, 8 000 sq.m., 1.200 parking places,

TESCO Commercial Centre, Zielona Góra, 8 000 sq.m., 831 parking places,

TESCO Commercial Centre, Bielsko Biała, 10 000 sq.m., 980 parking places,

CASTORAMA Commercial Centre, Bielsko Biała, 8 500 sq.m., 650 parking places,

TESCO Commercial Centre, Ruda Śląska, 7 500 sq.m., 559 parking places,

TESCO Commercial Centre, Tarnowskie Góry, 7 350 sq.m., 555 parking places,

TESCO Commercial Centre, Głogów, 5 920 sq.m., 555 parking places,

CARREFOUR Commercial Centre, Zielona Góra, 15 142 sq.m., 730 parking places,

CARREFOUR Commercial Centre, Legnica, 14 490 sq.m., 860 parking places,

TESCO Commercial Centre, Jawor, 2 000 sq.m., 112 parking places,

CARREFOUR Commercial Centre, Kalisz, 18 360 sq.m., 1 120 parking places,

CARREFOUR Commercial Centre, Zgorzelec, 18 230 sq.m., 1 020 parking places,

CARREFOUR Commercial Centre, Tarnowskie Góry, 7 460 sq.m., 515 parking places,

CARREFOUR Commercial Centre, Zamość, 13 380 sq.m., 769 parking places,

CARREFOUR Commercial Centre, Grudziądz, 16 085 sq.m., 870 parking places,

LEROY MERLIN Commercial Centre, Kalisz, 5 600 sq.m., 460 parking places,

CARREFOUR Commercial Centre, Białystok, 24 000 sq.m., 860 parking places,

CARREFOUR Commercial Centre in Szczecin, 18 394 sq.m., 1 166 parking places,

CARREFOUR Commercial Centre in Jastrzębie Zdrój, 23 513 sq.m., 535 parking places,

EDEN Commercial Centre in Zgorzelec, 9 942 sq.m., 306 parking places,

TWIERDZA Commercial Centre in Kłodzko, 21 538 sq.m., 712 parking places.
2.
Uptown commercial galleries.
The second category of investments implemented by the Capital Group of the Issuing Party is construction and renting of
commercial galleries located in the very centres of town with population from 50 to 100 thousands of people. In 2006, the
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Capital Group of the Issuing Party has finished the 1 stage of Galeria Piastów in Legnica with total area of 12 600 sq.m. In
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2008 the 2 stage of Galeria Piastów has been finished, and in 2009 – the third stage of Galeria Piastów with total area of
35 746 sq.m. Twierdza Commercial Centre in Kłodzko with area of ca. 23 800 sq.m.
Additionally, the following commercial galleries are in the stage of advanced preparations or implementation and
commercialisation:

„Galeria Tęcza” in Kalisz, ca. 33 750 sq.m.,

„Twierdza II” Commercial Park in Kłodzko, ca. 11 000 sq.m.,

„Pasaż Grodzki” gallery in Jelenia Góra, ca. 10 500 sq.m.,

„Galeria Świdnicka” in Świdnica, ca. 20 100 sq.m.,

„Twierdza Zamojska” gallery in Zamość, ca. 31 400 sq.m.
In addition to the aforementioned projects, the Issuing Party analyses and performs initial design of some other developercommercial projects throughout Poland, based on own ground reserves.
3.
High-profit, short term investment projects.
Page 50
The next area of business activity of the Capital Group of the Issuing Party is implementation of highly profitable, short-term
investment projcets, including the following actions: purchase of the real estate, design, implementation of all required
administrative procedures and agreements, followed by sale of the project. Closing of the investment position is performed
at different stages of the projects, depending on its characteristics, market conditions and needs of the partner. The
Partners in these projects are renown Polish and foreign companies.
4.
Apartments and office buildings
Aditionally, among the investment projecs of the Issuing Party, there is a group of mixed objects (services, apartments,
offices):

An apartment-service project „Marina Park” in Wrocław, 113 692 sq.m.,

2 apartment projects in Legnica, 6 600 sq.m. (total area),

A-class office building in Legnica, 15 200 sq.m.,

an office-commercial-service-entertainment object in Katowice, 93 000 sq.m.
In case of the aforementioned investment projects, the Issuing Party held the works, performing only actions leading to
acquisition of a purchaser or a partner for a joint implementation of the investment project. The Issuing Party does plan for
the future to develop its activities as the sole implementation of the aforementioned investments.
Table: Income divided into basic activity categories of the Group of the Issuing Party (in thousands of PLN).
st
Details
1 half of 2009
2008
2007
2006
Real estate rents
14 744
12 959
11 266
2 660
Real estate sales
70 836
72 413
34 484
44 129
Other
6 575
6 176
6 436
9 620
TOTAL
92 155
91 548
52 186
56 409
In the table above, the segment 2 income has been presented as income from real estate rents, and other segments – as
income from real estate sales. The ‘Other’ position relates to reinvoicing of materials and services, including services
income, e.g. from consulting services.
6.1.1.3. Organisation of the business activity of the Group
1.
Acquisition of information about the partners and grounds for investments.
The number of projects implemented throughout the country in the period of 12 years of business activity led to
development of a high operation efficiency of the Issuing Party in the fields of grounds acquisition and investment
implementation.
The issuing Party obtains information and searches for land for future investmets, using a procedure worked out
throughout the years:

On its own, by the expansions department; in the case of large area commercial objects, this acction is additionally
directed by information obtained from the main operators (Carrefour, Leroy Merlin, Metro, OBI, REAL, Aldi,
Biedronka), regarding the localisation of future objects,

Obtaining grounds from the aforementioned companies during acquisition and finishing the ground mergers for future
investments,

Offers made by permanently cooperating real estate agents and other entities, which have real estate trade as a part
of their business activity, eg. trustees, design offices etc.

Other business partners,

People, real estate owners (on its own).
The efficiency and effectiveness of the actions of the Capital Group of the Issuing Party in the field of selection and
acquisition of attractive grounds for investments are possible thanks to an experienced team of specialists, who have vast
knowledge related to the real estate market.
2.
Investment capacity verification process.
The optimal orgaisational structure of the company and mechanisms of ground classification for investments, worked out
throught the years of the Partnership’s activity resulted in a high analytical and decision-related efficiency within the field of
ground acquisition.
All decisions regarding purchases of real estates are preceeded by verification procedures. These procedures are
implemented in two variants, depending on the type of investment, which will be implenented on the analysed grounds.
Page 51
2.1. Large area objects.
The verification procedure for large area objects:

Verification of implementation possibility for the particular investment type,

Examination of legal state of the real estate,

Acquisition of basic information about the real estate.
On the basis of aforementioned information, an information memorandum is created for one of the main operators eg.
Carrefour, Leroy Merlin, OBI, Real, etc.
Once the initial acceptation has been obtained, but before the ground acquisition, the main parameters of cooperation and
of the investment are agree with the operator, such as:

Future rental area,

Rental fee and technical maintenance fees,

Rental contract period,

Range of works finances by each of the Parties.
Once the parameters of the investment project are agree, the Issuing Party brings the parties to sign these effects in the 2
stage:
st

1 stage – pre-initial contract of cessation of ownership rights or perpetual use rights,
nd

2 stage – signing the final contract once the suspending conditions are met.
nd
The above procedure guarantees safety of implementiation and income from these types of investments.
If no acceptance and positive evaluation of the operator are obtained, then the materials related to the real estate are
archivised for further, potential use in the future.
2.2. Commercial galleries.
The procedure of real estate localisation evaluation for the needs of commercial galleries includes:

Verification of implementation possibility for the particular investment type,

Geological, geophysical studies, studies of ground contamination, green area cataloguing,

Vefirication of entries in mortgage registers,

Determination of media availability (water, electricity, gas, etc.),

Negotiating, preparation of contract projects by the legal department,

Initial design works, preparation of architectural concept with determination of the most important parameters of the
investment and potential risks, which may raise the costs of investment implementation,

Project analysis in relation to potential renting parties,

Preparing an investment profitability analysis, budgeting, preparation of a business plan,
Once the parameters of the investment project are agree, the Issuing Party brings the parties to sign these effects in the 2
stage:
st

1 stage – pre-initial contract of cessation of ownership rights or perpetual use rights,
nd

2 stage – signing the final contract once the suspending conditions are met.
3. Investment implementation.
nd
Once the real estate has been secured, the Issuing Party takes next actions in order to implement the investment:




The choice of design office, preparing the architectural – construction project, together with obtaining necessary
permissions,
Commercialisation of commercial areas,
Financing management,
The choice of the general contractor who performs and coordinates the entirety of construction works.
An integral part of the investment process in area commercialisation, i.e. obtaining renting parties for the area in the
implemented object. The commercialisation process is performed by the Partnership itself, by the commercialisation
department.
A team of employees of the Capital Group of the Issuing Party also works on the commercialisation process, with the team
being responsible for implementation of the particular investment project, including a supervision inspector, specalists in
the particular fields (sanitary, electric), an architect, who supervises and coordinated works performed by the
subcontractors.
The choice of general contractor is made on the basis of an auction, for which the biggest companies in the domestic
market are invited, including: Budimex Dromex S.A., Skanska S.A., Erbud S.A., Budus S.A., Warbud S.A., Mostostal Warszawa
S.A. etc.
A contract is signed with the general contractor (chosen in a multistep auction), which regulates the deadlines of particular
investment stages and directly related schedule of payments.
Page 52
The Capital Group of the Issuing Party itself engages subcontractors for particular investment projects, which are supervised
by the supervision department of the Capital Group of the Issuing Party, or by the general contractor.
In both cases described above, the Board of the Issuing Party, together with subsidiaries – investment development
department, manager of the investment project, and if there is a need to – with a supervisor of the project acting in the
name of the bank which finances the investment, provide a complex supervision of the investment.
4.
Marketing and sales.
When the construction starts, the Capital Group of the Issuing Party starts its marketing actions related to advertising and
marketing of the implemented commercial object. This range of actions is related only to own objects of the Partnership.
5.
Object management.
The last element controlled by the Capital Group of the Issuing Party after the construction and release of the object for
use, is an independent management of the object. In the case of uptown galleries, the Capital Group of the Issuing Party
predicts that the objects implemented now and in the future will be managed independently by itself, because of positive
and measurable financial effects obtained with management of Galeria Piastów in Legnica and Twierdza Commercial Centre
in Kłodzko.
6.1.1.4. Main customers
Three categories of strategic customers must be separated in the context of business activity of the Group of the Issuing
Party:
1.
Large area customers.
Large area customers of the Issuing Party contain, among others:

Carrefour Polska Sp. z o.o.,

Leroy Merlin Polska Sp. z o.o.,

Superhobby Market Budowlany Sp. z o.o., (OBI)

Real Sp. z o.o. spółka komandytowa (limited partnership),

Empik Sp. z o.o.,

Metro Group Asset Services Sp. z o.o.

Marks & Spencer Polska Sp. z o.o.,

C & A,Polska Sp. z o.o.

Piotr i Paweł S.A.,

H & M Hennes & Mauritz Sp. z o.o.,

New Yorker. Polska Sp. z o.o.
The aforementioned companies are the main renting parties in large area objects and comercial centres. They form a group
of customers who guarantee the security of investment implementation through the fact of long-term rent of the area,
which is usually 10 years + options for the next 5 years. In the case of this group of renting parties, rental fees obtained are
oscillating within the range between 5,75 and 8,5 EUR/sq.m. and the rented area forms the following range:
The Renting Party
Rented area
Carrefour Polska Sp. z o.o.
from 4 000 sq.m. to 19000 sq.m.
Leroy Merlin Polska Sp. z o.o.
From 5 000 sq.m. to 10 000 sq.m.
Superhobby Market Budowlany Sp. z o.o.
about 10 000 sq.m.
Real Sp. z o.o., spółka komandytowa (limited partnership)
10 500 sq.m.
EMPiK Sp. z o.o.
from 600 sq.m. to 1 000 sq.m.
H&M Hennes & Mauritz Sp. z o.o.
From 1 500 sq.m. to 2 500 sq.m.
Metro Group Asset Services Sp. z o.o.
about 10 000 sq.m.
Marks & Spencer Polska Sp. z o.o.
From 1 300 sq.m. to 2 000 sq.m.
C & A Polska Sp. z o.o.
from 1 500 sq.m. to 2 500 sq.m.
Besides the fact that these companies form stable and secure income source, they are also guarantees of acquisition of
smaller, but far more profitable, renting parties.
2.
Renting parties of small and medium area.
Page 53
Another group of customers is formed by operators of renown, world-wide, European and Polish trademarks, which form
and expand their distribution networks i.e. by renting areas in commercial centres and uptown galleries. The best known
trademarks present in the objects of the Capital Group of the Issuing Party are as follows:

Douglas,

Tall Weijl,

Kappahl,

Grupa LPP,

Vobis,

Rossman,

Vistula i Wólczanka,

Almi Decor,

Deichmann,

Bytom,

Diverse,

Apart.

Ryłko,

KFC,

Wojas,
Customers in this group rent a smaller area, in the range from 100 to 1 000 sq.m., but renting fees are significantly higher
than in the first group, as they oscillate in the range between 10 and 40 EUR/sq.m. This parameter significantly increases
the average rental fee obtained on the area in a particular object.
3. Local renting parties.
Another group of customers is formed by companies and businessmen functioning within the particular town, where the
investment is located. These companies, having a solid position on the local market, want to increase their income and
prestige by renting area in attractive localisations offered by the Capital Group of the Issuing Party.
4.
Customers in short-term translations.
A separate group of customers, important for the activity of the Capital Group of the Issuing Party, are the companies,
which form parties in short-term transactions. A vast part of analysed offers and investment projects along with the
knowledge of the market have created a possibility to make income from implementation of relatively fast transactions,
namely, preparations of real estates for investments and sales.
This options include:

Ground purchase,

Implementation of required administrative procedures and agreements,

Obtaining decisions on the conditions of housing and area management or a permission for construction works,

Ground sale.
Average time of implementation of this type transaction is 3 – 10 months. This transaction type is characterised by low level
of own assets engaged and a high profitability.
The group of customers who took part in this type of transactions, include:

Carrefour Polska Sp. z o.o.,

Leroy Merlin Polska Sp. z o.o.,

Jeronimo Martins Dystrybucja Sp. z o.o.,

Superhobby Market Budowlany Sp. z o.o.,

Makro Cash and Carry Polska S.A.,

Aldi Sp. z o.o.
Table: Sales structure with values, including key customers (in thousands of PLN).
st
1 half of 2009
2008
Operator
2007
2006
54 963
13 892
18 807
40 179
50
815
8 000
0
Cap Wroc Log Sp. z o.o.
0
0
482
8 278
Jeronimo Martins Dystrybucja Sp. z o.o.
0
0
5 806
0
Abercromby Sp. z o.o.
0
56 407
0
0
16 000
0
0
0
Renting Parties of Galeria Piastów in Legnica
9 122
10 143
10 387
1 992
Renting Parties of Twierdza Gallery in Kłodzko
5 676
270
0
0
Others
6 344
10 021
8 704
5 960
TOTAL
92 155
91 548
52 186
56 409
Leroy Merlin Inwestycje Sp. z o.o.
Makro Cash and Carry Polska S.A.
6.1.1.5. Current investments of the Partnership
Page 54
Construction of commercial objects with a total area of ca. 106 000 of sq.m. throughout Poland in the period of 2010-2011.
Below, a chronological summary of investment projects for the years 2010-2011 is presented, with their detailed
description presented later.
Table: A chronological summary of investment projects for the period of 2010 -2011.
o
N
Location / Project Name
1
Jelenia Góra/ Pasaż Grodzki
2
Destination
Commercial object type
Predicted end date
rent
Commercial gallery in the centre of the town,
4 quarter of 2010
Kłodzko/ Twierdza II
Commercial Park
Rent
Commercial park (Media Expert, Jysk,
Biedronka)
4 quarter of 2010
3
Kalisz/ Tęcza Gallery
Rent
Commercial gallery in the centre of the town,
2 quarter of 2011
4
Zamość/ Twierdza Zamojska
Gallery
rent
Uptown gallery
2 quarter of 2011
5
Świdnica/ Galeria Świdnicka
rent
Uptown gallery
1 quarter of 2012
th
th
nd
nd
st
Source: Issuing Party.
1.
Uptown commercial gallery „Pasaż Grodzki” in Jelenia Góra.
In 2007, the Partnership has gained a partner, which is an owner of an attractively located parcel in the centre of Jelenia
Góra, who implements (via an intentional company) an uptown gallery-type object with a total area of ca. 10 500 sq.m. W
In July 2009, the dependent company Rank Müller Jelenia Góra Sp. z o.o., which implements this investment, has obtained
permission for construction works and has signed a contractor cotnract with Erbud S.A. for the contractory works of the
object, to be received ,,ready to use”. After the construction, the object will remain in the ownership of the entity bound to
the Partnership, although it is not excluded that the object will be sold. The expected date of the investment to be finished
th
is the 4 quarter of 2010 with total planned expenses of ca. 44,8 mln PLN. The expected income from renting the area after
a complete commercialisation is to be about 4,1 mln PLN net/uear.
2.
„Twierdza II” Commercial Park in Kłodzko.
The owned ground reserve of ca. 1,83 ha located exactly next to the Twierdza Kłodzko Commercial Centre, has been
expanded by the Issuing Party Emitent with a purchase of 2,01 ha. On this ground merger with a total area of 3,84 ha, a
design of a commercial park was started in the spring of 2009. Predicted total area of the object is ca. 11 000 sq.m. with 10
th
reting parties to participate. Construction works have begun in November 2009, their finish is planned for the 4 quarter of
2010. The expenses should total ca. 29,8 mln PLN. Estimated income from the rent of area after a complete
commercialisation is to be about 4,5 mln PLN net-year.
3.
Uptown commercial gallery „Galeria Tęcza” in Kalisz.
On a ground with area of 0,92 ha, the Issuing Party plans to implement the construction of „Galeria Tęcza” via its
dependent company E.F. Progres I Sp. z o.o., wit the area of ca. 33 750 sq.m., where ca. 86 shops will be located. In June
th
2009 the Issuing Party obtained persmission for the construction of the object and on October 28 , 2009, the dependent
entity obtained permission for its implementation. Construction works began in November 2009. Their finish is planned for
nd
the 2 quarter of 2011. Planned expenses are to total ca. 113,0 mln PLN. Estimated income from the rent of area after a
complete commercialisation is to be about 16, 8 mln PLN net-year.
4.
„Twierdza” Gallery in Zamość.
On the ground with an area of 7.4 ha, purchased using own assets, the Issuing Party shall implement a project via its
dependent company E.F. Progres III Sp. z o.o., namely construction of „Twierdza Zamojska” Gallery with an area of 31 436
mkw., which will host about 80 shops and a parking lot for 850 places. As of now, the Issuing Party has finished design
works and has submitted an application for permission to start construction works. The permission is planned to be
obtained in May 2010. Meanwhile, deconstruction works on objects located at the site have been finished. The expeted
nd
time of the investment’s finish is the 2 quarter of 2011, the expenses are planned to total ca. 126,2 mln PLN. Estimated
income from the rent of area after a complete commercialisation is to be about 18 mln PLN net/year.
5.
Śródmiejska galeria handlowa „Galeria Świdnicka” w Świdnicy.
In 2008, the Issuing Party has secured a ground real estate with an area of 3.63 ha, located in Świdnica, using a pre-initial
contract. The Issuing Party plans (via its dependent company, E.F. Progres VI Sp. z o.o.) to implement a commercial object –
Galeria Świdnicka, with an area of ca. 20 100 sq.m., which will host ca. 65 shops and a parking lot for 565 p.p. In August
2009, a local plan of spatial development has been decided, which predicts a construction of a commercial object. The
design works and agreements are underway. The permission for construction works is predicted to be obtained in
th
st
September 2010, construction works start – for the 4 quarter of 2010 and their finish – for the 1 quarter of 2012.
Page 55
Estimated value of the investement will total ca. 72,2 mln PLN. Estimated income from the rent of area after a complete
commercialisation is to be about 11 mln PLN net/year.
6.1.1.6. Planned investments of the Capital Group
Below, two categories of investment projects planned by the Capital Group of the Issuing Party are presented: projects
planned for construction and rent and projects for sale. Because change procedures of local spatial development plan are
underway, along with negotiations with main renting parties, or technical agreements are being made, estmations of exact
deadline for development of the investments projects will be made once the key conditions of their implementation are
met.
Table: Investment projects predicted for construction and rent.
o
N
Location / Project name
Commercial object type
Parcel area
1
Commercial Centre Krosno
Commercial park – during negotiations of the OBI contract
76 697 sq.m.
2
Commercial Centre Jarosław
Comercial park – change procedure for l.s.d.p./OBI
86 300 sq.m.
The total area of grounds presented in the summary above is, as of the date of Prospectus creation, 16,3 ha.
Table: Investment projects for sale.
o
N
Location / Project name
Project description/ Potential use
Parcel area
1
KATOWICE – Olimpijska
Multifunction object (gallery, offices, entertainment) in the city
centre
8 410 sq.m.
2
WROCŁAW Marina Park
Housing with services part of the Marina Park district; located in
Wrocław-Popowice, next to parks and Odra river; mini port for
boats, yachts and water tram is planned
68 513 sq.m.
3
Skarżysko Kamienna
Commercial park – change procedure for l.s.d.p./ mall
47 279 sq.m.
4
Zgorzelec LM
Commercial park
11 012 sq.m.
5
Zgorzelec CA
Commercial park
33 440 sq.m.
Legnica Browar –
Offices/apartments
A-class offices and apartments, in the city centre, close to Galeria
Piastów, City Hall and City Park
7
Legnica Fortepiany
Built real estate/multifunctional
10 797 sq.m.
8
Opole Malinka
Parcel with permission for construction of a commercial object
42 465 sq.m.
9
Brzeg
Commercial pavillion
13,15% of 1
854 sq.m.
10
Kłodzko next to Galeria
Twierdza
Parcel assigned for a petrol station
3 000 mkw.
Parcel destined for Mc Donald object
3 500 sq.m.
6
12
Kłodzko next to Galeria
Twierdza
8 600 sq.m.
13 Legnica Osiedle Ptasie
Parcel destined for housing
23 700 sq.m.
14 Grudziądz
Commercial park – design
18 299 sq.m.
15 Stargard Szczeciński
Commercial park – change procedure for l.s.d.p./ mall
78 554 sq.m.
16 Opole Turawa
46 479 sq.m.
17 Dąbrowa Górnicza
50% of 9 600
sq.m.
*
*) a bankruptcy application of the intentional company – the owner of the real estate, with an option of agreement, has
been lodged in.
Total area of grounds presented in the above summary, as of the date of Prospectus creation, is 38,85 ha.
Page 56
If favourable market conditions take place, the Issuing Party does not exclude returns to the aforementioned investment
projects, according to agreements and concepts possessed.
6.1.1.7. Other future projects
Because of current, negative economic conditions, including also the developers, the Issuing Party is very cautious with
estimations of new investment projects. A strong competitions which took place in the period of 2007-2008 led to creation
of many development projects. Becasue of this fact and of difficulties in obtaning funds for investments, projects partially
prepared for implementation have appeared on the market.
Taking into account the above, the Issuing Party plans purchases of investment projects or grounds only in the cases of a
very attractive ground price or if a valid local spatial development plan for the ground exists, significant technical
agreements and rental contracts are signed with the main renting party.
Other case, when the Issuing Party allows the possibility of ground purchase and engaging financial assets in preparation of
an investment project is purchase of ground indicated by the partner as potential locations of commercial objects. As of the
date of Prospectus creation, the Issuing Party cooperates within the latter scheme with ALDI Sp. z o.o., OBI Sp. z o.o. and
Makro Cash and Carry Polska S.A. The next step may involve implementation of an object with a rental or sale option, with
an assumption that favourable financial conditions have been negotiated.
6.1.1.8. Land bank
According to its strategic assumptions, the Group of the Issuing Party has created a land bank throughout Poland by
purchasing attractive ground which allow implementation of large area commercial objects, commercial galleries,
apartment investments and office-service investments, as well as implementation of short-term investment projects. As of
the date of Prospectus creation, the Group of the Issuing Party is an owner or a perpetual user of grounds with a total area
of about 686 000 sq.m.
6.1.2.
New products and services
The Group of the Issuing Party has not introduced any now products and services in the period from 2006 to the date of the
Prospectus approval, besides those described in p. 6.1.1.2 of the „Registration Document”.
6.2.
Main markets and competition of the Issuing Party
6.2.1.
1.
Market descriptions
Malls (hypermarkets and supermarkets).
Significant changes on the Polish retail sales market have taken place in the last years. Since the beginning of the 1990s,
supply of commercial area has increasd and in 2010 it covers an increasing number of international retail sales networks,
along with commercial places of high standards. Foreign trade networks, investors and developers start their activity in
Poland in order to access a new and less saturated market. According to this, foreign entities form a large part of owners of
large area commercial centres. Despite increasing concentration of sales and increasing importance of modern network
trade, the characteristic of the market still is a dominant role of shops with sale area less than 100 sq.m. The dominant role
of small shops is still an evidence of the fact, that the majority of Poles still prefer doing shopping in local shops, Despite this
fact, the expansion of large commercial networks goes on. The hypermarkets are located mostly in cities with the biggest
number of citizens, while supermarket owners place their shops in middle-sized towns.
First international supermarket networks started in Poland in the beginning of the 1990s. These were trademarks such, as
Billa, Rema 1000 or Globi. In the middle of the previous decade, expansion of the biggest international hypermarket
networks, such as Auchan, Carrefour, Geant, Real or Tesco, has started.
rd
In the 3 quarter of 2009 there were over 200 hypermarkets in Poland, located mostly in complex commercial centres
along with a few thousands of supermarkets and food discounts. In the sector of large area food shops, the period of
dynamic expansion is ending now. In the hypermarket sector, only foru huge players remained (Auchan, Carrefour, Real i
Tesco). The main entities in th supermarket segment are Carrefour, Tesco and Kaufland as well as delicatessen Piotr i Paweł
and Alma. In the discount segment, Lidl and Biedronka dominate. The supermarket networks start to verify their locations
and formats – missed investments will be closed and the new ones – thoroughly studied and selected. In 2009, in the food
sector, the objects of the Piotr i Paweł networks in Galeria Malta in Poznań, Carrefour in the Twierdza Kłodzko Centre and
Alma in Renoma in Wrocław and in Cuprum Arena in Lubin have opened. Further development of food shops sector in
Poland will be limited mainly to supermarkets and small local shops. Hypermarkets will be located in suburban centres and
commercial parks. Rental fees for the area rented by hypermarkets have stabilised at the level of 6,5-8 euro/sq.m./m, and
for the supermarkets - 11-15 euro/sq.m./m. Because of limited availability of area for large area food shops, no significant
1
rental fee drops are predicted .
1
Marketbeat Polska –Autumn 2009 – Cushman & Wakefield 2009
Page 57
2.
Commercial centres.
In the first half of 2009, in Poland almost 390 000 sq.m. of modern commercial area has been released, which equals to a
95% increase in comparison to the analogical period of 2008. The accumulation of supply is caused by entering delayed
investments started in the previous years on the market. The biggest objects finished in the period of January-June 2009 are
Galeria Malta in Poznań, Cuprum Arena in Lubin and Renoma in Wrocław. At the end of June, 2009, the reserves of modern
commercial area in Poland totalled 8 835 000 sq.m. This area included: commercial centres (72,5%), warehouses and
commercial parks (19,2%), sales centres (0,9%) and other commercial objects (7,4%). The supply of modern commercial
area in Poland is still concentrated in the eight biggest aglomerations (61,4%), however, each year brings an increase in the
rd
2
share of smaller cities (3 quarter of 2009 - 38,6%) .
In 2008, a significant intensification of developers’ activity could be noted in the medium-sized cities, e.g. in Bydgoszcz,
Białystok, Słupsk, Opole or Zielona Góra. In the four quarters of 2008, locations of this type were enriched with almost 409
000 sq.m. of commercial area, i.e. almost three times as much as in the main regional cities. Such locations are more and
more often chosen not only by Polish companies, but also by renown international trademarks, eg.: ZARA, H&M or C&A,
3
which are eager to located their shops in high-quality objects .
Despite the economic slowdown, there are still many businesses prepared to open new shops and the medium cities seem
to a natural direction of their expansion. The favourable factor of medium cities are rental fees, which are lower than in the
4
bigger cities .
The global financial crisis verifies forecasts of future supply on the market of commercial real estates. An intensive
construction activity can still be seen, as the decisions related to commercial objects constructed today have been made in
the peak of economic trends. At the end of June 2009 ca. 1 mln sq.m. of modern commercial area was still being built, with
the finish dates in the period of 2009-2010. Almost 66% of objects being constructed is located in small and medium cities
(eg. Focus– Piotrków Trybunalski and Galeria Jurajska – Częstochowa), but the investments are also performed in the
biggest aglomerations (e.g. IKEA Port in Łódź, Bonarka City Center in Kraków). It will help to retain the yearly supply of
modern commercial area in 2010 at the level of 800 000 sq.m. However, construction works of some significant trade
objects have been held (totalling ca. 280 tys. mkw.). At the date of the Issue Prospectus approval it is difficult to estimate,
which of the planned objects will be implemented, which will be delayed and which of them will be cancelled. However,
taking into account the specifics of investment processes on the real estate market, one can quite probably say that it is
safe to assume a significant drop of yearly supply after 2010.
Dynamic changes observed in the textile sector form trends within demand for the modern commercial area. On one hand,
a few of the known networks are suffering from financial problems, they seek new sources of financing and modify existing
development strategies. On the other hand, new market entries are observed along with an increased expansion of entities
in this sector, struggling to take a dominant position within the market. Until now, it has not been reflected in an increased
of empty buildings, which remain at a low level of 0-3,6%. However, the pheonomenon of secondary rental market in the
commercial centres. The difference between a stipulated rental fee and real rental fee increases, as this increase is caused
by the increase of prompts present in the full rental packages. The highest rental fees are at the main commercial streets,
where they are the level of 80-84 Euro/sq.m./month and in commercial centres, where they equal to 79-83
Euro/sq.m./month. One can also see a strong diversification of rental fee in first and second category objects.
Limited access to funding and conditions offered form the most important barrier for the development of rental market in
Poland. Its development has been also negatively influenced by strong fluctuations of Euro currency rate related to PLN.
Total rental costs increased even by 30-40%, because the contracts are signed in Euro and the payments are made in PLN,
according to the valid rate on the date of invoicing. The commercial networks do not stay idle in this situation and they take
different actions – including bonifications and sales, in order to increase the turnover, through modifications of expansion
strategies, shop sizes and offer types, up to renegotiations of rental conditions with the owners. A crisis is also the time of
nd
luxurious offers, fusions, overtakes and new entries. In the 2 quarter of 2009, the following phenomena could be seen:
consolidation, searches for strategic investors, renegotiation of loan conditions with the banks, introduction of repair
programs. One also has to note new entries (TK MAXX, S.Olivier, New Look, Peacock, Starbucks Coffee), expansion
acceleration (Marks&Spencer) or creation of new concepts (Ann Christine – New Yorker).
The importance of prompts in the total rental conditions has increased. They are introduced more often than ever before
and include: stepping rental fees, turnover rentals, rental holidays or participations in the arrangements of the place. The
level of rental fee became an important, although not the only one factor in making a decision on renting a place. It it the
5
total rental fee that matters, including expenses on the places’ arrangement, exploitation and marketing costs .
2
Marketbeat Polska – Autumn 2009 – Cushman & Wakefield 2009
Commercial Markets 2009 – Knight Frank 2009
4
Commercial centres in medium-sized cities of Poland – DTZ – 1st quarter of 2009
5
3
Page 58
The level of initial monthly rental fees for the areas in commercial centres is still the highest in the case of so called prime
units, namely 100 to 150 sq.m. and it is reached in Warsaw, where the rental fees are oscillating from 65 to 90 Euro/sq.m.
The second place was taken by Kraków with slightly lower fees of 60-70 Euro/sq.m. Trójmiasto, Poznań and Wrocław are
regions, where the monthly rental fees for these area are oscillating in the range from about 40 Euro/sq.m. to 55
Euro/sq.m., whereas the lowest rental fees were recorded in Katowice, Szczecin and Łódź, where the renting party are
6
about to pay from ca. 40 Euro/sq.m. to 50 Euro/sq.m. of a commercial area .
Because of a sharp increase of saturation with commercial areas observed in the last years, the Issuing Party foresees that
the most dynamic development of commercial centres will take place in small and medium-sized cities. Another factors that
is faovurable for this tendency is lower cost of ground acquisition in comparison with the biggest agglomerations.
3.
Office area market.
Warsaw remains the most mature office area market in Poland, with reserves of modern office area for rent estimated to
be about 2,43 mln sq.m. Among the regional markets (Kraków, Poznań, Wrocław, Trójmiasto and Katowice) Wrocław has
becoe the leader for the first time, with its office area for rent having exceeded the level of 257 000 sq.m., thanks to
implementation in 2008 a record quantity of new supply (ove 105 000 sq.m.). The second place, after the capital of the
Lower Silesia, was taken by Kraków, with its supplies estimated as about 234 000 sq.m., whereas Trójmiasto took the third
place (184 000 sq.m. of office area for rent). Katowice remain the smallest market with its supplies of over 111 000 sq.m. of
offices.
In the entire year 2008, there have been about 472 000 sq.m. of modern office area for rent implemented, where about
52% (247 000 sq.m.) constituted by new supply for the Warsaw market. On 5 biggest regional markets the developers have
released for use in the past 12 months some 225 000 sq.m. of modern office area, almost twice as much as in 2007. Such a
good result was possible thanks to implementation bigger investments, than it was in the previous years (eg. Bema Plaza in
Wrocław).
Besides the Warsaw market, where about 413 000 sq.m. was created in 2009, the market in Kraków shows the most
dynamic growth. It is estimated that in this town over 152 000 sq.m. of modern offices are at different stages of
construction. Much lower activity of developers is seen in other regional cities, where from abour 30 000 sq.m. to 61 000
sq.m. of office area was created. The dynamic development of some of the regional office area markets caused these cities
to become the focus of attention of an increasing number of international developers. On the other hand, one can observe
an ever stronger position of some selected local companies (eg. Grupa Buma in Kraków, Archicom in Wrocław or Allcon in
Trójmiasto).
As a consequence of turbulences on financial markets, which took place in the 2008 and 2009, start of implementation of
new investments on the planning stage can be postponed due to a limited access to debt financing and an increased
caution of developers when it comes to starting new investments.
The demand observed in 2008 in Warsaw was high, comparable to the record year 2007. In the period of January-December
2008 rental contracts for more than 445 000 sq.m. were signed in the capital, where over 60% of office area was rented as
pre-lets, which was a result of diminished amount of area available in the existing buildings. In 2008, also some notable
rental transactions were made by large entities, which decided to consolidate their activity in one location (eg. Pekao S.A.
or TP S.A.).
In some regional cities, the volume of signed rental contracts totalled almost 179 000 sq.m., whereas Kraków and Wrocław
were the most interesting for the renting parties (respectively, 54 500 sq.m. and 57 000 sq.m. of rented area). The demand
7
was created mainly by companies offering professional services, finance and banking sector and the IT sector .
st
After the slowdown, which took place in the 1 quarter of 2009, the second quarter turned out to be more optimistic.
Drops in rental fees and increases in prompts number resulted in a slight increase of volume of rental transactions. As a
result, one can still observe a slight increase of the unrented area factor and further drops of rental fees. Still, the problems
8
related to funding of new investment cause, that many of the investment projects have been held off.
The rental fees are similar in most of the regional cities and they are, on average, around 13-16 Euro/sq.m., that is, thez are
rd
about 10% lower than in the 3 quarter of 2008. In case of buildings, the fees are even lower and they are about 10-12
9
Euro/sq.m. The lowest fees were recorded in Łódź, Trójmiasto and Katowice.
The difficulty in obtaining bank loans and higher bank profits cause a sharp increase in expenses made on investments.
Bank requirements regarding high levels of pre-rent before the construction of office buildings starts render
6
Commercial Market 2009 – Knight Frank 2009
8
9
Office Area Market 3rd quarter of 2009 – Colliers International Poland
7
Page 59
implementation of a large part of the investment impossible. On the other hand, there is too little own assets, the source of
which could be sales of existing office buildings, if such sales transactions took place, of course. Thus, the plans of the
developers require a constant revision. It is estimated, that only 550 000 sq.m. has really bet release for use in the biggest
Polish cities in 2009 (55% of the number already circulates on the market), and in 2010, probably only 345 000 sq.m. will be
10
delivered onto the market. Authors of the cited reports estimate, that even lower number if new implementation will
arrive on the market in 2011– about 272 000 sq.m. – a period of 24 months is usually the timeframe required for economic
effects to be reflected in supply of the real estates. The authors note, that current declarations of the developers regarding
the plans for the 2010-2011 period a related to much higher values– almost twice as much for the 2010 and almost six
times as much for the 2011. The Authors think, that new supply of office areas will slow down until 2011 and they do not
expect that the developers would start a lot of new investments, despite the economic growth predicted for 2010 and the
expected financial unfreezing in 2010.
The slowdown of supply is also an effect of stopping construction works of implemented office buildings. It is estimated
that 103 000 sq.m. of area is in that situation. Moreover, many objects in advanced planning stage will be shrunk, or divided
into stage, and often the devlopers lean towards solutions, which are not capital-consuming.
The year 2010 should be a year of favourable conditions for the renting parties. Such phenomena, as the growing subrental
market (estimated in 2009 for 50 000 sq.m. in Warsaw and 10 000 sq.m. in Kraków), increasing availability of offices (282
000 sq.m. in main Polish cities) and pressure leading to lower rental fees have made a permanent effect on the market
reality. These tendencies are related to all Polish markets and some differentiation throughout Poland can be made. This
situation will probably continue until 2011. The authors expect, that until that time, available area will be consumed by the
market, and that, combined with reactivation of demand resulting from the economic growth should give the developers a
signal for starting construction works for new investments. The 2012 – 2013 period should thus bring a growthon the
supply side of the office area market. The authors think that rental fees should respond to this situation even earlier. In an
optimistic variant, transaction rental fees should stabilize in the half of 2010, and in 2011 small increase pressure on the
rental fees may appear, not exceeding 3% y/y. This situation may happen in Warsaw and 2-3 other regional markets.
Forecasts related to the level of rented office area in 2010 are very unsure.
4.
Housing market.
In the first half of 2009 the housing market in Poland showed little consumer activity, although apartment sales have
nd
increased, in comparison with results at the end of 2008, especially in the 2 quarter of 2009. Some markets in Poland have
even recorded a two-digit increase in the number of locals sold. This result is not very optimistic, however, if we take into
account the total data related to sales, which were few times worse than in the first half of 2008, especially in comparison
with the same period of 2007. In the first half of 2009, drop of prices has made a contribution to the increase of demand,
along with the possibility of price negotiations and interest in the government sponsored project of stimulation of the
housing real estate market „Rodzina na swoim” on the side of buyers and developers, who started adjusting their prices to
the prices of this program. The structure of demand has changed in favour of the cheaper apartmet. The program „Rodzina
na swoim” cannot be seen as a panaceum for all problems of the market, however, since the real demand is still highly
dependent on the possibility of obtaining a mortgage loan, expectation of the buyers and the general economical situation.
Despite huge housing needs in Poland one has to expect, that in the mid-term perspective, the customers will still make
their decision on real estate purchases very cautiously.
nd
In the 2 quarter of 2009 a correction of market price trends was seen – tempo of price drops slowed down, and some
markets have even recorded a slight increase of average nominal prices. The markets of the first wave of housing boom
(Warsaw, Kraków and Wrocław) can expect a gradual swith to the path of prices increase and their further stabilistaion. The
markets of the second wave (Trójmiasto, Łódź, Katowice, Poznań and other regional cities) are usually more prone to the
effects of the crisis, but even in these cities first signs of prices increase could be seen. The significant changes leading to
stabilisation in these markets should appear with some delay, though. One should not expect a sudden drop of prices of
housing real estates, rather a stabilisation. The unsure mood holding on the market causes the prices of apartments to be
still highly related to the future policy of banks within the field of funding and granting mortgage loans, to economic
11
expectations of the customers and to the state of Polish economy in the face of the global economic crisis.
5.
Investment transactions.
The negative sequence of events observed in 2009 on the market of real estate is a consequence of serious turbulences in
the financial sector. The crisis of global financial markets has not evaded Poland, especially the buyers, who participated in
large extent in the bank funding, because costs of this funding has significantly increased, while the access to the funding
remains very limited (especially for high ratios of the loan to the value of the real estate). As a consequence, the value of
transactions made has drastically dropped, while still single transactions on the real estate market can be seen. One has to
note, that Poland started to feel the effect of the global resession only after September/October of 2008. Despite the large
10
Forecast of development of office real estate in Poland: Back to the Future? – Jones Lang LaSalle, Institute for Studies on Market Economy
- August 2009
11
Page 60
drop of turnover on the real estate market, capitalisation rates in the firest 8-9 months of 2008 have not undergone serios
fluctuations. The situation dramatically changed after the fall of Lehman Brothers and the second wave of crisis on the
12
financial markets.
According to the authors of the cited report, capitalisation rates for the best office real estates in 2009 equalled 7,25-7,50%
and about 7,00% for the best commercial centres. The capitalistation rates have been decompressed due to the global
economic slowdown, lower interest of the investors and low availability of bank funding. However, the authors of the
report do not expect further decompression of the rates in the near future. Even higher capitalisation rates will not
generate higher turnover on the market, since most of the real estate owners will probably not decide to sell their
properties with a large correction of prices. The authors of the report predict and increase of transaction activity, drawing
more capital searching the investment product and trying to use revisioned price expectations of some sellers, along with
strong macroeconomic and demographic basis of Poland.
6.2.2.
Sales structure
Table: Sales structure by amount, divided into goods sales and products and services sales (in thousands of PLN).
st
Details
1 half of 2009
2008
2007
2006
Goods sales
70 842
16 000
34 484
44 129
Products and services sales
21 313
75 548
17 702
12 280
Total
92 155
91 548
52 186
56 409
Goods sales include mainly sales of real estates, which are purchased by the Issuing Party on its own account and sells back
to other buyers, or which are purchased on the account of the Issuing Party as parts of contracts signed with the ordering
parties and which are sold back after implementation of agreed procedures, eg. administrative procedures. Products and
services sales included mainy income from renting own real estates, including reinvoiced media costs, income from sales of
commercial objects constructed on the order of third parties and reinvoiced costs of the construction works, paid by the
Issuing Party. It is irrrelevant to look for regularities in the shaping of the aforementioned income sources, since it depends
on individual aspects of the real estates, obtained orders and implementation of particular investments by the Issuing
Party.
Table: Sales income according to the activity segments (in thousands of PLN).
st
Details
1 half of 2009
2008
2007
2006
Real estate rents
14 744
12 959
11 266
2 660
Real estate sales
70 836
72 413
34 484
44 129
Other
6 575
6 176
6 436
9 620
TOTAL
92 155
91 548
52 186
56 409
The Issuing Party systematically increases its sales income, both on the level of one-time transactions and of the long-term
rental income.
Table: Sales structure (by amount) including key customers (in thousands of PLN).
st
1 half of 2009
2008
Operator
2007
2006
54 963
13 892
18 807
40 179
50
815
8 000
0
Cap Wroc Log Sp. z o.o.
0
0
482
8 278
Jeronimo Martins Dystrybucja
0
0
5 806
0
Abercromby Sp. z o.o.
0
56 407
0
0
Makro Cash and Carry
16 000
0
0
0
9 122
10 143
10 387
1 992
Leroy Merlin Inwestycje Sp. z o.o.
Renting Parties of Galeria Piastów in Legnica
12
Forecast of development of office real estate in Poland: Back to the Future? – Jones Lang LaSalle, Institute for Studies on Market Economy
- August 2009
Page 61
Renting Parties of Galeria Twierdza Kłodzko
5 676
270
0
0
Others
6 344
10 021
8 704
5 960
TOTAL
92 155
91 548
52 186
56 409
The leading customer of the Issuing Party is the Carrefour Group, which has already cooperated with the Issuing Party for a
few years.
Table: Sales Structure (by amount) in a geographical setting (in thousands of PLN).
st
Location
1 half of 2009
2008
2007
2006
Białystok
0
2
117
22 002
Brzeg
0
0
5 886
0
Grudziądz
0
0
509
23 245
55 184
389
32
0
59
67
0
0
Kłodzko
5 989
287
0
0
Legnica
30 635
11 869
10 844
2 388
Opole
7
5 013
6 268
0
Sandomierz
0
0
1 350
0
Szczecin
0
10 630
18 767
1 324
Tarnowskie Góry
0
0
0
1 000
Wrocław
8
36
153
0
204
4 878
90
0
0
58 285
8 111
2 938
69
92
59
3 512
92 155
91 548
52 186
56 409
Jastrzębie Zdrój
Katowice
Zamość
Zgorzelec
Other
TOTAL
Until now, main areas in which the Issuing Party has finished its investments and obtained income by their virtue, is
southern and western Poland. However, the Issuing Party implements many investments in other parts of the country and
is not dependent, as far as its income is concerned, to a specific region.
6.2.3.
Competition
The field of business activity of the Group of the Issuing Party is very profitable. This fact causes many companies to
perform or to intend to expand its activities by the field, in which the Issuing Party Group acts. However, the core of the
competition is composed of companies present in this field for many years, and have well located investments on the
domestic market. The competition companies, in relation to the activity of the Issuing Party Group, include (among others):
1. Parkridge Holdings Ltd. – British development group with international reach, specialising in investing in commercial,
office and warehouse centres. This holding is represented on the Polish market by the entities like Parkridge CE
Developement Limited Sp. z o.o. and Parkridge Retail Developement Sp. z o.o.
2. Polimeni International LLC – American development group investing in commercial centres. It is present in Poland by
the Polimeni International Sp. z o.o.
3. Raiffeisen Evolution GmbH – a company of the Raiffesen group, specialised in development activity located in the
Central-Eastern Europe. The company implements in Poland a network of FERIO commercial centres (locations:
Legnica, Puławy, Konin), which are designed as family commercial-service centres predicted for small and mediumsized cities.
4. Quinlan Private Golub Sp. z o.o. – international investment-development group, acting within Central Europe.
5. Mayland International Ltd. – international development group specialised in commercial investments (commercial
centres and galleries).
6. Womak Sp. z o.o. – investor group implementing investments within the commercial real estate market. This Group
has implemented three investment projects (Poznań, Lublin, Wrocław).
Page 62
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Gray International Ltd. – development company implementing investments in Lublin. Except for the development
activity, Gray International offers advisory, architectural and renting agent services.
Caelum Developement Sp. z o.o. – Polish development company founded by an Irish investor (Capital Parterns). This
company specialises in investment and development activity. It has aforementioned commercial objects in its
portfolio, located mainly in medium-sized cities. This comapny also has objects on the territories of Germany, Hungary
and Romania.
Echo Investment S.A. – the basic activity subject of this company are services related to ground real estates and
activities on the housing construction market and on the commercial-industrial construction market.
Plaza Centers Poland Sp. z o.o..– a company belonging to an international group of developers of commercialentertainment centres. The Group acts on the markets of Central Europe, Central-Southern Europe and in India.
GTC S.A. – this company performs its activity in the real estate market. The areas of the market, where the company
has focused its activity are commercial construction (office centres, commercial centres, etc.), housing construction, as
well as sales and rents of locals. This company operates on the domestic market and on the foreign market.
Pa Nova S.A. – offers services of a complex implementation of construction investments throughout the country.
Commercial objects, petrol stations, industrial objects and public facilities are the main implementation objects of the
company.
Property Group S.A. – the company and its units perform activity in the field of real estate management, investments
and assets management in the Central-Eastern Europe.
LC Corp S.A. – a holding controlling a group of companies: Arkady Wrocławskie S.A. and Wrocław Nieruchomości Sp. z
o.o., Warszawa Nieruchomości Sp. z o.o., theor basic subject of activity is development activity, namely, purchases of
real estates and constructions of buildings designed for housing, offices, commerce or services, and then – sales and
rents of area located within this objects.
Dom Development S.A. – the main activity subject of this company is activity within housing construction market. The
company implements its actions on the domestic market only, especially in the region of Warsaw, focusing on
enhanced standard apartments.
J.W. Construction Holding S.A. – Polish holding specialising in housing development activity, mainly in the biggest
Polish cities. It focuses on the popular segment.
Polnord S.A. – Polish holding performing development and construction activities on the territory of Poland and
Russia.
Large commercial networks acting on the market also form a competition in the range presented below,:

Tesco Sp. z o.o.,

Auchan Sp. z o.o.,

Metro Group Asset Services

OBI Sp. z o.o.,

Castorama Polska Sp. z o.o.,
Sp. z o.o.,

Real Sp. z o.o.,

Lidl Sp. z o.o.

Aldi Sp. z o.o.,
These companies act through their own expansion departments, acquiring locations for their future commercial objects.
Their efficiency is limited, however, because of a time-consuming process of decision making, resulting from a complex
organisational structure. The Group of the Issuing Party has already overtaken real estates in its history, which were
partially purchased by one of the aforementioned competition companies. Then, the Group has finished ground merger on
its own, along with obtaining all administrative agreemnts and implementation of the investment. In the described case,
Metro AG corporation was one of the sellers, who sold this investment after over 3 years of ground merging process and
obtaining agreemnts, to the Group of the Issuing Party.
The above summary does not include all companies performing a competition activity against the Group of the Issuing
Party. This group includes companies of a whole country scale, regional scale and local contracting-construction companies.
The Group of the Issuing Party does not exclude the possibility of new companies entering the market, which perform
activities, which may form a competition against the Group of the Issuing Party.
6.3.
Influence of extraordinary factors
From the beginning of 2006 to the date of Prospectus’ approval, the activity of the Group of the Issuing Party has not been
influenced by any extraordinary factors.
6.4.
6.4.1.
Dependence of the Issuing Party on patents or licenses, industrial, commercial of financial
contracts or on new production processes
Commercial contracts
Within the normal mode of activity, the Issuing Party and the Companies from its Group have signed contracts with the
general contractors and deginers, as well as ground purchase contracts.
As of the date of Prospectus approval, the total value of contracts signed by these entities with:

General contractors totals 118 000 000 PLN,

Designers - 11 500 000 PLN.
Within the normal mode of activity, the Issuing Party and the Companies from its Group have signed pre-initial contracts for
ground purchase of the value of over 31 500 000 PLN.
Page 63
The Issuing Party is not dependent on commercial contracts within its business activities.
Additionally, the Issuing Party has listed descriptions of significant commercial contracts below, i.e. contracts, which do
exceed 10% of the own capital of the Issuing Party.
1.
Contract signed between E.F Progress I Sp. z o.o., and P.B Cezbed Sp. z o.o. on the General Contractor of Investment
within Implementation of the „Galeria Tęcza” commercial-serice Centre in Kalisz.
The contract signed between E.F Progress I Sp. z o.o. and P.B Cezbed Sp. z o.o. on the General Contractor of Investment
within Implementation of the „Galeria Tęcza” commercial-service Centre in Kalisz.
th
On October 28 , 2009, Cezbed Sp. z o.o. has signed with the E.F. Progress I Company (100% of shares held by the Issuing
Party), a contract on general contractor of the „Galeria Tęcza” commercial-service Centre in Kalisz.
The value of the contract totals 69 700 000 PLN net.
th
th
According to the contract, the object has to be constructed in the period from November 4 , 2009 to March 15 , 2011
when the reception procedure is about to start, whereas finish of the construction works allowing works of Renting Party to
th
be performed, including supply zone, will take place no later then on December 15 , 2010 and the contraction of the
th
external road layout – no later than on March 15 , 2011.
As a guarantee of good quality of the contraction, the Ordering Party holds 10% (net) of the contractor’s salary as a bail.
There is an option of exchanging 5% of the reserves bail for a bank guarantee equal to 5% of the net salary of th econtractor
for the warranty period, and after 5 years the bail is lowered to an amount equal to 5% of the roof works.
The Contractor has given warranty to the Ordering Party for the faults of the contract subject for a period of 5 years, with
equpiment and materials used for construction were granted a warranty for the same period as was granted by their
manufacturer, but not less than 2 years. The warranty period starts on the day of fault-free, final reception.
For delays in works exceeded the key deadlines for the object, the Contractor will pay the Ordering Party a stipulated
penalty equal to 0,5% of the total net salary for each day of the delay, with the possibility of returning these penalties on
the request of the Contractor, if further works are performed according to the schedule and the delay in contract
implementation will be fully reversed and if it does not influence other key deadlines; if the delay has not been reversed,
the Contractor will pay the Ordering Party an additional stipulated penalty equal to 0,5% of the total salary net for each day
of the delay in execution of the contract subject.
Both parties have agreed that the amount of stipulated penalties cannot exceed 10% of the total net salary, however, after
th
May 30 , 2010, if the object implementation deadline is exceeded, the the amount of stipulated penalties cannot exceed
20% of the total salary. Both parties have reserved the right to claim reparations exceeding the amount of stipulated
penalties, on general rules.
For a cessation of the contracts because for reasons, for which the Contractor is responsible, it will pay the Ordering Party a
stipulated penalty equal to 10% of its net salary. The the cessation was caused by reasons, for which the Ordering Party is
responsible, it will pay the Contractor a stipulated penalty equal to 10% of the total net salary.
2.
Contract on Jogra 2 Sp. z o.o. Company Shares sale
th
rd
On May 15 , 2007, as an execution of an investment contract signed on January 23 , 2007 (with annexes) and of a
th
resolution of Extraordinary Shareholders Assembly of JOGRA 2 Sp. z o.o. on May 15 , 2007, the Issuing Party has obtained
81 556 shares of JOGRA 2 Sp. z o.o. („Company”), which were obliged to be covered with a non-monetary contribution,
namely, a right of perpetual use of a real estate located in Wrocław, with an area of 58 375 sq.m. and an ownership right to
buildings, facilities and equipment located there, forming a separate real estate („Real Estate”). Jogra 2 Sp. z o.o. has taken
all obligations secured on the Real Estate together with the transfer of said contribution, resulting from the contract on
th
investment loan signed by the Issuing Party and Banki Zachodni WBK S.A. located in Wrocław, signed on November 17 ,
2006 and from the contract on a current loan signed by the Issuing Party and the Bank Zachodni WBK S.A. located in
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Wrocław, signed on January 24 , 2007. The total value of transferred obligations equalled 28 444 000 PLN. As a result of
this actions, the Issuing Party held 99,40% of the Company’s shares.
th
On the same day, i.e. May 15 , 2007, the Issuing Party has signed a pre-initial contract on sales of Company’s shares with
Rathburn Holdings B.V. located in Utrecht, the Netherlands („Buyer”). According to the said contract, the Issuing Party has
obliged to sell to the Buyer, and the Buyer – to purchase from the Issuing Party – 99,4% of shares in the Company, with the
said shares to be created when the increase of Company capital would be registered in the business entity register,
th
performed due to a resolution made by the Extraordinary Shareholders Assembly on May 15 , 2007, without any duties,
Page 64
under the condition of registering the aforementioned increase of Company capital in the business entity register
st
maintained for the Company, no later than on May 31 , 2007.
The first part of the price, according to the pre-initial sale contract, was about to total 16 753 000 PLN. Additionally,
according to the pre-initial sale contract, the price of share purchase by the Buyer will be increased by the amount of
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64 802 000 PLN under the condition, that a local spatial development plan will come into effect before April 16 , 2010,
covering the Real Estate being a contribution to the Company and which will be concordant with the agreements of the
shares sale contract, described below.
th
On May 30 , 2007, the Issuing Party and the Buyer have signed a contract for sale of 99,4% of the Company’s shares. On
the basis of the said contract, the Buyer paid the Issuing Party 16 753 000 PLN for the said shares. Besides, the Parties have
agreed that this price may be increased by 64 802 000 PLN (the Second Tranche), usign rules and conditions described in
the pre-initial sale contract described above.
In order to secure claims of the Issuing Party to the payment of the Second Tranche, the Company JOGRA 2 Sp. z o.o. has
created a bail mortgage on the Real Estate for the Issuing Party, for the amount of up to 64 802 000 PLN. Besides, on
30.05.2007, the Buyer has subjected itself to an execution on the behalf of an authenticated deed, to the Issuing Party,
regarding the obligation of Second Tranche payment through the powers of art. 777 § 1 p. 5 c.l.c., whereas the collector
th
(i.e. the Issuing Party) may claim to grant the authenticated deed with an execution clause, effective on May 16 , 2010.
nd
Local plan of spatial development went into effect on July 2 , 2009. Because of this fact, the Issuing Party ordered the
Buyer to execute payment of the Second Tranche, however, at the date of Prospectus approval, the Buyer refuses to
execute the payment. Currently, the Issuing Party holds negotiations with the Buyer in order to reach an arbitrary end of
the dispute. If the said end is not reached, however, the Issuing Party intends to execute its rights which will allow to satisfy
its clais, i.e., e.g. from the mortgage created on the real estate and from the authenticated deed, in which the Buyer
submitted to a free-willed execution of the obligation of Second Tranche Payment to the Issuing Party.
In addition, the Issuing Party remains in dispute with the Jogra 2 Sp. z o.o. company, which is described in p. 20.8.2.1. of the
Registation Document.
3.
Cooperation contract on the implementation of a commercial-service object in Zamość.
The Issuing Party has signed a cooperation contract with JA-WA Morgaś, Ostasz Spółka Jawna located in Zamość („Partner”)
th
on January 27 , 2007.
The said contract was signed in order to define rules of joint implementation of the economic goal, namely – management
of the real estates located in Zamość, at Kilińskiego and Przemysłowa streets – construction of a commercial object with the
area of about 35 thousands of square meters („Object”).
Within the contract, the Issuing Party has obliged to purchase a number of real estates located in Zamość, also belonging to
the Partner, and then to build the Object there. Additionally, after having a legally effective permission for the use of
constructed Object obtained, the Issuing Party has obliged to transfer 30% of shares of the Company onto the Partner or to
pay the Partner it is entitled to, i.e. an amount equal to 30% of the market price of the Object, minus all expenses of the
Issuing Party related to the investment.
As of now, the Issuing Party has managed to execute purchases of the real estates necessary to implement the Commercial
Centre and succesfully brought them to the dependent company - E.F. Progress III Sp. z o.o., whereas this company will
th
implement the said investment. Additionally, on August 25 , 2008 a l.s.d.p for the said real estates has been accepted and
became effective, which allows the Commercial Centre to be created. As of the date of Prospectus approval, E.F. Progress III
prepares for submission of an application for permission to start the construction works of the Object, which will be lodged
nd
in at the beginning of the 2 quarter of 2010, as the Issuing Party predicts, thus the decsion on permission for the
nd
rd
construction works should be reached at the break of 2 and 3 quarters of 2010.
In the opinion of the Board of the Issuing Party, the value of the contract cannot exceed 10% of the own capital of the
Issuing Party.
6.4.2.
Leasing contracts
As of the date of Prospectus approval, the Issuing Party is a party in 17 leasing contracts (current leasing), and these
contracts are related to cars used by the Partnership and to heavy construction equipment. Currently, the E.F. Progress V
Sp. z o.o. company is a party of two leasing contracts.
As of the date of Prospectus approval, none of the other companies of the Group of the Issuing Party is a party in any
leasing contract.
Page 65
The Issuing Party is not dependent on leasing contracts within its business activity.
6.4.3.
Industrial contracts and new production processes
The Issuing Party is not a party of any industrial contracts or contracts on new production processes, related to the scope of
its business activity, thus it does not depend on any of such contracts.
6.4.4.
Financial contracts
The Issuing Party does not depend on any financial contracts within the scope of its business activity.
6.4.5.
Patents or licences
The Issuing Party does not hold any patents.
The Issuing Party has licences listed in p. 11 of the Registration Document – Research and development, patents and
licences - Part III of the Prospectus. However, no licence held by the Issuing Party plays a significant role in the activity of
the Issuing Party.
The Issuing Party does not depend on patents or licences.
6.5.
Declaration of the Issuing Party on its competition position
Significant elements of competitional advantage of the Group of the Issuing Party listed in p. 6.2.3 „Registration
Document”, are as follows:
 Market niche – uptown galleries and commercial parks implemented in small and medium-sized cities. The local
markets have been so far avoided by the competition, which was focused on large agglomerations. The Group of the
Issuing Party has a solid position on local markets, which provides it with a permanent competitional advantage. Local
markets form the most attractive development for commercial projects, as the density of commercial areas in large
cities increases, along with the wealth level of the society,
 Very good relations with many operators (renting parties) of the most important, the biggest and/or the most
profitable areas,
 effective analytic and decision-making process, lasting– depending on the real estate type – from 5 to 30 days,
 long-time experience in implementation of investment and development projects in the field of real estates,
 strategic partnership with Carrefour – a close and long-term cooperation with second (as far as turnover rates are
concerned) food-related group in the world guarantees success of project implementation because of the guarantees
of a long-term rent,
 solid relations with business partners (e.g. Carrefour, Jeronimo Marins Distribution, Helical, Parkridge, Leroy Merlyn,
Grupa Metro, Ernst & Young, OBI),
 specialised and experienced managerial staff in the field of design and supervision of investment and construction
projects,
 cooperation with renown companies during implementation of each stage of the investment.
7. Organisational structure
7.1.
Short description of the Group of the Issuing Party
Neither the Issuing Party nor the Capital Group of the Issuing Party is not a part of any other capital group. The Issuing Party
is a dominating partner for other companies. The dependent companies of Rank Progress S.A. are as follows: HIT Zarząd
Majątkiem Polska Legnica 1 Sp. z o.o., KMM Sp. z o.o. w likwidacji (in liquidation), E.F. Progress I Sp. z o.o., E.F. Progress II
Sp. z o.o., E.F. Progress III Sp. z o.o., E.F. Progress IV Sp. z o.o. (for this company, a bankruptcy application has been lodged
in on August 14, 2009 with an agreement option), E.F. Progress V Sp. z o.o., E.F. Progress VI Sp. z o.o., E.F. Progress VII Sp.
z o.o., Rank Prosper Skarżysko Kamienna Sp. z o.o. and Colin Holdings Limited located in Nicosia, Cyprus. The Partnership
owns 100% of shares and votes of the general assemblies of the aforementioned companies. Also, Rank Müller Jelenia Góra
Sp. z o.o. is an entity related to the dependent company - E.F. Progress II Sp. z o.o., where E.F. Progress II Sp. z o.o. holds
54% of shares and 50% of votes in the general assembly.
Structure of the Capital Group of the Issuing Party
Page 66
7.2.
List of significant dependent entities of the Issuing Party
Table: List of significant dependent entities of the Issuing Party
N
Entity name
Location
% of shares held by the
Partnership
% of votes in the
Shareholders General
Assembly
1.
HIT Zarząd Majątkiem Polska
Legnica 1 Sp. z o.o.
Legnica
100%
100%
2.
KMM Sp. z o.o. w likwidacji (in
liquidation)
Zamość
100%
100%
3.
Legnica
100%
100%
4.
E.F. Progress II Sp. z o.o.
Legnica
100%
100%
5.
Legnica
100%
100%
6.
E.F. Progress IV Sp. z o.o.
Legnica
100%
100%
7.
E.F. Progress V Sp. z o.o.
Legnica
100%
100%
8.
Legnica
100%
100%
9.
Legnica
100%
100%
10.
Rank Prosper Skarżysko Kamienna
Sp. zo.o.
Legnica
100%
100%
11.
Colin Holdings Limited
Nikozja, Cypr
100%
100%
12.
Rank Müller Jelenia Góra Sp. z
o.o.*
Jelenia Góra
54%
50%
o
*) Rank Müller Jelenia Góra Sp. z o.o. is an entity related to the dependent company - „E.F. Progress II” Sp. z o.o., which
holds 54% of shares and 50% of votes in its general assembly.
8. Fixed assets
Page 67
8.1.
Existing or planned, significant, tangible fixed assets, including rented real estates and debts
created on these assets
For the needs of this point, the Issuing Party treats all assets listed in the consolidated financial report in the entries:
real estates and other fixed assets as tangible fixed assets.
The table below lists tangible fixed assets owned by the Group of the Issuing Party.
Table: Tangible fixed assets of the Group of the Issuing Party as of the date of Prospectus approval
Ownership structure of fixed assets
Ownership form
Net value as of the date of
Prospectus approval (in
thousands of PLN)
With own ground or in perpetual use
Real estates
0
In leasing
482 643
Total
Technical devices and equipment
Owned
313
In leasing
279
Total
592
27
Owned
Transportation means
Other fixed assets
In leasing
947
Total
974
Owned
118
0
In leasing
118
Total
483 101
Owned
TOTAL
482 643
1 226
In leasing
Total
484 327
The dominating part of tangible fixed assets are real estates, which together form over 99% of the total value. The value of
real estates owned by the Group of the Issuing Party is presented in Appendix 8 to the Prospectus, where summaries of
estimated operates, which defined the market value of particular real estates, are presented.
The highest value real estate is Galeria Piastów located in Legnica, at ul. Najświętszej Marii Panny 6 and 20A and Św. Piotra
th
11, with a market value of 71 478 888 Euro, according to the estimation as of October 12 , 2009. Galeria Piastów is an
uptown commercial gallery containing four buildings with a total used area of 35 438 sq.m., rented commercial area of 24
054 sq.m. and used apartment area of 1 544 sq.m. As of the date of Prospectus approval, 92% of rental area is rented. The
Rank Progress S.A. Partnership is the owner of the gallery’s buildings and the perpetual user of the ground, on which these
buildings are located.
Also, Twierdza Commercial Centre in Kłodzko, located at ul. Noworudzka 2, is a real estate of a significant value, with its
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market value equal to 33.865.529 Euro according to the estimation as of October 13 , 2009. The real estate of the centre
consists of two adjacent, one-floor (two-floor at some points) buildings with a total area of 23 566 sq.m. and a rental area
of 20 340 sq.m. As of the date of Prospectus approval, almost 98% of rental area is rented.
Other significant real estates owned and included in tangible fixed assets by the Group of the Issuing Party are as follows:
 A real estate in Zamość at ul. Kilińskiego / Przemysłowa with a market value of 21 152 000 PLN according to estimation
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as of October 26 , 2009. The area of the real estate is 73 690 sq.m. and it is designed for the construction of Twierdza
Zamojska Commercial Centre in the plans of the Group of the Issuing Party,
 A real estate in Opole-Turawa, Zawada with a market value of 12 084 000 PLN according to estimation as of June 30th,
2009. The area of the real estate is 46 479 sq.m.
Page 68

th
A real estate in Kłodzko, at ul. Noworudzka, with a market value of 11 756 000 PLN as of October 12 , 2009. The area
of the real estate is 38 361 sq.m. and it is designed for the construction of the „Twierdza II” Commercial Park in
Kłodzko in the plans of the Group of the Issuing Party.
8.1.1.
Significant real estates owned and rented.
Table: Summary of significant real estates of the Issuing Group as of 31.12.2009
Real estate designation,
o
N
Location
Street
area (ha), legal title and
Usage
MR
o
1
Legnica Galeria
Piastów I
Real estate N 243, 836/1
area of 0,3033, legal title:
perpetual use and MR
number LE1L/00043810/0
NMPanny
o
Real estate N 812, 813
Total bail stipulated mortgage of
122 530 000 PLN, total bail
stipulated mortgage of 7 300 000
PLN. All mortgages created for
Bank Zachodni WBK S.A.
Grodzka
Real estate No 789/1 area
of 0,5365, legal title:
ownership and MR
Total normal stipulated mortgage
of 18 000 000 EUR, total bail
Galeria Piastów II stipulated mortgage of 1 000 000
Commercial Centre EUR, total normal stipulated
o
o
(object N 1 and N mortgage of 20 000 000 EUR, total
bail stipulated mortgage of 122 530
2)
000 PLN, total bail stipulated
mortgage of 7 300 000 PLN. All
mortgages created for Bank
Zachodni WBK S.A.
Środkowa
Real estate N 851/3 area
Grodzka
2
of 18 000 000 EUR, total bail
stipulated mortgage of 1 000 000
EUR, total normal stipulated
mortgage of 5 500 000 PLN, total
Galeria Piastów I
PLN, total normal stipulated
Commercial Centre
mortgage of 20 000 000 EUR, total
000 PLN, total bail stipulated
mortgage of 7 300 000 PLN. All
mortgages created for Bank
Zachodni WBK S.A.
Real estate N 837 area of
0,2497, legal title:
ownership and a MR
o
Legnica Galeria
Piastów II
Obciążenia
o
o
N. M. Panny N
18
3
4
Legnica Browar
Legnica Fortepiany
o
o
ownership and MR
o
Witelona N 68
0,8601 legal title:
o
Real estates N N 594/5,
594/6, 594/7, 594/8 area
of 1,0797 legal title:
Senatorska N
21
o
o
Page 69
None
Galeria Piastów II 122 530 000 PLN, total bail
Commercial Centre stipulated mortgage of 7 300 000
o
(object N 3)
PLN. All mortgages created for
Bank Zachodni WBK S.A.
Former brewery in Total bail stipulated mortgage of 29
Legnica, planned 712 000 PLN as a security for
office-apartment debtors’ claims
investment
Parcel housed with Total bail stipulated mortgage of 29
former piano
712 000 PLN as a security of
factory
debtors’ claims
o
5
Legnica Kamienica
Złotoryjska 63
o
338/2 area of 1,1076, legal
title: perpetual use and
MR number
LE1L/00046156/8
o
Office building –
office of the
Issuing Party
Total bail stipulated mortgage of 29
712 000 PLN as a security of
debtors’ claims
o
Real estates N N 6/2, 6/3,
6/4, 6/5 i 6/6 area of
ownership and MR
number
SW1K/00080327/1
o
6
Kłodzko
Noworudzka 2
Real estate N 5/2 area of
ownership and MR
number
SW1K/00005954/6
24.466.884,02 EUR, total bail
stipulated mortgage 3 150 000
EUR, total normal stipulated
Twierdza
mortgage of 11.597.935,12 PLN,
Commercial Centre
o o
total bail stipulated mortgage of 6
Real estates N N 5/3, 5/4
000 000 PLN. All mortgages are
created for Bank Zachodni WBK
ownership and MR
S.A.
number
SW1K/00080299/5
o
number of
SW1K/00080390/3
o
7
Kłodzko
Noworudzka
Real estates N 3/4, 3/5
ownership and MR
number
SW1K/00039970/1
Construction works
of Twierdza II
Commercial Park
are performed on
the Real Estate
None
o
ownership and MR
number
SW1K/00082842/1
o
8
Zamość
Kilińskiego/
Przemysłowa
Real estates N 38/2, 38/3,
Real estate
38/4 area of 0,7518 legal
designed for
construction of
MR number
Twierdza Zamojska
ZA1Z/00087445/0
commercial centre
Page 70
None
Normal obligatory mortgage of 24
000 PLN, normal obligatory
mortgage of 16 000 PLN, bail
obligatory mortgage of 53 000 PLN
and bail obligatory mortgage of 27
o
Real estates N 40/5, 40/6
area of 0,1634 legal title:
number ZA1Z/00086935/5
000 PLN. All mortgages are created
for the City of Zamość.
Real estate 38/25 area of
0,2586 legal title:
Real estate 38/14 area of
o
Real estate N 38/22, 40/4
o
ownership and MR
o
Real estates N 38/18,
38/21, 38/23 area of
o
38/12, 38/13 area of
o
38/10 area of 0,2052, legal
MR number
ZA1Z/00080401/1
o
38/20, 38/24, 38/27,
38/29, 38/30 area of
ownership and MR
o
ownership and MR
o
9
Dąbrowa
Górnicza
Graniczna/Al.
Zagłębia
Dąbrowskiego
o
11/15, 13/1, 14/2, 8/2,
Real estate
17/2, 4/1, 4/3, 11/27,
designed for
15/4, 16/2, 20/9, 20/11
construction of a
commercial centre
ownership and MR
number KA1D/00017999/6
Bail stipulated mortgage of up to 3
000 000 PLN created for PKO BP
S.A.
up to 3 250 000 PLN created for
PKO BP S.A.
o
10
Zgorzelec
Łagów
ownership and MR
number JG1Z/00040069/4
Page 71
None
o
ownership and MR
o
ownership and MR
o
Real estate N 506/15,
506/16 and 506/5 area of
ownership and MR
o
11
Zgorzelec
Łagów
ownership and MR
Łagów
Real estate N 630, 632,
632 area of 2,6229, legal
title: ownership and MR
Al. Piłsudskiego
/ Jaskółcza
ownership and MR
Al. Piłsudskiego
/ Jaskółcza
ownership and MR
Grodzka - Jasna
nuber JG1J/00059789/0
None
o
12
Zgorzelec
13
Legnica Piekary
Osiedle
14
Legnica Piekary
Osiedle
None
o
Bail stipulated mortgage of 5 500
000 PLN created for PSS Społem in
Kalisz.
o
o
15
Jelenia
Góra
Bail stipulated mortgage of 5 500
000 PLN created for PSS Społem in
Kalisz.
Construction works
of Pasaż Grodzki
commercial gallery
are underway on
the real estate
Right to purchase the real estate by
the municipality of Jelenia Góra
within 5 yeats if the housing
deadline is exceeded. Mortgages:
none.
o
Real estates N 14, 25/3,
31/2, 32/2 are of 0,4028,
legal title: ownership and
MR number 5746
o
16
Skarżysko Kamienna
Paryska
Real estate N 18/3 Area of
ownership and MR
number 29174
Participation 2/4 in real
o
estate N 26 i 27 total area
of 0,4581, legal title: coownership and MR
number 5209
Page 72
None
o
ownership and MR
number 2420
o
ownership and MR
number 1217
o
SkarżyskoKamienna
ownership and MR
number 20447
SkarżyskoKamienna
ownership and MR
number 2804
o
o
ownership and MR
number SZ1T/00075214/2
17
Stargard
Szczeciński
Lipnik
o
ownership and MR
of 3.715.414 PLN, total normal
stipulated
mortgage
of
1.437.487,50 PLN and total normal
stipulated
mortgage
of
1.437.487,50 PLN created for the
sellers of the real estate.
of 3.715.414 PLN, total normal
stipulated
mortgage
of
1.221.864,50 PLN and total normal
stipulated
mortgage
of
1.221.864,50 PLN created for the
sellers of the real estate.
o
ownership and MR
Normal stipulated mortgage of
504.105 PLN created for the seller
of the real estate
o
ownership and MR
number
OP1O/00126714/2
o
18
Opole Turawa
Zawada
ownership and MR
number
OP1O/00126714/2
Bail stipulated mortgage of up to 6
100 000 PLN created for Erbud S.A.
o
ownership and MR
number
OP1O/00126714/2
o
19
Kalisz
Nowy Rynek
Real estates N 122 i 123
Construction of
total area of 0,6488:
Tęcza Commercial None.
ownership and MR
Gallery has started.
number KZ1A/00043837/7
3-Maja, Nowy
Rynek, Babina
Real assets N 26/2 area of
0,2760, legal form:
ownership and MR
number KZ1A/00076136/3
o
20
Kalisz
Page 73
The construction
Normal stipulated mortgage of 2
of „Galeria Tęcza”
586 000 created for PSS Społem in
commercial gallery
Kalisz.
has started
The Issuing Party predicts, that due to the securities created, the risk of tangible fixed assets loss is evaluated as small.
8.1.2.
Other significant tangible fixed assets
Except for the real estates, the value of other tangible fixed assets totalls 1 684 000 PLN.
In the case of technical devices and eqiupment, the Group of the Issuing Party owned the following significat assets:
 Smoke exhaust system with an account value of 91 000 PLN – purchased by own assets.
 Hydraulic jack Niftylift Nifty 170 with an account value of 31 000 PLN – financed by leasing granted by the BZ WBK
Leasing S.A.
 Multimedial LED display with lighting and sound system with an account value of 218 000 PLN – financed by leasing
granted by the BZ WBK Finance & Leasing S.A.
The aforementioned fixed assets remain a property of leasing-granting party until they are purchased by the Group of
the Issuing Party.
The transportation means are used by the Group of the Issuing Party as company cars for the management and specialists.
Within the field of transportation means, the Group of the Issuing Party owned 26 cars. The significant positions are:
 Mercedes CL 63 with an account value of 243 000 PLN, financed by leasing granted by BZ WBK Leasing S.A.,
 Bentley Continental GT with an account value of 326 000 PLN, financed by leasing granted by BZ WBK Leasing S.A.,
 Mercedes CLS 320 with an account value of 201 000 PLN financed by leasing granted by Mercedes Benz Leasing Polska
Sp. z o.o.,
The aforementioned cars remain a propertz of leasing-granting party until they are purchased by the Group of the Issuing
Party.
8.1.3.
Planned acquisition of tangible fixed assets of the Issuing Party
In the period from the date of Issue Prospectus approval to 2012, the Group of the Issuing Party plans to execute some
expenses on fixed assets, totalling 500,1 mln PLN, including 23,6 mln PLN designed for ground purchases. A detailed plan of
expenses related to significant fixed assets is presented in the table below.
Table: Expenses on purchases of significant fixed assets in the period of 2010 – 2012 (data in thousands of PLN)
Investment
Investment
Investment expenses
expenses (excluding
expenses on
Project name
total
grounds)
grounds
„Twierdza Zamojska” commercial centre in Zamość
110 235
-
110 235
"Galeria Tęcza" commercial gallery in Kalisz
98 177
9 200
107 377
"Pasaż Grodzki" commercial gallery in Jelenia Góra
36 319
-
36 319
„Galeria Świdnicka” commercial gallery in Świdnica
62 952
4 131
67 083
Jarosław – commercial centre
89 509
4 950
94 459
Krosno – commercial centre
55 094
5 295
60 389
"Twierdza II" commercial park in Kłodzko
24 232
-
24 232
476 518
23 576
500 094
TOTAL
8.2.
Issues related to environmental protection
According to the knowledge of the Board, currently no issues and requirements related to environmental protection exist,
which could influence parts of tangible fixed assets used by the Partnership. The Issuing Party is not obliged to obtain
permisions for using the environment or to be subjected to payments on this behalf.
9. Review of the operational and financial situation
The review of the financial situation of the Capital Group has been performed on the basis of studied historical financial
information of the Capital Group Rank Progress S.A. for the years of 2006 – 2008, prepared according to International
Standards of Financial Reporting, and mid-year financial information of the Capital Group Rank Progress S.A. for the period
st
th
st
from January 1 , 2009 to June 30 , 2009, containing comparable financial data for the period from January 1 , 2008 to June
th
30 , 2008, prepared according to International Standards of Financial Reporting.
Page 74
9.1.
Financial situation
Three areas are the subject of financial analysis: financial results, profitability and viability.
9.1.1.
Financial results
Table. Financial results (in thousands of PLN).
Details
st
st
1 half of 2009
1 half of 2008
2008
2007
2006
18 662
5 887
38 560
23 852
16 955
Current activity reult + depreciation (EBITDA)
122 263
4 845
54 083
29 749
111 036
Current activity result (EBIT)
121 137
4 299
52 719
28 872
110 605
Result gross
97 883
5 500
5 115
52 802
110 422
Result net
79 102
4 815
4 836
48 969
92 459
Sales result
st
Financial results of the Capital Group of the Issuing Party within the timeframe of 2006 – 1 half of 2009 show large
variability. These variations result from the nature of activity of the Group. The financial results are strongly influenced by
overestimations resulted from the update of real estate investment evaluations related to fair value. The net result of
92 459 000 PLN in 2006 was mainly influenced by overestimation to the fair value of Galeria Piastów in Legnica. The total
influence of estimation update on the account of profits and losses totalled 94 529 000 PLN in 2006, without the effect of
delayed tax. In 2007, the Group has obtained profit from the sale of shares of Jogra 2 Sp. z o.o. company, which was 23 825
000 PLN, it allowed to work out a net result at the level of 28 069 000 PLN. The drop of net income in 2008, to the level of
4 815 000 PLN was mainly caused by the financial costs, which totaled 54 902 00 PLN, in particular:
 Evaluation of derivative financial instruments -37 537 000 PLN,
 Differences in currency rates - 10 913 000 PLN.
The net result of 79 102 000 PLN, obtained in the first half of 2009 results mainly from the update of the investment real
estates in relation to their fair value. This value totalled 123 711 000 PLN in the first half of 2009 and it results mainly from
rd
the release of the 3 stage of Galeria Piastów and Galeria Twierdza in Kłodzko for use (the overestimation took place at the
moment when the investment was finished).
9.1.2.
Profitability analysis
A profitability analysis of the Group of the Issuing Party is presented in the table below.
Table. Profitability factors.
Details
st
st
1 half of 2009
1 half of 2008
19,1 %
12,6 %
36,6 %
38,3 %
30,1 %
124,2 %
9,0 %
50,0 %
46,3 %
196,1 %
Net profitability
81,1 %
10,3 %
4,6 %
78 ,5%
163,9 %
Return on assets (ROA)
11,9 %
0,9 %
1,4 %
16,2 %
42,7 %
Return on own capital (ROE)
36,5 %
3,3 %
3,6 %
37,7 %
87,5 %
Sales profitability
Current profitability
2008
2007
2006
Rules of factors calculation:
 Sales profitability – as a relation of sales profit to sales income,
 Current profitability – as a relation of current profit to sales income,
 Net profitability – as a relation of net profit to sales income,
 Return on assets (ROA) – as a relation of net profit to total assets x „n” (n = 1 in the case of a full year, n = 1/2 in the
case of half a year),
 Return on own capital (ROE) – as a relation of net profit to own capital x „n” (n = 1 in the case of a full year, n = 1/2 in
the case of half a year).
In the years of 2006 and 2007 and in the first half of 2009 profitability factors were high. The drop of net profitability factor
st
in 2008 is mainly a result of high financial costs. In the 1 half of 2009, the Issuing Party has improved all profitability factors
st
in comparison to the 1 half of 2008.
Page 75
9.2.
9.2.1.
Current result
Information about significant factors, including extraordinary events or rare or new solutions,
significantly influencing the results of current activity, with an indication of the degree, to which the
results have been influenced
Important factors, which influence results obtained on current activity and which are strictly related to the financial
situation of the Issuing Party, have been described in p. 9.1 and 9.2.2., Part III of the Prospectus, „Registration Document”.
According to the Issuing Party, in the studied period no extraordinary or rare events took place.
9.2.2.
Discussion of reasons of significant changes in net sales or net income of the Issuing Party, if the
financial reports show such changes
Table. Operational results of the Group of the Issuing Party (in thousands of PLN).
st
Details
1 half of 2009
1st half of 2008
2008
2007
2006
Net sales income
97 517
46 730
105 256
62 351
56 409
Current activity costs
78 855
40 843
66 696
38 499
39 454
Sales result
18 662
5 887
38 560
23 852
16 955
123 711
-784
16 595
6 436
94 529
209
6
1 011
168
44
21 444
810
3 447
1 584
923
121 137
4 299
52 719
28 872
110 605
108
3 921
7 298
28 251
285
Financial costs
23 361
2 720
54 902
4 321
467
Business activity result
97 883
5 500
5 115
52 802
110 422
0
0
0
0
0
Gross result
97 883
5 500
5 115
52 802
110 422
Net result
79 102
4 815
4 836
48 969
92 459
Evaluation of investment real estates
to their fair value
Other operational income
Other current costs
Current activity result
Financial income
Result of extraordinary events
st
In the period of 2006 – 1 half of 2009, the Issuing Party has recorded a significant increase in sales income. The income has
doubled in the aforementioned period. The most significant increase could be seen in the 2007 – 2008 period (+68%).
Income of the Issuing Party was generated from sales of goods and services and, in 2008 and 2007, from the change of
goods level (13 708 000 PLN in 2008 and 10 165 000 PLN in 2007). Goods sales included reselling grounds (with profit),
while goods and services sales included, i.e. sales of commercial objects constructed on the orders of third parties,
st
consulting services sales, reinvoicing of construction costs of the Issuing Party and rents of owned objects. In the 1 half of
2009, the Issuing Party has generated 97 517 000 PLN of income, which corresponde to a 108% increase in comparison to
an analogical period of the previous year. The income increase was mainly a result of increase of income from goods sales.
Analysis of current costs of the Issuing Party for the period of 2006 – 2008 shows, that these costs increased more slowly
than the sales income. The ratio of current costs to sales income totalled 69,9% in 2006, 61,7% in 2005 and 63,6% in 2008.
st
st
This factor was 80,8 % for the 1 half of 2009, but it was still lower than this factor for the 1 half of 2008, , when it had a
value of 87,4%.
The main entries of the current costs are: value of goods sold, material and energy usage and external services. The value of
goods sold was the cost of grounds purchased, which were later resold, and it totalled: in 2006 – 28 276 000 PLN, in 2007 –
18 270 000 PLN, in 2008 - 12 120 000 PLN and 64 429 000 PLN in the first half of 2009. The entry „materials and energy
usage” included mainly costs related to construction investments, which were performed by the Issuing Party on the order
of the customers. These costs included, i.e. exploitation materials, media etc. Purchased for own use and for the use of
renting parties of area in the commercial centres. This entry totalled, respectively: 2006 – 6 557 000 PLN, in 2007 – 2 551
000 PLN, in 2008 5 031 000 PLN and 3 494 000 PLN in the first half of 2009. The range of external services was comprised of
costs of legal, design, advisory and IT services, transport, construction services and subcontractors as well as costs related
to the renting of constructed commercial galleries. These totalled in 2006 – 2 573 000 PLN, in 2007– 12 852 000 PLN, in
2008 41 217 000 PLN and 4 794 000 PLN in the first half of 2009. The increase of value of external services in 2008 is related
mainly to services of subcontractors of construction works, related to a commercial object implemented on the order of the
Page 76
third party. The Group of the Issuing party has at the same time obtained the biggest income from sales of commercial
objects.
Other incomes and current costs had no significant influence on the financial results of the Group of the Issuing Party in the
2006 – 2008 period. In 2006, the entry of current costs totalled 923 000 PLN and it consisted of an amount of 293 000 PLN
covering reparations paid by the Partnership, loan of 195 000 PLN for a partner, included in costs, updating extracts of
debts, totalling 157 000 PLN. In 2007, other incomes and current costs totalled 1 584 000 PLN ad included mainly the
amount of 991 000 PLN, covering reserves created for disputed claims. In 2008, this entry equalled 3 447 000 PLN and it
included mainly an amount of 1 755 000 PLN, representing an extract updating the value of a real estate under construction
st
and 808 000 PLN, namely an updating extract for the value of the debt. In the 1 half of 2009, other current costs toralled
21 444, the amount is related to update of reserve value.
Evaluation of investments to their real value is a significant position here. According to the accounting policy taken by the
Group of the Issuing Party, the investment real estates are included according to their fair value, thus the Group of the
Issuing Party included to overestimate of investment real estates value as the following amounts: 94 529 000 PLN in 2006,
6 436 000 PLN in 2007, 16 595 000 PLN in 2008 and 123 711 000 PLN in the first half of 2009.
Financial income did not constitute a significant entry in the financial reults of the Group of the Issuing Party for 2006. The
main financial income entry was interest rates of bank deposits (206 000 PLN) and loans granted, with the amount of 58
000 PLN. In 2007, financial income totalled 28 251 000 PLN, with the main entry consisting of income from investments
sales for the amount of 23 825 000 PLN (sales of Jogra 2 Sp. z o.o. shares) and saldo from currency rate differeneces,
totalling 4 257 000 PLN. In 2008, the financial income totalles 7 298 000 PLN, and the main entry was income from
cessation of rights of the sale contract of FOCUS PARK PIŁA shares, totalling 7 089 000 PLN. In the first half of 2009, the
financial income was small and totalled 108 000 PLN.
Financial costs did not constitute a significant entry in the financial results for 2006, when they totalled 467 tys. PLN. These
costs included an extract created with the amount of 238 000 PLN for updating of value of loan given to one of the
partners, and interest rates of loans, totalling 229 000 PLN. In 2007, the financial costs totalled 4 321 000 PLN, including
interest rates of loan, totalling 4 302 000 PLN. In 2008, the financial costs totalled 54 902 000 PLN. This huge increase of
financial costs in 2008 was related to evaluation of derivative financial instruments for the amount of 37 537 000 PLN and
the result of currency rate changes, totalling 10 913 000 PLN. Additionally, the Issuing Party spent the costs of loan interest
st
rates, totalling 5 097 000 PLN. In the 1 half of 2009, financial costs totalled 23 361 000 PLN, including 3 266 000 PLN
related to evaluation of derivative instruments, while the rest consisted mainly of differences in currency rates.
In 2006, the income tax totalled 17 964 000 PLN, which was an effect of creation of a reserve for delayed tax payment
st
(related to overestimation of fair value of the 1 Stage of Galeria Piastów, then under construction), created by the Issuing
Party. The Issuing Party made the decision on creating this reserve because of the fact, that it would change its legal form
the next year (from a general partnership to a capital partnership) and this tax would have to be paid the next year by the
partnership, and not by the partners. In 2007, the income tax totalled 3 833 000 PLN, of which 2 433 000 PLN was an effect
of creation of delayed tax reserve by the Issuing Party. In 2007, the income tax totalled 279 000 PLN, of which 7 394 000
PLN was the effect of current duty by the virtue of income, and 7 120 000 PLN was an effect of reversal of transition
st
differences in delayed tax. In the 1 half of 2009, the income tax totalled 18 781 000 PLN.
9.2.3.
Information about any elements of governmental, economical, fiscal, monetary and political policy
and factors, which had significant influence or which could have directly or indirectly, significantly
influence the current activity of the Issuing Party
Information about any elements of governmental, economical, fiscal, monetary and political policy and factors, which had
significant influence or which could have directly or indirectly, significantly influence the current activity of the Issuing Party
have already been presented in Part II „Risk factors” of the Issue Prospectus and in p. 6.2. Part III of the Prospectus
„Registration Document”.
10. Capital resources
10.1. Information about the capital sources
Table. Financing sources (in thousnds of PLN).
th
Details
Total own capital
Own capital divided by shareholders of the dominating entity
1. Share capital
2. Reserve capital
Page 77
As of June 30
2009
2008
2007
2006
216 524
134 319
128 933
105 640
212 853
133 747
128 908
105 640
3 250
3 250
3 250
3 250
39 602
39 602
0
0
3. Reserve capital
0
0
0
0
173 099
90 895
125 658
9 931
79 106
4 839
48 969
92 459
3 671
572
25
0
Total obligations
449 925
407 641
172 497
110 712
1. Long-term obligations
254 025
160 727
93 399
36 802
207 493
137 250
71 246
16 992
195 900
246 914
79 098
73 910
148 660
103 194
14 447
30 957
666 449
541 960
301 430
216 352
4. Profits held / uncovered losses
- including net profit (loss) in the period
Own shareholders divided by minor shareholders
-including those by virtue of loans
2. Short-term obligations
- including those by virtue of loans
LIABILITIES TOTAL
The Group of the Issuing Party has recorded a very significant growth of own capital in the period of 2006 – 30.06.2009,
which was an effect of recorded profits, and the owners decided to leave this profits within the Partnership. The most
dynamic growth of this category of liabilities took place in the first half of 2009. Despite such a dynamic growth of own
capitals recorded in each year of the analysis, the Group of the Issuing Party still had the level of total liabilities highter than
the own capital level. Each year, the participation of long-term obligation in the structure of obligations increases, with
most of them being loans. Long-term obligations also include reserves for delayed tax. Obligations related to the delayed
tax are mainly the result of income scouting for the accounting and tax needs. In case of short-term obligations, they
formed the majority of obligations for the years of 2006 and 2008. Participation of loans in short-term obligations was
st
variable, with its highest level obtained at the end of the 1 half of 2009. The biggest entry among short-term obligaions
were prepayments for supplies, which totalled 32 800 000 PLN at the end of 2006, 47 783 000 PLN at the end of 2007 and
33 569 000 PLN at the end of 2008 as well as 14 347 000 PLN at the end of the first half of 2009. The obligations related to
st
supplies and services totalled at the end of the following periods, respectively: 3 279 000 PLN at the end of the 1 half of
2009, 8 478 000 PLN at the end of 2008, 11 545 000 PLN at the end of 2007 and 8 746 000 PLN at the end of 2006.
10.2. Explanations of sources and amount and description of monetary assets flow
Table. Flows of monetary assets of the Group of Issuing Party (in thousands of PLN).
st
st
Details
1 half of 2009
1 half of 2008
2008
2007
2006
Flows of monetary assets from current
activity
-37 723
-17 772
-19 926
-18 724
-10 410
Flows of monetary assets from
investment activity
-39 184
-37 926
-109 756
-18 729
-28 504
Flows of monetary assets from financial
activity
74 645
65 519
130 842
39 913
29 134
Net total monetary flows
-2 262
-3 564
1 160
2 460
-9 781
Monetary assets, beginning of period
6 115
4 955
4 955
2 495
12 276
Monetary assets, end of period
3 853
1 391
6 115
4 955
2 495
The account of monetary flows shows a change in level of monetary assets, equal to -9 781 000 PLN for 2006, 2 460 000
st
PLN for 2007, 1 160 000 PLN for 2008 and -2 262 for the 1 half of 2009 roku, which consist of:

Negative net monetary flow from current activity equal to -10 410 000 PLN for 2006, -18 724 000 PLN for 2007, -19 926
000 PLN for 2008 and -37 723 for the first half of 2009,

Negative net monetary flow from investment activity equal to -28 504 000 PLN for 2006, -18 729 000 PLN for 2007, 109 756 000 PLN for 2008 and -39 184 for the first half of 2009,

Posivite net monetary flow from financial activity, equal to 29 134 000 PLN for 2006, 39 913 000 PLN for 2007, 130 842
000 PLN for 2008 and 74 645 for the first half of 2009,
And its entries are properly assigned to the balance, account of profits and losses and with accounting books.
The main source of monetary flow from current activity in the years 2006 and 2007 and in the first half of 2009 was gross
profit, which totalled 110 423 000 PLN in 2006, 52 802 000 PLN in 2007 and 97 883 000 PLN in the first half of 2009. In 2008,
Page 78
the gross profit of 5 115 000 PLN did not constitute the main entry of monetary assets flows from current activity. The
other sources of monetary assets flow from current activity are as follows:

in 2006: depreciation (431 000 PLN), interest rates and participation in profits (229 000 PLN), change of reserve level
st
by the virtue of delayed income tax (from the overestimation of the value of Galeria Piastów – 1 Stage), equal to 18
311 000 PLN, the change of net level of current capital lowered the level of monetary assets by 27 239 000 PLN, also a
st
negative correction was seen, equal to 94 529 000 PLN from overestimation of the 1 stage of Galeria Piastów (under
construction) to its fair value, taking into account the fact that this operation was not a cash-based one,

in 2007: depreciation (877 000 PLN), interest rates and participation in profits (4 486 000 PLN), change of reserve
status related to the delayed income tax, equal to 2 660 000 PLN, the change of net current capital lowered the level of
monetary assets by 77 021 000 PLN, also a negative correction was made, equal to 6 436 000 PLN, caused by
overestimation of the investment real estates to their fair value, taking into account the fact that these operations
were not cash-based ones,

in 2008: depreciation (1 364 000 PLN), interest rates and participation in profits (5 828 000 PLN), change of reserve
rd
levels because of the delayed income tax (mainly from the overestimation of the 3 stage of Galeria Piastów 10 117
000 PLN and Opole Turowa – 4 045 000 PLN) equal to 1 843 000 PLN, the change of net current capital lowered the
monetary assets by 11 166 000 PLN, a negative correction was also made, equal to 16 595 000 PLN, from the
rd
st
overestimation of the 3 stage of Galeria Piastów, Opole Turawa and the 1 stage of Galeria Piastów to their fair value,
taking into account the fact that this operation was not a cash-based one,

in the first half of 2009: depreciation (1 126 000 PLN), interest rates and (3 419 000 PLN), change of reserves level
nd
rd
because of the delayed income tax (mainly from the overestimation of the value of the 2 and 3 stage of Galeria
Piastów and Twierdza/Kłodzko Gallery) equal to 23 588 000 PLN, the change of level of net current capital lowered the
level of the net current capital by 52 096 000 PLN, also a negative correction has been made, equal to 103 620 000 PLN
nd
rd
from the overestimation of the 2 and 3 stage of Galeria Piastów Twierdza/Kłodzko Gallery to their fair value, taking
into account the fact that this operation was not a cash-based one.
Monetary flows from investment activities consisted mainly of investment expenses, which totalled: 28 504 000 PLN in
2006, 42 864 000 PLN in 2007, 119 414 000 PLN in 2008 and 39 184 000 PLN in the first half of 2009.
Financial incomes came from granted loans with a value of 42 599 000 PLN for 2006, 80 929 000 PLN for 2007, 152 947 000
st
PLN for 2008 and 89 153 for the 1 half of 2009. The financial expenses equal to 13 465 000 PLN in 2006, 41 016 000 PLN in
st
2007, 22 105 000 PLN for 2008 and 14 508 for the 1 half of 2009 consisted mainly of profit payout for the owners (12 927
000 PLN in 2006 and 25 182 000 PLN in 2007) and bank loans payment (10 457 000 PLN in 2007, 12 404 000 PLN in 2008, 9
st
391 000 PLN in the 1 half of 2009).
10.3. Information about loan needs and financing structure
Debt factors of the Group of the Issuing Party are presented in the table below
Table. Debt factors.
Details
As of June 30th 2009
2008
2007
2006
Long-term debt indicator
0,38
0,30
0,31
0,17
Total debt indicator
0,67
0,75
0,57
0,51
Debt indicator of own capital
2,09
3,03
1,34
1,05
Rules of indicator calculations:

Long-term debt indicator – as a relation of long-term obligations to total assets,

Total debt indicator – as a relation of total obligations to total assets,

Debt indicator of own capital – as a relation of total obligations to own capital.
st
In the period of 2006 – 2008 and the 1 half of 2009, the assets of the Capital Group of the Issuing Party was largely
financed by obligations, whereas the obligation level in financing of the Parthership’s assets fell down in 2008 to the level of
75%, in comparison to the 51% - 57% level in the period of 2006 – 2007. In the first half of 2009, this participation dropped
to the level of 67%. It was a result of increase of own capital in the Group of the Issuing Party, greater than the increase of
obligations Short-term obligations dominated the structure of obligations financing the activity of the Group of the Issuing
party in the years of 2006 and 2008. In 2007 and in the first half of 2009, this situation has changed in the favour of longterm obligations. The debt indicator of own capital is variable in the period studied and it oscillated in the range of 1,05 –
3,03. The increase of this indicator to the level of 3,03 in 2008 was caused by a significant increase of total obligations in
relation to a small increase of own capital.
Table: Current capital of the Group of Issuing Party (thousands of PLN).
st
st
No
Details
1 half of 2009
1 half of 2008
Page 79
2008
2007
2006
1
Current assets
131 996
165 195
165 195
121 034
77 750
2
Monetary assets and other short-term
investments
3 853
1 391
6 115
4 955
2 495
3
Corrected current assets (1-2)
128 143
163 804
159 080
116 079
75 255
4
Short-term obligations
195 900
246 914
246 914
79 098
73 910
5
Loans and short-term debt securities
144 480
103 194
103 194
14 447
30 957
6
Corrected short-term obligations (4-5)
51 420
143 720
143 720
64 651
42 953
7
Current capital (1-4)
-63 904
-81 719
-81 719
41 936
3 840
8
Demand for current assets (3-6)
76 723
20 084
15 360
51 428
32 302
9
Net saldo of current assets (7-8)
-140 627
-101 803
-97 079
-9 492
-28 462
th
Below, obligations of th Group of Issuing Party as of September 30 , are presented.
Tabela: Zobowiązania Grupy Kapitałowej (w tys. PLN).
Details
th
As of September 30 , 2009
Long-term obligations:
264 976
- including bank loans
264 314
Short-term obligations:
126 238
- including bank loans
74 113
The obligations in the form of bank loans and by the virtue of leasing, taken by the Group of the Issuing Party in the period
of 31.12.2006 – 30.06.2009 had the following value:

Long-term loans with total value of 206 695 000 PLN at the end of June 2009, 137 250 000 PLN at the end of 2008; 71
246 000 PLN at the end of 2007; 16 992 000 PLN at the end of 2006,

Long-term financial leasing equal to 798 000 PLN at the end of June 2009, 861 000 PLN at the end of 2008; 620 000
PLN at the end of 2007; 405 000 PLN at the end of 2006,

Short-term loans, long-term loans in the part payable within 1 year from the balance date, equal to 144 480 000 PLN at
the end of June 2009, 103 194 000 PLN at the end of 2008; 14 447 000 PLN at the end of 2007; 30 957 000 PLN at the
end of 2006,

Short-term financial leasing equal to 955 000 PLN at the end of June 2009, 957 000 PLN at the end of 2008; 701 000
PLN at the end of 2007; 304 000 PLN at the end of 2006.
Table: Information about current bank debt of the Group of Issuing Party.
The granting party Loan type
Contract date
Amount granted Engagement as of the date of
Prospectus approval
BZ WBK S.A.
Investment loan GP I
05 grudnia 2005
20 000 000,00 €
19 169 541,16 €
BZ WBK S.A.
Investment loan GP II
05 czerwca 2008
98 530 000,00 PLN
27 653 746,29 €
i 3 000 000,00 PLN
BZ WBK S.A.
Investment loan CH
Twierdza
30 września 2008
68 932 000,00 PLN
16 175 328,89 €
i 8 434 504,96 PLN
BZ WBK S.A.
Investment loan
11 stycznia 2008
30 000 000,00 PLN
30 000 000,00 PLN
BZ WBK S.A.
Current loan
06 czerwca 2008
7 000 000,00 PLN
5 800 649,12 PLN
Deutsche Bank S.A.
Loan in current account
12 marca 2008
5 000 000,00 PLN
4 986 774,27 PLN
Deutsche Bank S.A.
Current loan
17 września 2008
13 500 000,00 PLN
13 500 000,00 PLN
Loan needs of the Issuing Party are presented in p. 10.5. Part III of the Prospectus „Registration Document”.
10.3.1. Viability analysis
Page 80
Viability analysis of the Group of the Issuing Party has been presented in the table below.
Table. Flow indicators and rotation cycles.
Details
st
st
1 half of 2009
1 half of 2008
2008
2007
2006
Current flow index
0,67
0,67
0,67
1,53
1,00
Fast flow index
0,14
0,13
0,13
0,38
0,26
221,63
437,21
389,51
438,55
270,84
45,94
80,09
87,57
115,4
91,33
414,35
540,12
565,24
447,85
395,11
Reserve rotation cycle (days)
Active debt collection cycle (days)
Debt regulation cycle (days)
Rules of indicator calculations:

Current flow index – as a relation of current assets to short-term obligations,

Fast flow index – as a relation of current assets minus reverses to short-term obligations,

Reserve rotation cycle – as a relation of average reserve level to sales income, multiplied by 365 days and multiplied by
„n” (n = 1 in the case of a year, n = 1/2 in the case of half a year),

Active debt collection cycle – as a relation of average active debt level to sales income, multiplied by 365 days and
multiplied by „n” (n = 1 in the case of a year, n = 1/2 in the case of half a year),

Debt regulation cycle – as a relation of average current debt level to sales income, multiplied by 365 days and
multiplied by „n” (n = 1 in the case of a year, n = 1/2 in the case of half a year).
The current flow index shows, how well the currents assets cover current obligations. The desired level of current flow
st
index is in the range of 1,0 – 2,0. In 2006 – 2007 the value of this index was maintained in the desired level. In the 1 half of
2009, the value of this index could also exceed 1,0, if one took into account the fact of prolongation of payment deadline
nd
for one of the loans, which took place in the 2 part of 2009. The fast flow index informs, how much the most fluid current
assets cover current obligations. The desired level of this index is in the range of 0,5 – 1,0. The fast flow index of the Group
of Issuing Party showed large variability in the period of 2006 – 2008, oscillating in the range of 0,13 – 0,38, which is below
the suggested norm. In the first half of 2009, this index reached the value of 0,14, an improvement in comparison to 2008,
however it is still below the suggested norm and it would equal 0,23, if one took into account the fact of prolongation of
payment deadline of the aforementioned loan. In the case of the Group of the Issuing Party, the nature of business activity
(construction) enables to maintain a high level of current obligations for the partners, which influences the levels of viability
indices. The reserve rotation cycle in days defines, how often does the company refresh its reserves on performing a
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particular sale. In the Group of the Issuing Party, this index shows a large variability in the period of 2006 – 1 half of 2009.
This variability is a result of the fact, that the Issuing Party treats its reserve as goods, namely – gronds purchased for future
sellback. Transactions related to purchased grounds usually last from few to even several tens of months and it influences
the level of reserves, which is always high. The collection cycle, which represents (in days) the average waiting time for debt
collection, this index is also very variable in the period of 2006 – 2008 and in the first half of 2009. The increase of collection
period in 2007 was a result of the fact, that the Issuing Party was implementing ever bigger investments, where the
payments are often performed in tranches, on the basis of stages of products, released by the Partnership. The debt
regulation cycle in days defined the time of regulation of current obligations. Obligation regulation time in gradually
increased in the period od 2006 – 2008, from 395 days to 565 days. These indices were bigger than those related to debt
collection time in the aforementioned period, which was caused by holding a high level of pre-payments obtained for future
supplies of products implemented in timeframes of few, sometimes even few tens of months, financing of current activity
of the Group of the Issuing Party using current loans, renewed each year and high level od investment obligations taken for
the implementation of investment projects. In the first half of 2009 this index dropped to the level of 414 days.
10.4. Information about any restrictions in using capital assets, which had, or which could have
influenced, directly of indirectly, the current activity of the Issuing Party
th
According to the investment loan contract dated September 30 , 2008, signed by the dependent unit E.F. Progress V Sp.
with o.o. a BZ WBK S.A., any loan grants by E.F. Progress V Sp. z o.o., including the dominating entity, require permission
from BZ WBK S.A. A permission is also required for dividend payment by E.F. Progress V Sp. z o.o. Proper statementsth
obligations on cancelling payouts of the dividend were signed on September 30 , 2008 by the Board of the dominant entity
Rank Progress S.A. and the main shareholders of the dominating entity, i.e. Jan Mroczka and Andrzej Bartnicki. Obligations
covered by these statements cannot be dismissed without permission from BZ WBK S.A. Currently, the Boards of the Issuing
Party and its dependent entity have started negotiations with BZ WBK S.A. in order to dismiss a part of financial surplus
from the obligation of permission obtaining from BZ WBK S.A. for the payment of the dividend.
The Board of the Issuing Party does not exclude, that in the future, limitations on payments of parts of the dividend or the
entire dividend or granting loans within the Group of the Issuing Party, can be placed on the dependent units implementing
future investment projects. However, the Board of the Issuing Party requires during negotiations of other investment loans
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for its dependent companies, that the financial insitutions took into account the fact that cash surpluses in the intended
companies will be transferred to the dominating entity and that it can be located in future investments or in dividend
payments, while preparing loan conditions.
In 2009, the Issuing Party did not meet the condition of introducing its own share to the „Galeria Piastów II”
st
investment, equal to 6,1 mln PLN, by March 31 , 2009, with the condition defined in the loan credit signed with
BZ WBK, which is mentioned in p. 22.1.4 Part III of this Prospectus. Additionally, the dependent company of the
Issuing Party - E.F. Progress V Sp. z o.o. – did not meet the condition of holding the factor of debt relation to the
value of Twierdza Commercial Company investment at the level not exceeding 55% at the moment of the
investment start, defined in the loan contract signed with BZ WBK, mentioned in p. 22.1.7 Part III of this
Prospectus. As a result of negotiations with BZ WBK, both aforementioned violations of loan contracts have been
accepted by BZ WBK, where it was necessary to change the conditions of said loan contracts, as well as of a
contract signed by the Issuing Party and by BZ WBK, mentioned in p. 22.2.1 Part III of this Prospectus. As a result
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of negotiations, on September 10 , 2009, proper annexes were signed by both entities. According to the annexes
to the load contracts presented in p. 22.1.1 and 22.1.4 Part III of this Prospect, signed by the Issuing Party, the
most important changes in relation to the initial contracts were related to the shortening of loan period to August
st
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31 , 2014 and Semptember 1 , 2014, respectively, assuming yearly loan depreciation of 1,5% and a balloon
installment at the end of the loand period, with the option of 2-year financing period extension, incrementation
of the bank’s interest and creation of additional protection of loans by means of mortgage on a real estate of the
Issuing Party located in Zgorzelec, introduction of „cash sweep” mechanism in the case of loan mentioned in p.
22.1.1 Part III of this Prospectus and its modification in the case of loand mentioned in p. 22.1.4 Part III of this
Prospectus. Additionally, the annexes predict additional obligations of the Partnership and a modification of
agreed parameters if the conditions presented in the annexes are not met. According to the annex signed on
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September 10 , 2009, the dependent company of the Issuing Party, E.F. Progress V Sp. z o.o. to the loan contract
mentioned in p. 22.1.7 Part III of this Prospectus, the most important changes in comparison to the initial contract
st
were related to the extension of loan period to September 1 , 2013 (the initial contract defined this deadline as
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June 30 , 2009 with the option of 15-year extension if some conditions are met) with the option of extension
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(under some conditions) to Septeber 1 , 2016, changes of capital installment levels includint a yearly loan
depreciation of 1,5%, incremented bank interest and change of the „cash sweep” mechanism. Additionally, the
annex includes additional obligations of the Partnership and modifications of agreed parameters if the conditions
presented in the annex are not met.
However, the Issuing Party states, that in the case of loan contract presented in p. 22.1.2 Part III of this Prospectus, the
st
Issuing Party did not make a payment of the loand granted by virtue of this contract before January 31 , 2010, and in the
case of loan contract presented in p. 22.1.5 Part III of this Prospectus – it did not make a payment of the loan granted by
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virtue of this contract before March 31 , 2010. As it was applied for by the Issuing Party, the loan committee of the BZ WBK
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S.A. bank, which met on April 8 , 2010, approved conditions of further conditions agreed with the Issuing Party, included in
the scope of the said loan contract, according to which the payment deadline for the said contract was extended to June
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30 , 2010. The payments of the loans are to be made thanks to obtaining financial assets by the Issuing Party by virtue of
selling the Twierdza Commercial Centre in Kłodzko, whch is mentioned in p. 5.2.1.3 Part III of this Prospectus, with the sale
being planned for June 2010. The Issuing Party does not predict any significant risks related to not making the payments of
the said loans within deadline. However, if the potential investor withdraws from the purchase of the Twierdza Commercial
Centre, the Issuing Party will negotiate an extension od the payment deadline for the said loans for a later date necessary
for sale of the Twierdza Commercial Centre, or other real estate designed for sale by the Issuing Party, takes place, and
which are included in the table „Investment projects for sale” in p. 6.1.1.6 Part III of this Prospectus.
10.5. Information about predicted funding sources necessary to implement obligations resulting
from the planned investments of the Issuing Party and planned significant tangible fixed
assets
In the period of 2010 – 2012, the Issuing Party intends to implement obligations resulting from the planned investments of
the Issuing Party, described in the p. 5.2.3 Part III of the Prospectus „Registration Document” and to perform purchases of
significant, tangible fixed assets described in p. 8.1.3 Part III of the Prospectus „Registration Document”. Assets for the
financing of these expenses wil be obtained from:
 Issue of the New Shares – 49 mln PLN,
 Bank loans – 398,2 mln PLN,
 Cash income from the current and investment activity – the remaining part i.e. 52,9 mln PLN.
11. Research and development, patents and licences
11.1. Research and development
In the period covered by the historical financial information, the Issuing Party did not perform any research-development
works.
11.2. Patents, licences and trademarks
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The Issuing Party and its dependent companies are not owners of any patents as understood by the act dated June 30 ,
2000 r. Industrial Property Law.
The Issuing Party and its dependent companies hold licences for use of computer software, such as MS Windows operating
systems, MS Office package and some specialised desigining and accounting programs.
The Issuing Party holds the rights to the following Internet domains:
 www.rankprogress.pl,
 www.galeriapiastow.pl,
 www.galeriafutura.pl,
 www.galeriatecza.pl,
 www.parkhandlowyeden.pl,
 www.pasazgrodzki.pl,
 www.galeriatwierdza.pl,
 www.swidnickagaleria.pl,
 www.galeriaswidnicka.pl,
 www.galeria-swidnicka.pl,
 www.twierdzazamojska.pl.
11.3. Trademarks
The Partnership Spółka has notified the Patent Office of the Republic of Poland of the following trademarks: Galeria
Piastów, Twierdza Kłodzko Centrum Handlowe w Kłodzku, Pasaż Grodzki Galeria Świdnicka, Galeria Tęcza, Rank Progress
S.A.
The registration proceeding related to these trademarks is underway.
12. Information about tendences
12.1. The most significant recent tendences in production, sales and supplies, as well as in costs
and sale prices for the period from the date of last tax year finish until the date of
Prospectus approval
Becasue of the global crisis on the financial and real estate markets, in 2009 the Issuing Party has lowered the level of its
engagement in implementation and sales of highly profitable, short-term projects in favour of long-term investment
projects with stable income andcosts, i.e. projects related to commercial objects designed for long-term rent. This tendency
is reflected in consolidate financial reports by systematic increase of income from rent of commercial objects and value of
real estate investments. At the same time, because of the crisis and changes of market conditions related to the crisis, the
Issuing Party has revisioned its investment plans in 2008 and 2009, delaying implementation of some investment projects,
as well as designing some projects, which do not satisfy expectations of the Issuing Party, for sale, and this decision caused
a significant increase in the value of reserves in consolidated financial reports, in comparison to previous years.
Turbulences on the financial markets have touched not only the investors of owners of commercial galleries, but also a part
of the renting parties, who had to revision their plans related to expansion or to hold the expansion off or more selectively
approach new locations. The significant increase of Euro rates in the beginning of 2009 probably also had negative influence
on their financial situation, especially if they purchased their store collections or obtained loans in Euro. All these factors
were reflected in a weak financial condition of the companies, especially from the textile market, which was the reason that
some of them, if they have not applied for bankruptcy, then they at least have started renegotiations of rental contracts in
order to lower the rent-related obligations. On the other hand, many trademarks still continue their expansion on the
Polish market or they plan entering the Polish market, also thanks to the weaker competition. However, despite precidted
and continued expansion, one can see a general drop of demand on new commercial area and one can also see an increase
in free, unrented commercial area.
Due to limited expansion of renting parties, limitations in acquisition of bank funding, one could recently see a drop
tendency of rental fees in relation to rental contracts signed in 2007 and 2008, with the exception of the most attractive
commercial centres, along with am increased bidding strength or potential renting parties, which want ever higher standard
of the area’s decor, zero rental fee for the first few months and additional gratifications covering the expenses of the area’s
decor as prompts. Starting from the mid-year 2009, the Issuing Party has observed a slight stabilisation of the real estate
market, which allowed a verification of investment plans on the basis of stable data regarding expected rental fees for
particular, implemented commercial objects (lower than market rental fees in 2008 and previous years), interest rates
(lower than those effective in 2008 and previous years), bank profits (higher than those effective in 2008 and later years),
construction costs (lower than those still effective in the beginning of 2009 and previous years), etc.
As indicated above, many of the real estates were designed by the Issuing Party for sale. However, throughout the entire
year 2009, up to the date of Prospectus creation, no significant sales of this type of real estates have been performed. It
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was a result of a few factors – e.g. diffictulties related to acquisitiong of bank financing, high level of real estate reserves in
many of the most important market players, who often purchased real estates for future development projects during the
hossa of 2007 and 2008 and who now await an improvement, which will allow to perform and to sell the investments, while
retaining proper financial parameters and with more cautious analysis of investment risk, which is also translated into
longer times of procedures related to finalisation of transactions. This situation is the reason that the sale prices obtained
during the time of hossa are not currently possible to obtain in most of the cases.
The current stabilisation on the real estate market and observed increase of interest of the investors in the real estates
planned for sale by the Issuing Party, indicates a possibility of performing such transactions at satisfactory prices even in
2010 and which will later reach the level of at least account value of these real estates, included in consolidated financial
reports of the Issuing Parties. At the same time, the Issuing Party does not exclude the possibility of returning to the
implementation of investment projects based on the owned grounds. Taking into account the fact that the aforementioned
grounds have their local spatial development plans, and most of the agreements, then the decision regarding the start of
the investment can be made in a very short time, and that should transform into a significant rise of income, which at the
same time will be postponed in time.
12.2. Information about any known tendencies, unsure elements, claims, obligations or events,
which are rather sure to influence the perspectives of the Issuing Party at least until the end
of current tax year
The macroeconomic situation of Poland
The entirety of the Partnership’s income is related to its activity on the domestic market and thus it is indirectly dependent
on factors related to the general macroeconomic situation of Poland, e.g. such, as unemployment level, economic growth
rate or inflation rate. Perturbations on the international financial markets have influenced the economic situation of
Poland. A drop of economic growth rate, increase of unemployment level and depreciation of PLN rates in relation to
foreign currencies have been observed. Economic tendencies described above have influenced the income level of the
Group of the Issuing Party. However, the macroeconomic situation should improve in 2010, which should see a positive
reflection in the situation of the Group of the Issuing Party
Legal regulations
Legal regulations of Polish law can also significantly influence the activity of the Group of the Issuing Party. Th Issuing Party
does not predict any significant changes to Polish law taking place at least until the end of 2010, which could influence the
activity of the Group of the Issuing Party.
Dynamics and directions of development of the markets of the Group of the Issuing Party
The activity of the Group of the Issuing Party can be influenced by dynamics and development of markets, on which the
activity of the Group of the Issuing Party is located. Since the mid-year 2009, one can observe a slight improvement of
dynamics and directions development of markets, on which the Group of the Issuing Party acts. According to the knowledge
of the Issuing Party, the dynamics and development of the markets of the Group of the Issuing Party should be faovurable
for the activity of the Group of the Issuing Party, at least until the end of 2010.
Competition of other entities
The development perspectives of the Group of the Issuing Party depend on the intensity of competition actions of domestic
and foreign companies present on the Polish market. Actions of the competition should not significantly influence the
activity of the Group of Issuing Party, at least until the end of 2010.
Currency rate changes
The activity of the Group of the Issuing Party is influenced by currency rate changes, especially the Euro rate changes.
According to the edge of the Issuing arty, the foreseeable currency rate changes should not significantly influence the
activity of the Group of the Issuing Party, at least until the end of 2010.
Possibility of strengthening of market position
The development perspectives of the Group of the Issuing Party are largely dependent on the success in the
implementation of the development strategy, which has been presented in p. 6.1.1.1. Part III „Registration Document”.
13. Result forecasts or estimated results
13.1. Basic assumptions of forecasts of estimations of the Issuing Party
Methodology of financial results forecasts and estimated results for the Capital Group Rank Progress S.A.
While preparing a results forecast for the years 2010, 2011, 2012, the Board of the Issuing Party included, e.g.:
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


Generally available macroeconomic forecasts for Polish economy, which can influence the activity of the Capital
Group,
Generally available analyses of commercial real estate market, which is the market of the activity of the Group of the
Issuing Party, related to the forecast of its development,
Own judgement of development perspectives of Polish commercial real estate market,
Strategic plans of the Capital Group, related to e.g. future investments, costs, incomes, and financial flows as well as
financing the activity.
13.1.1. Assumptions for estimated results of the Issuing Party
Estimated results of the Capital Group of the Issuing Party for the year 2009 have been created on the basis of transactions
st
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performed by the Capital Group of the Issuing Party in the period from January 1 to December 31 , 2009 roku, by using
the same methods of evaluation and presentations, as used to create the yearly financial report of the Issuing Party,
including those, which were used to create historical financial information presented in the Prospectus.
st
Evaluation of investments in the commercial real estates finshed before December 31 , 2009, to their fair value, along with
evaluation of ground real estates classified as investment real estates was based on estimated operates obtained in the
year 2009, performed by independent experts, corrected by the Issuing Party with factors present between the date the
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estimation of operates has been performed and December 31 , 2009, which can influence the value of these real estates,
estimated within these operates.
The Board of the Issuing Party took all possible care in order for the estimated results to be reliable, i.e., the estimations
have been made using the same rules and procedures as those used in yearly financial reports.
The estimated results presented in this Prospectus can differ from the values resulting from a studied, yearly, consolidated
financial report of the Capital Group of the Issuing Party for the year 2009.
13.1.2. Assumptions for financial forecasts, independent from the Issuing Party
While preparing a results forecast for the years 2010, 2011, 2012, the Board of the Issuing Party included macroeconomic
data. Forecasts of incomes and costs made by the Issuing Party included the predicted inflation rate of 2% yearly, however,
because indexation of rental fees with the inflation rate is used, it is predicted that these factors will not have significant
influence on the forecasts of the Issuing Party.
Additional factors related to the forecasts, independent from the Issuing Party:




Rental fees have been determined based on:
Current data obtained in the negotiation process performed by the Issuing Party with potential renting
parties (currently, the Issuing Party itself commercialises its commercial objects),
An analogy to current fees applied by the Issuing Party in existing objects,
Data obtaine from estimated operates of market value of existing and future investment real estates of the
Issuing Party, prepared by independent advisory companies.
Capitalisation rate of 8,5%, used in estimations of fair value of planned, real estate investment, has been determined
basing on:
Estimated operates of market value of existing and future objects of the Issuing Party created by
independent advisory companies,
Negotiations performed by the Issuing Party with potential customers interested in purchasing single
projects of the Issuing Party,
Generally available reports and analyses of the real estate market made by renown companies, such as
Knight Frank and Cushman & Wakefield, presenting tendencies in the field of shaping discount rates and
capitalisation of commercial real estates,
Values of transaction prices related to short-term investment projects have been based on:
Signed contracts, which will be implemented in the future,
Estimated operates of market value of current and future investment real estates of the Issuing Party,
created by independent experts,
Negotiations underway.
Interest rates of 1% i 3,5%, respectively, for loans denominated in Euro and in zlotys, bank profits and commissions of
banks financing the investments were based on:
Obtained in real time, initial conditions of real estate investments financed by banks interested in financing a
particular projects,
Interest rates and commissions applied by banks to the constructed investments of the Issuing Party,
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
Negotiations performed with banks;
Published EURIBOR and WIBOR interest rates.
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Evaluation of commercial real estate investments finished before December 31 , 2009, to their fair value and
evaluation of ground real estates classified as investment real estates was created on the basis of obtained, estimated
operates, performed by independent experts. The next years of the forecast do not include further changes in fair
value of investment real estates.
13.1.3. Assumptions for financial forecasts dependent on the Issuing Party
The Board of Rank Progres S.A. based its prepared forecast for the years 2010, 2011, 2012 on the main assumptions:
 The Issuing Party intends to implement planned investments,
 The Issuing Party shall implement planned short-term investments,
 Total rental areas for implemented and future objects are calculated on the basis of designs and architectural concepts
preparted for investments,
 Income from rents is a product of rental area and average yearly rental fees, set on the basis of already signed rental
contracts, along with negotiated and expected contracts,
 Current activity costs, including costs of general Board, are based on data for the last finished tax year and it includes
escalation of costs, e.g. caused by increase of the number of employees. The operational costs of particular investment
real estates are based on the historical data on costs of investment real estates, which are already finished,
 Exploitation fees income are equal to operational costs of the particular investment minus costs, which are not
reinvoiced on the renting parties and which have been estimated on the basis of implemented, similar investments,
 Sales income from the development activity has been based only on those investments, which are probable to be
implemented,
 Income from the sales of investment real estates have been based on negotiations performed with potential buyers,
 Investment real estates during the construction stage are evaluated to their fair value according to the accounting
policy used, where the fair value is scouted as proportional to the costs of investment creation from the start of
investment financing by the bank; No future changes of the fair value set at the moment when the construction works
are finished are planned,
 Evaluation of planned real estate investments – commercial objects to their fair value is made on the basis of the
following equation: (expected yearly income from rent) / (capitalisation rate),
 Costs of financing investments in their construction stage is related to the costs of this investment and they have been
taken into account during profit estimation for that particular investment,
 Expenses on construction works related to investments in the construction stage have been uniformly included in the
commercial object construction period,
 The forecast does not include increase of the value of ground designed for sale, which have been treated as goods,
 The drop of value of the grounds designed for sale has been included, where the grounds have ben treated as goods
on the basis of estimated operates of market values prepared by independent experts,
 Investment financing will be based on own assets generated from own business activity, assets obtained from the
Issue of Series C Shares and bank loans taken in PLN during the construction stage and later changed into bank loans
denominated in Euro,
 Future expenses on investment real estates have been predicted on the basis of estimates prepared by the Issuing
Party,
 No changes in the level of debts and active debts are predicted after 2010 (by virtue of supplies and services and other
sources) in the forecasts,
 The forecasts predicts a new issue of shares,
 Starting from 2010, the forecasts assume a payment of dividend on the level of 10% of net profit for the previous year.
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13.2. Report of independent accountants or expert auditors on the correctness of financial
forecasts and estimated results preparations
Report of an expert auditor on the correctness of financial forecasts and estimated results preparations
For the General Assebly, Supervisory Board and Board of RANK PROGRESS S.A.
We have peformed confirmation works, with the subject of the works being estimated results and financial forecasts,
including forecast of net sales income, profit from operational activity (EBIT), profit from operational activity increased by
depreciation (EBITDA) and net profit of the Capital Group RANK PROGRESS („Group”) for tax years ending on December
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31 , 2009 („Estimated results”) and December 31 , 2010, December 31 2011 and December 31 , 2012 („Results
forecast”).
The Estimated results and the Results forecast, together with significant assumptions which form their basis, have been
presented in p. 13.1. of the Registration Document prepared by the Issuing Party.
The Board of the Issuing Party holds the sole responsibility for preparation of Estimated results and Results forecast,
including their assumptions.
Our task was to give an opinion on these Estimated results and Results forecasts on the basis of our works. These works
were performed according to the International Standard of Attestation Services 3400, applied to checking predicted
financial information, issued by the International Federation of Accountants („IFAC”).
These works included a consideration, if the Estimated results and Results forecasts have been properly set on the basis of
revealed assumptions, according to the rules of accounting assumed by the Issuing Party.
Our works have been planned and performed in such a way, that we could gather information and explanations which we
decided to be necessary to be adequately sure, that the Estimated results and Results forecast have been (on the basis of
specified assumptions), properly created and that applied accounting rules are coherent with the accounting rules
presented in the introduction to the financial report presented in chapter 20 of the Registration Document.
Because the Results forecast and its assumptions are related to the future and thus they may be influenced by unexpected
events, we do not state that the real results will be similar to those presented in the Results forecast and if the differences
would be significant. Besides, the Estimated results can differ from values that will be obtained from the studied, yearly
consolidated financial report of the Capital Group of the Issuing Party for the year 2009, which was pointed at by the Board
of the Issuing Party in presented assumptions of the Estimated results. Such a situation may be a results of e.g. changes of
currency rates assumed for evaluation of fair values of investment real estates.
In our opinion, the Estimated results and the Result forecast have been properly prepared on the basis of assumptions
listed in the Registration Document p. 13.1., and the made assumptions form a rational basis for creation of predicted
financial results, while applied accounting rules are coherent with accounting rules presented in the introduction to the
financial report presented in chapter 20 of the Registration Document.
o
This report has been prepared according to the requirements of a Regulation of the Commitee (EC) N 809/2004 dated
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April 29 , 2004 executing the Directive 2003/71/EC of the European Parliament and of the Council on the information
contained in issue prospectuses and the form of inclusion by reference and on publication of such issue prospectuses and
th
advertisement propagation (Dz. Urz. UE L 149 dated April, 30 2004) and we issue this report in order to meet this
requirement.
Dariusz Sarnowski
…………………………
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Expert Auditor
Evidence number 10200
HLB SARNOWSKI & WIŚNIEWSKI Sp. z o.o.
61-478 Poznań, ul. Bluszczowa 7
Entity approved for studies
of financial reports included in the list of
approved entities, managed by the KIBR,
with the evidence number 2917
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Poznań, January 4 , 2010.
13.3. Forecast of selected financial data and estimated results
By taking into account the assumptions presented in p. 13.1 Part III of the Issue Prospectus, the Issuing Party estimates its
results obtained in 2009 and predicts that in the period of 2010-2012 it will obtain results at the level, which will be no
lower than that presented in the table below.
Table: Financial forecasts of the Capital Group for the period of 2010 – 2012, estimated results for 2009 and results
obtained in 2008 (in thousands of PLN)
2009
2010
2011
2012
Details
2008
estimation
forecast
forecast
forecast
91 548
143 657
166 488
77 227
133 890
Net income from sales (no level change of products)
Net profit
4 759
73 862
157 214
124 018
89 210
EBIT
59 921
116 647
216 316
173 983
134 768
EBITDA
61 285
118 011
217 680
175 347
136 132
13.4. Comparability of the results forecast or estimated results with the historical financial
information
Consolidated, historical financial information for the period of 2006–2008 presented in the Prospectus have been prepared
according to the International Standards of Accounting.
Estimated results of the Group of Issuing Party for rok 2009 and Results forecast of the Group of the Issuing Party for the
years 2010, 2011 and 2012 have been prepared using a basis, which guarantees their comparability with rules used for
creation and presentation of historical financial information for the years of 2006–2008.
The Issuing Party has not published issue prospectuses or forecasts before.
14. Administrative, management and supervisory organs and high-level
management personnel
14.1. Data of the memebers of management and supervisory organs and high-level management
personnel, which are significant for the statement that the Issuing Party has proper
knowledge and experience, which allows management of its activity
Board
The Board consists of:
All Board members work in the office of the Issuing Party, located at ul. Złotoryjska 63 in Legnica.
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Jan Mroczka
Function in the Issuing Party:
Board Chairman
Detailed description of knowledge and experience:
Education:
High school level
Professional experience:
2007 – current
Rank Progress S.A., Board Member
1997 – 2007
Spółka Bartnicki, Mroczka E.F. Rank Progress Sp. j., partner
Jan Mroczka does not perform basic activities outside Rank Progress S.A., which would be of importance for the Issuing
Party. The Partnerships, where Jan Mroczka is a member of administrative, management or supervisory organ of a partner,
do not perform competition activities related to the Issuing Party. He does not have family connections with other
members of administrative, management or supervisory organs and high-level managerial staff (described in p. 14.1 ch. d of
the Appendix I to the Regulation 809).
According to a submitted statement, Jan Mroczka has, within the last five years:
 Been a shareholder and the Board Chairman of the Issuing Party, and also in the dependent companies of the Issuing
Party, i.e. the Board Chairman of E.F. Progress I Sp. z o.o., E.F. Progress III Sp. z o.o., E.F. Progress V Sp. z o.o., E.F.
Progress VII Sp. z o.o, HIT Zarząd Majątkiem Legnica 1 Sp. z o.o., Rank Prosper Skarżysko Kamienna Sp. z o.o.; the Board
Deputy Chairman of E.F. Progress II Sp. z o.o., E.F. Progress IV Sp. z o.o., E.F. Progress VI Sp. z o.o., he is also a
Liquidator of the KMM Sp. z o.o. in liquidation and serves as a Director in the Colin Holdings Limited company,
 He also serves as a Director in the MB Progress Capital Limited company and as a Board Deputy Chairman in the MB
Progress 1 Sp. z o.o. company,
 Additionally, he has not been a member of administrative, management and supervisory organs or a partner in any
other commercial code companies,
 Is an owner of 8 125 480 of Series A Shares of Rank Progress S.A., and also holds 50% of shares of the MB Progress
Capital Limited company located in Nicosia, which is an owner of 13 674 185 of Series B Shares of Rank Progress S.A.,
in addition, he does not own, nor he has owned, shares of other entities for the last five years
 Has not been charged and found guilty of fraud,
 Has not been a member of administrative, management or supervisory organs or a high-level management personnel
(described in p. 14.1 ch. d of Appendix I to the Resolution 809) in the entities, which within the last five years, including
his chairman term, were declared bankrupt or being liquidated, or which were managed by receivership, except for the
companies of KMM Sp. z o.o. in liquidation (the Liquidator) and E.F. Progress IV Sp. z o.o., which has lodged in a
th
bankruptcy application with an agreement option on August 14 , 2009 (Board Deputy Chairman),
 Has not been subjected to official public charges by any statutory or regulatory organs (including renown professional
organisations), with he exception of proceeding before the Treasury Controlling Office (UKS) in Wrocław. Within this
proceeding, the UKS in Wrocław has charged Jan Mroczka and Andrzej Bartnicki have listed false data in a tax
declaration (for 2002) in April, 2003 r., which threatened the income tax for 2002 to be lowered by the amount of ca.
520 000 PLN and, that in the period from April 2002 to January 2003 they have listed false data in VAT tax declarations,
which threatened the VAT tax to be lowered by the amount of ca. 145 000 PLN. Jan Mroczka does not admit the deeds
he has been charged with, additionally, in his opinion, the crimes he has been charged with, have been limitated.
Additionally, Jan Mroczka and Andrzej Bartnicki have paid the total amount of income tax and of VAT tax, with default
th
interest. On March 12 , 2010 District Court in Legnica has remitted the said proceeding due to expiration of the
punishable deed, this decision is currently not legally effective.
 Has not obtained a court decision forbidding him acting as a member of administrative, management of supervisory
organs of any Issuing Party or forbidding him from participation in management or business execution of any Issuing
Party.
nd
Liquidation of KMM Sp. z o.o. On September 2 , 2008, and Extraordinary Shareholders Assembly of KMM Sp. z o.o., made
a resolution on liquidation of the company, based on the lack of perspectives for further business activity of the
company, let alone its development. In addition, the Shareholders Assembly was convinced that further existence of
the company has no sense, as the goals assumed by the shareholders have been reached. Jan Mroczka was desgined
the liquidator of the company. Currently, the Liquidator performs actions related to the liquidation of the company
and its final removal from the registry.
Page 89
th
Bankruptcy of E.F. Progress IV Sp. z o.o. On August 14 , 2009, a company of the Group of the Issuing Party – E.F. Progress
IV Sp. z o.o., where Jan Mroczka is the Deputy Board Chairman, has lodged in a bankruptcy application with an option of
agreement. A proceeding in this case is underway in the District Court in Legnica, Economic Department (files V GU 41/09).
As of the date of bankruptcy application, the total amount of obligations of the company to the debtors equalled 14 769
315,32 PLN, with 6 676 521,32 PLN being executable, and the amount of 8 092 794 PLN being a conditional obligation i.e.
non-executable, which resuted from a preinitial contract of ground sales, signed with a third party. On 16.12.2009, the third
party withdrew from the promised contract of ground sale, thus the conditional obligation of the preinitial contract became
invalid. Because of this, as of the date of Prospectus approval, the executable debt of the company amounts to 6 676
521,32 PLN. In the application, the E.F. Progress IV Sp. z o.o. applies for a division of debtors into two groups, where it
applies for debt reduction in the first group (main debts, interest rates and potential costs) by 25% and payment of such
reduced obligations in 10 equal, quarterly installments, paid at the end of each quarter, with the first installment being paid
after 12 months from the date, when the decision of the Court related to the agreement becomes legally effective, and in
the second group – for a 40% reduction of main debt, total cancellation of interest rate and any potential costs, together
with payments of such reduced costs in 12 equal, quarterly installments, paid at the end of each quarter, with the first
installment being paid after 12 months from the date, when the decision of the Court related to the agreement becomes
legally effective. According to the application of E.F. Progress IV Sp. z o.o., financing of the agreement is to be made from
profit obtained by the Company as a result of investment plans implementation (construction of a commercial centre), or
from sales of real estates owned by the Company, but after their purpose in the local spatial development plan is changed
(i.e. in ca. 18 months). During the initial debtors meeting, due to lack of quroum, no binding decisions have been reached.
Currently, the Company waits for the following Court proceedings to be announced, when the decisions related to the
bakruptcy of E.F. Progress IV Sp. z o.o will take place.
Dariusz Domszy
Education:
High school level
2007 – current
Rank Progress S.A., Board Deputy Chairman
2005 – 2007
Spółka Bartnicki, Mroczka E.F. Rank Progress Sp. j., Expansion
Director
1996 – 2005
Individual business activity – Real Estate Agent
1991 – 1995
TGG Polska Sp. z o.o. Legnica – Board Deputy Member
1990 – 1991
TGG GmbH Bruck/Leitha, Austria – Representative, Board Agent
Dariusz Domszy does not perform any other activity outside Rank Progress S.A. Dariusz Domszy is not a member of
administrative, management, supervisory organs or a partner in any other company. He has no family connections with
other members of administrative, management and supervisory organs and with high-level management personnel
(described in p. 14.1 ch. d of Appendix I to the Resolution 809).
According to a submitted statement Dariusz Domszy within the last five years:
 Has been the Board Deputy Chairman of the Issuing Party and serves as a Board Chairman of E.F. Progress II Sp. z o.o.,
E.F. Progress IV Sp. z o.o., E.F. Progress VI Sp. z o.o. and a Board Deputy Chairman of E.F. Progress I Sp. z o.o., E.F.
Progress III Sp. z o.o., E.F. Progress V Sp. z o.o., E.F. Progress VII Sp. z o.o., HIT Zarząd Majątkiem Legnica 1 Sp. z o.o.,
Rank Prosper Skarżysko Kamienna Sp. z o.o., Rank Müller Jelenia Góra Sp. z o.o. He was not a member of
administrative, management or supervisory organs or a parnter in any other commercial code companies,
 Has not been charged with and found guilty of fraud,
 Has not acted as a member of administrative, management or supervisory organs and high-level management
personnel (described in p. 14.1 ch. d of Appendix I to the Resolution 809) within the last five years, including his term,
of companies which were declared bankrupt or in liquidation, or which were managed by receivership, except for the
E.F. Progress IV Sp. z o.o., company which has lodged in a bankruptcy application with an agreement option on August
th
14 , 2009 (Board Chairman),
 Has not been subjected to official public charges by ony statutory or regulatory organs (including renown professional
organisations),
Page 90

Has not obtained a court decision forbidding him acting as a member of administrative, management of supervisory
Party.
Mariusz Kaczmarek
Board Member
Education:
Higher (Degree level)
2008 – current
Rank Progress S.A., Board Member
2007 – 2008
KPMG Audyt Sp. z o.o., Senior Manager
1995 – 2007
Ernst & Young Audit Sp. z o.o., Senior Manager
Mariusz Kaczmarek does not perform any other activity outside Rank Progress S.A. Mariusz Kaczmarek is not a member of
administrative, management, supervisory organs or a partner in any other company. He has no family connections with
other members of administrative, management and supervisory organs and with high-level management personnel
(described in p. 14.1 ch. d of Appendix I to the Resolution 809).
According to a submitted statement, Mariusz Kaczmarek within the last five years:
 Is a Board Member of the Issuing Party. He was not a member of administrative, management or supervisory organs
member in any other commercial code companies,
of companies which were declared bankrupt or in liquidation, or which were managed by receivership ,
 Has not been subjected to official public charges by ony statutory or regulatory organs (including renown professional
organisations),
Party.
Supervisory Board
The Supervisory Board consists of:
 Andrzej Bartnicki – Supervisory Board Chairman,
 Jakub Górski – Supervisory Board Deputy Chairman,
 Paweł Puterko – Supervisory Board,
 Piotr Kowalski – Supervisory Board,
 Łukasz Kurdyś – Supervisory Board.
All members of the Supervisory Board work in the office of the Issuing Party located at ul. Złotoryjska 63 in Legnica and
outside the office.
Andrzej Bartnicki
Supervisory Board Chairman
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Education:
High school level
2007 – current
Rank Progress S.A., Supervisory Board Member
1997 – 2007
Spółka Bartnicki, Mroczka E.F. Rank Progress Sp. j. Legnica, partner
Andrzej Bartnicki does not perform any other activity outside Rank Progress, which would be important of the Issuing Party.
The Partnerships, where Andrej Bartnicki is a member of administrative, management or supervisory organ of a partner, do
not perform competition activities related to the Issuing Party. He does not have family connections with other members of
administrative, management or supervisory organs and high-level managerial staff (described in p. 14.1 ch. d of the
Appendix I to the Regulation 809).
According to a submitted statement, Andrzej Bartnicki within the last five years:
 Currently is a shareholder of the Issuing Party, Supervisory Board Chairman and a Director in Colin Holdings Limited,
 Earlier, he acted as the Board Chairman of E.F. Progress II Sp. z o.o., E.F. Progress IV Sp. z o.o., Board Deputy Chairman
E.F. Progress I Sp. z o.o., E.F. Progress III Sp. z o.o., E.F. Progress V Sp. z o.o. and HIT Zarząd Majątkiem Legnica 1 Sp. z
o.o.,
 Additionally, he acts as a Director in MB Progress Capital Limited company and a Board Chairman of MB Progress 1 Sp.
z o.o.,
 He was not a member of administrative, management or supervisory organs or a partner in any other commercial code
company,
 Is an owner of 8 125 480 of Series A Shares of Rank Progress S.A., and also holds 50% of shares of the MB Progress
Capital Limited company located in Nicosia, which is an owner of 13 674 185 of Series B Shares of Rank Progress S.A.,
in addition, he does not own, nor he has owned, shares of other entities for the last five years
of companies which were declared bankrupt or in liquidation, or which were managed by receivership,
organisations), with he exception of proceeding before the Treasury Controlling Office (UKS) in Wrocław. Within this
proceeding, the UKS in Wrocław has charged Jan Mroczka and Andrzej Bartnicki have listed false data in a tax
declaration (for 2002) in April, 2003 r., which threatened the income tax for 2002 to be lowered by the amount of ca.
520 000 PLN and, that in the period from April 2002 to January 2003 they have listed false data in VAT tax declarations,
which threatened the VAT tax to be lowered by the amount of ca. 145 000 PLN. Jan Mroczka does not admit the deeds
he has been charged with, additionally, in his opinion, the crimes he has been charged with, have been limitated.
Additionally, Jan Mroczka and Andrzej Bartnicki have paid the total amount of income tax and of VAT tax, with default
th
interest. On March 12 , 2010 District Court in Legnica has remitted the said proceeding due to expiration of the
punishable deed, this decision is currently not legally effective.
Party.
Jakub Górski
Supervisory Board Deputy Chairman
Education:
Higher (Degree level), University of Wrocław, Law
2009 - current
Chocoffee S.A., Supervisory Board Member
2009 – current
Rank Progress S.A., Supervisory Board Deputy Chairman
Page 92
2007 – 2009
Jakub Górski does not perform any other activity outside Rank Progress, which would be important of the Issuing Party. The
Partnerships, where Jakub Górski is a member of administrative, management or supervisory organ of a partner, do not
perform competition activities related to the Issuing Party. He does not have family connections with other members of
According to a submitted statement, Jan Górski within the last five years has:
 Is a Supervisory Board Deputy Chairman at Rank Progress S.A., Supervisory Board Member of Chocoffee S.A.,
additionally he was not a member of administrative, management or supervisory organs of any other commercial code
company,
organisations),
 Has not obtained a court decision forbidding him acting as a member of administrative, management or supervisory
Party.
Paweł Puterko
Supervisory Board Member
Education:
Higher, University of Warsaw/University of Illinois, Executive MBA
University of Wrocław, Faculty of Law and Administration (Master
of Law Sciences, open doctoral proceeding)
2010 - current
ATON-HT S.A., Supervisory Board Member
2009 – current
Microtech S.A., Supervisory Board Member
2009 – current
Abak Sp. z o.o., Board Chairman
2009 – current
2007 – 2009
Rank Progress S.A., Supervisory Board Deputy Chairman
2007 – 2009
Internet Media Services S.A., Supervisory Board Member
2007 – 2008
Kopahaus S.A., Supervisory Board Chairman
2005
Lo – Ka Sp. z o. o., Board Chairman
2005
PPM Polesie Sp. z o. o., Supervisory Board Member
2003
JTT Computer S.A., Board Chairman
2002 – 2003
MCI Management S.A., Supervisory Board Member
2002 – 2003
Wielton S.A., Board Chairman
Page 93
2001 – 2002
Internet Designers S.A., Board Deputy Chairman, Financial Director
2000
Getin Service Provider S.A., Financial Director
1999 – current
PROFESCAPITAL Sp. z o.o., Board Chairman, shareholder
1995 – 2000
The Group of Bank Zachodni S.A., trainee, inspector, specialist of
the Department of Treasury, advisor of the Supervisory Board
Chairman, Board Member, Capital Operations Director Dom
Maklerski BZ S.A.
Paweł Puterko does not perform any other activity outside Rank Progress, which would be important of the Issuing Party.
The Partnerships, where Paweł Puterko is a member of administrative, management or supervisory organ of a partner, do
not perform competition activities related to the Issuing Party. He does not have family connections with other members of
According to a submitted statement, Paweł Puterko in the last few years has:
 Is a Board Chairman and a shareholder of PROFESCAPITAL Sp. z o.o., is a Board Chairman of Abak Sp. z o.o., Supervisory
Board Member of Rank Progress S.A., Supervisory Board Member of Microtech S.A.,
 Was a Board Deputy Member of Internet Designers S.A., Board Chairman of Wielton S.A., Supervisory Board Member
of MCI Management S.A., Board Chairman of JTT Computer S.A., Supervisory Board Member of PPM Polesie Sp. z o. o.,
Board Chairman of Lo – Ka Sp. z o. o. Additionally, he was not a member of administrative, management and
supervisory organs of any other companies,
 Is an owner of 40 shares of the PROFESCAPITAL Sp. z o.o. company, besides he does not own, nor he has owned,
shares of any other entities in the last five years,
 PROFESCAPITAL Sp. z o.o. manages, e.g. restructurisation projects of companies which are in a difficult economic
situation. PROFESCAPITAL Sp. z o.o. has performed restructurisation projects of companies which are in a difficult
economic situation from its very inception. Such projects were implemented, e.g. in the Wielton S.A. capital group
(Wieluń), or Delko S.A. (Śrem). Paweł Puterko as the Board Chairman managed a financial restructurisation project in
the Lo-Ka Sp. z o.o. company, a frozen food distributor. In 2005 PROFESCAPITAL Sp. z o.o. signed a contract with this
company and its shareholders, related to restructurisation and obtaining permanent business profitability. At the
moment the contract was signed, the company had very small sales, which did not allow it to reach the profitability
threshold, huge debt in banks and to suppliers, as well as revoked limits of trade loans. This company was also a
subject of vindication proceedings. The goal od PROFESCAPITAL Sp. z o.o. was to restore loan limits of the main
suppliers, restoring trade circulation and turnover, reaching the profitability threshold and then – restructurisation of
obligations. This result has been temporarily obtained, but this success was a result of the summer season, when the
consumption of ice-creams reaches its yearly top, which consisted a majority of Lo – Ka’s sales. After the season, sales
have dramatically dropped again, the suppliers refused to continue trade limits and the restructurisation project
became impossible to implement as a result. PROFESCAPITAL Sp. z o.o. terminated the contract with Lo-Ka, which in
turn lodged a bankruptcy application,
organisations),

Has not obtained a court decision forbidding him acting as a member of administrative,
management or supervisory organs of any Issuing Party or forbidding him from
participation in management or business execution of any Issuing Party.
Piotr Kowalski
Education:
Higher – Master of Arts, National Higher School of Arts/Painting in
Poznań
Page 94
2007 – current
1997 - 2007
Own business activity, designing services – interior designs
,,Brand”-Oleśnica
Piotr Emilian Kowalski does not perform any other activity outside Rank Progress, which would be important of the Issuing
Party. The Partnerships, where Piotr Emilian Kowalski is a member of administrative, management or supervisory organ of a
partner, do not perform competition activities related to the Issuing Party. He does not have family connections with other
According to a submitted statement, Piotr Emilian Kowalski in the last five years has:
 Not been a member of administrative, management or supervisory organs or a partner in any other commercial code
companies,
organisations),
Party.
Łukasz Kudryś
Education:
Higher – Master of Law Science, University of Wrocław, lawyer
2005 – current
Set of chambers located in Świdnica, Rynek 34, own business
activity
2002 – 2005
Employee in set of chambers of adw. Ryszard Trusiewicz in
Wrocław, ul. Świebodzka 2/3
2002 – 2005
Judge’s trainee
Łukasz Ryszard Kudryś does not perform any other activity outside Rank Progress, which would be important of the Issuing
Party. The Partnerships, where Łukasz Ryszard Kudryś is a member of administrative, management or supervisory organ of a
partner, do not perform competition activities related to the Issuing Party. He does not have family connections with other
According to a submitted statement, Łukasz Ryszard Kudryś in the last five years has:
 Not been a member of administrative, management or supervisory organs or a partner in any other commercial code
companies,
organisations),
Party.
Page 95
14.2. Conflict of interests in the administrative, management and supervisory organs and with
high-level managerial staff
According to statements submitted by the Board members, Jan Mroczka, Dariusz Domsza and Mariusz Kaczmarek, they do
not perform private activities or other duties, which would stay in conflict with the interest of the Issuing Party.
According to statements submitted by the Supervisory Board Members - Andrzej Bartnicki, Paweł Puterko, Łukasz Kudryś,
Piotr Kowalski and Jakub Górski they do not perform private activities or other duties, which would stay in conflict with the
interest of the Issuing Party.
Paweł Puterko, a Supervisory Board Member of the Issuing Party is simultaneously the Board Chairman and a shareholder
of PROFESCAPITAL Sp. z o.o., serving as a Financial Advisor of the Issuing Party, however, the Issuing Party claims that Paweł
Puterko does not have any private interest nor any other duties, which could contradict the interest of the Issuing Party.
Noone of the said people was elected to the Patnership’s bodies as a result of contract or agreement with significant
shareholders, customers, suppliers or other people. There are no limitations agreed by the said people, related to sales of
Issuing Party’s securities owned by them at a definite time.
14.2.1. Contracts and agreements with significant shareholders, customers, suppliers or other people,
which would form a basis of elevation of members of management and supervisory organs and highlevel managerial staff to their positions
No contracts and agreements with significant shareholders, customers, suppliers of other people exist, which would form a
basis of elevation of members of management and supervisory organs and high-level managerial stall to their positions,
exlcuding Board election in the „Rank Müller Jelenia Góra” Sp. z o.o company.
According to the Status of the Rank Progress S.A. Partnership, members of the Supervisory Board are chosen by the
General Assembly and the Board members – by the Supervisory Board.
On the other hand, according to the foundation acts of the „E.F. Progress I” Sp. z o.o., „E.F. Progress II” Sp. z o.o., „E.F.
Progress III” Sp. z o.o., „E.F. Progress IV” Sp. z o.o., „E.F. Progress V” Sp. z o.o., „E.F. Progress VI” Sp. z o.o., „„E.F. Progress
VII” Sp. z o.o., „HIT Polska Zarząd Majątkiem Legnica 1” Sp. z o.o., „Rank Prosper Skarżysko Kamienna” Sp. z o.o. companies
– Board members in these companies are chosen by shareholders assemblies. In the „KMM” Sp. z o.o. in liquidation, a
Liquidator has been selected.
Additionally, according to the foundation act of „Rank Müller Jelenia Góra” Sp. z o.o., each of the current partners holds a
right of choice of one Board member, thus Paweł Müller has the right to choose one Board member, while E.F. Progress II
Sp. z o.o. – the second one.
14.2.2. Limitations in the field of disposal of securities of the Issuing Party in a specified time, agreed by the
members of management and supervisory organs and high-level managerial staff
The Board Chairman – Jan Mroczka and the Supervisory Board Chairman – Andrzej Bartnicki, holding 8 125 480 Series B
Shares each, have made statements on limitations of sales of shares owned by them. An identical statement has meen
made by MB Progress Limited company, which is controlled by Jan Mroczka and Andrzej Bartnicki, and which owns 13 674
185 Series A Shares.
According to the contents of these statements, the said shareholders shall not sell Series A and B Shares owned by them
st
within 9 months from the initial date of shares debut on the Stock Exchange or until March 31 , 2011 whichever comes
first.
If the shareholders violate these statements, they are responsible for damages done according to genereal rules defined in
the Civil Law Codex.
15. Salaries and other benefits
15.1. Salaries of members of administrative, management and supervisory organs of the Issuing
Party
The Issuing Party has paid in 2009 the following gross salaries to the people forming the administrative, management and
supervisory organs, which are presented in the tables below.
Table: Gross salary of Board Members (in PLN).
Board Member
2009
Page 96
Jan Mroczka
380 000
Dariusz Domszy
281 111
Mariusz Kaczmarek
245 000
Table: Gross salary of Supervisory Board Members (in PLN).
2009
Andrzej Bartnicki
380 000
Jakub Górski
36 733
Paweł Puterko
47 266
Łukasz Kurdyś
36 000
Piotr Kowalski
36 000
The Board members and the Supervisory Board members were not paid their salaries on the basis of a bonus plan, profit
sharing, as options for shares and they were not granted any natural benefits.
In 2009, Board Members and Supervisory Board Members have not been paid any salaries by the dependent Partnerships.
15.2. Total amount reserved or collected by the Issuing Party or its dependent entities for pension
benefits or other similar benefits
The Issuing Party has not created reserves for pension benefits or for other similar benefits.
16. Practices of administrative, management and supervisory organ
16.1. End date of the current term of administrative, management and supervisory organ
members and periods, in which these people held their positions
The Board



st
Jan Mroczka was elected to the Board on October 1 , 2007 for a 3-year term as a Board Chairman. His term has started
st
at the moment of making of this resolution and it ends on October 1 , 2010. His term finishes not later than the date
st
of General Assembly accepting the financial report for the tax year ending on December 31 , 2009.
st
Dariusz Domszy was elected to the Board on October 1 , 2007 for a 3-year term as a Board Deputy Chairman. His term
st
has started at the moment of making of this resolution and it ends on October 1 , 2010. His term finishes not later
st
than the date of General Assembly accepting the financial report for the tax year ending on December 31 , 2009.
st
Jan Mroczka was elected to the Board on October 1 , 2007 for the position of Board Chairman. His term has started at
st
the moment of making of this resolution and it ends on October 1 , 2010. His term finishes not later than the date of
st
General Assembly accepting the financial report for the tax year ending on December 31 , 2009.
The Supervisory Board





th
Andrzej Bartnicki was elected the Supervisory Board Chairman on November 9 , 2009,
th
Paweł Puterko was elected a Supervisory Board Member on November 9 , 2009,
th
Piotr Kowalski was elected a Supervisory Board Member on November 9 , 2009,
th
Jakub Górski was elected the Supervisory Board Deputy Chairman on November 9 , 2009,
th
Łukasz Kurdyś was elected a Supervisory Board Member on November 9 , 2009.
th
The term of all aforementioned members of the Supervisory Board lasts until November 9 , 2011.
16.2. Contracts on services of members of administrative, management and supervisory organs
with the Issuing Party or with its dependent entity, defining benefits paid upon termination
of labour relation
The Board Chairman of the Supervisory Board, Jan Mroczka, holds this function as a result of election to the position of
st
Board Chairman on October 1 , 2007.
Page 97
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The Board Deputy Chairman Dariusz Domszy is employed on the basis of a managerial contract signed on November 1 ,
2007. According to the stipulations of the contract, it can be terminated upon the decision of one of the parties, with a 3month notice period. The contract can be terminated any time by a mutual agreement. In the case of managerial contract
recovation or termination, the Deputy Chairman of the Board will be obliged with a promise of abstaining from comptation
activities for two years. The Partnership will pay the manager a reparation equal to 100% of the salary paid in the paid in
the period of competition clause’s effectiveness, for two years.
st
The Board Member Mariusz Kaczmarek is employed on the basis of a managerial contract signed on July 1 , 2008.
According to the stipulations of the contract, it can be terminated upon the decision of one of the parties, with a 3-month
notice period. The contract can be terminated any time by a mutual agreement. In the case of managerial contract
recovation or termination, the Board Member will be obliged with a promise of abstaining from comptation activities for six
months. The Partnership will pay the manager a reparation equal to 80% of the salary paid in the paid in the period of
competition clause’s effectiveness.
The Issuing Party indicated that the rules of Supervisory Board members salaries result from the Resolution of the General
th
th
Assembly of January 26 , 2007 and from the Resolution of the General Assembly of November 9 , 2009. According to the
said resolutions, monthly salaries of the Supervisory Board members are as follows:

Supervisory Board Chairman – 50 000 PLN,

Supervisory Board Deputy Chairman – 4 000 PLN,

Supervisory Board Member – 3 000 PLN.
Additionally, the Issuing Party indicates, that in a case of dismissal or resignation before the end of the term, the
Supervisory Board member in question loses all additional benefits by virtue of premature dismissal or resignation as a
Supervisory Board member.
16.3. Audit Committee and Issuing Party’s Salary Committee
No Audit Committee or a Salary Committee has been created within the Supervisory Board of the Issuing Party. Because
there are five members of the Supervisory Board total and there are no indpendent members, the Issuing Party deems a
creation of a Salary Committee irrelevant, because its duties can be full executed by the entire Supervisory Board. However,
the Board of the Issuing Party intends to recommend an election of a new Supervisory Board member by this organ at the
next General Assembly, who would meet the requirements of art. 86 p. 4 of the Act on expert auditors and their selfgoverning bodies and on the public supervision, whereas this member shall be qualified in accounting or financial revision,
as well as creation of an Audit Committee by the Supervisory Board.
16.4. Rules of corporate order
th
According to the resolution dated February 13 , 2008., the Board of the Issuing Party decided to keep a corporation in the
Issuing Party, starting from the day the approval of circulation of the Issuing Party’s shares on GPW in Warsaw, which are
th
described in the resolution 12/1170/2007 of the Supervisory Board of the Stock Exchange dated July 4 , 2007 („Good
Practice of the Companies quoted at GPW”).
A proper report containing information on which of the rules are not applied, reasons for not applying a specific rule or
methods planned to be used by the Issuing Party in order to miminize the risk of not applying the rules of corporate order
will be published in the future as a current communication, in addition, contents of the Issuing Party’s report shall be
published o its website.
Additionally, the Partnership decided that the Partnership will follow all rules of the corporation order, excluding the
following rules: II.1 p.6, II.1 p.7 (until the Partnership obtains the status of a public partnership), III.1, III.7, III.8. The Issuing
Party presented its justification of not adhering to the aforementioned rules.
o
Rule N II.1 p.6: „The Partnership manages a corporate website and places there: (…) Annual reports on the actions of the
Supervisory Board, including works of its committees, together with an evaluation of the actions of the supervisory board
along with an internal control system and a risk management system, important for the Partnership.”
This rule is not and will not be applied in the part related to reports on the works of committees and in the evaluation of
the internal control system and the risk management system important for the Partnership, since no committees exist
within the activity of the Supervisory Board.
o
Rule N II.1 p.7: „The Partnership manages a corporate website and places there: (…) Questions of the shareholders related
to the issues included in the order of assembly, asked before and during the general assembly, together with answers to
those questions.” This rule is currently not applied. This rule will be applied, once the Partnership obtains the public
partnership status.
o
Rule N III.1 p.1: „Except for actions listed in legal regulations, the Supervisory Board should: once a year, perform and
present during a normal general assembly a compact evaluation of the state of the Partnership, including evaluation of
internal control system and risk management system, important for the Partnership.” This rules is not and will not be
applied in the part related to system evaluation. Because no committees exist within the Supervisory Board, which are
Page 98
responsible for evaluation of the internal control system and risk management system significant for the company, the
Supervisory Board will not present an evaluation of these systems to the general assembly.
o
Rule N III.7: „At least one audit committee should function within the Supervisory Board. This committee should include at
least member, which is independent from the Partnership and from the entities strictly related to the Partnership,
competent in the area of accounting and finances. In partnerships, which have the Supervisory Board consisting of the
minimal number of members provided by law, the Supervisory Board can perform the duties of the committee.”
This rule is not and will not be applied, since no committees function within the Supervisory Boards. The Partnership takes
the stance, that separation of committees within the Supervisory Board has no justification. The Supervisory Board
collegially works and makes decisions regarding competences of the committees. The Supervisory Board consists of
members having proper knowledge and competences in this field.
th
th
Within the Issuing Party no separate Audit Committee or a Salary Committee exists. On June 6 , 2009, an act dated May 7 ,
2009 on expert auditors and their self-governing bodies, entitites approved for studying financial reports and on public
o
supervision (Dz. U. 2009 r., N 77, pos. 649) went into effect, according to which, within the structure of a party issuing
securitied approved for circulation on a regulated market of a EU member state, an audit committee should exist,
consisting of at least 3 members elected from the members of the supervisory board. At least one member of the audit
committee should meet conditions of independence defined in the act and should be qualified in accounting or financial
revision. Because of this, the Issuing Party indicates that once its securities are approved for circulation, it will be necessary
to elect an audit committee, which meets requirements defined in the said act, which may make changes in the staff of
Supervisory Board necessary.
o
Rule N III.8: „In the field of duties and functioning of committess acting within the Supervisory Board, the Appendix I to the
th
Suggestion of the European Committee date February 15 , 2005, on the role of non-executive directors (…).”
o
This rule is not and will not be used by the Supervisory Board of Rank Progress S.A., because the N 7 rule part III „Good
Practices used by the Supervisory Boards members” is not applied. No committees function within the Supervisory Board.
17. Employees
17.1. Total number of employees of the Issuing Party, divided according to the form of
employment and functions performed
The Issuing Party
st
Because of the dynamic development of the Issuing Party in the period from December 31 , 2006 to the date of Prospectus
approval, total number of the Issuing Party’s employees has increased. The number of people employed in the
aforementioned period followed the pattern presented below:
Table: Employment in the Issuing Party according to the form of employment.
Including,
People
Employment
contracts
Mandate contracts
Task-specific
contract
2006-12-31
28
18
6
4
2007-12-31
45
41
4
0
2008-12-31
52
47
5
0
The date of Prospectus approval
64
58
6
0
As of:
Table: Employment in the Issuing Party according to the functions.
As of:
Board and Directors
Administration
Other employees
2006-12-31
1
7
20
2007-12-31
2
22
21
2008-12-31
5
28
17
6
38
20
The Issuing Party does not employ temporary (seasonal) personnel. Employees of the Issuing Party do their work service in
Legnica.
The Group of the Issuing Party
Page 99
With the exception of the E.F. Progress V Sp. z o.o. dependent company, other dependent companies of the Issuing Party
did not employ workers in the period of 2006 - 2008.
Table: Employment in E.F. Progress V Sp. z o.o. according to the form of employment.
Including,
People
Employment
contracts
Mandate contracts
Task-specific
contract
2006-12-31, 2007-12-31
0
0
0
0
2008-12-31
2
2
0
0
16
14
2
0
As of:
Table: Employment in E.F. Progress V Sp. z o.o. according to the functions
As of:
Board and Directors
Administration
Other employees
2006-12-31, 2007-12-31
2
0
0
2008-12-31
3
1
0
3
7
7
With the exception of two people serving the Board-related functions, all other people employed in the E.F. Progress V Sp. z
o.o. company do their work service in Kłodzko. The workplace of the Board is in Legnica.
In other dependent companies, only people forming the Boards of these companies act on the basis of their foundation
acts. Other dependent companies had the following number of people in their boards in the period covered by the
th
historical financial information: as of the date of Prospectus approval and on June 30 , 2009: 24 people, as of December
st
st
st
31 , 2008– 19 people, as of December 31 , 2007– 14 people, as of December 31 , 2006– 14 people.
17.2. Shares or options owned by the people forming the administrative, management and
supervisory organs
As of the date of Prospectus approval, members of the organs listed in p.14.1 Part III of the Prospectus „Registration
Document” do not own shares of the Issuing Party, with the exception of:
 Jan Mroczka, serving as the Board Chairman of the Issuing Party,
 Andrzej Bartnicki, serving as the Supervisory Board Chairman of the Issuing Party.
The levels of shares owned by the aforementioned people, along with participations in capital and votes during the GSA are
presented in the table below.
Table: Shares owned by people forming the administrative, management and supervisory organs.
o
o
Shareholder
N of shares
Capital %
N of votes
% of votes
Jan Mroczka
8 125 480 Series A sh.
25,00%
16 250 960
33,33%
Andrzej Bartnicki
8 125 480 Series A sh.
25,00%
16 250 960
33,33%
Sirs Jan Mroczka and Andrzej Bartnicki are also indirect shareholders of the Partnership, through the MB Progress Capital
Limited company, which is described in p.18.1 Part III of the Prospectus „Registration Document”.
As of the date of Prospectus approval, none of the members of administrative, management and supervisory organs
described in p.14.1 Part III of the Prospectus „Registration Doucment” has options on the shares of the Issuing Party.
17.3. Participation of employees in the capital of the Issuing Party
As of the date of Prospectus approval, employees of the Issuing Party do not own shares of the Issuing Party. No
agreements regarding participation of employees in the capital of the Issuing Party have been made for the future.
18. Significant shareholders
18.1. Information about people other than the members of administrative, management and
supervisory organs, who directly or indirectly have participations in the capital of the Issuing
Page 100
Party or voting rights requiring registration according to the law of the Issuing Group’s
country
As of the date of Prospectus approval, the only significant shareholder of the Partnership, with the exception of Board and
Supervisory Board members, is the entity, whose data have been presented in the summary below.
Table: Significant shareholders of the Issuing Party as of the date of Prospectus approval.
o
Shareholder
N of shares
% of capital
N of votes
% of votes
13 674 186
28,05%
13 674 186
42,07%
o
th
On November 27 , 2007 Jan Mroczka and Andrzej Bartnicki brought 16 250 960 Series B Shares of Spółki Rank Progress
S.A., with a nominal value of 0,1 PLN each, as a contribution to the MB Progress Capital Limited located in Nicosia, Cyprus.
As a return for the contribution, Jan Mroczka and Andrzej Bartnicki obtained 4 000 shares, issue price 110 EUR each, in the
increased capital of MB Progress Capital Limited. As a result of this transaction, MB Progress Capital Limited obtained
33,33% of votes in the General Assembly of Rank Progress S.A. MB Progress Capital Limited is an investment company, with
Jan Mroczka and Andrzej Bartnicki being its shareholders, owning half of the total number of shares each. They are also
direct shareholders of the Company, which is described in p.17.2 Part III „Registration Document” of the Prospectus.
th
th
In the period of March 7 , 2008 – November 20 , 2009, the MB Progress Limited Capital company has sold 2 576 775 Series
B Shares of Rank Progress S.A. to 21 entities. Additionally, the entities which purchased these shares, have signed contracts
st
with the Issuing Party, which obliged these entities not the sell their Series B Shares until March 31 , 2011 or within 6
months from the date of shares debut on the Stock Exchange (depending on which of these conditions is met first). If the
shareholders violate their statments, they are responsible for damages done according to the general rules dfined in the
Civil Law Codex
18.2. Information about other voting rights related to the Issuing Party
According to a statement of the Board of the Issuing Party, the shareholders are not entitled to voting rights other than
those resulting from participation in company capital of the Issuing Party.
18.3. Designation of a dominating entity of the Issuing Party or an entity controlling the Issuing
Party
The Issuing Party and the Capital Group of the Issuing Party are not a part of another capital group, thus there is no
dominant entity of the Issuing Party.
18.4. Description of all agreements known to the Issuing Party, the future implementation of
which may cause changes in the methods of control over the Issuing Party
The Issuing Party does not know any agreements, which could result in a change in the methods of control over the Isssuing
Party in the future.
19. Transactions with dependent entities
st
In the period covered by the historical financial information studied and in the period from January 1 , 2009 to
st
st
December 31 , 2009, and from January 1 , 2010 to the date of Prospectus approval, the Issuing Party was a party
of transactions with its dependent entities, which are presented below.
With the exception of transactions presented below, no other significant transactions of unsettled saldos or reserves
formed by the Partnership on particular balance dates in relation to transactions with the dependent entities, including
Board Members or Supervisory Board Members.
Additionally, the Issuing Party points out that all transactions presented below, made with dependent entities, were made
under market conditions.
st
st
In the period covered by studied, historical financial information and in the period from January 1 , 2009 to December 31 ,
st
2009 and from January 1 , 2010 to the date of Prospectus approval, the Issuing Party was a party in transactions made with
o
related people as defined in MSR 24, accepted according to the (EU) regulation N 1606/2002. Because of the definitions
resulting from MSR 24, the following entites should be interpreted as related to Rank Progress S.A.:
 Hit Zarząd Majątkiem Polska Legnica 1 Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same
number of votes at the shareholders assembly,
 E.F. Progress I Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at the
shareholders assembly,
Page 101















E.F. Progress II Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at the
E.F. Progress III Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at
the shareholders assembly,
E.F. Progress IV Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at
E.F. Progress V Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at the
E.F. Progress VI Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at
E.F. Progress VII Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at
KMM Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same number of votes at the
Rank Müller Jelenia Góra Sp. z o.o. – it is an entity, in which the dependent company of the Issuing Party E.F. Progress
II Sp. z o.o. has 54 % of shares of this company and 50 % of votes at the shareholders assembly,
Rank Prosper Skarżysko Kamienna Sp. z o.o. – Rank Progress S.A. has 100% of shares of this company and the same
number of votes at the shareholders assembly,
Colin Holdings Limited – Rank Progress S.A. has 100% of shares of this company and the same number of votes at the
MB Progress Capital Limited – a Cyprus law company, the shareholders of which are Jan Mroczka and Andrzej
Bartnicki, i.e. significant shareholders of the Issuing Party, and this company owns 42,07 % of shares of the Issuing
Party,
People being the Board members and their close family relatives,
People being the Supervisory Board members and their close family relatives,
Entities related to people forming the powers of the Partnership Spółki and to their close family relatives,
Shareholders of the Partnership: Jan Mroczka, Andrzej Bartnicki and MB Progress Capital Limited – Cyprus law
company, the shareholders of which are Jan Mroczka and Andrzej Bartnicki.
st
In the period covered by studied, historical financial information and in the period from January 1 , 2009 to
st
st
December 31 , 2009 and from January 1 , 2010 to the date of Prospectus approval, the Issuing Party was a party
in the transactions with related (dependent) entites, presented below.
With the exception of transactions presented below, no other significant transactions of unsettled saldos or reserves
formed by the Partnership on particular balance dates in relation to transactions with the dependent entities, including
Board Members or Supervisory Board Members.
Additionally, the Issuing Party points out that all transactions presented below, made with dependent entities, were made
under market conditions.
19.1. The period from January 1st, 2010 to the date of Prospectus approval
Mutual turnover and unsettled saldos of mutual debts and active debts by the virtue of transactions described
st
and presented below, made since January 1 , 2010, totalled (data in PLN):
Office rent
Accounting services sales
Reinvoincing – other costs
Investment replacement services sales
Payments made for capital
Turnover in PLN
Active debts as of
the date of
Prospectus approval
in PLN
Debts as of the date
of Prospectus
approval in PLN
366,00
15 250,00
13 410,027
739 320,00
3 636 184,00
122,00
3 660,00
0,07
246 440,00
3 561 284,00
-
366,00
4 270,00
Active debts as of
the date of
Prospectus approval
in PLN
488,00
5 490,00
4 266,88
-
Turnover in PLN
Office rent
Payment for capital related to the company capital
increase
Page 102
of Prospectus
approval in PLN
-
Loans obtained
Loan payment
Interest rates on loans
Interest rates on loans - payments
Office rent
Salary for real estate management
Reinvoicing of other costs
Return of real estate rent in Zamość
increase
Office rent
Reinvoicing – marketing service
Reinvicing – design of spatial development plan
Payments for capital
Loans obtained
Loans payment
Interest rates on loans - payment
Office rent
Management services sales
increase
404 589,56
31 427,00
77 410,00
366,00
5 490,00
2 200,88
9 524,00
Active debts as of
the date of
Prospectus approval
in PLN
14 354,72
122,00
1 220,00
550,22
2 387,00
33 013,20
-
-
150 000,00
-
35 000,00
Turnover in PLN
Turnover in PLN
366,00
14 640,00
24 400,00
786 000,00
Active debts as of
the date of
Prospectus approval
in PLN
1 098,00
12 200,00
11 170,32
24 400,00
-
3 440 000,00
1 937 000,00
58 882,11
33 081,78
366,00
18 300,00
140 679,93
Active debts as of
the date of
Prospectus approval
in PLN
122,00
6 100,00
46 488,36
-
-
Turnover in PLN
of Prospectus
approval in PLN
495 410,00
-
of Prospectus
approval in PLN
of Prospectus
approval in PLN
5 233 000,00
90 871,56
-
Turnover in PLN
Office rent
366,00
5 490,00
Active debts as of
the date of
Prospectus approval
in PLN
122,00
1 220,00
Reinvoicing – other costs
2 288,72
-
-
565 000,00
100 000,09
-
Turnover in PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
1 464,00
488,00
increase
Office rent
Page 103
of Prospectus
approval in PLN
-
-
increase
HIT Zarząd Majątkiem Polska Legnica 1 Sp. z o.o.
Loans obtained
Interest on loans
Office rent
KMM Sp. z o.o. w likwidacji
19 520,00
5 830,00
9 760,00
5 830,00
-
1 863 550,00
1 523 550,00
-
Turnover in PLN
1 011 945,73
1 464,00
14 640,00
Turnover in PLN
Loans obtained
Interest on loans
40 168,74
2 928,00
Active debts as of
the date of
Prospectus approval
in PLN
122,00
1 220,00
Active debts as of
the date of
Prospectus approval
in PLN
2 440,00
of Prospectus
approval in PLN
13 010 130,01
1 845 953,58
of Prospectus
approval in PLN
516 431,44
136 807,86
-
1 464,00
Active debts as of
the date of
Prospectus approval
in PLN
-
14 640,00
-
-
increase
34 026,00
-
40 974,00
Rank Prosper Skarżysko Kamienna Sp. z o.o.
Turnover in PLN
Office rent
Salary for secured loan
Rank Muller Jelenia Góra Sp. z o.o.
Reinvoicing – marketing materials
Turnover in PLN
185 000,00
4 962,35
170 269,56
Active debts as of
the date of
Prospectus approval
in PLN
2 196,00
113 513,04
-
1 135 317,12
Turnover in PLN
increase by E.F. Progress II
Klub Con Cuore Małgorzata Mroczka
Turnover in PLN
Office rent
Catering services purchase
PATI Mariola Bartnicka
Active debts as of
the date of
Prospectus approval
in PLN
-
4 392,00
27 636,01
Turnover in PLN
Page 104
Active debts as of
the date of
Prospectus approval
in PLN
1 464,00
251,49
Active debts as of
the date of
Prospectus approval
of Prospectus
approval in PLN
-
of Prospectus
approval in PLN
370 000,00
of Prospectus
approval in PLN
-
of Prospectus
approval in PLN
1 464,00
of Prospectus
approval in PLN
in PLN
Office rent
Easy Promotion S.C. M. Mroczka, D. Zboralski
14 884,01
Turnover in PLN
Office rent
Dariusz Domszy
-
Turnover in PLN
Settlement of business travels costs
Jan Mroczka
-
Turnover in PLN
Małgorzata Mroczka
8 685,63
of Prospectus
approval in PLN
of Prospectus
approval in PLN
-
-
-
-
Turnover in PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
-
-
-
Turnover in PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
34 824,34
3 810,00
7 320,00
3 810,00
-
4 880,00
7 384,59
7 469,50
Turnover in PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
-
-
-
Turnover in PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
25 986,00
13 395,00
-
Car rent
Reinvoicing – flight tickets
Reinvoicing – participation in real estate fair
Legal advisory services
Car rent
KMG Lawyers & Advisors Łukasz Kurdyś, Michał
Miłoń, Jakub Górski s.c.
Active debts as of
the date of
Prospectus approval
in PLN
14 044,71
-
of Prospectus
approval in PLN
Investment supervision services purchase
Kancelaria Adwokacka Łukasz Kurdyś
Active debts as of
the date of
Prospectus approval
in PLN
4 419,23
of Prospectus
approval in PLN
Turnover in PLN
"BRAND" Piotr Kowalski
Active debts as of
the date of
Prospectus approval
in PLN
-
-
Active debts as of
the date of
Prospectus approval
in PLN
Mariola Bartnicka
3 788,69
Page 105
-
Car rent
9 760,00
2 440,00
-
st
Additionally, in the period from January 1 , 2010 to the date of Prospectus approval, the Issuing Party has paid the
following gross salaries of people forming the administrative, management and supervisory organs.
Table: Salaries of Board members (in PLN).
st
Board Member
Jan Mroczka
From January 1 , to the date
of Prospectus approval
200 000
Dariusz Domszy
120 000
Mariusz Kaczmarek
130 000
Gross salaries of Supervisory Board members of Rank Progress S.A.:
Table: Salaries of Supervisory Board System (in PLN).
st
From January 1 , to the date
of Prospectus approval
Andrzej Bartnicki
200 000
Jakub Górski
16 000
Paweł Puterko
12 000
Łukasz Kurdyś
12 000
Piotr Kowalski
12 000
19.2. Rok 2009
st
st
By virtue of transactions presented and described below, made from January 1 , 2009 to December 31 , 2009
mutual turnovers and unsettled amounts of debts and active debts totalled (data in PLN):
Office rent
Reinvoicing – costs of Patent Office proceedings
Investment replacement service costs
Reinvoicing – Court proceedings payment
Office rent
Payments to capital rel. to the company capital
increase
Turnover PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
1 464,00
29 280,00
4 654,00
788 120,00
11 468,00
5 607 663,18
488,00
14 640,00
788 120,00
11 468,00
-
75 000
1 464,00
14 640,00
Active debts as of
the date of
Prospectus approval
in PLN
488,00
4 880,00
4 478 233,12
655 733,12
Turnover PLN
Turnover PLN
Loans obtained
Office rent
900 000,00
63 055,72
1 464,00
14 640,00
Page 106
Active debts as of
the date of
Prospectus approval
in PLN
122,00
1 220,00
of Prospectus
approval in PLN
of Prospectus
approval in PLN
900 000,00
63 055,72
-
Real estate sales
Reinvoicing – deconstruction works
Reninvoicing – other costs
170 000,00
6 602,64
229 604,00
62 232,00
2 370,00
-
Return for rent of real estate in Zamość
increase
132 052,80
-
11 004,40
2 181 867,60
-
35 000,00
Office rent
Reinvoicing – marketing services
Reinvoicing – spatial development plan
Loans obtained
Office rent
Investment replacement service costs
Sales – construction materials
Sales – warehouse services
Sales - CH „Twierdza” management services
Company car rent
Notebook sales
Turnover PLN
1 464,00
14 640,00
24 400,00
786 000,00
of Prospectus
approval in PLN
-
3 730 000,00
65 071,23
1 464,00
61 000,00
3 086 600,00
8 046,28
4 880,00
397 035,29
6 140,66
1 830,00
Active debts as of
the date of
Prospectus approval
in PLN
122,00
6 200,00
51 467,90
1 830,00
4 654,00
-
-
706 225,08
91 500,00
-
-
Turnover PLN
Reinvoice – costs of Patent Office proceeding
Reinvoice – commercialisation costs
Reinvoice – author’s supervision
Active debts as of
the date of
Prospectus approval
in PLN
732,00
7 930,00
11 170,32
24 400,00
-
of Prospectus
approval in PLN
3 730 000,00
65 071,23
-
Reinvoice – water network and sewage connection
76 860,00
Reinvoice – other costs
Reinvoice – graphical services purchase
24 823,23
2 696,20
-
-
Reinvoice of parcel division costs - zakup
5 124,00
-
-
Wall tiles purchase
59 805,79
-
59 805,79
increase
52 000,00
-
-
-
-
Turnover PLN
Office rent
1 464,00
14 640,00
Active debts as of
the date of
Prospectus approval
in PLN
488,00
4 880,00
7 041,00
-
-
735 000,09
-
264 999,91
Reinvoice – costs of Patent Office proceedings
increase
Page 107
of Prospectus
approval in PLN
-
Office rent
Reinvoice – visualisations
Investment replacement service sales
increase
Loans obtained
Office rent
KMM Sp. z o.o. w likwidacji
Turnover PLN
Active debts as of
the date of
Prospectus approval
in PLN
1 464,00
19 520,00
5 830,00
738 100,00
488,00
9 760,00
5 830,00
738 100,00
1 863 550,00
1 523 550,00
Turnover PLN
1 011 945,73
1 464,00
14 640,00
Turnover PLN
Loans obtained
40 168,74
2 928,00
Active debts as of
the date of
Prospectus approval
in PLN
122,00
1 220,00
Active debts as of
the date of
Prospectus approval
in PLN
244,00
of Prospectus
approval in PLN
-
of Prospectus
approval in PLN
14 785 775,81
70 307,81
of Prospectus
approval in PLN
516 431,44
136 807,86
-
1 464,00
Active debts as of
the date of
Prospectus approval
in PLN
-
14 640,00
-
-
increase
34 026,00
-
40 974,00
Turnover PLN
Office rent
Salary for loan security
Turnover PLN
370 000,00
Active debts as of
the date of
Prospectus approval
in PLN
-
Reinvoice – costs of Patent Office proceedings
Reinvoice – marketing materials
Reinvoice – costs of authenticated deed
Reinvoice – real estate evaluation
Real estate purchase in Zgorzelec
Investment replacement service sales
4 654,00
3 977,20
2 527,84
4 209,00
3 690 500,00
681 078,26
Active debts as of
the date of
Prospectus approval
in PLN
3 977,20
2 527,84
4 209,00
-
increase by E.F. Progress II
4 439 317,12
1 135 317,12
Turnover PLN
Page 108
of Prospectus
approval in PLN
-
of Prospectus
approval in PLN
555 000,00
of Prospectus
approval in PLN
-
Office rent
Turnover PLN
17 568,00
124 536,97
Turnover PLN
Office rent
Settlements by virtue of marketing
50 376,50
100,00
Turnover PLN
Office rent
Dariusz Domszy
44 457,89
Turnover PLN
Business trips costs settlement
Jan Mroczka
Małgorzata Mroczka
72 304,96
Turnover PLN
289 298,52
Investor supervision service purchase
Car rent
Reinvoice – participation in real estate fair
Reinvoice – flight tickets
Active debts as of
the date of
Prospectus approval
in PLN
2 285,34
Active debts as of
the date of
Prospectus approval
in PLN
4 419,23
Active debts as of
the date of
Prospectus approval
in PLN
9 423,18
15 625,00
of Prospectus
approval in PLN
of Prospectus
approval in PLN
-
of Prospectus
approval in PLN
of Prospectus
approval in PLN
-
Turnover PLN
of Prospectus
approval in PLN
646,99
-
-
Turnover PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
646,99
-
-
Turnover PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
-
2 440,00
7 320,00
7 469,50
3 574,59
-
Active debts as of
the date of
Prospectus approval
in PLN
847,52
-
of Prospectus
approval in PLN
Active debts as of
the date of
Prospectus approval
in PLN
Mariola Bartnicka
Active debts as of
the date of
Prospectus approval
in PLN
1 464,00
-
137 293,92
29 280,00
7 469,50
-
Page 109
Turnover PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
49 776,00
7 320,00
-
-
Turnover PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
107 726,00
-
-
21 960,00
-
-
Turnover PLN
Active debts as of
the date of
Prospectus approval
in PLN
of Prospectus
approval in PLN
4 701,30
-
-
Car rent
KMG Lawyers & Advisors Łukasz Kurdyś, Michał
Miłoń, Jakub Górski s.c.
Car rent
Payment for capital
In addition, the Issuing Party paid in 2009 the following gross salaries to the people being members of administrative,
management and supervisory organs.
Table: Salaries of Board members (in PLN).
2009
Board Member
Jan Mroczka
380 000
Dariusz Domszy
281 111
Mariusz Kaczmarek
245 000
Amounts of gross salaries paid to the Supervisory Board members of Rank Progress S.A.:
Table: Salaries of Supervisory Board Members (in PLN).
Andrzej Bartnicki
2009
380 000
Jakub Górski
36 733
Paweł Puterko
47 266
Łukasz Kurdyś
36 000
Piotr Kowalski
36 000
19.3. 2008
and presented below, totalled (data in PLN):
Office rent
Reinvoices of construction materials costs
Payment for capital related to the
company capital increase
Office rent
Turnover in 2008 in PLN
Active debts as of
31.12.2008 in PLN
Debts as of 31.12.2008
in PLN
1 464,00
7 320,00
122,00
610,00
-
336,72
-
-
35 000,00
-
-
Active debts as of
31.12.2008 in PLN
in PLN
1 464,00
7 320,00
336,72
122,00
610,00
-
-
Page 110
550 000,00
-
450 000,00
Active debts as of
31.12.2008 in PLN
in PLN
Office rent
Real estate sales
1 464,00
7 320,00
12 688 132,40
122,00
610,00
-
-
1 100,44
1 100,44
-
336,72
-
-
Reinvoice – perpetual use fee for grounds
in Zamość
11 558,04
7 705,36
-
317 204,11
317 204,11
-
Reinvoice – excluding grounds from
agricultural production
1 922,30
1 922,30
-
Reinvoice - Shopping Center advertisement
2 039,84
-
-
9 556,40
312 966,60
33 013,20
9 556,40
312 966,60
-
-
15 431 632,40
-
2 116 867,60
Active debts as of
31.12.2008 in PLN
in PLN
1 464,00
7 320,00
336,72
121 519,32
122,00
87,00
121 519,32
-
523,00
-
-
1 820 000,00
-
-
Active debts as of
31.12.2008 in PLN
in PLN
1 464,00
7 320,00
1 915 400,00
389 578,09
2 440,00
122,00
610,00
2 440,00
-
94,72
-
-
234 836,61
-
-
1 415,14
336,72
-
-
1 629 199,87
-
-
176 190,49
62 819,06
-
61 000,00
-
-
19 927,24
6 710,00
2 039,84
1 719,16
789,32
-
Reinovice – deconstruction works
Reinvoice – exploitation fees
Reinvoice – construction project fees
Return for rent in Zamość
Office rent
Reinvoice – marketing service
Reinvoice of business trip costs
Office rent
Construction materials sales
Warehousing services sales
Reinvoice – perpetual use fee
Reinvoice – exclusion from agricultural
production
Reinvoice – translation
Reinvoice – expenses on CH Twierdza
construction
Reinvoice – obtaining permission for
construction
Reinvoice – connection to gas network
Reinvoice – marketing plan development
Reinvoice – press advertisement
Reinvoice – IT services
Page 111
Reinvoice – advertising costs
585,60
585,60
-
22 882,11
22 882,11
-
16 650 750,00
-
52 000,00
Active debts as of
31.12.2008 in PLN
in PLN
Office rent
Payment for capital
610,00
6 100,00
250 000,00
122,00
1 220,00
-
-
Active debts as of
31.12.2008 in PLN
in PLN
610,00
6 100,00
10 000,00
244,00
2 440,00
-
40 000,00
Active debts as of
31.12.2008 in PLN
in PLN
Loans obtained
Payment of interest rates on loans
Office rent
1 673 172,54
- 1 249 744,14
1 464,00
7 320,00
122,00
610,00
13 010 130,01
834 007,85
-
Reinvoices of office materials costs
336,72
-
-
150 000,00
-
-
Active debts as of
31.12.2008 in PLN
in PLN
31 097,46
976,00
720,30
-
516 431,44
96 639,12
-
1 005,28
-
-
371,01
-
-
Active debts as of
31.12.2008 in PLN
in PLN
366,00
3 660,00
122,00
1 220,00
-
25 000,00
-
25 000,00
Active debts as of
31.12.2008 in PLN
in PLN
185 000,00
-
185 000,00
Active debts as of
31.12.2008 in PLN
in PLN
Reinvoice – graphical project design
5 392,40
Reinvoice – visualisations
5 490,00
-
-
Reinvoice – fee for connection to electric
network
Office rent
Payment for company capital
HIT Zarząd Majątkiem Polska Legnica 1 Sp.
z o.o.
KMM Sp. z o.o.
Loans obtained
Reinvoice – court fee
Reinvoice – authenticated deed costs
Reinvoice – announcement in Monitor
Sądowy (Court Monitor)
Rank Prosper Skarżysko Kamienna Sp. z
o.o.
Office rent
Salary for securing a loan
Page 112
8 952,59
-
-
Payment for capital by E.F. Progress II
550 000,00
-
-
Active debts as of
31.12.2008 in PLN
in PLN
17 568,00
99 083,02
-
-
Active debts as of
31.12.2008 in PLN
in PLN
48 613,78
1 430,28
-
Active debts as of
31.12.2008 in PLN
in PLN
122 648,43
48 847,38
-
Active debts as of
31.12.2008 in PLN
in PLN
28 108,90
2 571,55
-
627,50
-
-
Active debts as of
31.12.2008 in PLN
in PLN
200 000,00
1 868,15
203 647,50
3 793,19
-
Active debts as of
31.12.2008 in PLN
in PLN
- 24 300,00
- 16 587,09
646,99
646,99
-
Active debts as of
31.12.2008 in PLN
in PLN
- 75 000,00
- 19 896,81
-
-
646,99
646,99
-
Active debts as of
31.12.2008 in PLN
in PLN
7 686,40
-
-
Active debts as of
31.12.2008 in PLN
in PLN
8 540,00
-
-
Active debts as of
31.12.2008 in PLN
in PLN
102 806,96
-
2 440,00
Settlement of business trip costs
12 283,08
-
-
Car rent
17 080,00
7 320,42
-
Office rent
Catering services purchases
Office rent
Easy Promotion S.C. M. Mroczka, D.
Zboralski
Office rent
Dariusz Domszy
Pre-payments for business trips
Jan Mroczka
Loans obtained and paid back
Małgorzata Mroczka
Loan payments
Mariola Bartnicka
Loan payments
Kaczmarek Mariusz
Kowalski Piotr
Page 113
Biuro Obsługi i Realizacji Inwestycji
Budowlanych "GLOB-BUD"
Active debts as of
31.12.2008 in PLN
in PLN
310 822,56
-
26 149,24
Active debts as of
31.12.2008 in PLN
in PLN
1 464 000,00
-
-
Active debts as of
31.12.2008 in PLN
in PLN
163 602,00
29 280,00
-
-
PROFESCAPITAL Sp. z o.o.
IPO project management
Car rent
Additionally, the Issuing Party paid in 2008 the following salaries of people forming administrative, management and
supervisory organs.
Table: Salaries of Board Members (in PLN).
Board Member
2008
Jan Mroczka
360 000
Dariusz Domszy
240 000
Mariusz Kaczmarek
120 000
In addition to the aforementioned salaries, Board Members had the right to use business cars and cell phones.
Amounts paid to the members of Supervisory Board of Rank Progress S.A.:
Table: Salaris of Supervisory Board Members (in PLN).
Supervisory Board Members
2008
Andrzej Bartnicki
360 000
Jakub Górski
36 000
Paweł Puterko
48 000
Łukasz Kurdyś
33 800
Piotr Kowalski
36 000
Grzegorz Kołcz
2 200
19.4. 2007
st
and presented below, performed in 2007, totalled as of December 31 , 2007 (data in PLN):
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
Office rent
1 152,00
1 830,00
122,00
610,00
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
1 152,00
122,00
-
Office rent
Page 114
1 830,00
610,00
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
Office rent
1 464,00
1 830,00
122,00
610,00
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
Office rent
1 464,00
1 830,00
122,00
610,00
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
1 464,00
1 830,00
122,00
610,00
-
1 217 000,00
-
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
- 48 420,00
625 638,65
1 464,00
1 830,00
122,00
610,00
11 336 957,47
2 083 751,99
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
30 985,92
-
516 431,44
65 541,66
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
Office rent
21 756,70
2 928,00
-
Catering services purchases
56 858,00
-
7 995,00
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
55 394,21
-
0,04
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
121 655,10
27 034,23
-
Office rent
Payment for capital related to the company
capital increase
Loans payment
Office rent
KMM Sp. z o.o.
Loans obtained
Office rent
Office rent
Page 115
Gazeta Piastów Śląskich Sp. z o.o.
Office rent
Advertising services purchase
Dariusz Domszy
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
2 196,00
34 715,34
7 126,90
-
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
10 126,79
1 149,46
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
812 211,00
-
-
12 850 500,00
-
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
12 850 500,00
-
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
850,56
-
24 300,00
16 587,09
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
2 625,00
-
75 000,00
19 896,81
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
300,00
-
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
10 402,00
-
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
12 200,00
4 402,00
-
-
Pre-payments
Jan Mroczka
Net payments to the owner
Andrzej Bartnicki
Net payment to the owner
Małgorzata Mroczka
90,00
Loans obtained
Mariola Bartnicka
Loans obtained
Grzegorz Kołcz
Piotr Kowalski
Construction supervisory services purchase
Page 116
Biuro Obsługi i Realizacji Inwestycji Budowlanych
"GLOB-BUD"
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
76 860,00
-
25 620,00
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
488 000,00
4 483,50
-
-
Turnover in PLN
Active debts as of
31.12.2007 in PLN
Debts as of
31.12.2007 in PLN
25 000,00
-
-
Construction supervisory services purchase
Consulting service
Reinvoince – IPO catalogue print
Payment for capital related to the company
capital increase by E.F. Progress II
The Issuing Party has paid in 2007 the following salaries to people forming the administrative, management and supervisory
organs.
Table: Salaries of the Board Members (in PLN).
Board Member
2007
Jan Mroczka
60 000
Dariusz Domszy
40 000
In addition to the aforementioned salaries, the Board members also had the right to use business cars and cell phones.
Amounts paid to the members of the Supervisory Board of Rank Progress S.A.:
Table: Salaries of the Supervisory Board Members (in PLN).
Członek Rady Nadzorczej
2008
Andrzej Bartnicki
60 000
Jakub Górski
6 000
Paweł Puterko
8 000
Piotr Dębski
1 200
Piotr Kowalski
6 000
Grzegorz Kołcz
4 900
19.5. 2006
st
and presented below, totalled as of December 31 , 2007 (data in PLN):
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
50 000,00
-
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
50 000,00
Page 117
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
122,00
50 000,00
122,00
-
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
122,00
50 000,00
122,00
-
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
50 000,00
-
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
- 180 622,59
1 458 113,34
1 464,00
122,00
11 385 377,47
1 458 113,34
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
- 263 639,00
34 555,74
-
516 431,44
34 555,74
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
14 754,64
6 832,00
-
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
7 236,29
7 136,29
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
17 503,03
-
579,43
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
1 841,71
5 285,19
1 342,00
50 000,00
1 841,71
5 285,19
-
1 342,00
-
Office rent
Office rent
Office rent
Loan payments
Office rent
KMM Sp. z o.o.
Loan payments
Reinvoice – equipment purchase
Office rent
Office rent
Office rent
Reinvoice of printing services
Marketing services purchase
Page 118
Jan Mroczka
Payment to the owner
Andrzej Bartnicki
Payment to the owner
Małgorzata Mroczka
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
6 463 500,00
-
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
6 463 500,00
-
-
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
24 300,00
15 736,53
-
24 300,00
15 736,53
Turnover in PLN
Active debts as of
31.12.2006 in PLN
Debts as of
31.12.2006 in PLN
75 000,00
17 271,81
-
75 000,00
17 271,81
Loans obtained
Mariola Bartnicka
Loans obtained
20. Financial information on assets and credits of the Issuing Party, its financial
situation and profits and losses
20.1. Historical financial information
Introduction
Historical financial information of the Group of the Issuing Party are created according to International Standards of
Financial Reporting
In this chapter, historical financial information of the Group of the Issuing Party have been presented, covering the period
st
st
st
st
st
from January 1 , 2006 to December 31 , 2006, from January 1 , 2007 to December 31 , 2007 and from January 1 2008 to
st
December 31 , 2008 prepared according to International Standards of Financial Reportin (ISFR), approved for application
within the EU.
The Issuing Party is a dominating entity in a capital group, thus, according to the requirement of Appendix I position 20.1,
o
th
position 20.3, position 20.6 of the Committee Regulation (EC) N 809/2004 dated April 29 , 2004 executing the 2003/71/EC
Directive of the European Parliament and of the Council on information contained in issues prospectuses and their form,
o
inclusion by reference and publishing such issue prospectuses and advertisement propagation (Dz. Urz. EU. L 2004 N 148)
and on the basis of Recommendations of the Committee of European Supervisors of the Security Market (CESR) on the
o
coherent implementation of the Committee Regulation N 809/2004 (document CESR/05-054b dated February 2005), The
Issuing Party presents historical financial information for the 2006-2008 period in the Prospectus, prepared according to
International Standards of Financial Reporting, which were approved by the European Union.
Basis of creation
Historical and mid-year financial information have been prepared on the basis of financial reports of units forming the
Group of the Issuing Party and summarised in such a way, that the Group would form a single unit. Historical financial
information include financial reports of the dominating unit RANK PROGRESS S.A. oraz and financial reports of dependent
companies, controlled by the dominating unit.
RANK PROGRESS S.A. („Dominating Unit”) was created on the basis of resolution made by partners of the Bartnicki,
st
Mroczka E.F. RANK PROGRESS Spółka jawna partnership, dated October 1 , 2007, by a transformation of general
th
partnership into a stock partnership. This stock partnership was registered in the National Court Register on October 10 ,
2007.
Because of the above, the historical financial information cover proper consolidated financial information of the Gapital
Group Bartnicki, Mroczka E.F.RANK PROGRESS Spółka jawna (later in text „RANK PROGRESS Capital Group”) for the period
ending on the day of legal form transformation.
Page 119
Presented financial information include e.g.:
st
- Consolidated balance as of December 31 , 2008, consolidated account of profits and losses, consolidated account of
st
monetary flows, consolidated summary of own capital changes for the period of 12 months, ended on December 31 ,
2008,
st
- Consolidated comparison data for 2007, consisting of: consolidated balance as of December 31 , 2007, consolidated
account of profits and losses, consolidated account of monetary flows, consolidated summary of own capital changes
st
for 2007 as a total, consolidated financial report for the period from January 1 , to
th
th
st
October 9 , 2007 for the period of general partnership activity and for the period from October 10 , to December 31 ,
2007 for the period of stock partnership activity,
- Consolidated comparison data for 2006 of the legal predecessor of the stock partnership, i.e. Bartnicki, Mroczka E.F.
RANK PROGRESS Spółka jawna,
Historical financial information were corrected with amounts of mutual incomes, costs, unsettled profits and settlements
resulting from transactions between the units of the Group.
Unitary financial reports forming the basis for preparing historical financial information were created under the assumption
of continuity of business activity of units forming the Group of the Issuing Party in the predictable future and on the basis of
opinion, that no circumstances indicating a threat to that continuity exist, with the sole exception of KMM Sp. z o.o. in
liquidation, which has been declared in liquidation in 2008.
Assets and credits evaluation methods and estimation of financial results are used in a continuous way.
Historical financial information has been presented in Polish currency („PLN”) and expressed in thousands of Polish zlotys.
Unitary finanacial reports of the Dominating Unit and of the dependent companies for the period of 2006-2008 were
created according to the Act on accounting, and for the needs of preparing historical financial information, they have been
adjusted to ISFR.
20.1.1. Opinion of an independent expert auditor on the study of historical financial informantion for the
General Assembly, the Supervisory Board and the Board of RANK PROGRESS S.A. („Issuing Party”)
located in Legnica.
We have performed a study of historical consolidated financial information of the RANK PROGRESS S.A. Capital Group
st
st
(„Group”) presented by the Issuing Party in this Prospectus, as of December 31 , 2008, December 31 , 2007 and December
st
31 , 2006 („appended historical consolidated financial information of the Group”), prepared according to the International
Standards of Financial Reporting, which have been approved by the EU, for the needs related to this Prospectus and
o
th
according to the requirements of Committee Regulation (EC) N 809/2004 dated April 29 , 2004, executing th 2003/71/EC
Directive of the European Parliament and of the Council on the information contained in issues prospectuses and their
form, inclusion by reference and publication of such issue prospectuses and advertisement propagation.
The Board of the Issuing Party is responsible for reliability and clarity of appended consolidated financial information, and
for the correctness of their preparation. Our task was to study the appended historical financial information and giving an
opinion on their reliability and clarity.
The study of appended, consolidated financial information was performed according to the effective legal regulations and
professional norms, according to the regulations of:
th
o
- chapter 7 of the Act of September 29 , 1994 on accounting (Dz. U. dated 2009 N 152, pos. 1223, with later changes), and
- practices of studying financial reports, applied in Poland, and
- international standards of financial revisions
so a rational certainity can be obtained, that the appended historical consolidated financial information do not contain
significant incorrectnesses. The study included, in particular, checks of correctness of application of accounting rules
(policies), checking – mostly in a random way – accounting entries and proofs, which give numbers and information
included in appended historical consolidated financial, as well as a global evaluation of appended historical consolidated
financial information. We think that our study gave us adequate basis for giving out an opinion on the appended historical
consolidated financial information, treated as a whole.
In our opinion, the appended historical consolidated financial information of the Group prepared according to the
nternational Standards of Financial Accounting, which have been approved by the EU, reliably and clearly present all
st
information significant in the evaluation of material and financial situation of the Group as of December 31 , 2008,
Page 120
st
st
December 31 , 2007, December 31 , 2006 as well as of activity results, capital changes and monetary assets flow, for the
respective years ending on the aforementioned dates.
Without restrictions related to the correctness and reliability of the historical financial data, we hereby inform, that
financial reports of 10 dependent companies covered by these historical financial information, which participated in the
st
balance account as of December 31 , 2008 at the level of 8,7%, were not studied by the expert auditor. This is consistent
with regulations of art. 64 of the Act on accounting.
Dariusz Sarnowski
Expert Auditor
HLB Sarnowski & Wiśniewski Sp. z o.o.
Entity approved to study financial reports, registered in
the list of approved entities managed by KIBR, with the
evidence number 2917
rd
Poznań, December 23 , 2009.
20.1.2. Information about opinions of the expert auditor on particular years presented in this chapter
The Expert Auditor has performed (for the needs of the Prospectus) a study of consolidated financial data of RANK
st
st
ROGRESS S.A. Capital Group presented in the Prosepctus, as of December 31 , 2008 December 31 , 2007 and December
st
31 , 2006 and for the years ending on these dates, created according to the International Standards of Financial Reporting,
which have been approved by the EU. The opinion on the historical financial information was presented in p.20.1.1. Part III
of the Prospectus „Registration Document”. Consolidated financial reports of the Issuing Party for years ending on
st
st
December 31 , 2008 and December 31 , 2007 have been studied by the Expert Auditor. The Issuing Party has not prepared
st
a consolidated financial result for the year ending on December 31 , 2006, since there was no obligation to do so. Historical
st
financial information contained in this Prospectus for the year ending on December 31 , 2006, have been prepared only for
the needs of this Prospectus and they have been a subject of study performed by the Expert Auditor, as indicated above.
st
The opinion of Expert Auditor on the consolidated financial report on the year ending on December 31 , 2008, contained,
st
while the opinion of the expert advisor on the consolidated financial report for the year finished on December 31 , 2007
contained an explanation related to the transformation of the legal form of the Issuing Party from a general partnership to
the stock partnership and to the effects of this transformation on presentation of selected elements in the financial report
presented on the basis of the consolidated financial report of the legal predecessor, i.e. Bartnicki, Mroczka E.F. Rank
Progress Spółka jawna. The opinions of the Expert Auditor on consolidated financial reports for the years ending on
st
st
December 31 , 2008, December 31 , 2007, have been presented in p.20.4 Part III „Registration Document” of the
Prospectus.
20.1.3. Historical financial information of the Capital Group of the Issuing Party prepared according to the
ISFR
All
values
presented
in
(„tys. PLN”), unless stated otherwise.
this
chapter
are
expressed
in
thousands
of
zlotys
1. Consolidated Balance
Assets
Note
31.12.2008
31.12.2007
31.12.2006
Real estates
14
360 456
174 164
132 126
Fixed assets under construction
16
-
2 109
2 453
Page 121
Other fixed assets
16
4 419
3 817
3 832
Non-material values
15
474
-
-
Company value
17
-
-
183
Active debts and other assets
20
1 598
269
-
Assets by virtue of delayed tax
18
9 818
37
8
376 765
180 396
138 602
Fixed assets
Reserves
19
133 540
91 111
58 720
20
25 540
24 968
14 460
Loans granted
21
-
-
2 075
Monetary assets
22
6 115
4 955
2 495
165 195
121 034
77 750
541 960
301 430
216 352
Current assets
Total assets
Credits
Note
31.12.2008
31.12.2007
31.12.2006
3 250
3 250
3 250
Reserve capital
39 602
-
-
Profits held / uncovered losses
90 895
125 658
102 390
4 839
48 969
92 459
133 747
128 908
105 640
572
25
-
134 319
128 933
105 640
138 111
71 866
17 397
-
1 578
1 433
22 616
19 955
17 972
160 727
93 399
36 802
Share capital
23
- including net profit
Own capital assigned to shareholders of the Dominating Unit
Minority participation
24
Own capital
Financial obligations
25
Other obligations
Reserve by virtue of delayed income tax
18
Long-term obligations
25
141 688
15 148
31 261
Obligations by virtue of supplies and services
24
8 478
11 545
8 746
Reserves
27
-
991
339
Other obligations
26
96 748
51 414
33 564
246 914
79 098
73 910
541 960
301 430
216 352
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
105 256
62 351
56 409
Total credits
2. Consolidated account of profits and losses
Details
Note
Continued activity
Sales income
28
Page 122
Goods and services sales income
75 548
17 702
12 280
Goods sales income
16 000
34 484
44 129
Change of goods levels
13 708
10 165
0
66 696
38 499
39 454
12 120
18 270
28 276
5 031
2 551
6 557
41 217
12 852
2 573
8 328
4 826
2 048
38 560
23 852
16 955
29
Value of goods sold
Materials and energy usage
External services
Other costs
Sales profit
Evaluation of investment real estates to their fair value
30
16 595
6 436
94 529
Other current income
31
1 011
168
44
Other current costs
32
3 447
1 584
923
52 719
28 872
110 605
Current activity profit
Financial income
33
7 298
28 251
285
Financial costs
34
54 902
4 321
467
5 115
52 802
110 423
279
3 833
17 964
4 836
48 969
92 459
4 836
48 969
92 459
4 839
48 969
92 459
-3
-
-
0,15
1,51
2,84
0,15
1,51
2,84
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
Gross profit
5 115
52 802
110 423
Corrections
-25 041
-84 398
-120 834
-16 595
-6 436
-94 529
-3
-
-
1 364
877
431
10 915
-4 258
5 828
4 486
229
-4 610
-
-
Gross profit
Income tax
35
Net profit from z działalności kontynuowanej
Abandoned activity
Net profit from abandoned activity
Net profit for the tax year
Assigned to shareholders of the dominating unit
Assigned to minor shareholders
Basic profit per share in the reporting period (in PLN)
36
Diluted profit per share in the reporting period (in PLN)
3. Consolidated account of monetary flow
MONETARY FLOW ACCOUNT
Flow of monetary assets from current activity
Evaluation of real estates to their fair value
Minority profits
Depreciation
Currency rate differences
Interest rates
Profit (loss) on investment activity
Page 123
Change of reserve levels
1 843
2 660
18 311
Change of supplies levels
-43 081
-32 391
-25 958
Change of active debt levels
-8 991
-9 942
-618
Change of short-term obligations levels
40 906
-34 688
-663
-12 380
-873
-62
-279
-3 833
-17 964
42
-
-11
-19 926
-18 724
-10 410
9 658
24 135
-
-
-
-
Granted loans – payment
1 401
24 135
-
From other financial assets
8 257
-
-
119 414
42 864
28 504
1 284
42 864
27 196
750
-
1 308
117 380
-
-
-109 756
-18 729
-28 504
152 947
80 929
42 599
750
-
-
152 197
80 929
42 599
22 105
41 016
13 465
-
25 182
12 927
12 404
10 457
-
Payments by the virtue of financial leasing
1 307
801
310
Interest rates
8 394
4 576
228
130 842
39 913
29 134
Net monetary assets flows
1 160
2 460
-9 781
Balance change of monetary assets level
1 160
2 460
-9 781
4 955
2 495
12 276
6 115
4 955
2 495
Change of interperiodic settlements levels
Income tax
Other corrections
Net monetary flows from current activity
Flow of monetary assets from investment activity
Income
Disposal of tangible fixed assets and non-material values
Expenses
Purchase of tangible fixed assets and non-material values
Udzielone pożyczki – wypłata
On other financial assets
Net monetary flows from investment activity
Flow of monetary assets from financial activity
Incomes
Capital monetary support
Bank loans
Expenses
Payouts from the profit
Bank loans payment
Net monetary flows from financial activity
4. Consolidated summary of changes in own capital
st
The year ending on December 31 , 2008
Details
State as of
st
January 1 , 2008
Financial result
Basic capital
Total result
from previous Net result
years
Reserve
capital
Own capital
assigned to
major
shareholders
Capital assigned
to minor
shareholders
Total own
capital
3 250
-
125 658
-
128 908
25
128 933
-
39 602
-39 602
-
-
-
-
Page 124
division
Profit payment
-
-
-
Net profit-loss in
tax year
-
-
-
Payments to
capital
-
-
3 250
39 602
Stats as of
st
December 31 ,
2008
-
-
-
4 839
4 839
-3
4 836
-
-
-
550
550
86 056
4 839
133 747
572
134 319
Capital assigned
to minor
shareholders
Total own
capital
st
Details
State as of
st
January 1 , 2007
Total result
years
Reserve
capital
Basic capital
3 250
Financial result
division
Own capital
assigned to
major
shareholders
-
102 390
-
105 640
-
105 640
-
-
-
-
-
-
Profit payment
-
-
-25 701
-
-25 701
-
-25 701
Net profit-loss in
tax year
-
-
-
48 969
48 969
-
48 969
-
-
-
-
25
25
-
76 689
48 969
128 908
25
128 933
Capital assigned
to minor
shareholders
Total own
capital
Payments to
capital
State as of
st
December 31 ,
2007
3 250
st
Details
State as of
st
January 1 , 2006
Basic capital
Total result
years
Reserve
capital
Own capital
assigned to
major
shareholders
3 250
-
22 858
-
26 108
-
26 108
Financial result
division
-
-
-
-
-
-
-
Profit payment
-
-
-12 927
-
-12 927
-
-12 927
Net profit-loss in
tax year
-
-
-
92 459
92 459
-
92 459
3 250
-
9 931
92 459
105 640
-
105 640
State as of
st
December 31 ,
2006
5.Financial report according to the segments of activity
The Group has defined operational segments on the basis of reports, which are used in the process of making strategic
decisions.
Reporting related to the segments is an internal one, presented to people who manage the Group and who make decision
at the operational level.
Page 125
The basic division of activity into segments is the division according to basic groups in sales portfolio of the Group, namely
virtures, by which sales income is obtained. According to this, the Board has separated 2 segments, i.e. „Real estate rents”
and „Real estate sales”.
Sales income according to the segments of activity
Details
Real estate rent
Real estate sale
2006
Sales income
Goods sales income
-
44 129
2 660
9 620
Total
2 660
53 749
-
34 484
11 266
6 436
Total
11 266
40 920
-
16 000
12 959
62 589
Total
12 959
78 589
2007
Sales income
Goods sales income
2008
Goods sales income
Other information according to the segments of activity
Real estate rent
Real estate sales
Segments of activity
31.12.2008
Segment assets
31.12.2007
31.12.2006
31.12.2008
31.12.2007
31.12.2006
379 818
212 833
141 290
140 436
87 745
75 062
21 706
852
-
-
-
-
Total assets
401 524
213 685
141 290
140 436
87 745
75 062
Segment obligations
257 295
121 483
69 918
63 191
51 014
40 794
87 155
-
-
-
-
-
344 450
121 483
69 918
63 191
51 014
40 794
-
27 898
29 399
-
1 344
376
Unassigned expenses
1 284
-
-
-
-
-
Total expenses on tangible
fixed assets and non-material
values
1 284
27 898
29 399
-
1 344
376
Depreciation
1070
256
185
1 104
693
246
-
-
-
-
-
-
1 070
256
185
1104
693
246
56
50
111
44
36
46
-
-
-
-
-
-
56
50
111
44
36
46
Unassigned assets
Unassigned obligations
Total obligations
Expenses – fixed assets
Depreciation not assigned to a
segment
Total depreciation
Updating extracts
Unassigned updating extracts
Total updating extracts
Page 126
6. Additional explanatory notes
1.
General Information
RANK PROGRESS Capital Group(„Group”, „Capital Group”) consists of a dominating unit Rank Progress S.A. and its
dependent companies.
RANK PROGRESS S.A. („Dominating Unit”, „Partnership”) was created as a result of resolution made by the partners of
st
Bartnicki, Mroczka E.F. RANK PROGRESS Spółka jawna on October 1 , 2007, through a transformation from a general
th
partnership to a stock partnership. The share partnership was registered in the National Court Register on October 10 ,
2007.
The Dominating Unit is located in Legnica, Złotoryjska 63. The Partnership performs its activity as a stock partnership
registered in Poland and currently registered in the business entities register, managed by the District Court in Wrocław
with the number KRS 0000290520.
The existence period of the Dominating Unit and units forming the Group is defined as permanent, with the exception of
KMM Sp. z o.o. in liquidation, which is currently being liquidated.
Basic areas of the Dominating Unit’s activity are:
 Deconstruction and demolition of buildings,
 Execution of general construction works,
 Execution of other finishing construction works,
 Real estate rents on its own account,
 Management and sales of real estates on its own account.
The Capital Group focuses its present and future activity on implementation of four categories of projects within the real
estate market:
 Large area commercial-service centre,
 Uptown commercial galleries,
 Mixed function objects, i.e. apartments-services-offices,
 Highly profitable, short-term investments projects.
2.
Composition of the Group
In the years covered by historical financial information, in addition to the Dominating Unit, the Group consisted also of the
following dependent companies:
Basic
Group
Group
Group
o
N
Unit name
Location
activity area
part. in
part. in
part. in
2008
2007
2006
1
(1)
Legnica
100%
100%
100%
2
(1)
Legnica
100%
100%
100%
3
(1)
Legnica
100%
100%
100%
4
(1)
Legnica
100%
100%
100%
5
(1)
Legnica
100%
100%
100%
6
(1)
Legnica
100%
-
-
7
(1)
Legnica
100%
-
-
8
(1)
Legnica
100%
100%
100%
9
(2)
Legnica
-
-
100%
10
KMM Sp. z o.o. in liquidation
(1)
Zamość
100%
100%
100%
11
Rank Müller Jelenia Góra Sp. z o.o.
(1)
Jelenia Góra
50%
50%
-
12
(1)
Legnica
100%
-
-
(1) Real estate agency, real estate circulation, real estate management and construction on its own account, real
estate construction on the account of third parties.
Page 127
(2) Press activity – publishing and journalism.
All companies have been consolidted in historical financial information using the full method. This method was also used in
the case of Rank Müller Jelenia Góra Sp. z o.o. in order to provide a more reliable reflection of the material situation of the
Capital Group. It is planned to increase control over this company in 2009, by increasing capital engagement. The choice of
consolidation method in the case of this particular unit had no significant impact on current financial result of the Group.
3.
Companies fusions
In the period covered by historical financial information, no fusion of the Dominating Unit with other business entity took
place. All dependent companies with the exception of KMM Sp. z o.o. in liquidation, HIT Zarząd Majątkiem Polska Legnica 1
Sp. z o.o. and Rank Müller Jelenia Góra Sp. z o.o. have been founded by the Dominating Unit.
4.
The Board of the Dominating Unit
As of the date of creation of these financial information, the Board of the Dominating Unit consisted of:



Jan Mroczka – Board Chairman,
Dariusz Domszy – Board Deputy Chairman,
Mariusz Kaczmarek – Board Member.
In 2008, Mr Mariusz Kaczmarek was elected as a Board Member.
In the period, in which the Dominating Unit acted as a general partnership, the Owners of the Partnership formed its
management:
 Andrzej Bartnicki,
 Jan Mroczka.
5.
The Supervisory Board of the Dominating Unit
As of the date of creation of these financial information, the Supervisory Board of the Dominating Unit consisted of:





Andrzej Bartnicki,
Paweł Puterko,
Łukasz Kurdyś,
Piotr Kowalski,
Jakub Górski.
6.
Approval of historical financial information for publishing
These historical financial information was accepted for publishing by the Board of the Dominating Unit on December 22th,
2009.
7.
Declaration of conformity and the basis of preparation
These historical financial information of the RANK PROGRESS S.A. Capital Group have been prepared according to the
International Standards of Financial Reporting (ISFR) and interpretations related to them, published as executive
regulations by the European Committee and which apply to the yearly reporting, and in the field, which is not
regulated in these Standards, according to the requirements of the Act on accounting and to executive
regulations issued on the basis of this Act.
As of the date of approval of these historical financial information for publishing, taking into account the fact that the
process of ISFR standards implementation is underway within EU and the activity of the Group, in the field of accounting
rules applied by the Group no significant differences have been observed between effective ISFR standards, and the ISFR
standards being implemented by the EU.
ISFR include standards and interpretations accepted by the International Accounting Standards Council („IASC”) and by the
Committee for Interpretation of International Accounting Reporting („CIIAR”).
Historical financial information was prepared using the assumption of continuity of business activity by the companies of
the Group in the predictable future, with the exception of KMM Sp. z o.o. in liquidation, which is being liquidated. As of the
date of approval of these historical financial information, no circumstances indicating a threat to the continuity of business
activity of other companies of the Group have been observed, with the exception of the dependent unit E.F. Progress IV Sp.
z o.o., the Board of which has lodged a bankruptcy application with a possibility of agreement to the proper court, this
Page 128
application has not been considered as of the date of preparation of these historical financial information. As a
consequence, one cannot exclude that the assumption of continuity of business activity of E.F. Progress IV Sp. z o.o. may
become irrelevant.
8.
Measurement currency and financial report currency
The measurement currency of the Dominating Unit and other companies included in these historical financial information,
as well as the reporting currency, is Polish zloty. All values, unless stated otherwise, are expressed in thousands of zlotys
(„tys. PLN”).
9.
Changes of applied accounting rules
Below, new or changed ISFR/MSR regulations applied by the Group in 2008, are presented. Except for few additional
revelations, application of these rules had no influence on the current result of the Group or on its financial situation.



MSR 1 Financial reports presentation – Capital-related revelations. The Group has used changed regulations of MSR 1.
(Note 45)
ISFR 7 Financial instruments: inclusion and evaluation. The Group has applied MSSF 7. The most important changes
have been introduced to the Goals and rules of financial risk management.
ISFR 8 Operational segments – The Group has presented the report according to the operational segments, in
accordance with the new ISFR 8 regulations.
Currently, ISFR in the shape approved by the EU do not significanly from the regulations approved by the International
Accounting Standards Council (IASC), excluding interpretations presented belw, which have not yet been approved for use
st
as of December 31 , 2008:
 ISFR 1 (change) „First instance of application of International Standards of Financial Reporting" and to MSR 27 (zmiana)
"Consolidated and unitary financial reports "- published on May 22nd 2008, modified ISFR 1 and MSR 27 is effective in
st
relation to yearly periods starting on January 1 , 2009 of later.
 ISFR 1 (change) „First instance of application of International Standards of Financial Reporting "- published on
th
November 27 , 2008. This standard is required for preparation of the first financial report of the unit according to ISFR
st
for yearly periods, starting from July 1 , 2009, with the possibility of earlier application thereof.
 ISFR 3 (change) „Business entities fusions"- published on January 10th, 2008 and effective in relation to reporting
st
periods starting on July 1 , 2009 or later.
 MSR 27 (change) „Consolidated and unitary financial reports"- published on January 10th, 2008 and effective in relation
st
to reporting periods starting on July 1 , 2009 or later.
 MSR 32 (change) „Financial instruments: presentation" and MSR 1 (change) "Financial reports presentation"- published
th
st
on February 14 , 2008, the modified Standard is effective in relation to reporting periods starting on July 1 , 2009 or
later.
 MSR 39 (change) „Financial Instruments: inclusion and evaluation"- published on July 31st, 2008, these changed are
st
retrospectively applied to yearly periods stating on July 1 , 2009 or later.
 MSR 39 (change) „Reclassification of financial assets: effectiveness date and regulations of the transition period"
th
st
published on November 27 , 2008. For reclassifications performed before November 1 , 2008: the partnership can
st
st
reclassify the financial assets with date effective from July 1 , 2008 (but not earlier) or on any day other than July 1
st
st
2008, but not later than at October 31 2008. The assets must be recognized and documented before November 1 ,
2008 or after that date (regardless of the starting time of the reporting period) are effective since the reclassification
date i.e. reclassifications are made at the moment of their actual reclassification.
 ISFR (2008) „Amendments to the International Standards of Financial Reporting 2008" – published on May 22nd, 2008.
st
The majority of amendments is effective for yearly periods starting on January 1 , 2009 or after that date.
 Interpretation of CIIAR 12 „Contracts on licenced services"- CIIAR 12 interpretation, published on November 30th,
st
2006, is applied for the first time to yearly periods starting from, or after, January 1 , 2008
 Interpretation of CIIAR 15 „Contracts on real estate construction"- CIIAR 15 interpretation, published on July 3rd, 2008,
st
is applied to yearly financial reports for the periods starting on January 1 , 2009 or later.
 Interpretation of CIIAR 16 „Net securities of investments in a foreign entity "- CIIAR 16 interpretation, published on July
rd
st
3 , 2008, is applied to yearly financial reports starting on October 1 , 2008 or later.
The Group does not predict that introduction of these standards or interpretations could significantly influence the
accounting rules (policy) applied by the Capital Group.
In 2009, the European Union approved for useinterpretations and further changes to the existing ISFR standards,
introduced by the IASR. The Group does not predict that application of these changes and interpretations could significantly
influence the accounting policy applied by the Capital Group, with the exception of changes introduced to MSR 40
st
„Investment real estates”, which apply to periods starding on January 1 , 2009 or later. According to these changes, entities
which accepted a model of evaluation of investment real estates to their fair value are obliged to perform such evaluation
also for real estates under construction. According to the previously effective rules, the Issuing Party has evaluated real
Page 129
estates under construction according to the MSR 16 i.e. historical cost of creation of purchase, thus the application of the
modified evaluation model will cause evaluation of the difference from overestimation of these real estate in periods
previous to the period, in which the real estate was released for use. Because no evaluations to the fair values for the real
estates under construction, owned by the Issuing Party are available, the influence of application of new rules to this data
for each balance day included in the historical financial information cannot be defined.
Additionally, the Group does not predict, that application of standards, which are already published, but not approved by
the EU, should significantly influence data presented in this Prospectus as historical financial information.
10. Significant values based on professional judgement and estimations
The Board of the Dominant Unit has used the best of its knowledge related to the applied standards and interpretations, as
well as to methods and rules of evaluation of particular entries of these historical financial information. Preparation of
historical financial information according to the ISFR required the Board to make some estimations and assumptions, which
are reflected in this information. The actual results may differ from these estimations.
Below, the basic assumptions related to the future are discusses, along with other key uncertainity sources as of the
balance date, which are related to a significant risk of a large correction of balance value of assets and obligations in the
next financial year.
Leasing contracts classification
The Group is a party of leasing contracts, which meet the requirements of financial leasing contracts according to the
Board.
Assets and reserves for delayed income tax
Assets and reserves for delayed income tax are evaluated using tax rates, which, according to the effective regulations, will
be applied at the moment of asset implementations or reserve cancellation, taking tax regulations in legal or actual effect
on the balance day, as basis. The Group defines the part of assets by virtue of delayed income tax, basing on the
assumption that a tax profit will be obtained, which will allow its use. Drop of tax results in the future could render this
assumption irrelevant.’
Depreciation fees
The level of depreciation is defined on the basis of predicted period of economic usefulness of elements of tangible fixed
assets and non-material values. These estimations are based on predicted life cycles of particular tangible fixed assets,
which may change in the future.
The Group evaluates investment real estates according to a fair value model, using evaluations made by professional
experts.
Extracts updating supplies value
The Group makes an estimation for each balance day, if there are any indications of value loss for real estates classified as
supplies. If such indications of value loss exist, the Group makes extracts, which update the real estate value to the level of
recovered value, i.e. to the higher of two values: fair value minus sale costs or useful value.
Extracts updating obligations
The Group has updated values of obligations, estimated the probability of obtaining income from outdated active debts and
loans given and estimated the value of lost income, for which an updating extract was made.
Fair value of derivative instruments
The Group has defined the fair value of derivative financial instruments, which are not quoted on active markets (eg.
forward contracts) on the basis of evaluations obtained from banks, which are parties of these contracts. These evaluations
include discounted future flows generated by these instruments and by predictes currency rates.
11. Important accounting rules
Basis of preparation
Historical financial information has been prepared according to the rule of historical cost, with the exception of evaluation
of investment real estates to their fair values and evaluation of derivative financial instruments. The historical financial
information have been presented in Polish currency, and all values, unless stated otherwise, are given in thousands of
Polish zlotys.
Consolidation rules
Page 130
Financial reports of dependent companies are created for the same reporting periods as the reports of Dominating Unit,
applying coherent accounting rules, on the basis of uniform accounting rules applied to the transactions and similar
economic events. Corrections are introduced in order to eliminate discrepancies in the applied accounting rules.
The Dominating Unit and dependent units prepare unitary financial reports according to the Polish Accouting Standards
(„PAS”), thus, for the needs of consolidation, they are adjusted to the ISFRF.
All significant saldos and transactions between the units of the Group, including unsettled profits and losses resulting from
transactions made within the Group, have been wholly eliminated.
The dependent units undergo consolidation in the period from taking the control over them by the Group, and they stop
being consolidated until the date of control cessation. The control of the Dominating Unit takes place then, when it directly
or indirectly, thorugh its dependent parties, owns more than a half of votes in the given company, unless it can be proven
that such ownership does not grant the control over the company. The control also takes place then, when the Unit can
influence the financial and operational policy of the particular unit.
Participations of the minority in the net assets (excluding value of the company) of consolidated dependent entities are
presented in a separate position of own capital „Minority participations”. Minority participations consist of value of shares
on the day of business units fusion and minority shares in the changes of own capital, starting from the date of the fusion.
Losses assigned to minority participations, which exceed the participation in the basic capital of the entity, are allocated to
the Group’s shares, with the exception of binding obligation and the ability of minor shareholders to perform additional
investments, which are about to cover the losses.
Business entities fusions
Overtakes of dependent units are settled using the purchase method. The cost of units fusion is evaluated to aggregated
fair value (as of the payment date) of assets transfered, taken or overtaken obligations and capital instruments issued by
the Group in exchange for overtaking the dependent unit, increased by costs directly related to the fusion of business units.
Identifiable assets, obligations and conditional obligations of the overtaken unit, meeting the inclusion requirements
according to ISFR 3 „Business units fusion" are included in the fair value as of the overtake date, excluding fixed assets (or
groups for disposal), classified as destined for sale, according to ISFR 5 „Fixed assets designed for disposal and activity
cancellation", included in and evaluated to the fair value minus sales costs.
Company value
The value of the company created as a result of the overtake results from the event of surplus of unit overtake cost in
comparison to the participation of the Group in net fair value of identifiable assets, obligations and conditional obligations
of the dependent unit, associated unit or a joint venture, included as of the overtake date.
The value of the company is initally included as an element of assets after the cost, and then evaluated according to the
cost minus the accumulated loss by virtue of values loss.
For the needs of value loss testing, the value of the company is allocated to the particular units of the Group generating
monetary flows, which should make profit from the synergies resulting from the fusion.
Investment real estates
Investment real estates are defined as a ground, a building or a part of a building, which is treated by the Group as a source
of rental income or which the Group holds because of the increase of its value. The condition of inclusion in this balance
entry is the probability of obtaining economic benefits by virtue of ownership of the given real estate and the possibility of
creditable estimation of purchase cost or of creation cost.
The initial inclusion of investment real estates is made according to the purchase price, including transaction costs. The
balance value of this element of the assets includes the cost of replacement of a part of the investment real estate the
moment the cost is paid, if the inclusion criteria are met, and if the cost does not include current maintenance of the real
estate. After the inital inclusion, the investment real estates are listed according to their real values. Profits or losses
resulting from changes of the real value of investment real estates are included in the account of profits and losses for the
period they have taken place.
The investment real estates are removed from the balance in the case of their disposal or in the case of permanent removal
of the real estate from use, if no future profits are expected from its sale. All profits or losses resulting from the removal of
the investment real estate from the balance are included in the account of profits and losses for the period they have taken
place.
Page 131
Transfers of assets to the investment real estates are made only then, when their mode of use is changed, as confirmed by
the end of assets element usage by the owner, by signing an operational leasing contract or by finishing construction
works/creation of the investment real estate. If the element of assets used by the owner becomes an investment real
estate, the Group applies rules described in the Fixed assets part until the mode of usage for this real estate is changed. In
the case of transfer of assets from the supples to the investment real estate, the difference of fair value of the real estate
estimated as of the transfer date and its previous balance value is included in the account of profits and losses. When the
Group finishes construction works or the creation process of an investment real estate, the difference between the fair
value estimated for this day and its previous balance value is included in the account of profits and losses.
In the case of a transfer of investment real estate to the assets used by the owner or to the supplies, the suspected costs of
such an element of the assets, which will be accepted for its inclusion in another category is equal to the fair value of the
real estate evaluated on the date of the usage mode change.
Investment real estates under construction
The investment real estates are listed in the real estate entry as real estates under construction until the time their
construction is finished or the time they are created. Costs of agent commissions for finishing the commercial area rental
contracts and expenses on finishing of the premises of the renting parties are included in active debts in other assets,
accoring to the rental contracts. These costs are later included in the overestimation amount of investment real estates,
which they are related to.
Fixed assets
Fixed assets acquired in separate transactions are listed at their historical cost minus the cancellation and accumulated loss
caused by the value loss. The depreciation is calculated using a linear method for the predicted usage period of these
assets. The predicted usage period and the depreciation are verified at the end of each yearly reporting period, and the
effects of changes in these estimations are related to future periods.
Assets maintained on the basis of financial leasing contracts are depreciated through their predicted usage period using the
same rules as in the case of own assets, if there is a certainity of obtaining ownership rights before the end of the leasing
period. Otherwise, these assets are depreciated, but not longer then the leasing period.
Profits or losses resulting from sales / liquidation or end of usage of the entries of tangible fixed assets is defined as the
difference between the sales income and the balance value of these entries, and they are included in the account of profits
and losses.
Non-material values
Non-material values acquired in separate transactions are listed at their historical cost minus the cancellation and
accumulated loss caused by the value loss. The depreciation is calculated using a linear method for the predicted usage
period of these assets. The predicted usage period and the depreciation are verified at the end of each yearly reporting
period, and the effects of changes in these estimations are related to future periods.
Non-material values overtaken during a fusion of business entities are identified and included as separated from the value
of the company, if they meet the definition of non-material and legal values and their fair value can be reliably estimated.
The cost of such assets corresponds to their fair values as of the overtake date.
After the initial inclusion, such values are listed at their historical cost minus the cancellation and accumulated loss caused
by the value loss in the same way, as non-material and legal values obtained in separate transactions.
Loss of value of tangible fixed assets and non-material values
For each balance day, the Group performs a survey of balance values of owned fixed assets and non-material values in
order to state, if there are indications of loss of their value. If such indications were confirmed, the recollectable value of
such an element of the assets is estimated in order to define a potential extract by this virtue.
Assets and reserve by virtue of delayed income tax
The delayed tax is calculated using a balance obligations method as a tax subjected to future payment or return, related to
differences between balance values of assets and credits and their taxation values used to calculate the tax basis.
The reserve for delayd tax is subtracted from all positive transitory differences subjected to taxation, while the element of
the assets by virtue of delayed tax is defined to the level of probable decrease of future tax profits by the defined transition
differences. The assets entry or obligation by virtue of delayed tax does not form, if the transition difference forms by virtue
of the company value or by virtue of the initial inclusion (with the exception of inclusion after business entities fusion) of
Page 132
other element of the assets or a transaction obligation, which does not influence either the tax result, or the accounting
result.
The reserve for delayed tax is subtracted from transition tax differences formed as a result of investment in dependent
companies, associated companies and participations in joint ventures, unless the Group is able to control the moment of
reversal of the transition difference and if it is probable, that the transition difference does not reverse in the predictable
future. Assets by virtue of delayed tax resulting from the transition differences in deductions related to such investments
and participations is included in the scope corresponding to probable, taxable profits, which could be compensated using
transition differences, if it is probable that these differences will not reserve in the predictable future.
The balance value of an element of assets by virtue of delayed tax is a subject to survey on each balance day, and if
expected future tax profits will be to small to recollect the element of assets or a part of it, then this values has to be
properly lowered.
Assets and obligations by virtue of delayed tax are calculated using tax rates, which wil be in effect the moment the asset
entry is implemented or when the obligation becomes executable, according to the tax regulations (fees) in legal or actual
effect on the balance day. The evaluation of assets and obligations by virtue of delayed tax reflects tax consequences of the
way, the Group wants to use in order to recollect or to settle the balance value of assets and obligations as of the day of
preparation of the financial report.
Assets and obligations by virtue of delayed tax are compensated in the case, when the right to compensate current entries
of assets and tax obligations exist, if these entries are taxed by the same tax organ, and if the Group wants to settle its
current assets and tax obligations as net values.
Supplies (reserves)
The supplies include: preproducts and products being produced, ready products, goods and prepayments for supplies.
Because of the activity specifics, the purchased grounds or rights or perpetual use of the ground are classified as products
being produced, if the ground is destined for housing, or as goods for sale, if the ground is destined for sale. Ready products
include mainly apartments and facilities sold by final contracts. The supplies of fixed elements of current wealth are
evaluated according to their values corresponding to the purchase price of ground real estates and costs of creation of
development activity products, increased by activated financial costs. Supplies related to long-term construction contracts
are evaluated according to suggestions of MSR Nr 11 "Construction works contracts". The supplies are valued not higher
than the potential net value of sale.
Active debts by virtue of supplies and services and other active debts
Active debts by virtue of supplies and services are included and listed according to the initially invoiced amounts, including
an updating extract for non-executable active debts. The updating extract for questionable active debts are included in the
account of profits and losses if their non-exectuability is confirmed.
If the monetary flow in time is significant, then the value of active debt is defined by discounting forecasted future
monetary flows to their current value using gross discount rate, which reflects current market evaluations of monetary
value in time. If a discount-based method was used, the increase of active debt in time is included as financial income.
Monetary assets and their equivalents
Monetary assets and short-term deposits listed in the balance include monetary assets in the bank and in the cashier,
together with short-term deposits with initial due dates not longer than three months.
The saldo of monetary assets and their equivalents listed in the monetary flow accounts consists of the aforementioned
monetary assets and their equivalent, minus unpaid loans in the current accounts.
Monetary assets in foreign currencies are evaluated at the average NBP rate for the reporting day. Currency rate diffrences
related to monetary assets in foreign currencies and operations on foreign currencies (forex) are included in the account of
profits and losses.
Financial assets
Financial assets are divided into the following categories:
 Financial assets maintained until their execution date,
 Financial assets evaluated to the fair value by the financial result,
 Granted loans and active debts,
 Financial assets available for sale.
Page 133
Financial assets held to the execution date are investments with defined or definable payments and a defined executability
date, which the Group intends to hold and has the ability to hold them until that date. Financial assets held until the
execution date are evaluated according to their depreciated cost using the method of effective interest rate. Financial
assets held to execution date are classified as long-term assets, if their due date exceeds 12 months from the balance day.
Financial assets obtained in order to generate profit as a result of short-term price fluctuations are classified as financial
assets, evaluated to their fair value by the financial result. Derivative instruments are also classified as designed for
circulation, unless these are instruments designed as effective securing instruments or financial promise contracts. Financial
assets evaluated to their fair value by financial result are evaluated to their fair value by taking into account their market
value on the balance day without taking into account the costs of sale transaction. Changes of value of these instruments
are included in the account of profits and losses as financial incomes or costs. Financial assets evaluated to their fair value
are classified as current assets. If a contract contains one or more built-in derivative instruments, then the entire contract
may be classified within the category of financial assets evaluated to their fair value by the financial result.
Granted loans and active debts are financial assets not classified as derivative instruments, with defined or definable
payments, not quoted on the active market. They are classified as current assets, if their execution date does not exceed a
current cycle since the balance day. Granted loans and active debts with execution date exceeding a current cycle since the
balance day are classified as fixed assets.
All other financial assets are financial assets available for sale. Financial assets available for sale are included according to
their fair value. If they have no stock quotations on the open market and a reliable estimation if their fair value using
alternative methods is not possible, then the financial assets available for sale are included at their purchase price,
corrected with extract on the value loss. The positive and negative diffrence between the fair value of the assets available
for sale (if there is a market price defined on an active market or the fair value of which can be defined in other reliable
way,) and their purchase price, minus delayed tax, is included in the reserve capital from evaluation update. The drop of
value of assets available for sale caused by loss of value is included in the account of profits and losses as a financial cost.
Purchases and sales of financial assets are defined on the day of transaction. Upon its initial inclusion, the element of
financial assets is evaluated to its fair value, increased (in the case of element of assets not classified as evaluated to its fair
price by financial results) by the transaction costs, which can be directly assigned to the purchase.
The element of financial assets is removed from the balane, if the Group loses control over legal contracts consisting that
particular financial instrument; it usually takes place in the case of instrument sales or when all monetary assets flow
assigned to the particular instruments are transferred to an independent third party.
Reserves
Reserves are listed in the case of creation of current obligations within the Group (legal or normative), which are a
consequence of past events, the probability of settling them by the Group is high and the amount of these obligations can
be reliably evaluated.
The included reserve amount reflects the most precise estimation of amount required for settlement of a current obligation
as of the balance day, including risk and uncertainity related to this obligation. If the reserve is evaluated using the method
of estimated monetary flow required for the settlement of the current obligation, its balance value corresponds to the
curent value of these flows.
If there is a possibility that a part, or the entire economic profits required to settle the reserve could be recollected from a
third party, this active debt is included as an element of assets, if the probability of recollection of this amount is high and if
it can be reliably evaluated.
Commercial obligations are evaluated to the payment amount.
Other financial obligations, the settlement of which is made by release of financial assets other than monetary assets or
exchange for financial instruments, according to the contract, are evaluated to their fair value.
Financial obligations, which are not financial instruments evaluated to their fair value by the financial result, are evaluated
according to the depreciated cost using the method of effective interest rate.
Interest-rated bank loans and debt securities
All bank loans and debt securities are included (in the initial inclusion) according to the fair value minus costs related to
obtaining the loan.
Page 134
After the initial inclusion, all rated loans and debt securities are then evaluated according to their depreciated cost, using
the method of effective interest rate, with the exception of obligations designed for secured positions, which are evaluated
according to the accounting rules for securities or obligations classified upon the initial inclusion as financial instruments
evaluated to their fair value by the financial result.
During the estimation of depreciated cost, one includes costs related to obtaining the loan and discounts or bonuses
obtained during the settlement of the obligation.
Profits and losses are included in the account of profits and losses at the moment they are removed from the balance, and
also in proper periods of the instrument’s life, using the effective interest rate method.
Own capital
Own capitals and reserve capitals are evaluaed according to their nominal value. Differences between the market value of
obtained payment and the nominal value of shares is included in the reserve capital. The costs of shares issue, related to
the increase of the capital, lower the reserve capital.
The Group also lists minority participations in a separate entry of the own capital.
The Group reveals undivided profit from the previous years, the result of the period and results of the transformation from
a general partnership to the stock partnership in the entry „Profits held”.
Inclusion of sales income
The incomes and profits are understood as creation of economic benefits during the reporting period, which have a reliably
defined value, as an increase of assets value or as a decrease of obligations value, which will lead to the increase of own
capital or to decrease its deficiency in a way different than bringing in assets by shareholders or owners.
Sales income is understood as due or received amounts from the sales of material elements and services, minus the
effective VAT tax. The sales incomes are defined in the value expressed in real sales prices, including bonifications and
bonuses.
Income from products, goods and materials sales are included, when the significant risk and benefits from the ownership
right to the products, goods and materials have been passed on to the buyer. Income from construction services sales and
implementation period shorter than 6 months are defined at the moment the construction service is finished. The Group
includes the sales income as values of probable benefits obtained in the sale transactions. All conditional income resulting
from the sales transactions are included, when all significant conditions of the sales transaction are met and if there is a
high probability of obtaining significant economic benefits by the Group.
The Group has assumed a rules, that the moment of passing the significant risk and benefits from the ownership rights to
investments, products, goods and materials to the buyer takes places no earlier than at the moment of signing the proper
authenticated deed, if the sale transaction requires it. This is the case mainly for real estate sales (grounds and other real
estates being a subject of circulation, such as buildings created by the Partnership, including apartments).
Income from real estate rents are included using a linear method for the rental period, according to the signed contracts.
Income by virtue of interest rates and dividends
Income by virtue of dividends are included, when the right of shareholders to obtain the payment is created.
Income by virtue of interest rates is included as increasing, according to their creation time, by relation to the amount of
the capital which is yet to be paid, including the effective interest rate, namely, the interest rate which effectively discounts
future monetary income predicted for the expected period of usage of the given element of assets to the net balance value
of that element.
Leasing
Leasing is classified as financial leasing, when all potential benefits and the risk of being an owner are transferred to the
leasing receiver, as specified in the contract. All other leasingu types are treated as current leasing.
Foreign currencies
The functional currency of the Group is Polish zloty, which is the currency of basic economic environment of the Group’s
activity.
Page 135
Transactions performed in a currency other than Polish zloty are included according to the given currency rate of the day of
transaction. Monetary obligations and assets denominated in foreign currencies are recalculated according to the currency
rate of the balance day, i.e. the average rate set by the NBP. Non-monetary assets and obligations evaluated to their fair
value and denominated in foreign currencies are evaluated according to the rate of the day, when the evaluation to the fair
value was performed. Non-monetary entries evaluated in foreign currencies according to their historical cost are not
renominated again.
All currency rate differences are included in the account of profits and losses in the period they take place, with the
exception of:
 Rate differences related to the assets under construction, designed for future production use, which are included in
the costs of these assets and treated as corrections of costs of interest rate loans granted in foreign currencies,
 Currency rate differences resulting from transactions performed as a security measure against a specific currency risk,
currency rate differences resulting from entries of monetary active debts or obligations against foreign units, which are
not planned to be settled with or if such settlements are not probalbe, forming a part of net investments in a unit
located abroad and included in reserve capital for foreign currency recalculations and in net profit/loss from the
disposal of the investment.
The following rates have been assumed for the needs of balance evaluation:
st
st
st
December 31 , 2008
December 31 , 2007
December 31 , 2006
EUR
4,1724
3,5820
3,8312
USD
2,9618
2,4350
2,9105
External financing costs
External financing costs directly related to purchase or creation of elements of assets requiring a longer time in order to be
released for use or sale, are added to the costs of creating such assets, until the moment, when these assets are in general
ready for the planned use or sale. Income from the investment obtained as a result of short-term investment of obtained
external assets before investing them in the discussed assets lower the value of external financing costs, which are a subject
to capitalisation.
All other costs of financial investment are directly included in the account of profits and losses for the period they took
place.
Current tax
Current tax duties are calculated on the basis of tax results (tax basis) of the given tax year. Tax profit (loss) differs from the
net accounting profit (loss), because of exclusion of taxable incomes and costs forming the costs of income generation in
the next years and costs, which will never by subjected to taxation. The duty of the Group by virtue of current tax is
calculated on the basis of tax rates effective in the given tax year.
12. Change of legal form
th
On October 10 , 2007, the transformation of Bartnicki, Mroczka E.F. Rank Progress Spółka jawna general partnership into a
stock partnership Rank Progress S.A has been registered. Here, the consolidated balance and the account of profits and
losses for the period of general partnership activity and the stock partnership activity in 2007, is presented.
BALANCE
Assets
31.12.2007
Real estates
09.10.2007
174 164
173 263
Fixed assets under construction
2 109
4 458
Other fixed assets
3 817
4 040
-
183
269
470
Asset by virtue of delayed tax
37
48
180 396
182 461
Company value
Fixed assets
Page 136
Reserves
91 111
71 019
24 968
23 715
4 955
10 671
121 034
105 405
301 430
287 866
Monetary assets
Current assets
Total assets
Credits
31.12.2007
Share capital
09.10.2007
3 250
3 250
125 658
113 392
12 784
36 185
128 908
116 642
25
25
128 933
116 667
71 866
68 523
1 578
2 079
19 955
18 269
93 399
88 871
15 012
13 852
11 545
9 982
991
-
Other obligations
51 550
58 494
79 098
82 328
301 430
287 866
10.10.2007 31.12.2007
01.01.2007 09.10.2007
18 157
44 194
8 189
9 513
779
33 705
9 189
976
13 190
25 309
Sold goods value
1 556
16 714
738
1 813
External services
9 705
3 147
Other costs
1 191
3 635
4 967
18 885
6 436
-
41
127
Profits held
Including net profit
Own capital assigned to shareholders of the Dominating Unit
Minority participation
Total own capital
Other obligations
Reserves
Total credits
ACCOUNT OF PROFITS AND LOSSES
ACCOUNT OF PROFITS AND LOSSES
Continued activity
Sales income
Products and services sales income
Goods sales income
Product level changes
Sales profit
Evaluation of investment real estate to their fair value
Page 137
Other current costs
1 375
209
Current activity profit
10 069
18 803
Financial income
6 910
21 341
611
3 710
16 368
36 434
3 584
249
12 784
36 185
-
-
12 784
36 185
12 784
36 185
-
-
Financial costs
Gross profit
Income tax
Net profit from continued activity
Abandoned activity
Net profit from abandoned activity
NET PROFIT IN CURRENT YEAR
Assigned to shareholders of the dominating unit
Assigned to minor shareholders
13. Correction of previous periods error
st
st
An error was found in the financial report for the period from January 1 , 2007 to December 31 , 2007, namely, an
incorrent inclusion of an amount of 853 000 PLN in the cost of sold goods and materials, representing value of the grounds
and expenses on these grounds, located in Zgorzelec. The transaction of sale of these ground has taken place in 2009, thus
st
the Group made a correction to the report for the year ended on December 31 , 2007, which was an increase of goods
level at the end of 2007, and a decrease of the value of goods sold, and as a consequence – decrease of the value of goods
sold, and thus – an increase of the financial result by the amount of 853 000 PLN.
Below, the effects of inclusion of the aforementioned operation in the financial report for the tax year ending in 2007, are
presented.
State as of
State as of
December
December
Error
st
st
BALANCE CHANGES
31 , 2007
31 , 2007
correction
before
after
correctoin
correction
Assets
Fixed assets
180 396
-
180 396
Reserves
90 258
853
91 111
Other current assets
29 923
-
29 923
300 577
853
301 430
128 080
853
128 933
Including net profit
48 116
853
48 969
93 399
-
93 399
79 098
-
79 098
300 577
853
301 430
State as of
December
st
31 , 2007
before
correction
Correction of
the basic error
State as of
December
st
31 , 2007
after
correction
62 351
-
62 351
TOTAL ASSETS
Credits
Total own capital, including
TOTAL CREDITS
ACCOUNT OF PROFITS AND LOSSES CHANGES
Sales income
Page 138
Current activity costs, including:
39 352
-853
38 499
Sold goods value
19 123
-853
18 270
Profit (loss) from sales
22 999
853
23 852
Gross profit (loss)
53 655
-853
52 802
3 833
-
3 833
48 116
853
48 969
Income tax
Net profit (loss) from continued activity
In these historical financial information, the comparable data for 2007 have been transformed, including the correction
described above.
14. Real estates
Specification of investment real estates
Details
31.12.2008
31.12.2007
31.12.2006
119 831
117 204
123 853
- Fortepiany Legnica
9 080
9 080
-
- Zgorzelec
8 646
8 646
-
- Galeria Piastów II (Podkowa)
23 157
-
-
-Opole Turawa
12 084
-
-
172 798
134 930
123 853
- Galeria Piastów
85 672
14 531
6 463
- Zamość
15 253
13 138
-
- Twierdza Commercial Centre / Kłodzko
73 288
8 683
-
- Grudziądz
2 345
2 344
-
- Stargard Szczeciński
8 540
-
-
- other
4 315
538
1 810
189 413
39 234
8 273
Extracts updating real estates under construction
-1 755
-
-
-Stargard Szczeciński
-1 755
-
-
Total real estates under construction, net
187 658
39 234
8 273
Total real estates, net
360 456
174 164
132 126
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
a) state at the beginning of the period
174 164
132 126
18 956
- investment real estates
134 930
123 853
-
39 234
8 273
18 956
b) increases (by virtue of)
188 241
49 972
113 170
- purchase
171 646
35 602
18 641
16 595
14 370
94 529
1 949
7 934
-
- Galeria Piastów I
Total investment real estates
Real estates under construction
Total real estates under construction, gross
CHANGE OF REAL ESTATE LEVELS (ACC. TO TYPE GROUPS)
- real estates under construction
- reevaluation to the fair value
c) decreases (by virtue)
Page 139
- updating extracts
- reevaluation to the fair value
1 755
-
194
7 934
- sales
d) state at the end of the period
360 456
-
-
-
174 164
132 126
Other information
The Group has evaluated all finished investment real estates to their fair value, using the services of experts.
Within the real estates, the Group presents real estates classified as investment real estates according to MSR 40 by their
fair value and real estates under construction, evaluated according to MSR 16. According to the changes in MSR 40, starting
st
from January 1 , 2009, the method of evaluation of real estates under construction is changes, as described above in p. 9 –
Changes of applied accounting rules above.
15. Non-material values
Specification of non-material values
Details
31.12.2008
31.12.2007
31.12.2006
474
-
-
-gross value
536
-
-
- redemption
62
-
-
474
-
-
31.12.2008
31.12.2007
31.12.2006
4 419
3 817
3 832
91
91
91
1 966
2 222
2 479
384
404
209
1 873
1 014
976
105
86
77
-
2 109
2 453
4 419
5 926
6 285
Computer software and other (own, purchased), including:
Total non-material values
16. Fixed assets under construction and other fixed assets
Specification of tangible fixed assets
Details
a) fixed assets, including:
- grounds (including perpetual right of ground use)
- buildings, premises and objects of land and water engineering
- technical devices and equipment
- means of transportation
- other fixed assets
b) fixed assets under construction
Total tangible fixed assets
Changes of tangible fixed assets
Tangible fixed assets
Ground,
buildings
and
constructs
Equipment
Means of
and techical transportati
devices
on
Other
Total
Initial value or evaluation
st
As of January 1 , 2006
Increases – purchases
Increases - other
Decreases (sales, liquidation, transfers)
Decreases (other)
st
As of December 31 , 2006
2 116
66
552
115
2 849
-
163
-
73
236
2 564
-
1 018
-
3 582
-2 025
-
-
-
-2 025
-
-
-
-102
-102
2 655
229
1 570
86
4 540
Page 140
st
2 655
229
1 570
86
4 540
-
717
529
-
1 246
131
180
28
30
369
-
-45
-
-
-45
-131
-592
-
-
-723
2 655
489
2 127
116
5 387
2 655
489
2 127
116
5 387
1 174
72
1 796
49
3 091
-641
-4
-
-
-645
Decreases (other)
-529
-
-
-
-529
2 659
557
3 923
165
7 304
429
7
271
98
805
85
13
323
9
430
-429
-
-
-
-429
-
-
-
-98
-98
85
20
594
9
708
85
20
594
9
708
257
153
519
21
950
Decreases by virtues of liquidations or sales
-
-3
-
-
-3
Other decreases
-
-85
-
-
-85
342
85
1 113
30
1 570
342
85
1 113
30
1 570
Yearly depreciation
260
88
937
30
1 315
st
602
173
2 050
60
2 885
st
2 570
209
976
77
3 832
st
2 313
404
1 014
86
3 817
st
2 057
384
1 873
105
4 419
31.12.2008
31.12.2007
31.12.2006
Own
2 589
2 976
3 123
Used on the basis of leasing contracts
1 830
841
709
Total
4 419
3 817
3 832
Increases – other
Decreases (other)
st
st
st
Redemption and value loss
st
Yearly depreciation
Decreases by virtues of liquidations or sales
Other decreases
st
st
Yearly depreciation
st
st
Net value
Ownership structure of fixed assets
Details
Page 141
Other information
Depreciation (redemption) fees in particular groups of tangible fixed assets were determined on the basis of periods of
economic usefulness and they are as follows:
 from 10 to 40 years for buildings,
 from 3 to 22 years for techical devices and equipment,
 from 5 to 7 years for means of transportation,
 from 2,5 to 10 for other fixed assets.
st
st
st
As of December 31 , 2008, December 31 , 2007 and December 31 , 2006 there were no circumstances, according to which
the Group should create significant extracts updating the value of tangible fixed assets.
st
st
st
As of December 31 , 2008, December 31 , 2007 and December 31 , 2006 there were no fixed assets created on the
Group’s own.
The Group uses fixed assets on the basis of financial leasing contracts (means of transportation and construction
equipment).
17. Company value
st
The Dominating Unit purchased on September 21 , 2004 100% of shares of HIT Zarząd Majątkiem Polska Legnica 1 Sp. z
o.o., taking full control over this entity.
This overtake was settled according to the ISFR 3 regulations, using purchase method.
Because of the fact, that due to the first allocation of purchase price of the net fair value of purchased assets, a surplus of
net fair value of purchased shares was created against the purchase price, the Group has performed the allocation once
again. The new evaluation did not change the purchase settlement, however, and the created surplus of 3 811 000 PLN was
included in the result for the period, i.e. year 2004.
The net fair value as of the purchase date totalled 12 802 000 PLN, while the purchase price was 9 412 000 PLN, which
caused the surplus of 3 811 000 PLN.
th
On December 13 , 2004, the Dominating Unit purchased 100% of shares (in two transaction) of KMM Sp. z o.o., taking full
control over this entity.
This overtake was settled according to the ISFR 3 regulations, using purchase method.
Allocation of purchase price to the net fair value of purchased assets was made, which caused a positive company value in
the form of a surplus of the purchase price (240 000 PLN) over the net fair value of the assets (57 000 PLN) with the amount
of 183 000 PLN.
Other companies of the Group
Other companies forming the Capital Group were founded or co-founded by the dominating unit, thus no company values
were created by virtue of their foundation.
Extracts updating company value
On the basis of analysis performed, the Board of the Partnership has made at the end of 2007 an extract, updating company
value created upon purchase of KMM Sp. z o.o. because of the planned liquidation of this company.
18. Assets and credits by virtue of delayed income tax tytułu odroczonego podatku dochodowego
Details
Balance
Account of profits and losses
31.12.2008 31.12.2007 31.12.2006
01.01.2008 01.01.2007 01.01.2006
31.12.2008 31.12.2007 31.12.2006
Reserve by virtue of delayed tax
Evaluation of real estates to their fair
value
Other
22 535
19 227
17 972
3 289
1 255
17 964
81
728
-
-647
728
-
Page 142
Gross reserve by virtue of delayed tax
22 616
19 955
17 972
2 642
1 983
17 964
Extracts updating value of long-term
investments
356
-
-
356
-
-
Evaluation of derivative instruments
7 132
-
-
7 132
-
-
197
13
-
184
13
-
-
8
-
-8
-
1 297
-
-
1 297
-
-
Tax loss for settlement
377
-
-
377
-
-
Other
459
24
-
435
24
-
9 818
37
8
9 781
29
-
7 139
-1 954
-17 964
Assets by virtue of delayed tax
Unpaid workers’ benefits
Evaluation to the fair price – dependent
unit purchase
Negative rate differences
Gross assets by virtue of delayed tax
Duty by virtue of delayed income tax
Net asses/reserve by virtue of delayed
tax, including:
Reserve by virtue of delayed tax –
continued activity
-12 798
-19 918
-17 964
9 818
37
8
22 616
19 955
17 972
-
-
-
Reverse by virtue of delayd tax –
abandoned activity
In all periods presented in the table above, the effect of changes of asset by virtue of delayed tax and of reserve for delayed
tax have been included in total for particular periods in the account of profits and losses.
19. Supplies
Specification of supplies
Detailes
31.12.2008
31.12.2007
31.12.2006
952
-
-
18 353
62 376
-
Goods
114 235
28 735
58 720
Total
133 540
91 111
58 720
Materials
Production underway
st
The goods of the Group consist of grounds purchased for their further sale. As of December 31 , 2008 the Group has
included in the goods :
o
N
Project name
Location
Project type
Ground area
(ha)
Balance
value
1.
Opole Malinka
Opole
Mall (hypermarket)
3,14
3 049
2.
Jastrzębie Zdrój
Jastrzębie Zdrój
Commercial gallery
3,53
8 735
3.
Brzeg
Brzeg
Market
-
1 833
4.
Wrocław
Wrocław
Apartment district
6,84
44 296
5.
Legnica, ul. Nowodworska
Legnica
Mall (hypermarket)
3,01
2 120
6.
Legnica, ul. Jaworzyńska
Legnica
Wholesale object
4,62
12 771
7.
Bielsko-Biała
Bielsko-Biała
Supermarket
0,49
2 394
8.
Katowice
Katowice
Multifunctional centre
0,84
39 037
Page 143
Total
114 235
st
As of December 31 , 2007 the Group listed as goods:
o
N
Project name
Location
Project type
Ground area
(ha)
Balance
value
1.
Carrefour
Zamość
Mall (hypermarket)
0,79
1 289
2.
Carrefour
Opole
Mall (hypermarket)
3,14
3 048
3.
Carrefour
Jastrzębie
Mall (hypermarket)
3,54
8 861
4.
Carrefour
Szczecin
Mall (hypermarket)
3,46
7 579
5.
Leroy Merlin
Legnica
Mall (hypermarket)
2,85
1 648
6.
Utility premise
Brzeg
Utility premise
-
1 808
7.
Ground
Zgorzelec
Ground
4,45
3 583
8.
Other
-
919
Total
28 735
st
As of December 31 , 2006 the Group listed as goods:
o
N
Project name
Location
Project type
Ground area
(ha)
Balance
value
1.
Carrefour
Opole
Mall (hypermarket)
4,25
3 736
2.
Carrefour
Jastrzębie Zdrój
Mall (hypermarket)
3,54
8 537
3.
Carrefour
Szczecin, ul Struga
Mall (hypermarket)
3,46
7 420
4.
Carrefour
Szczecin, ul. Wiosenna
Mall (hypermarket)
7
9 278
4.
Grunt
Wrocław
Ground
5,84
24 658
5.
Grunt
Zgorzelec
Ground
12,33
4 561
5.
Other
-
530
Total
58 720
The ongoing production at the end of 2008 consisted of expenses made by the end ot the year, which were related to the
planned construction of apartment districts and service facilities.
o
N
Project name
Location
Project type
Balance
value
1.
Browar - Legnica
Legnica
Office-apartment building
6 243
2.
Osiedle Ptasie
Legnica
Apartment district
2 456
3.
Galeria Piastów III - Legnica
Legnica
Apartments
9 120
4.
Zgorzelec
Zgorzelec
Roads
534
Total
18 353
st
The ongoing production listed by the Group as of December 31 , 2007, included, e.g.:
o
N
Project name
Location
Project type
Balance
value
1.
Browar - Legnica
Legnica
Apartment-service building
5 800
2.
Osiedle Ptasie
Legnica
Apartment district
2 453
3.
Galeria Piastów III - Legnica
Legnica
Apartments
2 556
4.
Zgorzelec
Zgorzelec
Commercial gallery
6 239
Page 144
5.
Popowice - Wrocław
6.
Other
Wrocław
Apartment district
42 247
3 081
Total
62 376
st
As of December 31 , 2006 no ongoing production was listed.
In the period of 2006-2008 the Group did not perform any significant extract updating the value of supplies.
20. Active debts and other assets
Specification of active debts and other long-term assets
Details
31.12.2008
31.12.2007
31.12.2006
68
269
-
Commercialisation costs of real estates under construction
1 530
-
-
Net total active debts
1 598
269
-
-
-
-
1 598
269
-
31.12.2008
31.12.2007
31.12.2006
23 363
24 336
14 404
2 245
901
56
25 608
25 237
14 460
68
269
-
25 540
24 968
14 460
31.12.2008
31.12.2007
31.12.2006
3 674
10 013
4 583
12 538
667
2 980
7 151
13 656
6 841
23 363
24 336
14 404
100
91
157
23 463
24 427
14 561
Active debts by virtue of financial leasing
Extracts updating the value of active debts
Gross active debts
Specification of active debts and other short-term assets
Details
Active debts by virtue of supplies and other active debts
Inter-periodic settlements
Total
- long-term
- short-term
Specification of short-term active debts
Details
Active debts by virtue of supplies and other active debts
Public-legal active debts
Other active debts and assets
Net total active debts
Extracts updating value of the active debt
Gross active debts
Analysis of age structure of active debts by virtue of supplies and services
Balance date
Total
Past due date, but executable
Before due date
< 30 days
30 - 90 days
91 - 180 days
> 180 days
st
3 674
2 104
434
585
58
493
st
10 013
9 192
333
207
65
216
st
4 583
2 014
376
1 815
65
313
December 31 ,
2008
December 31 ,
2007
December 31 ,
2006
Analysis of changes in extracts updating the amounts of active debts
Page 145
Balance date
State at the
beginning of
period
Increase
Correction
related to the
discount rate
Extraction of
unused amonuts
Usage
State at the
end of period
st
December 31 ,
2008
91
81
(67)
(5)
-
100
157
-
(62)
(4)
-
91
-
157
-
-
-
157
st
December 31 ,
2007
st
December 31 ,
2006
No active debts and other assets in foreign currencies were present in the presented periods. All active debts by virtue of
supplies and services presented above are payable within 1 month from the balance date.
Specification of inter-periodic, short-term settlements
Details
31.12.2008
Insurance costs
31.12.2007
31.12.2006
73
58
56
1 700
471
-
Other costs settled in time
232
372
-
Commercialisation costs of real estates under construction
240
-
-
2 245
901
56
Costs of planned public issue of shares
Total
The inter-periodic settlements in the period of 2006-2008 consisted of the next year costs, the expenses on which have
been made in the given year, including especially insurances settled in time, and in 2008 – also costs of shares issue, equal
to 1 700 tys. PLN, which will decrease thus created company capital. The costs of real estate commercialisation costs consist
of expenses made on adaptation of the real estates for rent and they are settled during the duration of their repsective
rental contracts.
21. Granted short-term loans
Specification
Detailes
31.12.2008
31.12.2007
31.12.2006
-
-
2 075
Loans granted
Summary of loans as of 31.12.2006
Details
Amount acc. to the
contract
Currency
Remaining payable
amount
PLN
Currency
Interest rate
Payment
deadline
PLN
SAASS Sp. z o.o.
-
500
-
502
6,0%
31.12.2007
SAASS Sp. z o.o.
-
50
-
54
6,0%
30.04.2007
SAASS Sp. z o.o.
-
645
-
653
6,0%
31.12.2007
JA-WA Sp. z o.o.
-
1 337
-
549
6,0%
30.04.2007
B.U.T. AGA-TUR Sp. z o.o.
-
195
-
0
50 tys. PLN
15.08.2004
Silesian Investment Center Sp.
z o.o.
-
300
-
317
Total
-
-
-
2 075
7,0%
31.12.2007
The loand granted to B.U.T. AGA-TUR Sp. z o.o. was totally covered by an updating extract in 2006. Other loans were fully
cleared in 2007.
22. Monetary assets
Specification
Page 146
Details
31.12.2008
31.12.2007
31.12.2006
6 015
1 249
2 495
Other monetary assets
100
3 706
-
Total monetary assets
6 115
4 955
2 495
708
700
700
Monetary assets in the cashier and on bank accounts
- including monetary assets of limited disposability
Monetary assets of limited disposability form bails, which secure investment loans in the BZ WBK S.A bank.
23. Own capital
Basic capital
Details
31.12.2008
31.12.2007
31.12.2006
3 250
3 250
3 250
Basic capital
st
The basic capital of the Dominating Unit totalled 3.250 000 PLN as of December 31 , 2008 and it consisted of 32.501.920
shares, including 16.250.960 Series A Shares, which are registered shares, with priviledged voting rights during the General
Assembly in such a way, that 2 votes are allocated per 1 share and 16.250.960 Series B Shares, which are shares to bearer
and they are not priviledged.
In 2006, the basic capital totalled 3.250 000 PLN and was equally divided in regard to the value and voting rights between
the Owners: Andrzej Bartnicki and Jan Mroczek, because then the Partnership acted as a general partnership. On October
th
10 , 2007, the court has registered the transformation of the legal form of the Issuing Party, by which Jan Mroczka and
Andrzej Bartnicki have obtained 50% of Series A and Series B shares each in the Stock Partnership formed due to
transformation of the general partnership.
Nominal value of shares
All issued shares have a nominal value of 10 groszy and they have been fully paid.
Significant shareholders
st
As of December 31 , 2008, the shareholders owning directly or indirectly, through the dependent entities, at least 5% of
general number of votes during the general assembly of the Partnership.
Number of
Nominal
% of
Number of
Shareholder
shares
value of
participatio
Vote %
votes
owned
shares (PLN)
n in capital
Andrzej Bartnicki
8 125 480
812 548
16 250 960
25,00%
33,33%
Jan Mroczka
8 125 480
812 548
16 250 960
25,00%
33,33%
15 626 624
1 562 662
15 626 624
48,08%
32,05%
624 336
62 434
624 336
1,92%
1,28%
32 501 920
3 250 192
48 752 880
100,00%
100,00%
Minor shareholders
Total
Andrzej Bartnicki and Jan Mroczka hold 50% of votes and 50% of shares each in the capital of MB Progress Capital Limited, a
Cyprus law company located in Nicosia.
24. Reserve capital
st
The reserve capital as of December 31 , 2008 totally consists of reserve capital of the Dominating Unit created by dividing
its net profit for 2007.
25. Profits held / uncovered losses
The Profits held entry includes a consolidated amount of profit, worked out by the Capital Group, minus losses in the
st
current period and previous periods. The total loss for the period ending on December 31 , 2008, recorded by the units of
the Capital Group, presented in unitary statutory financial reports, totalled 12 409 000 PLN.
26. Minor shareholders capital
st
st
The minority capital, equal to 572 000 PLN as of December 31 , 2008 and to 25 000 PLN as of December 31 , 2007,
Page 147
consisted of capital assigned to minor shareholders in the Rank-Müller Jelenia Góra Sp. z o.o. company and it resulted
totally from the transaction od dependent company increase minus participation in the loss generated by this unit.
27. Financial obligations
Specification of financial obligations
Details
31.12.2008
31.12.2007
31.12.2006
240 444
85 693
47 949
1 818
1 321
709
37 537
-
-
279 799
87 014
48 658
Long-term
138 111
71 866
17 397
Short-term
141 688
15 148
31 261
31.12.2008
31.12.2007
31.12.2006
Bank loans
240 444
85 557
47 817
- long-term
137 250
71 246
16 992
- short-term
103 194
14 311
30 825
Loans
-
136
132
- long-term
-
-
-
- short-term
-
136
132
Total bank loans and loans, including:
240 444
85 693
47 949
- long-term
137 250
71 246
16 992
- short-term
103 194
14 447
30 957
Loans
Obligations by virtue of financial result
Derivative financial instruments
Total financial obligations, including:
Specification of obligations by virtue of bank loans and loans
Details
st
Obligations by virtue of bank loans and loans as of December 31 , 2008
Payable amount
Loan acc. to contract
remaining
Bank / Granting party
currency
Currency
tys. PLN
tys. PLN
(tys)
(tys)
Interest rate
conditions as of
31.12.2008r.
Payment
deadline
BZ WBK S.A.
20 000 EUR
-
-
81 534 EURIBOR1M+1,2p.p.
2022-03-31
BZ WBK S.A.
-
98 530
-
58 671
WIBOR1M+2p.p.
2024-06-01
BZ WBK S.A.
-
7 000
-
6 393
WIBOR1M+2p.p.
2009-08-31
BZ WBK S.A.
-
30 000
-
30 000
WIBOR1M+1,4p.p.
2009-01-13
ING Bank Śląski
-
11 377
-
9 762
WIBOR1M+0,8p.p.
2009-07-31
Deutsche Bank
-
1 000
-
1 003
WIBOR1M+0,8p.p.
2009-09-17
PKO BP
-
2 700
-
2 690
WIBOR1M+2,3p.p.
2009-10-31
Deutsche Bank
-
30 000
-
14 962
WIBOR1M+0,8p.p.
2009-09-10
BZ WBK S.A.
-
68 932
-
28 385
WIBOR1M+2,5p.p.
2009-06-30
BZ WBK S.A.
-
7 000
-
7 044
WIBOR1M+2,5p
2009-06-30
Total
20 000 EUR
256 539
240 444
st
Page 148
Payable amount
remaining
Bank / Granting Party
BZ WBK S.A.
currency
(tys)
Currency
(tys)
tys. PLN
Interest rate
conditions as of
31.12.2007r.
tys. PLN
Payment
deadline
20 000 EUR
-
-
2022-03-31
ING Bank Śląski S.A.
-
6 646
-
6 646 WIBOR 1M + 0,8p.p.
2009-02-28
ING Bank Śląski S.A.
-
7 500
-
7 500 WIBOR 1M + 0,8p.p.
2008-08-23
Mrs Małgorzata Mroczka
-
700
-
41
3,50%
2007-12-31
Mrs Mariola Bartnicka
-
600
-
95
3,50%
2007-12-31
20 000 EUR
15 446
-
85 693
Interest rate
conditions as of
31.12.2006r.
Payment
deadline
Total
st
Payable amount
remaining
currency
Currency
tys. PLN
tys. PLN
(tys)
(tys)
BZ WBK S.A.
29 700
18 980
WIBOR1M+2,3p.p.
2015-11-30
BZ WBK S.A.
4 000
2 662
WIBOR1M+2,5p.p.
2006-06-30
BZ WBK S.A.
21 330
21 330
WIBOR1M+2p.p.
2008-05-15
BZ WBK S.A.
5 500
4 845
WIBOR1M+1,75p.p.
2007-07-21
Mrs Małgorzata Mroczka
700
40
3,50%
2007-12-31
Mrs Mariola Bartnicka
600
92
3,50%
2007-12-31
61 230
47 949
-
-
Total
With the exception of loans presented above, no other financial obligations in foreign currencies were presnt.
Protections of loan payments
st
As of December 31 , 2008, the main protections of loan payments were as follows:

normal total mortgage of 20 000 000 EUR on the real estates located in Legnica, being the property of the Grup (at ul.
NMP and ul. Grodzka),

cessation of active debt from the entirety of rental contracts for the area of Galeria Piastów I in Legnica,

financial pledge on a separated account with blockage of assets up to the amount of 700 000 PLN,

total bail mortgage of up to 122 530 000 PLN on real estates and perpetual use rights to the real estates located in
Legnica, being the property of the Group (at ul. NMP and ul. Grodzka),

cessation of active debts from current and future rental contracts for Galeria Piastów II and III,

totail bail mortgage of up to 7 300 000 PLN on the real estates located in Legnica, being the property of the Grup (at ul.
NMP),

normal mortgage of 30 000 000 PLN and total bail mortgage of up to 1 500 000 PLN on real estates located in
Wrocławiu,

total bail mortgage of up to 17 065 000 PLN on real estates located in Legnica, being the property of the Group,

bail mortgage of up to 8 642 tys. PLN on real estates located in Legnica, being the property of the Group,

register pledge on all current and future active debts of the Loaning Party,

total bail mortgage of up to 3 483 000 PLN on real estates located in Kłodzko,

total normal mortgage of 94 092 000 PLN on real estates located in Kłodzko,

cessation of active debts from rental contracts of future gallery area located in Kłodzko,

register pledge on shares of Rank Progress V Sp. z o.o.,

total bail mortgage of up to 7 300 000 PLN on real estates located in Kłodzko.
Specification of obligations by virtue of financial leasing
Details
31.12.2008
31.12.2007
31.12.2006
Obligations by virtue of financial leasing
1 818
1 321
709
Total obligations by virtue of financial leasing, including:
1 818
1 321
709
Page 149
- long-term (payable with 3 years from the balance date)
861
620
405
- short-term
957
701
304
Additional revelations related to leasing contracts
31.12.2008
Cars
31.12.2007
Other
Cars
31.12.2006
Other
Cars
Other
Gross value
3 331
125
1 547
0
965
0
Redemption up to date
1 573
53
706
0
256
0
Net value
1 758
72
841
0
709
0
3 years
4 years
3 years
3
3 years
------
76
3
37
19
24
------
1 608
341
840
569
609
------
- 1 year
815
233
529
449
285
------
- from 2 to 5 years
793
108
311
120
324
------
0
0
0
0
0
------
104
27
34
54
53
------
- 1 year
71
21
28
27
36
------
- from 2 to 5 years
33
6
6
27
17
------
- more than 5 years
0
0
0
0
0
------
1 504
314
806
515
709
- 1 year
744
212
501
422
304
------
- from 2 to 5 years
760
102
305
93
405
------
0
0
0
0
Average contract length
Monthly installments
Total amount of minimum leasing
fees, required in:
- more than 5 years
Including amount of future interest
rates:
Current value of future obligations,
required within:
- more than 5 years
------
Conditions of contract prolongation
or purchase of leasing subject
Permanent contrats. Purchase is possible after contract termination.
Protection of contact execution
Blank bills
------
Blank bills
------
31.12.2008
31.12.2007
31.12.2006
Derivative financial instruments, including:
37 537
-
-
- short-term
37 537
-
-
Blank bills
------
------
Blank bills
Specification of obligations by virtue of evaluation of derivative financial instruments
Details
st
As of December 31 , 2008 derivative instruments of the Group consisted of financial instruments, which have no active
market, i.e. forward contracts, protecting from the currency rate risk.
Below, derivative financial instruments owned by the Group are presented.
Instrument type
Nominal value of
Due date
Page 150
Fair value of
Currency
bought
Financial
asset
Currency sold
Financial
obligation
Fair value,
loss
Forward contract
832
TEUR
2 803
TPLN
29.05.2009
2 740
3 419
-679
Forward contract
16 630
TEUR
55 045
TPLN
29.05.2009
53 790
68 356
-14 566
Forward contract
10 000
TEUR
32 800
TPLN
29.05.2009
32 052
41 102
-9 050
Forward contract
19 611
TEUR
68 932
TPLN
30.11.2009
67 677
80 919
-13 242
156 259
193 796
-37 537
31.12.2008
31.12.2007
31.12.2006
Long-term
-
1 577
1 433
a) obligations by virtue of supplies and services
-
-
-
b) other obligations, including:
-
1 577
1 433
- obtained bails - Galeria Piastów
-
60
694
- obtained bails – construction works
-
1 517
739
105 226
62 959
42 310
a) obligations by virtue of supplies and services
8 478
11 545
8 746
b) obligations by virtue of taxes, customs, social insurance and other
1 732
2 023
37
256
-
10
d) pre-payments obtained for supplies
33 569
47 783
32 800
e) obligations by virtue of acquired construction services
44 045
-
-
f) other obligations, including:
17 146
1 608
717
- obtained bails - Twierdza Commercial Centre - Kłodzko
4 980
-
-
- obtained bails - Galeria Piastów in Legnica
9 400
-
-
105 226
64 536
43 743
Total
28. Obligations by virtue of supplies and services and other obligations
Specification of obligations by virtue of supplies and services and other obligations
Details
Short-term
c) obligations by virtues of salaries
Total
No significant obligations by virtue of supplies and services and other obligations in foreign currencies have taken place. All
obligations by virtue of supplies and services and other obligations are to be paid within one year from the balance date
and they can be due within one year from the balance date in the case of meeting some conditions by the suppliers.
The entry Pre-payments obtained for supplies included pre-payments obtained by the Group in relation to real estate sale.
At the end of 2008, these pre-payments were related to e.g.:
o
N
Partner name
Project name
Value
1.
Carrefour
Jastrzębie Zdrój
8 140
2.
Carrefour
Opole
4 600
3.
Leroy Merlin
Legnica
7 000
4.
Makro Cash and Carry Polska
Legnica
13 279
5.
Galeria Piastów 1
Legnica
24
6.
Galeria Piastów 3
Legnica
346
7.
Other
180
Total
33 569
Page 151
At the end of 2007, pre-payments included e.g.:
o
N
Partner name
Project name
Value
1.
Carrefour
Jastrzębie Zdrój
4 940
2.
Carrefour
Opole
4 600
3.
Carrefour
Zamość
2 000
4.
Carrefour
Szczecin Struga
8 000
5.
Carrefour
Wrocław
2 000
6.
Leroy Merlin
Legnica
7 000
7.
Farset
Zgorzelec
8.
Other
18 917
326
Total
47 783
At the end of 2006, pre-payments included e.g.:
o
N
Partner name
Project name
Value
1.
Carrefour
Jastrzębie Zdrój
3 200
2.
Carrefour
Opole
4 600
3.
Carrefour
Zamość
2 000
4.
Carrefour
Szczecin Struga
8 000
5.
Carrefour
Szczecin Wiosenna
6.
Carrefour
Wrocław
13 000
2 000
Total
32 800
29. Reserves for other obligations
The reserve amount of 991 000 PLN showed for 2007 consisted of reserve for court claims of a partner, evaluated by the
Dominating Unit and related to the dependent company HIT Zarząd Majątkiem Polska Legnica 1 Sp. z o.o. This proceeding
was finished in 2008, with an unfavourable result for the Group, which caused this reserve to be used.
30. Sales income
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
Goods sales
16 000
34 484
44 129
Products and services sales
75 548
17 702
12 280
Product level change
13 708
10 165
-
105 256
62 351
56 409
Details
Total
All incomes from sales have been obtained by the Group on the domestic market.
The goods sales in 2008 consisted of the following sales :
o
N
Partner name
Project name
Value
1.
Carrefour
Zamość
2 899
2.
Jawa
Zamość
1 600
3.
Leroy Merlin
Zgorzelec
4.
Carrefour
Szczecin
5.
Gmina Legnica
Legnica
Page 152
815
10 500
102
6.
Other
84
Total
16 000
o
N
Partner name
Project name
Value
1.
Leroy Merlin
Zgorzelec
8 000
2.
Ogen i Eren
Sandomierz
1 350
3.
Carrefour
Szczecin Wiosenna
4.
Jeronimo Martins
Brzeg
5.
Other
18 000
5 800
1 334
Total
34 484
o
N
Partner name
Project name
Value
1.
Carrefour
Zgorzelec
413
2.
Carrefour
Grudziądz
20 766
3.
Cargo 69
Szczecin
4.
Carrefour
Białystok
950
22 000
Total
44 129
The income from products and services sales in the period of 2008 – 2006, consisted of the following entries:
01.01.2008 - 01.01.2007 Details
31.12.2008
31.12.2007
01.01.2006 31.12.2006
Income from area rent in Galeria Piastów I and III
10 143
10 387
1 992
Commercial objects sales
56 414
-
2 755
5 000
-
1 000
-
5 600
-
772
1 387
5 867
Other
3 219
328
666
Total
75 548
17 702
12 280
Consulting and agency services
Contract of right and duties transfer
Reinvoices for construction works
The main entry of income from commercial objects sale in 2008 was income from the sale of Galeria Eden in Zgorzelec,
which totalled 56 414 000 PLN.
31. Specification of current activity costs
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
Depreciation
1 360
877
431
5 031
2 551
6 557
41 217
12 852
2 573
Taxes and fees
1 721
1 536
734
Salaries
3 797
1 381
288
Social insurances and other benefits
542
250
50
Other type-related costs
908
782
545
12 120
18 270
28 276
Details
External services
Value of sold goods and materials
Page 153
Total
66 696
38 499
39 454
The fundamental entry of type-related costs of the Group in 2008 is formed of external services, where the biggest entry
consists of subcontractory works related to the construction investments. At the same time, the Group obtained the biggest
income from sales of commercial objects.
In the period of 2007 – 2006 the biggest part of type-related costs was formed by the value of sold goods and materials,
which was caused by a more intensive engagement of the Group in the real estate circulation.
32. Evaluation of investment real estates
Details
Galeria Piastów
Galeria Piastów II
Fortepiany Legnica
Zgorzelec
Opole Turawa
Total
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
2 627
-7 934
94 529
10 117
-
-
-155
7 311
-
-39
7 059
-
4 045
-
-
16 595
6 436
94 529
33. Other current income
01.01.2008 - 01.01.2007 - 01.01.2006 31.12.2008 31.12.2007 31.12.2006
Details
Profit from disposal of non-financed fixed assets
Dissolution of reserve for disputed claims
Total
-
35
-
991
-
-
20
133
44
1 011
168
44
34. Other current costs
01.01.2008 - 01.01.2007 - 01.01.2006 31.12.2008 31.12.2007 31.12.2006
Details
Loss on disposal of non-financed fixed assets
-
41
-
808
7
157
1 755
-
-
Creation of reserve for disputed claims
-
991
-
Donations
-
252
-
Execution costs
-
33
-
884
260
766
3 447
1 584
923
Extract updating the value of active debt
Extract updating real estates under construction
Other current costs
Total
35. Financial income
01.01.2008 - 01.01.2007 - 01.01.2006 31.12.2008 31.12.2007 31.12.2006
Details
Interest rates , including:
5
65
285
- bank interests
5
9
207
- interest rates on granted loans
-
56
58
- other interest rates
-
-
20
7 089
23 825
-
Proft from investment disposal
Page 154
Other financial incomes
204
4 361
-
-
4 257
-
204
104
-
7 298
28 251
285
- saldo of currency rates differences
- other
Total
The main entry of financial income in 2008 was the profit from cessation of rights granted by the contract of sale of FOCUS
PARK PIŁA shares.
In 2007, the Group has obtained profit from selling shares of Jogra 2 Sp. z o.o. This transaction is discussed in detail in note
40 of these historical financial information.
36. Financial costs
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
5 097
4 302
229
Interest on budget obligations
265
-
-
Bank profits and fees
604
-
-
-
19
238
Evaluation of derivative financial instruments
37 537
-
-
Result on currency rate differences
10 913
-
-
486
-
-
54 902
4 321
467
01.01.2008 31.12.2008
01.01.2007 31.12.2007
01.01.2006 31.12.2006
-7 394
-1 400
-
-5
-
-
-
-
-
7 120
-2 433
-17 964
279
3 833
17 964
Details
Interest on bank loans
Extract updating granted loans
Other financial costs
Total
37. Income tax
Details
Account of profits and losses
Current income tax
Current duty by virtue of income tax
Additional tax obligation from the previous years
Current duty by virtue of income tax from abandoned activity
Delayed income tax
Related to creation and reversal of temporal differences
Tax duty listed in the account of profits and losses
The main entry of income tax in the account of profits and losses in the period of 2008-2007 was the the reverse level
change by virtue of the delayed income tax on the evaluation to the fair value of investment real estates.
At the end of 2006, the reserve by virtue of the evaluation to the fair value of investment real estates was included, despite
the fact the the Unit was a general partnership and was not a subject to the income tax. The decision of Owners was a
th
result of transformation into a stock parntership, which was performed later and registered on October 10 , 2007.
38. Profit per share, account value per share
Total net profit
01.01.2008 - 01.01.2007 - 01.01.2006 31.12.2008 31.12.2007
31.12.2006
Details
Net profit for the period (in tys. PLN)
Średnia liczba akcji (w tys. szt)
Zysk netto na akcję w PLN
Page 155
4 839
48 969
92 459
32 501,92
32 501,92
32 501,92
0,15
1,51
2,84
The number of shares after the transformation of the partnership from the general partnership into stock partnership, i.e.
32.501.920 shares, was taken as the average weighted number of shares.
Account value per share and diluted account value per share
Details
Account value (in tys. PLN)
Average weighted number of shares (in tys. pcs)
Account value per share (in PLN)
31.12.2008
31.12.2007
31.12.2006
134 319
128 933
105 640
32 501,92
32 501,92
32 501,92
4,13
3,97
3,25
The number of shares after the transformation of the partnership from the general partnership into stock partnership, i.e.
32.501.920 shares, was taken as the average weighted number of shares.
39. Information about important transactions within the Capital Group
Loans granted within the Group as of 31.12.2008
Amount
Loan granting party
Loan receiving party
acc. to the
contract
Remaining
payable
amout
Interest rate
Payment
deadline
HIT Zarząd Majątkiem
Polska Legnica 1 Sp. z
o.o.
Rank Progress S.A.
10 000
4 362
WIBOR1M+1%
31.12.2010
o.o.
Rank Progress S.A.
4 080
4 783
WIBOR1M+1%
31.12.2010
o.o.
Rank Progress S.A.
2 727
3 115
WIBOR1M+1%
31.12.2010
KMM Sp. z o.o. w
likwidacji
Rank Progress S.A.
780
613
WIBOR1M+1%
31.12.2010
o.o.
Rank Progress S.A.
750
750
WIBOR1M+1%
31.12.2010
18 337
13 623
Total
Additionally, the Partnership Rank Progress S.A. has signed an investment replacement contract within the Group, with EF
Progress V Sp. z o.o. Income of the Dominating Unit from this transaction in 2008 totalled 1 270 000 PLN. This transaction
was performed according to market rules.
Loan granting party
Amount
acc. to the
contract
Remaining
payable
amout
Interest rate
Payment
deadline
o.o.
Rank Progress S.A.
10 000
5,5%, interest paid
5 523 together with the entire
amount of the loan
31.12.2010
o.o.
Rank Progress S.A.
4 080
5,5%, interest paid
amount of the loan
31.12.2010
o.o.
Rank Progress S.A.
2 727
5,5%, interest paid
amount of the loan
31.12.2010
780
Interest rate acc. to a
constant yearly interest
582
rate of 6%. Interest paid
together with the loan.
30.06.2008
KMM Sp. z o.o.
Rank Progress S.A.
Page 156
Total
17 587
14 003
Loan granting party
Amount
acc. to the
contract
Remaining
payable
amout
Payment
deadline
Interest rate
o.o.
Bartnicki, Mroczka, E.F.
Rank Progress Sp. jawna
10 000
5,5%, interest paid
amount of the loan
31.12.2007
o.o.
4 080
5,5%, interest paid
amount of the loan
31.12.2006
o.o.
2 727
5,5%, interest paid
amount of the loan
31.12.2007
KMM Sp. z o.o.
780
Interest rate acc. to a
constant yearly interest
550
rate of 6%. Interest paid
together with the loan.
31.12.2007
Total
17 587
13 394
40. Salaries of the Board and of the Supervisory Board
Salaries paid to Board members and to Supervisory Board members of the Dominating Unit of the Group and of the
dependent companies were as follows:
01.01.2008 01.01.2007 01.01.2006 Details
31.12.2008
31.12.2007
31.12.2006
Board – salaries
720
100
-
Board – benefits in the form of own shares
-
-
-
Board (dependent units) – salaries
-
-
-
Board (dependent units) – benefits in the form of
own shares
-
-
-
516
86
-
-
-
-
1 236
186
-
Supervisory Board – salaries
Supervisory Board - benefits in the form of own
shares
Total
41. Employment
Details
31.12.2008
31.12.2007
31.12.2006
Blue collar workers
29
14
20
White collar workers
16
27
8
Total
45
41
28
42. Conditional assets
Sale of Jogra 2 Sp. z o.o.
th
On May 30 , 2007, the Dominating Unit sold its shares of Jogra 2 Sp. z o.o. to a Dutch law company Rathburn Holdings B.V.
The total purchase price was set as 81 556 000 PLN, with the payment of 64 802 000 PLN dependent on passing the local
spatial development plan for the real estates sold as a part of Jogra 2 Sp. z o.o., which would be consistent with the contract
signed with Rathburn Holdings B.V. The conformity of the spatial development plan, which went into effect in July, 2009,
has not been finally confirmed as of today.
Page 157
Thus, the amount of 64 802 000 PLN was taken as a conditional asset.
43. Conditional obligations
Guarantees and warranties granted by the Dominating Unit to the dependent entities
th
A guarantee granted on September 30 , 2008 in the name of E.F. Progress V Sp. z o.o. („Debtor”) to Bank Zachodni WBK
S.A. („Bank”), which is an obligation to pay in the name of the Debtor the debt resulting from the Loan Contract, including
the amout of capital to be paid, the interest rates and documented costs of claim proceeding, under the condition that the
payment demand will be delivered in the validity period of the guarantee. The guarantee is valid in the period from
th
th
September 30 , 2008 to July 30 , 2009.
th
A guarantee given on September 30 , 2008 in the name of E.F. Progress V Sp. z o.o. („Debtor”) to Bank Zachodni WBK S.A.
(„Bank”), which is an obligation to pay in the name of the Debtor the assets necessary to finish the investment
implemented by the Debtor, which is specified in the Loan Contract signed by the Bank and the Debtor, up to the amount of
th
st
86 164.tys. PLN. The guarantee is valid in the period from September 30 , 2008 to December 31 , 2009.
Guarantees and warranties given by the Group to other entities and significant extrabalance obligations
th
An obligation against the City of Kalisz, on the basis of statement dated September 11 , 2007, on the construction of an
underground parking lot for at least 250 parking places on a real estate located in Kalisz. The condition of fulfillment of this
obligation is to release the said real estate to the Rank Progress S.A. with granting it for the needs of the construction
works. Once the parking lot is completed, the Partnership will release it back to the City of Kalisz for free, and in exchange
for this, customers of Galeria Tęcza Commercial Centre, which is being constructed by the Partnership, will be entitled to
use this parking lot.
An obligation against the Urban Municipality Kłodzko, to construct a cinema with the minimum number of 500 seating
places in the cinema hall. The start of the construction works was determined to take place no later than 30.06.2010, while
the deadline for obtaining the permission for use – no later than 30.06.2013. If these deadlines are exceeded, the
Partnership will pay the Urban Municipality Kłodzko a stipulated penalty of 3 000 000 PLN. If the cinema is not costructed at
all, it will force the Partnership to pay a stipulated amount of 5 000 000 PLN.
th
On January 27 , 2007 Rank Progress S.A. has signed a contract with JA-WA Morgaś, Ostasz Spółka Jawna located in Zamość,
on cooperation in the field of defining rules of joint implementation of an economic goal, which is to manage real estates
located in Zamość, by creating a commercial object with the area of about 35 thousands of square meters. As a part of the
contract, Rank Progress S.A. has obliged to purchase a number of real estates located in Zamość, also real estates, which
are indirectly owned by JA-WA Morgaś, Ostasz Spółka Jawna, and then to implement the object on the real estate. Once the
legal, effective permission for use of the constructed object is obtained, Rank Progress S.A. has obliged to perform a free
transfer of 30% of shares of the intended company, created for the implementated of the said investment or to pay the
partner the profit he is entitled to, i.e. an amount equal to 30% of the market price of the object, minus all expenses related
to the investment. Effects of this contract have not been included, since the condition of right acquisition has not been
fulfilled.
th
On May 14 , 2008, Rank Progress S.A. signed a contract with H.M. Prosper Hildebrand Morgaś Spółka Jawna located in
Zamość („Partner”), on cooperation in the field of defining rules of joint implementation of an economic goal, which is to
manage real estates located in Skarżysko-Kamienna, by construction of a multifunctional object (commercial-servicesoffices) („Obiekt”). As a part of this contract, the Parties have obliged, e.g., to the implementation of the joint venture and
to obtaining profit in the following proportions 67,00 % - Rank Progress S.A., 33,00 % - Partner, which will be paid to the
Partner in cash or in shares of intended company, created for the implementation of the investment. However, the Parties
have agreed, that this contract will be modified, so the Object will not be constructed and the ground of the real estate will
be sold back to a potential investor, while profit from this transaction will be divided according to the proportions
presented above. As of the balance date, the obligation against the Partner by virtue of the Partner’s services, has not been
created yet.
44. Goals and rules of financial risk management
The main financial instruments used by the Group include: bank loans, loans in the current account, financial leasing
contracts and obtained loans. The main goal of these financial instruments is to obtain monetary assets for the activity of
the Group. The Group also has financial assets, such as active debts by virtue of supplies and services, monetary assets and
short-term deposits, which are created as a direct result of its activity. In 2008, the Group has signed future forward
contracts, which were meant to secure the risk of unfavourable changes of Euro rates in the case of renomination of bank
loans from PLN to EUR. The details of these transactions were described in the note 25. In the period of 2007-2006, the
Group did not made any transactions using derivative financial instruments. The main types of risk resulting from the
financial instruments of the Group include the risk of monetary flows interest rates, viability risk, currency risk and loan risk.
The Board verifies and agrees rules of management of each of these risk types – these rules have been shortly described
below.
Page 158
Interest rate risk
Vulnerability of the Group to the risk caused by changes of market interest rates is related mainly to the long-term financial
obligations with variable interest rates, i.e. bank loans and obligations by virtue of leasing contracts. However, curremt
financial crisis may cause changes of the evaluation of this risk.
Until the end of 2008 the Group thought that the interest rate risk had no significant influence on its financial results. In the
future, the Group plans to protect itself from unfavourable changes of the interest rates by signing contracts with constant
interest rates.
Loan risk
The Group makes transactions only with renown companies with good creditibility. All customers, who want to use trade
loans, are subjected to a verification procedure.
Additionally, thanks to constant monitoring of active debt levels, the risk, that the Group will have active debts, which are
impossible to be executed, is small. Age structutre ot trade active debts has been presented in note 20.
In relation to other financial assets of the Group, such as monetary assets and its equivalent, the loan risk of the Group
arises as a result of the inability of the other party to make payments, and maximum exposure to this risk is equal to the
balance value of these instruments.
Currency risk
The Group signs the majority of rental contracts for its areas in Euro, and this creates a currency risk related to
unfavourable changes of Euro, related to PLN. In order to protect itself against the risk of Euro rate change as the currency
used to settle the income from rent, the Group decided in 2007 to renominate bank loans taken for investment financing,
from PLN to Euro. Future investment in real estates with flows dependent on Euro will be largely secured with bank loans
financing these investments, denominated in Euro.
In 2008, the Group has signed currency future forward contracts, which were meant to serve as protection against the risk
of unfavourable changes of Euro rate in the case of renomination of bank loans obtained in 2008, from PLN to Euro. The
details of these transactions have been described in note 25.
Viability risk
The Group monitors the risk of lack of funds, using the tool of periodical viability planning.
This tool includes due dates of both investments and financial assets (e.g. active debt account, other financial assets) and
predicted monetary flows from current activity.
The goal of the Group is holding balance between the continuity and the flexibility of financing, by using various funding
sources, such as loans in current acount, financial leasing contracts.
45. Sensibility analysis
Goals and rules of loan risk management:
The main types of loan risk resulting from the financial instruments of the Group include: interest rate risk, currency risk,
viability risk and loan risk.
Interest rate risk:
The Group uses obligations mainly in the form of loans with variable interest rates. In 2008, the average weighted interest
rate of all loans was 6,39%, while interest rates of loans influencing the financial risk totalled 5 097 000 PLN.
Analysis of interest sensibility to the interest rates:
Interest rates change
Average
weighted
interest rate of
loans [%]
Interests
Influence on net
results
Influence on
own capital
+0,25 p.p.
6,64%
5 296
-162
-162
+0,50 p.p.
6,89%
5 496
-323
-323
+0,75 p.p.
7,14%
5 695
-485
-485
+1,00 p.p.
7,39%
5 895
-646
-646
-0,25 p.p.
6,14%
4 898
162
162
Page 159
-0,50 p.p.
5,89%
4 698
323
323
-0,75 p.p.
5,64%
4 499
485
485
-1,00 p.p.
5,39%
4 299
646
646
Currency risk
The Group is subjected to the currency risk by virtue of made transactions. All contracts signed with renting parties are
denominated in Euro. Average yearly Euro rate in 2008 was equal to 3,5129 PLN/EUR. In 2008, income from rent
denominated in Euro totalled 6 839 000 PLN, which constituted 9% of total income.
Analysis of income sensibility to the Euro rate:
Change of Euro rate as of 31.12.2008
Average Euro
rate after change
Evaluation
Influence on net
result
Influence on
own capital
+5%
3,6885
7 181
277
277
+10%
3,8642
7 523
554
554
+15%
4,0398
7 865
831
831
+20%
4,2155
8 207
1 108
1 108
- 5%
3,3372
6 497
-277
-277
-10%
3,1616
6 155
-554
-554
-15%
2,9859
5 813
-831
-831
-20%
2,8103
5 471
-1 108
-1 108
The only costs expressed in Euro in 2008 were loan interests, which totalled 3 851 000 PLN, which constituted 3% of the
costs. The loan in Euro was granted from 30.03.2007. The average Euro rate in the period of 01.01.2008 – 31.12.2008 was
equal to 3,5129 PLN/EUR.
Analysis of interest sensibility to the Euro rate:
Change of average Euro rate in 2008
Average Euro
rate after change
Interests
Influence on net
result
Influence on
own capital
+5%
3,6885
4 044
-156
-156
+10%
3,8642
4 236
-312
-312
+15%
4,0398
4 429
-468
-468
+20%
4,2155
4 621
-624
-624
- 5%
3,3373
3 659
156
156
-10%
3,1616
3 466
312
312
-15%
2,9860
3 274
468
468
-20%
2,8103
3 081
624
624
Additionally, the Group has reevaluated the value of Galeria Piastów and Galeria Piastów III in Legnica to its fair value,
which was expressed by the expert in Euro. The fair value of Galeria Piastów was set at the level of 28 720 000 EUR, while
the fair value of Galeria Piastów III - 5 500 000 EUR. Total value of the evaluation expressed in Euro totalled 34 270 000 EUR,
which, according to the Euro rate for 31.12.2008, equal to 4,1724 PLN/EUR totalled an amount of 142 988 000 PLN.
Analysys of fair value sensibility to the Euro rate:
Change of Euro rate as of 31.12.2008
Average Euro
rate after change
Evaluation
Influence on net
result
Influence on
own capital
+5%
4,3810
-6 081
5 791
5 791
+10%
4,5896
-6 370
11 582
11 582
+15%
4,7983
-6 660
17 373
17 373
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+20%
5,0069
-6 949
23 164
23 164
- 5%
3,9638
-5 501
-5 791
-5 791
-10%
3,7552
-5 212
-11 582
-11 582
-15%
3,5465
-4 922
-17 373
-17 373
-20%
3,3379
-4 633
-23 164
-23 164
46. Financial instruments
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As of December 31 of, respectively, 2008, 2007, 2006, the fair value of financial instruments did not significantly differ
from their balance value. The table below presents a list of significant financial instruments of the Partnership, divided into
classes and categories of assets and obligations
Details
Category
according
to MSR 39
Balance value
31.12.2008
31.12.2007
Fair value
31.12.2006 31.12.2008 31.12.2007 31.12.2006
Financial assets
Monetary assets
Loans granted
Derivative financial results
6 115
4 955
2 495
6 115
4 955
2 495
HuDD
-
-
-
-
-
-
WwWGpWF
-
-
-
-
-
-
Active debts by virt. of
financial leasing
LaAD
68
269
-
68
269
-
Active debts by virtue of
supplies and services and
other active debts
LaAD
10 825
23 669
11 424
10 825
23 669
11 424
Loans obtained
OFAaccDC
240 444
85 557
47 949
240 444
85 557
47 949
Obligations by virt. of
financial leasing
OFAaccDC
1 818
1 321
709
1 818
1 321
709
Derivative financial
instruments
EtFVaFR
37 537
-
-
37 537
-
-
Including currency
future forward contracts
EtFVaFR
37 537
-
-
37 537
-
-
Obligations by virtue of
supplies and services
OFAaccDC
8 478
11 545
8 746
8 478
11 545
8 746
Other obligations
OFAaccDC
94 760
50 968
34 950
94 760
50 968
34 950
Abbreviations used:
LaAD – Loans granted and active debts
OFAaccDC – Other financial assets evaluated according to depreciated cost
HuDD – Financial assets held until due date
EtFVaFR – Financial assets/obligation evaluated to the fair value by financial result
Incomes and costs by virtue of interests related to financial result
01.01.2008
31.12.2008
01.01.2007
31.12.2007
01.01.2006
31.12.2006
5
9
207
Interests on loans
----
56
58
Interests from the partners
----
----
20
5
65
285
Income from intersts
Bank interests
Total
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01.01.2008
31.12.2008
01.01.2007
31.12.2007
01.01.2006
31.12.2006
4 963
4 217
183
Interests by virtue of financial leasing
134
85
46
Other interests
265
----
----
5 362
4 302
229
01.01.2008
31.12.2008
01.01.2007
31.12.2007
01.01.2006
31.12.2006
----
19
238
Evaluation of derivative financial results
37 537
----
----
Total
37 537
19
238
Interest costs
Interests by virtue of loans
Total
Losses by virtue of value loss acc. to categories of financial instruments
Loss by virtue of value loss acc. to categories of financial instruments
Extract updating granted loans
Assets reclassification
In the period of 2006 - 2008 the Group has not performed reclassfication of elements of financial assets evaluated
according to the cost or to the depreciated costs, to elements evaluated to their fair value, it also has not reclassified
elements of financial assets evaluated to their fair value, to elements evaluated according to their cost or depreciated cost.
Assets exclusion
In the period covered by this financial issue prospectus, the Group has not transferred financial assets, which could cause
any risks of profits in the future, which could in turn result in creation of an obligation or a cost.
Protection of obligations and conditional obligations on financial assets
Financial assets created as the protection of obligations
On the current and future active debts, which are created as a result of execution of rental contracts of two objects of the
Group: Twierdza Commercial-Service Centre and Galeria Piastów, a cessation for BZ WBK S.A. bank has been created, which
funds these real estates. On the other hand, the active debts coming from transactions with large commercial networks are
cessated to the ING BŚ S.A. bank, with the obligations against ING BŚ S.A. have been regulated in 2009, thus this protection
has expired.
Protection of assets or non-financial assets created for the Group
No protection of elements of financial assets or non-financial assets were made for the Group, for which the Group was
entitled to sell the protection or to be subjected to another pledge in case of execution of all duties by the owners of the
protection subjects.
Protections accounting
In the years covered in this Issue Prospectus, the Group did not use accounting for the protections.
47. Capital management
The main goal of capital management of the Group is mainating a good creditability rating and safe capital indices, which
would support the current activity of the Partnership and which increased its value for the shareholders.
The Group manages the capital structure and makes changes to it as results of changes of economic conditions. In order to
maintain or to correct the capital structure, the Group may change payment of dividend for the share holders, return the
st
st
capital to the shareholders or issue new shares. In the years ending on December 31 , 2008 and December 31 , 2007, no
changes to goals, rules and processes effective in this field have been made.
48. Significant events after the balance date
Rank Progress S.A.
th
On December 9 , 2009, allocation of Series A bonds took place, with their nominal value of a 1.000 PLN each and total
value of 24.760.000 PLN, issued by the Partnership. These are 1-year bonds with a yearly interest rate of oprocentowanymi
12%, with the interest paid quarterly. The income from bond issue were assigned for payment of bank loan in ING Bank
Śląski S.A. and for investments in commercial objects: Twierdza II Commercial Park in Kłodzko, Tęcza Commercial Gallery in
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Kalisz, Pasaż Grodzki in Jelenia Góra and Galeria Piastów II in Legnica. The bonds have been secured with mortgage equal to
120% of issue value, on the real estates of the Partnership, located in Katowice at ul. Olimpijska 11, and on three real
estates located in Legnica: at ul. Złotoryjska 63, ul. Senatorska 21 and ul. Witelona 6-8.
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On November 9 , 2009, Ordinary General Assembly („OGA” later in text) made the Resolution N 15/11/2009 on the
increase of the company capital of the Issuing Party by issuing normal shares to bearer, Series C, with exclusion of
acquisition rights of the current shareholders and on changes to the Status of the Partnership. According to this resolution,
the OGA decided to increase the company capital of the Partnership from the amout of 3.250.192 PLN to the amount not
greater than 3.714.505 PLN, namely by an amount no greater than 464.313 PLN. The increase of company capital is to be
performed by issuing no more than 4.643.130 new Series C Shares with the nominal value of 0,10 PLN. Series C Shares are
about to be fully covered by monetary assets before the registration of capital increase and they are normal shares to
bearer, and no special rights will be assigned to these shares. Series C Shares will participate in the dividend, starting from
the payments from profit designed for division, for the tax year ending on 31.12.2009. The Issue of Series C Shares will be
performed in the public offer mode. Series C Shares and rights to Series C Shares („PDA”) will be registered for permission
and introduction to circulation on a regulated market of Stock Exchange w Warszawie S.A.
th
On November 9 , 2009, Ordinary General Assembly of the Shareholders made a resolution on exclusion of the net profit for
2008 from division between shareholders and decided that it will be used to increase the reserve capital of the Partnership.
o
On 23.03.2009, by the authenticated deed Rep. A N 7170/2009, the Partnership has transferred the ownership rights to
the real estates located in Zgorzelec to the dependent company E.F. Progress II Sp. z o. o. The contract of ownership
o
transfer has been created as a result of obligation resulting from Resolution N 1 of Extraordinary Assembly of Shareholders
of E.F. Progress II Sp. z o. o. In exchange for the brought real estates, Rank Progress S.A. obtained 1550 shares of E.F.
Progress II Spółka z o. o., valued at 2.000,00 PLN each.
o
On 23.03.2009, buy the authenticated deed Rep. A N 7483/2009, the dependent company E.F. Progress II Sp. z o. o. has
transferred the ownership of real estates located in Zgorzelec, acquired on the same day, to the dependent company Rank
Müller Jelenia Góra Sp. z o. o. The contract on ownership transfer has been created as a result of obligation, resulting from
o
Resolution N 1 of Extraordinary Assembly of Shareholders of Rank Müller Jelenia Góra Sp. z o. o. In exchange for the
brought real estates and the monetary deposit, E.F. Progress II Spółka z o. o. brought the increased value of 40 existing
shares of Rank Müller Jelenia Góra Sp. z o. o., valued at 77.600,00 PLN each.
On 23.01.2009, the Partnership acting as the Seller, has signed a pre-initial sale contract with Aldi Sp. z o. o. in Chorzów, of
real estates located in Bielsko-Biała with total area of 4.871 sq.m. The sale price was agreed as 3 900 000 PLN.
On 13.01.2009, the Partnership acting as the Seller, has signed a sale contract with its dependent company E.F. Progress III
Sp. z o. o., of the ground located in Zamość, with the area of 3.005 sq.m. The sale price was agreed as 170 000 PLN.
On 22.05.2009, the Partnership acting as the Seller, has signed a sale contract with Carrefour Polska Sp. z o. o., of a ground
real estate with a building, located in Jastrzębie Zdrój, with the total area of 28.964 sq.m. The sale price was agreed as 54
836 000 PLN.
th
On September 10 , the Partnership has signed annexes to investment loan contracts for funding the real estates of Galeria
Piastów I, II i III (GPI, GP II, GP III) and the real estate in Katowicae. According to signed annexes to the loan contracts of GP
I, II i III, the most important changes in comparison to the initial contracts were related to shortening of the loan period,
st
st
respectively, to August 31 , 2014 and September 1 , 2014, assuming the yearly loan depreciation rate of 1,5% and a
balloon rate at the end of loan period with the possibility of extension of the funding period for additional 2 years, changes
of capital installments, increase of the bank’s profit, creation of additional protection of the loan using a mortgage on a real
estate in Zgorzelec, introduction of a „cash sweep” mechanism for the GP I loan and modifications thereof in the case of GP
II and GP III loan. Additionally, the annexes predict additional obligations of the Partnership and a modification of agreed
parameters if the conditions specified in the annexes are not met. The changes of loan conditions do not pose a threat of
losing the ability of the unit to contnue its acitivity.
Forward contracts signed by the unit for sales of Euro currency, signed as a protection against the currency exchange rate
th
th
of an investment loan granted in PLN to Euro, have been settled on May 29 , 2009 and June 29 , 2009, generating a total
loss on derivative instruments equal to 31.722 000 PLN, where 24.296 000 PLN was found in 2008.
Galeria Piastów III has been opened in April, 2009.
E.F. Progress I
On 28.10.2009, the unit has signed a contract with P.B. Cezbed Sp. z o.o. located in Wrocław, on the general contractor for
the investment within implementation of a commercial-service centre „Galeria Tęcza” in Kalisz. The value of the contract is
a net amount of 69.700 000 PLN.
Page 163
E.F. Progress III
On 13.01.2009, on the basis of an authenticated deed 403/2009, the partnership has sold the perpetual use right to the
40/1 ground parcel to MB PROGRESS CAPITAL LIMITED, together with ownership of a building, which is a separate real
estate.
On the basis of loan contract dated 02.02.2009 – the Partnership has granted Rank Progress S.A. a loan of 900 000 PLN. The
st
payment date of the loan is December 31 , 2010.
On 14.08.2009 the Board of the dependent unit E.F. Progress IV Sp. z o.o. has lodged a bankruptcy application with a
possibility of agreement to the proper court. The court has not made a decision in this matter as of the date of preparation
of these consolidated financial information.
E.F. Progress V Sp. z o. o.
rd
On April 3 , 2009, this company has opened Twierdza Commercial Centre in Kłodzko.
th
On September 10 , the Partnership has signed an annex to the investment loan contract, financing Twierdza Commercial
Centre. According to the signed annex, the most significant changes in comparison to the initial contract were related to the
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shortening of loan period to September 1 , 2013 with a possibility of extension to September 1 , 2016, if some defined
conditions are met, changes of capital installments, increase of bank profit and change of the „cash sweep” mechanism.
Additionally, the annex provides additional duties on the Partnership and modification of existing parameters if the
conditions specified in the annex are not met. The changes of loan conditions do not pose a threat of losing the ability of
the unit to continue its activity.
The settlement date of the forward contract signed by the partnership in the part related to 3.300 000 Euro has been
th
extended to November 30 , 2009, with the loss on this part of the contract was stated in 2008 and it totalled 2.228 000
PLN.
E.F. Progress VII Sp. z o. o.
th
On June 29 , 2009, the Partnership has signed a contract with Erbud S.A. on the general contractor of a commercial-service
centre Retail Park in Kłodzko with a net value of 16.000 000 PLN.
Rank Müller Jelenia Góra Sp. z o.o.
th
On June 29 , 2009, the Partnership has signed a contract with Erbud S.A. on the general contractor of Pasaż Grodzki centre
in Jelenia Góra with a net value of 32.000 000 PLN.
49. Information about contracts with entities entitled to study
The salary of the expert auditor for the services of study and survey related to the financial reports of units of the Capital
Group for 2008 totalled 60 000 PLN, net. No other services were performed by the expert auditor for the Group in 2008.
50. Information on economic character and goal of contracts signed by the unit and not included in the balance in a
scope necessary for evaluation of their influence on material and financial situation and on the financial result
of the unit
th
On January 27 , 2007 Rank Progress S.A. has signed a contract with JA-WA Morgaś, Ostasz Spółka Jawna located in Zamość,
on cooperation in the field of defining rules of joint implementation of an economic goal, which is to manage real estates
located in Zamość, by creating a commercial object with the area of about 35 thousands of square meters. As a part of the
contract, Rank Progress S.A. has obliged to purchase a number of real estates located in Zamość, also real estates, which
are indirectly owned by JA-WA Morgaś, Ostasz Spółka Jawna, and then to implement the object on the real estate. Once the
legal, effective permission for use of the constructed object is obtained, Rank Progress S.A. has obliged to perform a free
transfer of 30% of shares of the intended company, created for the implementation of the said investment or to pay the
partner the profit he is entitled to, i.e. an amount equal to 30% of the market price of the object, minus all expenses related
to the investment. Effects of this contract have not been included, since the condition of right acquisition has not been
fulfilled.
th
On May 14 , 2008, Rank Progress S.A. signed a contract with H.M. Prosper Hildebrand Morgaś Spółka Jawna located in
Zamość („Partner”), on cooperation in the field of defining rules of joint implementation of an economic goal, which is to
manage real estates located in Skarżysko-Kamienna, by construction of a multifunctional object (commercial-servicesoffices) („Obiekt”). As a part of this contract, the Parties have obliged, e.g., to the implementation of the joint venture and
to obtaining profit in the following proportions 67,00 % - Rank Progress S.A., 33,00 % - Partner, which will be paid to the
Page 164
Partner in cash or in shares of intended company, created for the implementation of the investment. However, the Parties
have agree, that this contract will be modified, so the Object will not be constructed and the ground of the real estate will
be sold back to a potential investor, while profit from this transaction will be divided according to the proportions
presented above. As of the balance date, the obligation against the Partner by virtue of the Partner’s services, has not been
created yet.
Jan Mroczka
Dariusz Domszy
Mariusz Kaczmarek
Board Chairman
Board Member
Person responsible for preparation
20.2. Financial information pro forma
The Issuing Party has not prepared financial information „pro forma”, since no transactions took place in the Group, which
would oblige the Issuing Party to prepare such information.
20.3. Financial reports
The financial reports have been presented in p.20.1 Part III „Registration Document” of the Prospectus. Presented financial
information and comparable financial data contain an extended range of informations and explanations in comparison to
signed financial reports for particular tax years.
20.4. Study of historical yearly financial information
20.4.1. Statement declaring, that historical financial informations have been studied by an expert auditor
Historical financial information presented in p.20.1 Part III „Registration Document” of the Prospectus have been studied by
an expert auditor. None of the expert auditors refused their opinion either about historical financial information or about
financial reports for particular tax years, presented in this Prospectus. Additionally, none of the opinions of the expert
auditors, related to these reports, were negative and they did not contain objections.
20.4.1.1. Opinion of an independent expert auditor on the study of historical financial information for the General
Assembly, Supervisory Board and the Board of RANK PROGRESS S.A. („Issuing Party”), located in Legnica.
The opinion from the study done by an independent expert auditor about historical financial information has been
presented in p.20.1.1. of the „Registration Document”.
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20.4.1.2. Opinion of an independent expert auditor for the current year from January 1 to December 31 , 2008
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Page 166
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20.4.1.3. Opinion of an independent expert auditor for the current year from January 1 to December 31 , 2007
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20.4.2. Indication of other information in the Registration Document, which were studied by expert
auditors
HLB Sarnowski & Wiśniewski Spółka z o.o., in addition to studies of historical financial information, study of mid-year
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financial information of the period from January 1 , 2009 to June 30 , 2009 and execution of confirmation works on the
forecasts of results of the Capital Group of the Issuing Party, has studied consolidated financial reports prepared according
Page 169
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to the International Standards of Financial Accounting (ISFR) for the tax years ending on December 31 , 2008 and
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December 31 , 2007, and for the period of 6 months ended on June 30 , 2009 and has given an opinion on these
informations, raising no objections (p.20.4, 13.2, 20.4.1, 20.6.1 Part III „Registration Document” of the Prospectus).
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20.4.2.1. Opinion of an independent expert auditor for the current year from January 1 to June 30 , 2009
For the General Assembly, Supervisory Board and Board of
RANK PROGRESS S.A.
We have performed a study of the appended, mid-year short consolidated financial report of Rank Progress S.A. Capital
Group („Capital Group”) including:
th
 mid-year consolidated report on financial position as of June 30 , 2009, which shows an amount of 666 449 000 zl on
the side of assets and on the side of credits
st
th
 mid-year consolidated report on total income for the period from January 1 , 2009 to June 30 , 2009, showing a net
profit of 79 102 000 z, and a net profit assigned to shareholders of the Dominating Entity of 79 106 000 zl,
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th
 mid-year consolidated report on changes of own capital for the period from January 1 , 2009 to June 30 , 2009,
showing an increase of own capital by the amount of 82 205 000 zl,
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 mid-year consolidated report of monetary flows for the period from January 1 , 2009 to June 30 , 2009, showing a
decrease of monetary assets level equal to 2 262 000 zł,
 additional explanatory notes.
The Board of the Dominating Unit is responsible for the reliability, correctness and clarity of the appended, consolidated
financial report, as well as for the correctness of the consolidation documentation.
Our task was to study the appended mid-year short consolidated financial report and to express an opinion based on this
study, if the mid-year short consolidated financial report properly, reliably and clearly presents the material and financial
situation of the Group along with its financial result it all significant aspects.
We have performed the study of appended, mid-year short consolidated financial report according to the statements of:
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 regulations of the Act dated September 29 , 1994 on accounting (uniform text, Dz. U. dated 2009 N 152, pos. 1223
with later changes),
 practices of studying financial reports, used in Poland,
 international standards of financial revision on all issues not regulated in the aforementioned regulations.
We have planned and performed this study in order to obtain a rational certainity to as if the report contains any significant
errors. The study included checking the correctness of accounting rules (policy) used by the bound units and checking
(mostly on a random basis) of basis, which were used to provide numbers and informations included in the consolidated
financial report, as well as a global evaluation of the report.
We think that the study we have performed brought all basics necessary to express a reliable opinion. In our opinion, the
appended, mid-year short consolidated financial results, including numeric data and verbal explanations, in all important
aspects:

Properly, reliably and clearly presented all informations important for evaluation of material and financial situation of
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the Capital Group as of June 30 , 2009, as well as of its financial result for the current year, from January 1 , 2009 to
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June 30 , 2009,

It has been prepared properly, i.e. according to the accounting rules (policy), resulting from International Accounting
Standards/International Standards of Financial Reporting and interpretations related to them, announced as
regulations of the European Committee, and in the scope not regulated in these Standards – according to the
requirements of the Act on accounting and executive regulations issued on the basis of this Act,

Conform to the legal regulations, binding for the Capital Group, influencing the contents of the consolidated financial
reports.
Without raising objections to the mid-year short consolidated report we would like to inform, that the financial reports of
11 dependent units covered in this report, which participated in the balance amount at the level of 8,9%, were not studied
by the expert auditor.
Additionally, the consolidated financial report of the Group for the year 2008 has not been accepted by the General
Shareholders Assembly, lodged in a court or submitted for publishing in Monitor Polski B, until an opinion is obtained.
Dariusz Sarnowski
Expert Auditor
Page 170
Entity entitled to study
financial reports, registered in the list of entitled
entities managed by KIBR,
with evidence number 2917
th
Poznań, January 4 , 2010
20.4.3. Source of data included in the financial reports
The expert auditor has not used any other sources of financial data than the financial reports and accounting books of the
Partnership.
20.5. Date of the newest financial information
The last historical financial information studied by the expert auditor is the report for 2008, which was presented in p.20.1.
Part III „Registration Document” of the Prospectus.
The last mid-year financial information studied by the expert auditor is the report for the 6 months of 2009, which was
presented in p.20.6. Part III „Registration Document” of the Prospectus.
20.6. Mid-year and other financial information
Introductions
st
th
The Board of the Issuing Party has prepared mid-year financial information for the period of January 1 to June 30 , 2009.
The mid-year financial information, as well as other financial information, have been prepared according to the
International Standards of Financial Reporting, including the fact that their contents correspond to the directives defined in
MSR 34 „Mid-year financial reporting”.
Page 171
20.6.1. Opinion of the independent expert auditor on mid-year financial information for the period from
st
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January 1 to June 30 2009, for the General Assembly, Supervisory Board and Board of RANK
PROGRESS SA („Issuing Party”) located in Legnica
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th
The mid-year financial information of the RANK PROGRESS Capital Group for the period from January 1 , 2009 to June 30 ,
2009, submitted by the Board of the Issuing Party, have been subjected to study according to the requirements included in
o
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the Committee Regulation (EC) N 809/2004 dated April 29 , 2004, implementing the 2003/71/EC Directive of the
European Parliament and of the Council on the information included in issue prospectuses and their form, inclusion be
reference and publishing of such issue and advertising propagation.
The Board of the Issuing Party is responsible for reliability, correctness and clarity of the appended mid-year financial
information, prepared according to the International Standards of Financial Reporting, applying to the mid-year reporting,
which have been approved by the European Union („MSR 34”).
Our task was to study the information and to express the opinion on the reliability, correctness and clarity of these financial
information.
We have performed the study of the mid-year financial information according to the statements of:



th
o
chapter 7 of the Act dated September 29 , 1994 on accounting (uniform text, Dz. U. dated 2009 N 152, pos. 1223 with
later changes),
practices of studying financial reports, used in Poland,
international standards of financial revision on all issues not regulated in the aforementioned regulations.
We have planned and performed the study of mid-year financial information in order to gain rational certainity, allowing to
express an opinion on mid-year financial information.
The study included in particular checking the correctness of accounting rules (policy) applied by the Group and significant
estimations, checking – mostly on a random basis – the basis of numbers and informations included in the mid-year
financial information, and a global evaluation of the situation of the Capital Group of the Issuing Party expressed by the
mid-year financial information.
We think that the study gave us an adequate basis for expressing a reliable opinion.
In our opinion, the studied mid-year financial inforation of the RANK PROGRESS Capital Group included in the Prospectys,
containing numerical data and verbal explanations:




Properly, reliably and clearly presented all informations important for evaluation of material and financial situation of
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st
the Capital Group as of June 30 , 2009, as well as of its financial result for the current year, from January 1 , 2009 to
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June 30 , 2009,
It has been prepared properly, i.e. according to the accounting rules (policy), resulting from International Accounting
Standards/International Standards of Financial Reporting and interpretations related to them, announced as
regulations of the European Committee, and in the scope not regulated in these Standards – according to the
requirements of the Act on accounting and executive regulations issued on the basis of this Act,
Conform to the legal regulations, binding for the Capital Group, influencing the contents of the consolidated financial
reports,
Contain an information scope concordant with the International Standards of Financial Reporting, applying to mid-year
reporting, which have been approved by the European Union („MSR 34”).
Without raising objections to the mid-year short consolidated report we would like to inform, that the financial reports of
11 dependent units covered in this report, which participated in the balance amount at the level of 8,9%, were not studied
by the expert auditor.
Dariusz Sarnowski
Expert Auditor
Page 172
Entity entitled to study
financial reports, registered in the list of entitled
entities managed by KIBR,
with evidence number 2917
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Poznań, January 4 , 2010.
20.6.2. Mid-year, short, consolidated financial report of the Rank Progress S.A. Capital Group for the period
from 01.01.2009 to 30.06.2009 together with comparable data for the period from 01.01.2008 to
30.06.2008, prepared according to the ISFR
1.Consolidated Report of financial position
Assets
Note
30.06.2009
31.12.2008
506 125
360 456
7 134
4 419
388
474
5 853
1 598
14 953
9 818
534 453
376 765
101 198
133 540
26 945
25 540
3 853
6 115
Current assets
131 996
165 195
TOTAL ASSETS
666 449
541 960
30.06.2009
31.12.2008
3 250
3 250
39 602
39 602
170 001
90 895
79 106
4 839
212 853
133 747
3 671
572
216 524
134 319
207 493
138 111
46 532
22 616
Real assets
12
Other fixed assets
Non-material values
Fixed assets
Reserves
13
Monetary assets
Credits
Note
Share capital
Reserve capital
Profits held/uncovered losses
Including net profit for the period
Own capital (assigned to shareholders of the Dominating Unit)
Minority capital
Total own capital
14
Page 173
254 025
160 727
148 660
141 688
3 279
8 478
43 961
96 748
195 900
246 914
TOTAL CREDITS
666 449
541 960
01.01.2009 30.06.2009
01.01.2008 30.06.2008
97 517
46 730
21 313
6 735
Goods sales income
70 842
15 814
5 362
24 181
78 855
40 843
Value of goods sold
64 429
10 171
3 494
1 151
External services
4 794
24 545
Other costs
6 138
4 976
18 662
5 887
123 711
-784
208
6
21 444
810
121 137
4 299
108
3 921
Financial costs
23 361
2 720
Gross profit (loss)
97 883
5 500
Income tax
18 781
685
Net profit (loss) from continued activity
79 102
4 815
-
-
Other elements of total income
-
-
Income tax related to other elements of total income
-
-
Other total income (net)
-
-
14
Other obligations
2.Consolidated report on total income
Details
Note
Continued activity
Sales income
23
Profit (loss) on sales
Other current incomes
Other current costs
Profit (loss) on current activity
Financial incomes
Abandoned activity
Net profit (loss) from abandoned activity
Other total income
Page 174
Total income
79 102
4 815
Net profit assigned to:
79 102
4 815
Shareholders of the Dominating Unit
79 106
4 816
-4
-1
Total income assigned to:
79 102
4 815
Shareholders of the Dominating Unit
79 106
4 816
-4
-1
2,43
0,15
2,13
0,15
01.01.2009 30.06.2009
01.01.2008 30.06.2008
Gross profit
97 883
5 500
Corrections
-135 606
-23 272
Evaluation of real estates to their fair value
-103 620
402
-4
-1
Depreciation
1 126
546
Currency rate differences
8 101
-3 815
Interests
3 419
2 261
Profit (loss) from investment activity
1 733
386
Reserve level change
23 588
869
Supplies level change
12 923
-21 556
2 742
-161
Short-term obligations level change
-67 761
-3 418
Inter-periodic settlements level change
-10 220
-2 610
-
-
-18 781
-685
11 148
4 510
-37 723
-17 772
2 107
215
5
215
2 102
-
41 291
38 141
187
441
41 229
37 700
-39 184
-37 926
Minor shareholders
Minor shareholders
Basic profit per share from the profit in the period in PLN
Diluted profit per share from the profit in the period in PLN
24
3.Consolidated report on monetary flows
Details
FLOW OF MONETARY ASSETS FROM CURRENT ACTIVITY
Minority profits
Active debt level change
Transfer between fixed assets and supplies
Income tax
Other corrections
Net monetary flows from current activity
FLOWS OF MONETARY ASSETS FROM INVESTMENT ACTIVITY
Incomes
Disposal of tangible fixed assets and non-material values
From other financial assets
Expenses
Purchase of of tangible fixed assets and non-material values
On investments in real estates
Net monetary flows from investment activity
FLOWS OF MONETARY ASSETS FROM FINANCIAL ACTIVITY
Page 175
Incomes
89 153
65 519
Bank loans
89 153
65 519
Expenses
14 508
13 385
Bank loans payments
9 391
8 821
Payments by virtue of financial leasing
1 590
708
Intersts
3 520
3 856
7
-
Net monetary flows from financial acitivity
74 645
52 134
Net flows of monetary assets
-2 262
-3 564
Balance monetary assets level change
-2 262
-3 564
6 115
4 955
3 853
1 391
For other financial obligations
4.Consolidated Report on changes of own capital
th
6 months period ended on June 30 , 2009
Details
State as of
st
January 1 , 2009
Basic capital
Undivided
result from
previous
zears
Reserve
capital
Own capital
assigned to
major
shareholders
Net
profit
(loss)
Capital assigned
to minor
shareholders
Total
own
capital
3 250
39 602
90 895
-
133 747
572
134 319
Division of
financial result
for 2008
-
-
-
-
-
-
-
Net profit (loss)
-
-
-
79 106
79 106
-4
79 102
Other total
income for the
period of 6
months
-
-
-
-
-
-
-
Extra payments
for capital of
dependent unit
-
-
-
-
-
3 103
3 103
State as of June
th
30 , 2009
3 250
39 602
90 895
79 106
212 853
3 671
216 524
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Details
State as of
st
January 1 , 2008
Basic capital
Undivided
result from
previous
zears
Reserve
capital
Own capital
assigned to
major
shareholders
Net
profit
(loss)
3 250
-
125 658
Division of
financial result
for 2007
-
39 602
-39 602
Net profit (loss)
-
-
-
Other total
income for the
period of 6
months
-
-
-
Page 176
-
Capital assigned
to minor
shareholders
Total
own
capital
128 908
25
128 933
-
-
-
4 816
4 816
-1
4 815
-
-
-
-
Extra payments
for capital of
dependent unit
-
-
-
-
-
-
-
State as of June
th
30 , 2008
3 250
39 602
86 056
4 816
133 724
24
133 748
st
12 months period ended on December 31 , 2008
Details
Basic capital
State as of
st
January 1 , 2008
Undivided
result from
previous
zears
Reserve
capital
Own capital
assigned to
major
shareholders
Net
profit
(loss)
Capital assigned
to minor
shareholders
Total
own
capital
3 250
-
125 658
128 908
25
128 933
Division of
financial result
for 2007
-
39 602
-39 602
-
-
-
Net profit (loss)
-
-
-
4 839
4 839
-3
4 836
Other total
income for the
period of 6
months
-
-
-
-
-
-
-
Extra payments
for capital of
dependent unit
-
-
-
-
-
550
550
State as of June
th
30 , 2008
3 250
39 602
86 056
4 839
133 747
572
134 319
5. Financial report according to segments of activity
The Group has set its current segments on the basis of reports, which are used in the process of strategic decision making.
The reporting related to the segments conforms to the internal reporting, presented to the people managing the Group and
making decisions on the operational level.
The basic division into segments of activity is division according to basic groups of sales portfolio of the Group, i.e. the
virtues, by which it obtains its sales income. Because of the above fact, the Board has separated 2 segments, i.e. „Real
estate rents” and „Real estate sales”.
The tables below present data related to incomes, profits and assets and obligations of particular segments of the Group for
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the 6 months period ended on June 30 , 2009 and June 30 , 2008.
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th
6 months period ended on June 30 , 2009 or as of June 30 , 2009
Details
Real estate
rents
Real estate
sales
Unassigned
entries
Consolidation
corrections
Total
activity
6 months period ended on 30.06.2009
Goods sales income
-
70 836
6
-
70 842
14 744
-
10 159
-3 590
21 313
Total
14 744
70 836
10 165
-3 590
92 155
7 545
6 406
4 710
-
18 662
Gross profit (loss) from sales
Assets and obligations as of30.06.2009
Page 177
Total assets
543 078
111 021
35 125
-22 775
666 449
Total obligations
387 962
43 761
37 200
-19 000
449 925
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st
6 months period ended on June 30 , 2008 or as of December 31 , 2008
Details
Real estate
rents
Real estate
sales
Unassigned
entries
Consolidation
corrections
Total
activity
6 months period ended on 30.06.2008
Goods sales income
-
15 814
-
-
15 814
6 362
-
642
-269
6 735
Total
6 362
15 814
642
-269
22 549
-798
5 643
1 075
-33
5 887
Total assets
381 532
140 436
38 066
-18 074
541 960
Total obligations
289 299
63 199
73 666
-18 522
407 641
Gross profit (loss) from sales
Assets and obligations as of 31.12.2008
6. Additional explanatory notes
1. General information
Rank Progress Capital Group („Group”, „Capital Group”) consists of the Dominating Unit Rank Progress S.A. and its
th
Mid-year financial information of the Group cover 6 months period ended on June 30 , 2009 and contain comparable data
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for a 6 months period ended on June 30 , 2008 or as of December 31 , 2008.
Rank Progress S.A. („Dominating Unit”, „Partnership”) was created as a result of resolution made by the partners of
st
Bartnicki, Mroczka E.F. Rank Progress Spółka jawna partnership on October 1 , 2007, through a transformation from a
general partnership into a stock partnership. The stock partnership has been registered in the National Court Register on
th
October 10 , 2007.
The office of the Dominating Unit is located in Legnica, Złotoryjska 63. The Partnership performs its activity in a form of a
stock partnership registered in Poland and currently registere in the business units register maintained by the District Court
in Wrocław, with the number KRS 0000290520.
The duration of the Dominating Unit and of the units forming the Group is permanent, with the exception of KMM Sp. z o.o.
in liquidation, which is being liquidated.
The basic activity subjects of the Dominating Unit are:
 Deconstruction and demolition of buildings,
 Execution of general construction works,
 Execution of other finishing construction works,
 Real estate rents on its own account,
 Management and sales of real estates on its own account.
The Capital Group focuses its current and future activity on implementation of four categories of projects within the real
estate market:
 Large area commercial-service centres,
 Uptown commercial galleries,
 Mixed function objects, i.e. apartment-services-offices,
 Highly profitable, short-term investment projects.
Page 178
The dominating unit and the entire Group is controlled by Mr Andrzej Bartnicki and Mr Jan Mroczka, who directly and
indirectly hold 49,36% (each) of votes at the General Assembly.
2.
Group Composition
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st
As of June 30 , 2009 and as of December 31 , 2008, the following dependent companies form the Capital Group:
Basic activity
Particip. in
Particip. in
o
subject
capital
capital
N
Unit name
Location
Legnica
30.06.2009
100%
31.12.2008
100%
1
(1)
2
(1)
Legnica
100%
100%
3
(1)
Legnica
100%
100%
4
(1)
Legnica
100%
100%
5
(1)
Legnica
100%
100%
6
(1)
Legnica
100%
100%
7
(1)
Legnica
100%
100%
8
(1)
Legnica
100%
100%
9
(1)
Zamość
100%
100%
10 Rank Müller Jelenia Góra Sp. z o.o.
(1)
Jelenia Góra
50%
50%
11 Rank Prosper Skarżysko Kamienna Sp. z o.o.
(1)
Legnica
100%
100%
12 Colin Holdings Limited
(1)
Nicosia,
Cyprus
100%
-
(1) Real estate agents, real estate circulation, real estate construction and management on own account, real estate
construction on third parties account.
All companies have been consolidated in the mid-year financial information using the full method, with the exception of
Colin Holdings Limited, which has been excluded from the consolidation according to MSR 8, using the significance rule. The
full consolidation methods has been also used for Rank Müller Jelenia Góra Sp. z o.o., which is designed to become a
dependent unit of Rank Progress S.A.
3.
Declaration of conformity and the basis of preparation
These mid-year financial information of the RANK PROGRESS S.A. Capital Group have been prepared according to the
International Standards of Financial Reporting (ISFR) as approved by the EU, which apply to the mid-year financial
reporting.
As of the date of approval of these historical financial information for publishing, taking into account the fact that the
process of ISFR standards implementation is underway within EU and the activity of the Group, in the field of
accounting rules applied by the Group no significant differences have been observed between effective ISFR
standards, and the ISFR standards being implemented by the EU.
ISFR include standards and interpretations accepted by the International Accounting Standards Council („IASC”) and by
the Committee for Interpretation of International Accounting Reporting („CIIAR”).
These mid-year financial informations have been prepared according to the historical cost rule, with the exception of
investment real estates, which are evaluated to the fair value.
The mid-year financial informations have been presented in thousands of zlotys ("tys. PLN"), unless stated otherwise.
Mid-year financial information was prepared using the assumption of continuity of business activity by the companies of
the Group in the predictable future, with the exception of KMM Sp. z o.o. in liquidation, which is being liquidated.
As of the date of approval of these financial information, no circumstances indicating a threat to the continuity of business
activity of other companies of the Group have been observes, with the exception of the dependent unit E.F. Progress IV Sp.
z o.o., the Board of which has lodged a bankruptcy application with a possibility of agreement to the proper court, this
application has not been considered as of the date of preparation of these historical financial information. As a
consequence, one cannot exclude that the assumption of continuity of business activity of E.F. Progress IV Sp. z o.o. may
become irrelevant.
Page 179
A mid-year financial information does not contain all informations and revelations required in a yearly, consolidated
financial report and they should be read together with yearly financial information of the Group for the year
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eneded on December 31 , 2008.
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These mid-year financial informationof the Group for the 6 months period ended on June 30 , 2009, have been
nd
approved for publication by the Board on December 22 , 2009.
4.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Changes of applied accounting rules
Below, new or changed ISFR regulations and new CIIAR interpretations (approved or undergoing approval by the
st
European Union), which are effective as of January 1 , 2009:
ISFR 8 Operational segments – The Group has presented the report according to the operational segments, in
accordance with the new ISFR 8 regulations.
ISFR 1 (change) „First instance of application of International Standards of Financial Reporting" and to MSR 27 (zmiana)
"Consolidated and unitary financial reports "- published on May 22nd 2008, modified ISFR 1 and MSR 27 is effective in
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relation to yearly periods starting on January 1 , 2009 of later.
MSR 32 (change) „Financial instruments: presentation" and MSR 1 (change) "Financial reports presentation"- published
th
st
on February 14 , 2008, the modified Standard is effective in relation to reporting periods starting on July 1 , 2009 or
later.
nd
ISFR (2008) „Amendments to the International Standards of Financial Reporting 2008" – published on May 22 , 2008.
st
The majority of amendments is effective for yearly periods starting on January 1 , 2009 or after that date.
rd
Interpretation of CIIAR 15 „Contracts on real estate construction"- CIIAR 15 interpretation, published on July 3 , 2008,
st
is applied to yearly financial reports for the periods starting on January 1 , 2009 or later. This interpretation has not
been approved by the European Union.
Interpretation of CIIAR 16 „Net securities of investments in a foreign entity "- CIIAR 15 interpretation, published on July
rd
st
3 , 2008, is applied to yearly financial reports starting on October 1 , 2008 or later.
th
MSR 23 (updated) "Costs of external financing", published on December 10 , 2008, is effective in relation to the yearly
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periods starting on January 1 , 2009 or later.
th
MSR 1 (updated) "Financial report presentation", published on December 17 , 2008, is effective in relation to yearly
st
periods starting on January 1 , 2009, or later.
MSSF 2 (change) .Payments in the form of shares – Conditions of obtaining rights and their cancellation", published on
th
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January 17 , 2008, it is effective in relation to yearly periods starting on January 1 , 2009, or later.
Application of the updated MSR 1 "Financial reports presentation", had influenced the field of naming particular
reports and presenting only transactions with the owners in the summary of changes in consolidated own
capitals. Other elements were included separately, in a consolidated summary of total income.
Application of the updated MSR 40 "Investment real estates", to the field of real estates under construction, forces the
model of evaluation to the fair price to be applied to them. However, in a case when the fair value of an
investment real estate under construction cannot be reliably evaluated, it is evaluated according to the historical
cost model, to the earlier date of these: date of finish of the construction works, or a moment, in which the
possibility of reliable evaluation of the fair price is possible. On this basis, the Partnership continues to evaluate
the investment real estates under construction according to the historical cost model. Application of the updated
MSR 40 does not cause a necessity of making changes in the financial data for previous periods in order to obtain
their comparability.
Application of ISFR 8 "Operational segments", which replaced MSR 14 "Reporting related to activity segments "
influenced the field of revealing data related to the operational segments of the Group, according to which the
strategic decision within the Group are made.
Except for the listed ones, other changes of standards and interpretations did not cause significant changes in the
accounting policy of the Group and in data presentation in the mid-year financial information.
5.
1.
2.
New standards and interpretation, which have been published, and are not yet effective
As of the date of preparation of these mid-year financial information, the following standards, changes of standards
and interpretations have been published, but which are not yet effective:
ISFR 1 (change) „First instance of application of International Standards of Financial Reporting"- published on
th
November 27 , 2008. This standard is required for preparation of the first financial report of the unit according to ISFR
st
for yearly periods, starting from July 1 , 2009, with the possibility of earlier application thereof.
th
ISFR 3 (change) „Business entities fusions"- published on January 10 , 2008 and effective in relation to reporting
st
periods starting on July 1 , 2009 or later.
Page 180
th
3.
MSR 27 (change) „Consolidated and unitary financial reports"- published on January 10 , 2008 and effective in relation
st
to reporting periods starting on July 1 , 2009 or later.
st
4. MSR 39 (change) „Financial Instruments: inclusion and evaluation"- published on July 31 , 2008, these changed are
st
retrospectively applied to yearly periods stating on July 1 , 2009 or later.
5. MRS 39 (change) "Financial instruments: Entries qualifying to the protection accounting ", are effective for yearly
st
periods starting on July 1 , 2009 and later. These changes have not been approved by the European Union.
6. MSSF 1 (updated) " First instance of application of International Standards of Financial Reporting ", it is applied to
st
yearly periods starting on July 1 , 2009 and later. This standard has not been accepted by the European Union.
st
7. CIIAR 17 "Distribution of non-monetary assets to the owners", it is applied to yearly periods starting on July 1 , 2009
and later. This interpretation has not been approved by the European Union.
8. CIIAR 18 "Free transfer of assets", is applied prospectively to the elements of assets obtained from the customers on
st
July 1 , 2009 or later. This interpretation has not been approved by the European Union.
9. Improvements in the International Standards of Financial Reporting – a set of changes to the International Standards
st
of Financial Reporting, these changes are applied in most of the cases to yearly periods starting on January 1 , 2010
and later. These changes have not been approved by the European Union.
th
10. ISFR for Small and Medium Units. This standard comes into effect on the day on its publication (July 9 , 2009). This
standard has not been accepted by the European Union.
11. ISFR 1 (change) " First instance of application of International Standards of Financial Reporting", they are applied to
st
yearly periods starting on January 1 , 2010, or later. These changes have not been approved by the European Union.
According to the estimations of the Group, the aforementioned standards, interpretations and changes to standards
would not significantly influence the mid-year financial information, if they had been applied by the unit as of the
balance date.
Additionally, the Group does not predict that application of the standards already published, but not approved by the
EU could significantly the numerical values presented in this Prospectus as mid-year financial information.
6.
Importing accounting rules
With the exception of changes described in Note 4, accounting rules and calculation methods used in preparations of
mid-year financial information are concordant with the rules described in the studied consolidated financial
st
results of the Rank Progress Capital Group, preparec according to the ISFR for the year ended on December 31 ,
nd
2008, accepted for publication on October 2 , 2009, and with historical financial information for the year ended
st
on December 31 , 2008.
7.
Significant values based on professional judgement and estimation
The Board of the Dominating Unit has used the best of its knowledge related to the standards and interpretations used, as
well as to methods and rules of evaluation of particular entries of these mid-year financial information. The preparation of
the mid-year financial information according to ISFR, required the Board to make some estimations and assumptions, which
are reflected in these informations. The real results may differ from these estimations.
Below, the basic assumptions regarding the future and othey key uncertainity sources existing as of the balance day, which
are connected with a significant risk of a significant correction of balance value of assets and obligations in the next
financial periods.
Classification of leasing contracts
The Group is a party of leasing contract, which, according to the Board, fulfill the conditions of financial leasing.
Assets and reserves for delayed income tax
Assets and reserve by virtue of delayed income tax are evaluated using tax rates, which, according to the legal regulations,
will be in effect at the moment of asset implementation or reserve dissolution, by taking legal tax regulations legally or
actually effective on the balance day, as the basis of evaluation. The Group recognizes the element of assets by virtue of
delayed income tax, basing on the assumption that in the future, a tax income will be gained, which would allow to use it. A
drop of tax results in the future could cause, that this assumption could become irrelevant.
Depreciation rates
The level of depreciation rates is set on the basis of predicted period of economic usefulness of elements of tangible fixed
assets and non-material values. These estimations are based on predicted file cycles of particular elements of fixed assets,
which can be chnaged in the future.
Fair value of investment real estates
The Group evaluates investment real estates according to the fair value model, using evaluations of independent experts, at
least once a year. In other cases, the Group makes its own estimations on the basis of previously obtained estimated
operates.
Page 181
Extracts updating the value of supplies
The Group makes an evaluation on each balance date, if there are any suggestions of value loss of the real estates classified
as supplies. If such suggestions of value loss are obtained, the Group makes extracts updating the value of the real estate to
the recovered value level, i.e. to the higher of these two values: fair value minus disposal costs or useful value.
Extracts updating active debts
The Group has updated values of active debts, estimated the probability of obtaining income from active duties past their
due dae and estimated the value of lost income, for which an updating extract has been created.
Fair value of derivative instruments
The Group has defined the fair value of derivative financial instruments, not quoted on the active markets (eg. forward
contracts), on the basis of evaluations obtained from the banks, with which these contracts have been signed. The
evaluations include discounted future incomes, generated by these instruments and predicted foreign currencies rates.
8. The seasonal or cyclic character of activity of the Capital Group
In the opinion of the management of the Group, seasonal or cyclic character of the activity of units of the Group could not
be seen in the reporting period and in the comparable period.
9.
Characteristic and amount of atypical entries according to their nature, amount or scope, influencing the midyear financial information
th
In the period ended on June 30 , 2009, no atypical events for the the Rank Progress Group took place, which could
influence the mid-year financial information by their nature, amount or scope.
10. Changes in the structure of the Capital Group
st
On March 31 , 2009, the Dominating Unit has founded and obtained 100% of shares of Colin Holdings Limited („Colin
Partnership”) according to art. 113 of the Cyprus act Partnership Law, as a limited liability Partnership located in Cyprus.
The Colin Partnership has been registered in the partnership register, managed by the Minister of Trade, Industry and
Tourism (Partnership Registration Department) in Nicosia, with the number 247767. The company capital totals 1000 EUR.
No other changes in the structure of the Group took place.
th
st
The structure of Rank Progress Capital Group as of June 30 , 2009 and as of December 31 , 2008, has been presented in
Note 2.
11. Changes of estimated values
th
st
In the table below, basic estimated values as of June 30 , 2009 and as of December 31 , 2008 are presented.
Details
30.06.2009
31.12.2008
14 953
9 818
484 227
172 798
46 532
22 616
Depreciation
1 126
1 360
Extracts updating the value of active debts
1 242
808
Extracts updating the value of real estates under construction
2 484
1 755
19 846
-
3 226
37 537
30.06.2009
31.12.2008
127 831
119 831
Legnica/Senatorska
9 080
9 080
Zgorzelec
6 043
8 646
26 967
23 157
Fair value of investment real estate
Reserve by virtue of delayed tax
Extracts updating the value of supplies
Evaluation of derivative financial instruments
12. Real estates
Details
Galeria Piastów I
Galeria Piastów II
Page 182
Opole Turawa
12 084
12 084
Osiedle Ptasie
4 650
-
Galeria Twierdza / Kłodzko
148 817
-
Galeria Piastów III
148 755
-
484 227
172 798
-
85 672
14 555
15 253
Twierdza Commercial Centre / Kłodzko
-
73 288
Grudziądz
-
2 345
8 965
8 540
862
4 315
Real estates under construction (gross)
24 382
189 413
-2 484
-1 755
Total real estates under construction, net
21 898
187 658
506 125
360 456
Real estates under construction
Zamość
Stargard Szczeciński
Other
Total real estates, net
th
st
The Group has evaluated all investment real estates as of June 30 , 2009 and as of December 31 , 2008, to their fair value
on the basis of evaluations of independent experts.
th
st
As of June 30 , 2009 and as of December 31 , 2008, all investment real estates under construction have been evaluated
according to their historical model.
The table below presents changes of value of investment real estates in the reporting periods:
Details
30.06.2009
31.12.2008
172 798
134 930
Purchases
-
21 372
Sales
-
-
Effects of evaluation to the fair value
123 711
16 496
Transfer from investments under construction
187 718
-
At the end of the reporting period
484 227
172 798
At the beginning of the reporting period
The table below presents changes of value of investment real estates under construction in the reporting periods:
Details
30.06.2009
31.12.2008
187 658
39 234
Purchases and expenses on investments
25 032
175 778
-
-25 599
-729
-1 755
-187 718
-
Transfers to goods
-2 345
-
21 898
187 658
Sales
Transfers to investment real estates
The table below presents the effect of changes of the fair value of real estates in the periods presented in these mid-year
historical information.
Page 183
01.01.2009 30.06.2009
01.01.2008 30.06.2008
8 000
-628
-
-117
-2 603
-39
3 810
-
Osiedle Ptasie
2 194
-
Galeria Twierdza / Kłodzko
67 528
-
Galeria Piastów II
44 782
-
123 711
-748
Details
Galeria Piastów I
Legnica/Senatorska
Zgorzelec
Total
13. Supplies
Details
30.06.2009
31.12.2008
Materials
623
952
Production underway
672
18 353
7 040
-
Goods
92 863
114 235
Total
101 198
133 540
Ready products
th
The goods of the Group include grounds purchased in order to sell them back with profit. As of June 30 , 2009, the Group
has included in the goods:
o
N
Project name
Location
Purpose
Balance value
1.
Opole Malinka
Opole
Mall (hypermarket)
3 050
2.
Brzeg
Brzeg
market
1 847
3.
Wrocław
Wrocław
Apartment district
44 334
4.
Legnica
Mall (hypermarket)
2 120
5.
Bielsko-Biała
Bielsko-Biała
Supermarket
2 485
6.
Katowice
Katowice
Multifunctional object
22 895
7.
Browar
Legnica
5 800
8.
Kłodzko 2
Legnica
Commercial park
4 556
9.
Other
5 776
Total
92 863
st
As of December 31 , 2008 the Group has included in the goods :
o
N
Project name
Location
Purpose
Balance value
1.
Opole Malinka
Opole
Mall (hypermarket)
3 049
2.
Jastrzębie Zdrój
Jastrzębie Zdrój
Commercial gallery
8 735
3.
Grudziądz
Grudziądz
Commercial-entertainment
centre
4.
Brzeg
Brzeg
Market
Page 184
4
1 833
5.
Wrocław
Wrocław
Apartment district
44 296
6.
Legnica
Mall (hypermarket)
2 120
7.
Legnica, ul. Jaworzyńska
Legnica
Wholesale
8.
Bielsko-Biała
Bielsko-Biała
Supermarket
9.
Katowice
Katowice
12 771
2 394
39 033
Total
114 235
The table below presents changes of value levels of supplies in the reporting periods:
Details
30.06.2009
31.12.2008
133 540
91 111
9 010
54 549
Sales
-21 506
-12 120
Extracts updating supplies
-19 846
-
101 198
133 540
Expenses and purchases
The Group has not made any significant extracts updating the value of supplies in the reporting periods.
14. Financial obligations
Details
30.06.2009
31.12.2008
351 175
240 444
Obligations by virtue of financial leasing
1 753
1 818
Derivative financial instruments
3 225
37 537
Total financial obligations, including:
356 153
279 799
- long-term
207 493
138 111
- short-term
148 660
141 688
30.06.2009
31.12.2008
Bank loans
351 175
240 444
- long-term
206 695
137 250
- short-term
144 480
103 194
Bank loans and loans
15. Bank loans
Details
th
Specification of bank loans as of June 30 , 2009
Remaining payment
BZ WBK S.A.
20 000 TEUR
-
-
86 422
Interest rate
conditions as of
30.06.2009
EURIBOR1M+2,1p.p.
BZ WBK S.A.
27 852 TEUR
-
-
124 488
EURIBOR1M+2,1p.p.
2024-06-01
BZ WBK S.A.
-
7 000
-
5 915
WIBOR1M+2p.p.
2009-08-31
BZ WBK S.A.
-
30 000
-
30 000
WIBOR1M+3,5p.p.
2010-01-31
ING Bank Śląski
-
11 377
-
7 823
WIBOR1M+0,8p.p.
2009-07-31
Deutsche Bank
-
1 000
-
1 000
WIBOR1M+0,8p.p.
2009-09-17
Currency
(tys.)
Currency
(tys.)
tys. PLN
Page 185
tys. PLN
Payment
deadline
2022-03-31
PKO BP
-
2 700
-
2 672
WIBOR1M+2,3p.p.
2009-07-31
Deutsche Bank
-
17 500
-
17 486
WIBOR1M+0,8p.p.
2009-09-10
BZ WBK S.A.
-
68 932
-
1 405
WIBOR1M+3,25p.p.
2009-07-31
BZ WBK S.A.
-
7 000
-
1 056
WIBOR1M+2,5p.p.
2009-07-31
BZ WBK S.A.
16 311 TEUR
Total
64 163 TEUR
145 509
-
2024-04-30
351 175
st
Specification of bank loans as of December 31 , 2008
Currency
(tys.)
Remaining payment
Currency
(tys.)
tys. PLN
tys. PLN
Interest rate
conditions as of
30.06.2009
Payment
deadline
BZ WBK S.A.
20 000 TEUR
-
-
2022-03-31
BZ WBK S.A.
-
98 530
-
58 671
WIBOR1M+2p.p.
2024-06-01
BZ WBK S.A.
-
7 000
-
6 393
WIBOR1M+2p.p.
2009-08-31
BZ WBK S.A.
-
30 000
-
30 000
WIBOR1M+1,4p.p.
2009-01-13
ING Bank Śląski
-
11 377
-
9 762
WIBOR1M+0,8p.p.
2009-07-31
Deutsche Bank
-
1 000
-
1 003
WIBOR1M+0,8p.p.
2009-09-17
PKO BP
-
2 700
-
2 690
WIBOR1M+2,3p.p.
2009-10-31
Deutsche Bank
-
30 000
-
14 962
WIBOR1M+0,8p.p.
2009-09-10
BZ WBK S.A.
-
68 932
-
28 385
WIBOR1M+2,5p.p.
2009-06-30
BZ WBK S.A.
-
7 000
-
7 044
WIBOR1M+2,5p
2009-06-30
20 000 TEUR
256 539
-
240 444
Total
16. Protection of loan payments
As of June 30th 2009, the main protection of loan payments was as follows:

normal total mortgage of 20 000 000 EUR on the real estates located in Legnica, being the property of the Grup (at ul.

cessation of active debt from the entirety of rental contracts for the area of Galeria Piastów I in Legnica,

financial pledge on a separated account with blockage of assets up to the amount of 700 000 PLN,

bail mortgage of up to 4 036 000 EUR on real estates and perpetual use rights to the real estates located in Legnica,
being the property of the Group (at ul. NMP and ul. Grodzka),

total normal mortgage of 27 068 000 EUR and a total bail mortgage of up to 13 801 000 EUR on real estates located in
Legnica, being the property of the Group (at ul. NMP and ul. Grodzka),

totail bail mortgage of up to 13 813 000 PLN on real estates located in Legnica, being the property of the Group (at ul.

cessation of active debts from current and future rental contracts for Galeria Piastów II and III,

totail bail mortgage of up to 7 300 000 PLN on the real estates located in Legnica, being the property of the Group (at
ul. NMP),

normal mortgage of 30 000 000 PLN and total bail mortgage of up to 1 500 000 PLN on real estates located in
Wrocławiu,

total bail mortgage of up to 17 065 000 PLN on real estates located in Legnica, being the property of the Group,

bail mortgage of up to 8 642 tys. PLN on real estates located in Legnica, being the property of the Group,

register pledge on all current and future active debts of the Loaning Party with the exception of active debts by virtue
of rental contracts, cessated onto the banks,

total bail mortgage of up to 3 483 000 PLN on real estates located in Kłodzko,

bail mortgage of up to 24 467 000 EUR on real estates located in Kłodzko, in Ustronie area and at ul. Noworudzka,

total normal mortgage of 11 598 000 PLN, and a total bail mortgage of up to 6 000 000 PLN on real estates located in
Kłodzko, in Ustronie area and at ul. Noworudzka,

cessation of active debts from rental contracts of future gallery area located in Kłodzko,

register pledge on shares of Rank Progress V Sp. z o.o.,

total bail mortgage of up to 7 300 000 PLN on real estates located in Kłodzko.
17. Financial instruments
Page 186
st
As of June, 30th 2009 and as of December 31 , grudnia 2008, the fair value of financial instruments did not significantly
differ from their balance value. The table below presents a list of significant financial instruments of the Partnership,
divided into classes and categories of assets and obligations
Details
Category
according to
MSR 39
Balance value
30.06.2009
Fair value
31.12.2008
30.06.2009
31.12.2008
Financial assets
Monetary assets
3 853
6 115
3 853
6 115
HuDD
-
-
-
-
results
WwWGpWF
-
-
-
-
Active debts by virt.
of financial leasing
LaAD
-
68
-
68
Active debts by
virtue of supplies
and services and
other active debts
LaAD
18 033
10 825
18 033
10 825
Loans obtained
OFAaccDC
351 175
240 444
351 175
240 444
Obligations by virt.
of financial leasing
OFAaccDC
1 753
1 818
1 753
1 818
instruments
EtFVaFR
3 225
37 537
3 225
37 537
Including
currency future
forward contracts
EtFVaFR
3 225
37 537
3 225
37 537
Obligations by
virtue of supplies
and services
OFAaccDC
3 279
8 478
3 279
8 478
Other obligations
OFAaccDC
43 960
94 760
43 960
94 760
Loans granted
Financial
obligations
Abbreviations used:
LaAD – Loans granted and active debts
OFAaccDC – Other financial assets evaluated according to depreciated cost
HuDD – Financial assets held until due date
EtFVaFR – Financial assets/obligation evaluated to the fair value by financial result
18. Implementation of derivative financial results
Forward contracts signed by Rank Progress S.A. on the sale of Euro currency, serving as a protection of currency exchange
th
th
rate for the investment bank loan granted in PLN, to Euro, have been settled on May 29 , 2009 and on June 29 , 2009,
generating a total loss on derivative instruments equal to 31.722 000 PLN, with the amount of 24.296 000 PLN
acknowledged in 2008.
Forward contract signed by E.F. Progress V Sp. z o.o. on the sale of Euro currency, serving as a protection of currency
th
exchange rate for the investment bank loan granted in PLN, to Euro, has been partially settled on April 30 , 2009 at the
amount of 16.311 000 euro, generating a total loss on the settled part of the derivative instrument equal to 14.171 000 PLN
where the amount of 11.013 000 PLN has been already acknowledged as a loss for 2008. The settlement date of the
th
forward contract for the part of 3.300 000 Euro has been extended to November 30 , 2009 where the loss acknowledged
for this part of contract in 2008 totalled 2.228 000 PLN.
19. Issue, purchase and payments of debt and capital securities
Page 187
th
In the period ended on June 30 , 2009 and in the comparable period, no issue, purchase or payment of debt or capital
securities took place.
20. Changes of conditional obligations or conditional assets
o
th
According to the Annex N 1 to the contract dated May 14 , 2008 signed by Rank Progress S.A. with H.M. Prosper
Hildebrand Morgaś Spółka Jawna located in Zamość („Partner”) in order to define rules of joint implementation of the
economic goal, which is management of real estates located in Skarżysko-Kamienna by construction a multifunction object
(commercial-service-office) („Object”), which was signed after the balance date, the Parties decided, that their will is first to
dispose of the said real estate for an entity, which independently implements the construction of the object on its own
account or on the account of the commercial network. In such case, the Parties will share the profit obtained on the sale of
the real estate, in the following proportions: 33% - Partner and 67% - the Partnership. Because of the above fact and of the
planned settlement of the transaction, the Partnership has stated that as of the balance date, the obligation against the
Partner by virtue of the Partner’s services, has not been created.
Rank Progress S.A. has bailed a bill on 825.000,00 PLN issued by Adam Morgaś (Buyer) as a protection of sale contract
signed with Cezary Wielgus (Seller) on 30% of shares of GLOBAL-In Bogdan Rzążewski i Wspólnicy Spółka Jawna located i
Lublin.
Rank Progress S.A. has bailed a bill on 530.000,00 PLN issued by Adam Morgaś (Buyer) as a protection of sale contract
signed with Cezary Wielgus (Seller) on 30% of shares of GLOBAL-In Bogdan Rzążewski i Wspólnicy Spółka Jawna located i
Lublin.
Except for the above, no changes related to conditional obligations or conditional assets, which were revealed by the Group
in the consolidated finanacial report for the 12 months period ended in 2008 and in the historical financial information
presented for the yaer ended on December 31, 2008, took place.
21. Infomation about paid (or declared) dividend
The dominating Partnership Rank Progress S.A. has neither paid nor declared a dividend payout.
22. Court proceedings
th
As of June 30 , 2009, with the exception of lodging in a bankruptcy application with the possibility of agreement by the
depndent company E.F. Progress IV Sp. z o.o., which as of the date of signing the mid-year financial information has not
been proceeded by the court, no other significant proceedings were started before a court or a public administration organ,
related to the obligations or active debts of Rank Progress S.A. and its dependent units.
23. Sales income
01.01.2009 30.06.2009
01.01.2008 30.06.2008
21 313
6 735
Goods sales income
70 842
15 814
5 362
24 181
97 517
46 730
Details
Total
The income from sales of products and services consisted in the reported periods from the following entries:
01.01.2009 Details
30.06.2009
Rental fees from commercial galleries
01.01.2008 30.06.2008
14 431
6 123
288
588
Consulting services
4 035
-
Reinvoices on construction works
1 718
-
Other
841
24
Total
21 313
6 735
Commercial objects sales
Incomes from goods sales obtained in the first half of 2009 and in the comparable period were obtained from ground sales.
Page 188
24. Diluted profit per share
st
th
The diluted profit per share for the period from January 1 to June 30 , 2009, was defined on the basis of number of
existing shares, increased by the maximum number of shares which will be issued in the public offer, on the basis of
resolution of Ordinary Shareholders Assembly, which is discussed in Note 26 below.
25. Significant transactions within the Capital Group
The table below presents total amounts of transactions made with dependent entities in the 6 months period ended on
th
June 30 , 2009 and for the year ended on December 31, 2008.
th
Dependent entity
Sale
HIT ZMPL 1
Saldo of
load
obtained
Purchase
Interest
from the
Saldo af
Saldo of
dependent active debts obligations
entity
by virtue of by virtue of
included in
supplies
supplies
the result for and services and services
the period
Saldo of
interest
calculated
for the
obtained
loan
8
-
13 010
1 156
322
5
-
E.F.Progress I
13
-
-
-
-
10
-
E.F.Progress II
8
-
-
-
-
5
-
E.F.Progress III
424
66
900
18
18
247
33
E.F.Progress IV
8
-
-
-
-
130
-
E.F.Progress V
4 035
-
-
-
-
15
-
E.F. Progress VI
15
-
-
-
-
12
-
E.F.Progress VII
8
-
-
-
-
5
-
KMM Sp.zo.o.
1
-
516
109
13
1
-
Rank Prosper
Skarzysko Kamienna
8
-
-
-
-
5
-
MB Progress Capital
Ltd
-
185
-
-
-
-
370
Rank Muller
5
-
-
-
-
5
-
4 533
251
14 426
1 283
353
440
403
Total
st
12 months period ended on December 31 , 2008
Dependent Entity
Sale
Saldo of
load
obtained
Purchase
Interest
from the
Saldo af
Saldo of
dependent active debts obligations
entity
by virtue of by virtue of
included in
supplies
supplies
the result for and services and services
the period
Saldo of
interest
calculated
for the
obtained
loan
HIT ZMPL 1
7
-
13 010
834
1 071
1
-
E.F.Progress I
7
-
-
-
-
1
-
E.F.Progress II
7
-
-
-
-
1
-
E.F.Progress III
291
27
-
-
-
651
-
E.F.Progress IV
108
-
-
-
-
122
-
E.F.Progress V
2 072
16
-
-
-
90
2
E.F. Progress VI
6
-
-
-
-
1
-
E.F.Progress VII
6
-
-
-
-
3
-
Page 189
KMM Sp.zo.o.
3
-
516
97
34
-
-
Rank Prosper
Skarzysko Kamienna
3
-
-
-
-
1
-
MB Progress Capital
Ltd
-
185
-
-
-
-
185
16
-
-
-
-
-
-
Małgorzata Mroczka
-
-
-
-
1
-
-
Mariola Bartnicka
-
-
-
-
3
-
-
Jan Mroczka
-
-
-
-
2
-
-
2 526
228
13 526
931
1 111
871
187
Rank Muller
Total
26. Significant events after the end of the mid-year period, which have not been reflected in the mid-year financial
information for the given mid-year period
Rank Progress S.A.
th
o
On November 9 , 2009, Ordinary General Assembly („OGA” later in text) made the Resolution N 15/11/2009 on the
increase of the company capital of the Issuing Party by issuing normal shares to bearer, Series C, with exclusion of
acquisition rights of the current shareholders and on changes to the Status of the Partnership. According to this resolution,
the OGA decided to increase the company capital of the Partnership from the amount of 3.250.192 PLN to the amount not
greater than 3.714.505 PLN, namely by an amount no greater than 464.313 PLN. The increase of company capital is to be
performed by issuing no more than 4.643.130 new Series C Shares with the nominal value of 0,10 PLN. Series C Shares are
about to be fully covered by monetary assets before the registration of capital increase and they are normal shares to
bearer, and no special rights will be assigned to these shares. Series C Shares will participate in the dividend, starting from
the payments from profit designed for division, for the tax year ending on 31.12.2009. The Issue of Series C Shares will be
performed in the public offer mode. Series C Shares and rights to Series C Shares („PDA”) will be registered for permission
and introduction to circulation on a regulated market of Giełda Papierów Wartościowych w Warszawie S.A.
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On December 9 , 2009, allocation of Series A bonds took place, with their nominal value of a 1.000 PLN each and total
value of 24.760.000 PLN, issued by the Partnership. These are 1-year bonds with a yearly interest rate of oprocentowanymi
12%, with the interest paid quarterly. The income from bond issue were assigned for payment of bank loan in ING Bank
Śląski S.A. and for investments in commercial objects: Twierdza II Commercial Park in Kłodzko, Tęcza Commercial Gallery in
Kalisz, Pasaż Grodzki in Jelenia Góra and Galeria Piastów II in Legnica. The bonds have been secured with mortgage equal to
120% of issue value, on the real estates of the Partnership, located in Katowice at ul. Olimpijska 11, and on three real
estates located in Legnica: at ul. Złotoryjska 63, ul. Senatorska 21 and ul. Witelona 6-8.
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On September 10 , the Partnership has signed annexes to investment loan contracts for funding the real estates of Galeria
Piastów I, II i III (GPI, GP II, GP III) and the real estate in Katowicae. According to signed annexes to the loan contracts of GP
I, II i III, the most important changes in comparison to the initial contracts were related to shortening of the loan period,
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respectively, to August 31 , 2014 and September 1 , 2014, assuming the yearly loan depreciation rate of 1,5% and a
balloon rate at the end of loan period with the possibility of extension of the funding period for additional 2 years, changes
of capital installments, increase of the bank’s profit, creation of additional protection of the loan using a mortgage on a real
estate in Zgorzelec, introduction of a „cash sweep” mechanism for the GP I loan and modifications thereof in the case of GP
II and GP III loan. Additionally, the annexes predict additional obligations of the Partnership and a modification of agreed
parameters if the conditions specified in the annexes are not met.
On 14.08.2009 the Board of the dependent unit E.F. Progress IV Sp. z o.o. has lodged a bankruptcy application with a
possibility of agreement to the proprt court. The court has not made a decision in this matter as of the date of preparation
of these financial information.
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On September 10 , the Partnership has signed an annex to the investment loan contract, financing Twierdza Commercial
Centre. According to the signed annex, the most significant changes in comparison to the initial contract were related to the
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shortening of loan period to September 1 , 2013 with a possibility of extension to September 1 , 2016, if some defined
conditions are met, changes of capital installments, increase of bank profit and change of the „cash sweep” mechanism.
Additionally, the annex provides additional duties on the Partnership and modification of existing parameters if the
conditions specified in the annex are not met.
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The deadline for using the remaining amount of construction loan, equal to 10.193 000 PLN, has been extended to
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November 30 , 2009.
27. Salary of the expert auditor
The salary of the expert auditor for the services of study and survey related to the financial reports of units of the Capital
Group for 2009 totalled 94 500 PLN; salary for works related to the Issue Prospectus of the Rank Progress S.A. Partnership
in 2009 has been set as 24 000 PLN.
Jan Mroczka
Dariusz Domszy
Mariusz Kaczmarek
Board Chairman
Board Member
Person responsible for preparation
20.7. Dividend policy
The proper organ for making a resolution on profit division (or on loss cover) and on dividend payment is the Ordinary
General Assembly, which, according to art. 395 CCC, should take place within 6 months after the end of each tax year. The
Ordinary General Assembly of a stock company sets the dividend level, date of determining the right to dividend and
dividend payment date (art. 348 § 3 CCC). The shareholders, who have shares in their accounts on the day, which is
declated by the General Assembly as the date of determination of the right to dividend, are entitiled to the dividend for the
given tax year.
The Status of the Issuing Party provides an option of dividend pre-payment. The pre-payments of dividend are made by the
Board of the Partnership. The pre-payment of dividend may take place, if the Partnership has the assets necessary for the
pre-payment. The pre-payment has to be approved by the Supervisory Board, and also, if the approved financial report for
the previous tax year shows a profit. The pre-payment can constitute no more than half of the profit made from the end of
the previous tax year, listed in a financial report studied by an expert auditor, increased by reserve capitals created from
the profit, which can be used by the Board to make pre-paymets, and decreased by uncovered losses and own shares. The
Board will inform about the pre-payment at least four weeks before the pre-payments are made, specifying the date for
which the financial report was made, the amount set for payment and the date of determination of shareholders entitled to
pre-payments. This day should be within the period of seven days from the date of first pre-payments.
The conditions and methods of dividend transfer are announced by the Partnership in the form of current reports,
according to §39 p. 1 sp 7 of the Regulation on current and periodic reports. The conditions and date of dividend transfer, if
the Genral Assembly decides to pay it, will be defined according to the rules accepted for public partnerships. Accordign to
§91 p. 1 of the Detailed Rules of Functioning of the National Deposit of Securities (KDPW), the Issuing Party is obliged to
inform the KDPW about the amount of the dividend, the date of determination of the right to dividend (defined in
regulations of Commercial Companies Code as the „dividend day”) and about the date of dividend payment. According to
§91 p. 2. of the Detailed Rules of Functioning of the KDPW, at least 9 days must pass between the date of determination of
right to dividend and the date of dividend payment. Additionally, according to §26 of the GPW Status, effective on the
regulated market, the Issuing Party is obliged to inform the GPW about the intention of dividend payment and to agree
with GPW all decisions regarding the dividend payment, which can influence the organisation and method of making stock
exchange transactions. The dividend payment will be made using a deposit system of KDPW. Dividend payment, to which
the shareholders owning dematerialised shares of the company are entitled, according to §97 of the Detailed Rules of
Functioning of th KDPW, is executed in such a way, that the Issuing Party leaves assets at the disposal of KDPW, which are
to be used to settle the rights to dividend on a monetary account or a bank account indicated by the KDPW, followed by the
division of assets obtained from the Issuing Party by the KDPW on the account of participators of KDPW, which in turn
transfer the assets to the accounts of particular shareholders.
One of the priority goals of the Rank Progress Spółka Akcyjna Partnership is to guarantee its Shareholders a possibility of
building their wealth in the aspect of increases of share prices by implementing an investment program, together with a
clear, long-term and stable dividend policy. The surplus of free assets, depending on the interests of the Partnership and on
proper monetary assets of the Partnership made by the supervising and managing bodies of the Partnership, will be
available for payment in cash. The dividend will be paid to the shareholders once a year, after the end of the tax year, on
the basis of a resolution made by the Ordinary General Assembly on designing the profit to be paid to the shareholders. The
Board intends to recommend the General Assembly a dividend payment on the level of 10% to 20% of yearly consolidated
net profit.
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Additionally, the dividend payment, according to regulations of the loan contract on investment loand signed on June 5 ,
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2008, with Bank Zachodni WBK S.A., requires a permission from this bank. On July 9 , 2008 Bank Zachodni WBK S.A. issued
a statement on permission for dividend payment equal to 25% of consolidated net profit of Rank Progress S.A. and its
dependent entities, under the condition, that:
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The dividend payment will not exceed 50% of unitary net profit of Rank Progress S.A. revealed for the tax year
preceeding the tax year, when the dividend payment takes place,
The factor defined as the amount of profit held for the tax year preceeding the tax year when the dividend payment
takes place, related to the sum of capital installments assigned to the tax year, when the dividend payment takes
place, will not be lower than 1,2,
No violations of conditions of bank loans signed by Rank Progress S.A. and Bank Zachodni WBK S.A will take place.
The dividend payment factor must reflect properly the interest of the Shareholders and the Partnership itself. After the end
of each tax year, the Board will present the application for dividend payment at the General Assembly, taking into account
market conditions and the environment of the Partnership. The information justifying the factor of dividend payment, will
be available to the Shareholders. The Partnership will execute the payment according to art. 348 § 3 KSH, which states, że
that the dividend day can be set at the date the resolution is made or within three months from that date. The definition of
deadlines related to the dividend payment and the very operation of dividend payment is performed according to the
regulations of KDPW. The General Assembly holds the right of final decision in this matter. The Board of the Issuing Party
predicts, that it will recommend the General Assembly a divident payment for the tax year of 2009.
The Issuing Party did not pay the dividend for 2006 and in the period of 1.01.2007 - 9.10.2007, because its activity was
based on the form of a commercial code company, namely a general partnership. The Partners of the legal predecessor of
the Issuing Party, however, were paid in the aforementioned periods proper amounts from the profit. Additionally, no
dividend was paid by the Issuing Party in 2008 and in 2009.
The amounts from the profit paid to the Partners of the legal predecessor of the Issuing Party in ther period of 2006 –
2007
In the period covered by historical financial information, the legal predecessor of the Issuing Party paid the Owners the
following amounts from the profit, for particular years:

For the year 2006 - 12 927 000 PLN (which would consist 0,40 PLN per share in the case of share partnership existence,
assuming the number of shares to be 32 501 960),

For the year 2007 - 25 701 000 PLN (which would consist 0,40 PLN per share in the case of share partnership existence,
assuming the number of shares to be 32 501 960).
Value of dividends paid for 2007
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On July 27 , 2008, the Ordinary General Assembly of Rank Progress S.A. made a resolution N 4/06/2008, through the
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powers of which, the net profit obtained by the Partnership in the ended period from October 10 , 2007 to December 31 ,
2007, in the amount of 8 430 000 PLN, was excluded from division into the shareholders and it was totally assigned as a
support of reserve capital of the Partnership, in order to fund the current activity of the Partnership.
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Addtionally, the General Assembly of Rank Progress S.A. decided (resolution N 4/06/2008), that the undivided net profit
obtained by the Partnership in the previous tax years (by the legal predecessor of the Company), equal to 34 813 909,44
PLN was totally assigned as a support of reserve capital o the Partnership, in order to support the current activity of the
Partnership.
Value of dividends paid for 2008
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On November 9 , 2009, the Ordinary General Assembly of Rank Progress S.A. made a resolution N 3/11/2009, through the
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powers of which, the net profit obtained by the Partnership in the ended period from January 1 , 2008 to December 31 ,
2008, in the amount of 1 311 000 PLN, was excluded from division into the shareholders and it was totally assigned as a
support of reserve capital of the Partnership, in order to fund the current activity of the Partnership.
20.8. Court and mediatory proceedings
In this point, description of those proceedings started within the past 12 months is presented, the result of which has or can
have a significant importance for the activity of the Issuing Party or its capital group.
20.8.1. Bankruptcy, settlement, negotiation, agreement, execution or liquidation proceedings started
against the Issuing Party, its Capital Group or against a shareholder owning at least 5% of shares or
of the total number of votes at the General Assembly of the Issuing Party or of a company from its
Capital Group
In the last 12 months no bankruptcy, settlement, negotiation, agreement, execution or liquidation proceedings have not
been started against the Issuing Party or against a shareholder owning at least 5% of shares or of votes at the General
Assembly of the Issuing Party or against a dependent company of the Issuing Party, with the exception of a proceeding
presented below.
1.
Liquidation of KMM Sp. z o.o.
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On September 2 , 2008, Extraordinary Shareholders Assembly of KMM Sp. z o.o. made a resolution on liquidation of this
Partnership. Currently, the Liquidator executes actions related to the liquidation of the company and to the removal of the
company from the proper register.
2.
Bankruptcy of E.F. Progress IV Sp. z o.o.
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On August 14 , 2009, a company from the Group of the Issuing Party – E.F. Progress IV Sp. z o.o. has lodged in a bankruptcy
application with the possibility of an agreement annoucement. The proceeding regarding this issue is underway in the
District Court in Legnica. As of the date of application lodging, the total amount of debt of the Partnership to the creditors
was equal to 14 769 315,32 PLN (including due debt of 6 676 521,32 PLN), while the amount of 8 092 794 PLN consisted of
conditional debt, i.e. non-due/non-executable debt, resulting from the preinitial contract of ground sale signed with a third
party and this obligation became invalid on 16.12.2009 due to withdrawal of the third party from the preinitial sale
contract. As of the date of Prospectus approval, the debt of the company is equal to 6 676 521,32 PLN. E.F. Progress IV Sp. z
o.o. asks in the aformentioned application for division of the Creditors into two categories, where the company asks for
reduction of debt (main debts, interests and potential costs) in the first group by 25% and for payment of thus reduced debt
in 10 equal quarterly installments, paid at the end of each quarter, with the first installment to be paid within 12 months
from the date when the Court decision on the approval of agreement comes into effect, while in the second category it asks
for reduction of main debt by 40%, total redemption of interests and potential costs and for payment of thus reduced debts
in 12 equal quarterly installments, paid at the end of each quarter, with the first installment to be paid within 12 months
from the date when the Court decision on the approval of agreement comes into effect. According to the application of E.F.
Progress IV Sp. z o.o., this agreement is to be paid either from the profit obtained by the Partnership as a result of
implementation of investment plans (construction of a Commercial Centre), or from sales of real estates owned by the
Partnership, but after a change of their purpose in the local spatial development plan (i.e. in ca. 18 months). During the
initial meeting of creditors, they did not make any binding decision, because there was no quorum. Currently, the Issuing
Party waits for appointment of the next Court sessions, when the decisions regarding the bankruptcy of E.F. Progress IV Sp.
z o.o will be made.
20.8.2. Other proceedings, where the Issuing Party, company from its Capital Group or a shareholder
owning at least 5% of shares or of the total number of votes during the General Assembly of the
Issuing Party or of a company from its Capital Group, is a party in the proceeding
In relation to proceedings currently underway in the public administration organs, as well as to court and arbitrary
proceedings underway during the last 12 months, where the Issuing Party was a party in the proceeding, it has to be
pointed out that the Issuing Party is a party of two court proceedings, which might signiicantly influence its financial
situation or viability.
1.
Dispute with the City-Municipality of Grudziądz
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On July 30 , 2009, the City-Municipality of Grudziądz instituted an action against the Issuing Party. The acting Party
demanded the Issuing Party to make a statement of will, which would contain a transfer of ownership of a real estate
located in Grudziądz, area of ca. 3,5 ha and a value of ca. 3 500 000 PLN (value of the subject of dispute). The basis of the
claim would be an „Obligating Contract of Free Ground Transfer Constituing a Condition of Implementation of Galeria
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Grudziądz Commercial Centre Investment” of January 26 , 2006. According to the Issuing Party, the action instituted by the
City-Municipality of Grudziądz was irrelevant, thus it applied for a dismissal of the action in a response to the action and in
the following proceeding correspondence.
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The stance of the Issuing Party was also shared by the 1 Instance Court, which fully dismissed the action on December 3 ,
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2009, as well as the 2 Instance Court, which on April 8 , 2010 fully dismissed the appeal of the City-Municipality od
Grudziądz. The decision is legally effective.
2.
Dispute with Jogra 2 Sp. z o.o. company
Currently, the Issuing Party remains in a dispute with a Rathburn Holdings B.V. partnership („Buyer”), which is a dominating
entity of Jogra 2 Sp. z o.o., regarding the obligations of payment stated in p. 6.4.1.2 of the Registration Document.
Currently, the Issuing Party is negotiating with the Buyer in order to end the dispute arbitrarily. However, if no such
agreement is reached, the Issuing Party intends to use its rights which will enable its claims to be satisfied, i.e. e.g. from a
mortgage created on the real estate and from an authenticated deed in which the Buyer subjected itself willingly to an
execution of Sencond Tranche salary payment obligation to the Issuing Party, which is mentioned in p. 6.4.1.2 of the
Registration Document.
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Additionally, on January 18 , 2010, Jogra 2 Sp. z o.o. has lodged in an application for protection of its claims in an amount
of 2 930 188,00 PLN which would result from a lack of agreement to the erasure of mortgage to the Issuing Party. On
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February 3 , 2010, the District Court in Legnica granted Jogra 2 Sp. z o.o. with the said protection (before the proceeding
for payment has started) by creating an obligatory mortgage on the real estate of the Issuing Party. However, right after the
said decision has been obtained, the Issuing Party has lodged in a complaint to the decision of the Court. The issuing Party
claims that the application lodged in by Jogra 2 Sp. z o.o. was fully irrelevant. The stance of the Issuing Party was shared by
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the Appeal Court in Wrocław, which changed the charged decision on March 30 , 2010, by dismissing the application for
protection.
20.8.2.1. Court proceedings, where the Issuing Party or a company from its Capital Group is a party in the proceeding
In regard to proceedings, which are underway before the public administration organs, as well as in regard to the court and
mediatory proceedings, which were underway during the last 12 months, and where the Issuing Party was a party in the
proceeding, it has to be pointed out that the Issuing Party is a party in one court proceeding, which can have a significant
influence on its financial situation or viability.
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On July 30 , 2009, the Municipality-City of Grudziądz made a claim against the Issuing Party. The proceeding takes place
before the District Court in Toruń. The Claimant of the proceeding demands, that the Issuing Party has to present a
statement of will with the content of transferring the ownership of a real estate located in Grudziądz with the area of ca.
3,5 ha and a value of ca. 3 500 000 PLN (the value of the subject of dispute). The basis of the claim is a „Obligating Contract
Of Free Ground Transfer, Constituting a Condition for Implementation of the Investment of Galeria Grudziądz Commercial
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Centre” signed on January 26 , 2006. In the opinion of the Issuing Party, the claim made by the Municipality-City of
Grudziądz is irrelevant, thus the Issuing Party demanded to revoke the claim in a response to the aforementioned claim and
in the following proceeding correspondence.
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The stand of the Issuing Party was supported by the 1 Instance Court, which on December 3 , 2009 revoked the claim in
its entirety. As of the date of Prospectus approval, this decision is not effectual.
20.8.2.2. Execution proceedings, where the Issuing Party or a company from its Capital Group is a party in the proceeding
Currently, or in the last 12 months, no execution proceedings have been underway against the Issuing Party and its
20.8.2.3. Proceedings, where the Issuing Party is a shareholder of the Issuing Party or of a company from its Capital
Group, owning at least 5% of shares or of total number of votes during the General Assembly of the Issuing
Party or a company from its Capital Group
The Issuing Party does not know of any proceedings, where a shareholder of the Issuing Party or of a company from its
Capital Group is a party in the proceeding, and the result of which could have a significant influence on the activity of the
Issuing Party.
20.8.2.4. Proceedings before the administration organs related to the activity of the Issuing Party or of the companies
from its Capital Group
In the last twelve months before the date of Prospectus approval, no significant proceedings against the Issuing Party have
been underway before the administration organs, which could have a negative influence on the activity of the Issuing Party,
with the exception of the proceeding presented below.
1.
Proceeding related to defining the housing conditions for the investment – construction of Galeria Tęcza Commercial
Centre in Kalisz.
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On August 30 , 2007, the President of the City of Kalisz has issued a decision for Rank Progress S.A., on the defining of
housing conditions for the investment – construction of Galeria Tęcza Commercial Centre in Kalisz. This decision was
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charged by Waldemar Wiącek to the Local Appealing Committee in Kalisz. As a result of the appeal given on Apirl, 17 ,
2008, the LAC held the charged decision. The aforementioned decision of LAC was charged by Waldemar Wiącek to the
Voivodeship Administration Court in Poznań, he also claimed for revoking both the decision of LAC and the preceeding
decision of the President, as well as for returning the case for repeated proceeding. On June 24, 2009, the Voivodeship
Administration Court in Poznań revoked the charged decision of LAC and the preceeding decision of the President. The
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Issuing Party did not agree with the decision of the VAC in Poznań, and on August 22 , 2009 the Issuing Party lodged in an
appeal against the sentence of VAC in Poznań to the Supreme Administration Court. The appeal has been accepted and sent
together with the files to the SAC. In the appeal, the Issuing Party claimed for revoking the charged sentence of VAC in
Poznań in its entirety and for returning this case for a repeated proceeding of VAC in Poznań, or for revoking the charged
sentence of VAC in Poznań in its entirety and for identification of the appeal against the aforementioned sentence.
2.
Proceedings related to the decision on permission for the construction of Galeria Tęcza Commercial Centre in Kalisz.
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On April 29 , 2009 the President of the City of Kalisz has issued a decision for Rank Progress S.A. on an approval of the
construction project and granting the permission for the construction of a commercial-service-entertainment building of
the Galeria Tęcza Commercial Centre in Kalisz. This decision was charged by Waldemar Wiącek to the Voivode of Greater
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Poland. As a result of this appeal, on June 26 , 2009, the Voivode of Greater Poland has held the charged decision. The
aforementioned decision of the Voivode of Greater Poland was charged by Waldemar Wiącek to the Voivodeship
Administration Court in Poznań, who claimed for revoking the decision of the Voivode and the preceeding deciosion of the
President and for returning this case for a repeated proceeding. The Issuing Party does not agree with the stand of the
claimant, thus it will demand in the proceeding, that the charge of Waldemar Wiązcek should be dismissed.
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20.9. Significant changes in financial or commercial situation of the Issuing Party
Changes in the financial situation of the Issuing Party in the period covered by historical and mid-year financial information
presented in p.20, Part III of the Prospectus „Registration Document”, have been presented in p.5.1, 6, 9 Part III of the
Prospectus „Registration Document”. After this period, and until the date of Prospectus approval, the only significant
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change in the financial situation of the Issuing Party was related to the issue of bonds. On December 9 , 2009, allocation of
Series A bonds with nominal value of 1.000 zł each was performed, with the total value of bonds issued by the Partnership
equal to 24.760.000 zł. The bonds are yearly bonds, with the yearly interest rate of 12%, the interest is paid quarterly.
Income from the issue of bonds was used for payment of loan granted by ING Bank Śląski S.A. with the value of 6,3 mln zł
and for supplying the capital of dependent companies, which have used these assets for investments in commercial objects
Twierdza II Commercial Centre in Kłodzko, Galeria Tęcza in Kalisz, Pasaż Grodzki in Jelenia Góra and Galeria Piastów II in
Legnica. The bonds have been secured with mortgage equal to 120% of the total issue value, on the real estates of the
Company located in Katowice at ul. Olimpijska 11, and on three real estates located in Legnica: at ul. Złotoryjska 63, ul.
Senatorska 21 and ul. Witelona 6-8.
However, no significant change of commercial situation of the Issuing Party after the period covered in historical and midyear financial information took place.
21. Additional information
21.1. Share capital
21.1.1. Amount of issued capital
The share capital of the Issuing Party totals 3.250.192 PLN and it is divided into 32.501.920 Shares, including:
 16.250.960 (sixteen millions two hundred and fifty thousands nine hundred and sixty) registered, priviledged shares,
Series A with nominal value of 10 groszy (ten groszy) each, created on the basis of the resolution on transformation of
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the Issuing Party into a stock company, on October 1 , 2007,
 16.250.960 (sixteen millions two hundred and fifty thousands nine hundred and sixty) normal shares to bearer, Series
B with nominal value of 10 groszy (ten groszy) each, created on the basis of the resolution on transformation of the
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Issuing Party into a stock company, on October 1 , 2007.
Series A shares are priviledged in regard to voting (each shares equals two votes at the General Meeting). All shares have
been paid. Status of the Issuing Party also predicts creation of a reserve fund and it allows a possibility of creation of
targeted funds (including a targeted funds covering losses of the Company).
The nominal value of each share of the Issuing Party is 0,10 PLN (in words: ten groszy) each.
In the period of 2004 – 2006, the legal predecessor of the Issuing Party acted as a general partnership, as a company named
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Bartnicki, Mroczka E.F. Rank Progress Sp. j., thus, as of January 1 , 2007 as well as of December 31 , 2006, company capital
of the legal predecessor of the Issuing Party did not include any shares. In the period covered by historical financial
information, over 10% of the capital was not paid with assets other than cash.
21.1.2. Shares, which do not represent capital
No shares forming the company capital exist, other than the shares of the Issuing Party.
21.1.3. Shares owned by the Issuing Party, other people in the name of the Issuing Party or other
dependent entities of the Issuing Party
The Issuing Party or its dependent entities do not own any Shares of the Issuing Party as of the date of Prospectus approval.
21.1.4. Interchangeable, exchangeable securities or securities with warrants
No interchangeable, exchangeable securites of securities with warrants exist, which are related to the Issuing Party.
21.1.5. All purchase rights or obligations related to the target capital or obligations to increase company
capital
No purchase rights to shares, obligations related to target capital or obligations to increase company capital exist.
21.1.6. Capital of any member of the Group, which is a subject of options, or for which it has been
conditionally or unconditionally agreed, that it will become a subject of options
No capital of a member of the Group, which is a subject of options, or for which it has been conditionally or unconditionally
agreed, that it wil become a subject of options, exists.
21.1.7. Historical information about the company capital for the period covered with historical financial
information
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Until October 9 , 2007, the Issuing Party acted as a general partnership – a company Bartnicki, Mroczka E.F. Rank Progress
Sp. j. The company capital of the Issuing Party did not change during that time. Company capital of the legal predecessor of
the Issuing Party, i.e. Bartnicki, Mroczka E.F. Rank Progress Sp. j. partnership, totalled 3 250 192 PLN, with each of the
partners bringing in a contribution of 1 625 096 PLN.
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On October 1 , 2007, partners of the Bartnicki, Mroczka E.F. Rank Progress Sp. j. partnership have made a resolution on
transformation of the said partnership into a stock partnership through the powers of art. 551 -574 c.c.c. Additionally,
through the powers of the aforementioned resolution, covering the company capital was performed by bringing in the
assets of the partnership by current partners of the general partnership, which corresponded to their capital participation
in the general partnership, according to the state confirmed by an opinion and a report of the expert auditor, with a study
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of the transformation plans and of the assets and credits evaluation as of May 31 , 2007 r. and according to the financial
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report for the period from January 1 , 2007 to May 31 , 2007. Additionally, the transformed partnership became a subject
of all rights and duties of the partnership undergoing transformation, and it also became the owner of the current assets of
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the general partnership. On October 10 , 2007, the transformed Partnership was included in the business entities register
of the National Court Register.
The amount of the company capital of the Issuing Party has not changed in the following period.
21.2. Status
21.2.1. Description of subject and goal of the activity of the Issuing Party
According to § 2 of the Status, the subject of activity of the Issuing Party is as follows:
1.
45.11.Z – deconstruction and demolition of buildings; ground works,
2.
43.13.Z – execution of geological-engineering digs and drillings,
3.
41.20.Z – Execution of general construction works related to buliding construction,
4.
42.13.Z – Execution of general construction works related to bridges and tunnels,
5.
42.12.Z – Execution of general construction works related to railroads and underground rail transport,
6.
42.21.Z – Execution of general construction works related to pipings and electric HV networks
7.
42.22.Z – Execution of general construction works related to IT lines and electroenergetic lines,
8.
42.99.Z – Execution of general construction works related to construction of other land and water engineering
objects, not classified elsewhere,
9.
43.99.Z – Other specialistic construction works, not classified elsewhere,
10.
42.99.Z – Execution of general construction works related to engineering objects, not classified elsewhere,
11.
41.20.Z – Works related to habitable and inhabitable buildings,
12.
43.19.Z – Execution of roof constructions and coverings,
13. 42.11.Z – Construction of roads and highways,
14. 42.21.Z – Construction workds of industrial pipelines and HV electric networks,
15. 43.21.Z – Execution of electric installations,
16. 43.22.Z – Execution of water-sewage, heat, gas and air-conditioning installations,
17. 43.21.Z – Execution of electric installations,
18. 80.20.Z – Security – security systems management,
19. 43.29.Z – Execution of other construction installations,
20. 43.21.Z – Execution of other electric installations,
21. 43.22.Z - Execution of water-sewage, heat, gas and air-conditioning installations,
22. 43.31.Z - Plastering,
23. 43.32.Z – Assembly of construction woodworks,
24. 43.33.Z - Flooring; wall-papering and cladding,
25. 43.34.Z – Paiting and glassing,
26. 55.10.Z- Hotels and other accomodation sites,
27. 56.10.A - Restaurants and other fixed catering sites,
28. 56.30.Z – Preparation and serving of drinks,
29. 55.52.Z – Preparation and serving of food to external customers (catering),
30. 56.29.Z – Other catering services,
31. 49 – Land transport,
32. 49.41.Z – Land transport of goods,
33. 42.99.Z - Execution of general construction works related to construction of other land and water engineering objects,
not classified elsewhere,
34. 41.10.Z Implementation of construction projects related to building construction,
35. 68.20.Z – Purchases and sales of real estates on own account,
36. 68.20.Z – Leasing and management of owned or rented real estates,
37. 73.11.Z – Marketing agencies,
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38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
73.12.A – Agency – sales of time and place for marketing needs – radio/TV,
73.12.B - Agency – sales of place for marketing needs – printed media,
73.12.C - Agency – sales of time and place for marketing needs - electronic media (Internet),
73.12.D - Agency – sales of time and place for marketing needs – other media,
59.20.Z – Sound and music recording,
63.99.Z – Other IT services, not classifies elsewhere,
74.10.Z – Specialistic design services,
74.90.Z – Other professional, scientifical and technical activity, not classified elsewhere,
77.40.Z – Leasing of intellectual and similar goods, excluding pieces protected by law,
82.91.Z – Payments services and loan offices,
82.99.Z – Other activity supporting business activity, not classified elsewhere,
96.02.Z – Hairdressing and other cosmetic services,
85.51.Z – School-unrelated forms of sport education and sport/leisure activities,
93.13.Z – Activity of sites for improvement of phyiscal stamina,
96.04.Z – Services for improvement of physical stamina,
46.- Wholesale trade, excluding wholesale car trade
47.- Retail trade, excluding retail car trade
69.20.Z – Accounting services; tax advisory,
02.40.Z – Forestry-related services,
70.21.Z - Public relations and communication,
70.22.Z – Other advisory services related to business activity and management,
85.60.Z – Education support
74.14.B – Management and control of business activity,
64.20.Z – Activity of financial holdings,
70.10.Z – Activity of head offices and holdings, excluding financial holdings.
21.2.2. Summary of all statements of the Status of the Issuing Party and rules of the Issuing Party related to
the members of management and supervisory organs
The Board
The rules of functioning, duties and rights of the Board are defined in the Status of the Partnership, § 5 and in the work
rules of the Board, approved by the Supervisory Board. The rules of the Board is presented on the websitr of the
Partnership: www.rankprogress.pl
According to § 5.1 and § 5.3.1 of the Status, the Board manages the actions of the Partnership and represents it in external
affairs. The following members are authorised to represent the Partnership: 1) The Board Chairman – one person, 2) two
Board Members together or 3) a Board Member with a procurator (§ 5.3.2).
The Board consists of: 2 to 5 members, including the Chairman, elected by the Supervisory Board with by absolute majority
of votes. The number of the Board members is defined by the Supervisory Board. The Board members are elected for a
st
colletive, 3-year term. Board Members of the first term were elected by virtue of resolution dated October 1 , 2007, on the
transformation of a partnership acting as a company „Bartnicki, Mroczka E.F. Rank Progress” Sp.j. into the partnership Rank
Progress S.A. The Board Members can be elected for future terms. A Board Member who resigns, is obliged to notify the
Supervisory Board of this fact, in a written form (§ 5.2 of the Status).
According to § 5.4 of the Status, the Board makes decisions as resolutions during meetings called for by the Board Chairman
or by a Board Member, or by the Supervisory Board. Resolutions of the Board can be also made outside the meetings of the
Boards in a written form, or by using telecommunication means, under the condition, that all Board Members have been
notified about the contents of the project of the resolution. Voting in the mode described in the previous sentence can be
called for by the Board Chairman or by any Board Member (§ 5.4.2). Resolutions of the Board are passed by a normal
majority of votes, while if they are made during Board meeting, the presence of at least half of the Board members in
necessary for the resolution to become valid. If the vote numbers (for and against) are equal, the decision is made by the
vote of the Board Chairman (§ 5.4.3).
The Supervisory Board
Rules of functioning, duties and rights of the Supervisory Board are defined in the Status of the Partnership, § 6 and rules of
the Supervisory Board approved by the General Assembly. The rules of the Supervisory are presented on the website of the
Partnership: www.rankprogress.pl.
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According to § 6 of the Status, the Supervisory Board consists of five members. The term of members of the first
Supervisory Board, elected by the resolution on transformation of the Partnership, described in § 1.8 of the Status, ends on
the date of approval of the financial report for the year 2008 by the General Assembly. Members of the next Supervisory
Boards are elected by the General Assembly, for a 3-year term.
At least two members of the Supervisory Board should be independent. The independent members of the Supervisory
Board should be free of connections with the partnership and its shareholders of employees, which could significantly
influence their ability to make objective decisions (§ 6.4.8 of the Status).
It is acceptable to elect the same people to the Supervisory Board, for the next terms (§ 6.1.5 of the Status).
According to § 6.4.1 of the Status, the Supervisory Board makes its decisions in a form of a resolution during meetings
called for by the Supervisory Board Chairman or, if the call is impossible to be made by the Chairman, by the Supervisory
Board Deputy Chairman. The authorised person, specified in the previous sentence, calls for the meeting of the Supervisory
Board by own initiative, or within two weeks from the date the application of the Board or of a member of the Supervisory
Board is received. The application defined in the previous sentence, should be submitted in a written form, with a proposed
order of the meeting.
Members of the Board can be invited to the Supervisory Board meetings, excluding meetings directly related to the Board
Members, especially their revocation, responsibility and salary determination.
The meetings of the Supervisory Board will be held as necessary, but at least once a month.
Resolutions of the Supervisory Board can be passed, if at least half of its members is present at the meeting, and all its
members have been invited at least 3 working days before the planned meetings. Resolutions of the Supervisory Board will
also be valid then, if its member notified in a period shorter than that specified in the previous sentence declares in a
written form, that he/she agrees for the resolution of the Supervisory Board to be passed.
Members of the Supervisory Board can participate in making resolutions of the Supervisory Board, voting in a written form,
through another member of the Supervisory Board.
The Supervisory Board can make resolutions outside the meetings, in a written form or by using telecommunication means,
under the condition that all its members have been notified about the contents of the project of the resolution. Voting in
the mode defined in the previous sentence can be ordered by the Supervisory Board Chairman, or by a Supervisory Board
Member or a Board Member.
Resolution of the Supervisory Boards are passed with a normal majority of votes. If the votes are divided equally (for and
against), the result is decided by the vote of the Supervisory Board Chairman.
According to § 6.5 of the Status, the contracts forming the basis on which the Board members perform their duties, are
signed by the Supervisory Board Chairman, and in the case of his absence – another authorised member of Supervisory
Board. The same mode is applied to other legal actions between the Partnership and a Board member.
According to § 6.6 of the Status, the Supervisory Board constantly monitors the activity of the Partnership. Except for
matters defined in the regulations of the Commercial Company Code and other statements of the Status, competences of
the Supervisory Board include:
 Evaluation of financial reports of the Partnership and reports of the Board, as well as evaluation of applications of the
Board regarding profit division or loss covering, and presentation of the yearly written report on the results of the
evaluation to the General Assembly,
 Representation of the Partnership in the agreements and disputes with the Board members,
 Suspension in functions, based on important reasons, of the particular Board members and assigning the member of
the Supervisory Board to a temporal execution of duties of the Board members, who cannot execute their duties,
 Approving the rules of the Board,
 Making resolutions mentioned in § 5.8.4 of the Status, i.e. regarding the approval of the Investment Plan,
 Agreement to or signing a contract or a greater number of bound contracts, by which the Partnership accepts
obligations with value exceeding 5 000 000 PLN (in words: five million zlotys),
 Agreement to a purchase or disposal of elements of fixed assets, i.e. non-materials and legal values, with value
exceeding 5 000 000 PLN (in words: five million zlotys),
 Purchase and disposal of real estates, rights of perpetual use or participations in real estates, with value exceeding
5 000 000 PLN (in words: five million zlotys),
 Agreement to make pre-payments for the shareholders of the Partnership by virtue of an expected dividend,
 Designation and change of expert auditors studying the financial reports of the Partnership,
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







Agreement to purchases of own shares by the Partnership in order to redeem them,
Agreement to signing any contracts of a Board member or to obtaining a benefit from the Partnership and from any
other entity related to the Partnership,
Agreement to signing of a significant contract by the Partnership with an entity related to the Partnership, to a
member of a Supervisory Board or to a member of the Board or entities related to them,
Agreement to signing agreements by the Partnership on shares subissues,
Agreement to election of a procurator by the Board,
Defining the level of salaries of the Board members,
Agreement to employment of managerial staff,
Agreement to issuing subscription warrants by the Partnership.
21.2.3. Description of rights, priviledges and limitations related to shares of the Issuing Party
Rights and priviledges related to shares of the Issuing Party are defined in the Status of the Issuing Party, in the CCC
regulations and in other regulations. In order to obtain more detailed information, one has to use an advice of an approved
solicitor.
According to § 3.2.2 of the Status, Series A Shares are registered shares priviledged in regard to votes during the General
Assembly, namely, two votes are allocated per each of these shares. Series B shares to bearer entitle to one vote during the
General Assembly of the Issuing Party.
Rights with asset-related character, related to shares of the Issuing Party
1.
Right to dividend – participation in profit of the Partnership revealed in the financial report of the Partnership,
studied by an expert auditor, assigned by the General Assembly for payment to the shareholders (art. 347 CCC). The
profit is divided according to the number of shares. The Status does not predict any priviledges in regard to this
right, which means, that an equal dividend is assigned to all shares. The right to dividend for the given tax years is
held by these shareholders, who were entitled to shares on the date of resolution on profit division. An Ordinary
General Assembly of the public partnership defines the dividend day and the payment date. The dividend day can
be defined on the date of resolution, or within three months from that date (art. 348 CCC). The General Assembly
should take into account regulations of the National Deposit of Securities and of the Stock Exchange, when defining
the dividend day. The Issuing Party is obliged to inform the National Deposit of Securities about the level of dividend
assigned per share, about the date of the dividend day and about the payment date, by sending a resolution of the
proper organ of the Partnership on this matters immediately, but not later than 10 days before the dividend day.
The payment date can be defined at least on the tenth day after the dividend day. The National Deposit of
Securities passes the aforementioned information to all direct participators. The direct participators defined the
number of shares granting the right to dividend, allocated to their securities accounts, and send to the National
Deposit of Securities an information on:

Level of monetary assets, which should be transferred to the participators, related to the dividend payment,

Total amount of payable income tax from legal entities, which should be taken by the Issuing Party from
dividends paid through an agent,

Number of securities accounts managed for people being tax-payers of tax from legal entities.
On the payment date, the Issuing Party is obliged to leave assets assigned for execution of the right to dividend at
the disposal of the National Deposit of Securities. As a result of resolution on assignment of profit for division, the
shareholders obtain a claim for dividend payment. The claim becomes due as of the date indicated in the resolution
of the General Assembly and it is a subject of limitation using general rules. Legal regulations do not define te date,
when the rights to dividend cease to exist. In the case of tax-payers, who do not hold an office or the Board on the
territory of the Republic of Poland, which are subjects of the duty of income tax from dividends, have those tax
rates applied, which result from contracts on prevention of double tax, signed by the Republic of Poland or no tax
from them is collected according to the said contracts, only after a presentation of so called residency certificate,
issued by the proper tax administration to an entity entitled to deduction of flat rate income tax. The residence
certificate has to prove if the given entitiy is included in the scope of agreement on avoiding double tax, i.e. it is
entitled to use lower, preferential tax rates or to be exempted from tax. In the case, when doubts exist, the taxpayer will deduct the tax in amount predicted by the act. If a non-resident proves, that the decisions of the
international agreement predicting a reduction of the national tax rate (including a total exemption) apply to
him/her, he/she will be entitled to claim an overpayment statement and to return of tax, which was not due,
directly from the tax office. The amount assigned for division between shareholders cannot exceed the profit for the
last tax year, increased by undivided profits from the previous years and by amounts transferred from reserve
capitals created from the profits, which can be assigned to the dividend payment. Uncovered losses, own shares
and costs, which according to the Status or to the act should be spent from the profit for the last tax year on reserve
capitals (art. 348 § 1 CCC), should be deducted from this amount. The law, which is effective in Poland, does not
introduce other regulations regarding the dividend rate or the methods of its calculations, frequency and
cumulative or a non-cumulative nature of payments. No right other than the right of participation in the profits of
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2.
3.
4.
5.
6.
7.
the Issuing Party is related to the shares of Issuing Party, in particular, the Status of the Issuing Party does not
predict an award of participation in the profits of the Partnership by issuing nominal foundation certificates, in
order to pay for services made during the formation of the Partnership, or by issuing use certificates in exchange for
redeemed shares.
Right of subscription – Priviledged rights of subscription for new shares related to the number of owned shares.
According to the conditions specified in art. 433 CCC, the shareholders can be stripped of the right of subscription,
partially or totally, in the interest of the Partnership, through the powers of a resolution of the General Assembly.
This resolution is made by a majority of at least four fifths of votes. The rule, that 4/5 of the votes is necessary, is
not applied, if the resolution on increase of company capital states, that the new shares are about to be obtained in
their entirety by a financial institution (a subissuing party), with the obligation of offering them later to the
shareholders in order to let them execute the right of subscription on the conditions specified in the resolution, or if
the resolution states that the new shares are to be obtained by the subissuing party, if the shareholders holding the
right of subscription, do not obtain a part of all of shares offered them. The stripping of the shareholders of the
right of subscription can take place in a case, when it has been announced in the order of meeting of the General
Assembly.
Right of participation in the assets of the Partnership after satisfaction or security of the creditors is obtained in the
case of its liquidation. According to art. 474 § 2 CCC, the assets remaining after the satisfaction or security of the
creditors is obtained, is divided by the shareholders, proportionally to payments for the company capital, made by
each of them. The Status of the Issuing Party does not predict any priviledges in this field.
Right of disposal of owned shares. The status of the Issuing Party does not provide any limitations in this field.
Right of duty on the owned shares using a pledge or a usage. In the period, when shares of the public partnership,
which have a pledge or a usage created, are registered on securities accounts in a brokerage house or in a bank
managing securities accounts, the shareholder is entitled to the right of vote from these shares (art. 340 § 3 CCC).
Shares of the Partnership can be redeemed. The shares can be redeemed by lowering of the company capital, by
shares purchase (with permission of the shareholder) by the Partnership.
Right of changing registered shares to shares to bearer. The change of registered shares to shares to bearer can be
done by request of the shareholder (art.334 CCC related to § 3.2.5 of the Status of the Partnership). The change of
registered shares to shares to bearer causes loss of the priviledges.
Corporate rights related to the shares of the Partnership
The following corporate rights are related to the shares of the Partnership:
1.
Right of participation in the General Assembly (art. 412 CCC) and voting rights during the General Assembly (art. 411
§ 1 CCC), with the right of participation in the General Assembly of the public partnership is held only be people,
who are shareholders of the Partnership, sixteen days before the date of the General Assembly (date of registration
of participation in the General Assembly) (art. 406 1 CCC), which requested a nominal certificate of the right of
participation in the General Assembly to the entity, which manages the securities account (art. 406 3 CCC). Each
share entitles to one vote during the General Assembly (art. 411 CCC).
2.
Right of submission of an application for the call for an Extraordinary General Assembly and of submission of
application for including particular issues in the order of meeting of this Extraordinary General Assembly, granted to
the shareholders owning at least one twentieth of the company capital of the Partnership (art. 400 § 1 CCC).
3.
Right of submission, within 21 days before the set date of the General Assembly, an application for including
particular issues in the order of meeting of this General Assembly, granted to the shareholders owning at least one
twentieth of the company capital of the Partnership (art. 401 § 1 CCC).
4.
Right of submission of resolution projects to the Partnership, in a written form or using telecommunication means,
related to the issues included in the order of meeting of the General Assembly, or issues, which are to be included
in the order of meeting, granted to the shareholders owning at lease one twentieth of the company capital of the
Partnership (art. 401 § 4 CCC).
5.
Right of submission of resolution projects during the General Assembly, related to the issues included in the order
of the meeting.
6.
Right of charging the resolutions of the General Assembly, according to the rules specified in art. 422-427 CCC.
7.
Right of demand of election of the Supervisory Board in separated groups according to 385 § 3 CCC by an
application of the shareholders representing at least one fifth of the company capital, the election of the
Supervisory Board should be performed by the next General Assembly, by voting in separate groups.
8.
Right of demand of study of a particular issue related to the foundation of the public partnership or to the
management of its affairs by an expert (auditor for special cases), to be paid by the Issuing Party; a resolution on
this issue is made by the General Assembly, due to an application of a shareholder or shareholders owning at least
5% of the total number of votes during the General Assembly (art. 84 and 85 of the Acnt on Public Offer). In order to
perform this, the Shareholders can demand an Extraordinary General Assembly to be called for, or demand to
include the issue of this resolution in the order of meeting of the next General Assembly. If the General Assembly
does not make a resolution according to the contents of the applications, or if it makes such a resolution with a
violation of art. 84 p. 4 of the act, the applying shareholders can claim for assgning a specified entity as an auditor
for special cases to the Register Court, within 14 days from the date of the resolution.
9.
Right of obtaining information about the Partnership in the scope and in the way defined by legal regulations,
especially by art. 428 CCC, during the meeting of the General Assembly, the Board is obliged to reveal information
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10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
related to the Partnership to a shareholder demanding such information, if it is justified for the evaluation of the
issue included in the order of meeting. A Shareholder, which was refused the demanded information during the
meeting of the General Assembly, and who raised an objection to the protocol, can submit an application to a
Register Court for obliging the Board to reveal said information (art. 429 CCC).
Right to a registered deposit certificate, issued by the entity managing the securities account, according to the
regulations on the circulation of financial instruments, to which shareholders of public partnership, owning
dematerialised shares are entitiled, with the right of this shareholder to a registered certificate of the voting right in
a general assembly of a public partnership (art. 328 § 6 CCC).
Right of demand of issuing extracts of the report of the Board on the activity of the Partnership and of the financial
report with an extract of the report of the Supervisory Board and of the opinion of the expert auditor, no later than
fifteen days before the meeting of the General Assembly (art. 395 § 4 CCC).
Right to browse the list of shareholders entitled to participation in the General Assembly, in the office of the Board,
and to demand a copy of the list for a return of costs of this copy (art. 407 § 1 CCC). The shareholder can also
demand a free copy of the shareholders list, sent via e-mail, giving the address, to which the said list should be sent
(art. 407 § 11 CCC).
Right to demand extracts of applications of the issues included in the order of meeting, a week before the meeting
of the General Assembly (art. 407 § 2 CCC).
Right to submit an application for checking the presence list during the General Assembly by a special committee
elected for this issue, consisting of at least three people. The application can be submitted by the shareholders
owning one tenth of the company capital represented during this General Assembly. The applicants have the right
to select one committee member (art. 410 § 2 CCC).
Right to browse the protocol book and to demand extracts of resolutions, testified by the Board (art. 421 § 2 CCC).
Right to lodge in a charge for reparations of damage done to the Partnership, according to the rules specified in art.
486 and 487 CCC, if the Partnership does not lodge in a charge for reparation of the damage done to it within one
year from the date of revelation of the damaging action.
Right to browse documents and to demand a free access (in the office of the Partnership) of extracts of the
documents mentioned in art. 505 § 1 CCC (in a case of parnterships fusion), in art. 540 § 1 CCC (in a case of
Partnership division) and in art. 561 § 1 CCC (in a case of Partnership transformation).
Right to browse the share book and to demand an extract, for return of the costs of extract preparations (art. 341 §
7 CCC).
Right to demand, that a commercial company, which is a shareholder of the Issuing Party, revealed information
about the fact, if it is dominant or dependent to a specified commercial company or a cooperative being a
shareholder of the Issuing Party, or if such relation of dominance or dependency ceased to exist. The shareholder
can also demand the number of shares or votes owned by this commercial company (also as a pledger, user or on
the basis of agreements with other parties) to be revealed. The demand of information revelation and the
responses should be placed in a written form (art. 6 § 4 and 6 CCC).
21.2.4. Descriptions of actions necessary to change rights of shares owners, with indications of the rules
which are more significant than it is required by the law
In the field of actions necessary to change rights of shares owners, the Status does not provide rules, which are more
significant than it is required by the law. Shares of the Partnership can be redeemed by their purchase performed by the
Partnership.
According to the Status of the Issuing Party, Series A Shares are registered shares, while other shares are shares to bearer.
In the field of actions necessary to change rights of shares owners, the Status of the Issuing Party does not provide rules,
which are more significant than it is required by the law.
Regulations of the Commercial Companies Code provide a possibility of issuing shares with special priviledges by the
partnership, and also of individually assigning personal priviledges to a designated shareholder, which cease to exist no
earlier than as of the date, when the entitled person ceases to be a shareholder of the Partnership.
Priviledged shares, with the exception of non-voting shares, should be registered, and the aforementioned priviledges can
be related to, e.g. voting rights, rights to dividend or to division of assets in the case of partnership liquidation. Priviledges
related to the voting rights cannot be applied to a public partnership, and additionally, one share cannot have more than 2
votes assigned, and this priviledge is revoked if such share is changed to a share to bearer or if it is sold against agreed
conditions. Shares priviledged to the dividend can grant the entitled person a dividend, which exceeds the dividend
assigned for payment to non-priviledged shareholders by no more than 50% (it does not apply to non-voting shares and
pre-payments for dividend) and they do not use priority of satisfaction before other shares (does not apply to non-voting
shares). Shares priviledgeg to the dividend can have the voting right excluded (non-voting rights), additionally, the
priviledged shareholder, who was not partially or wholly paid the dividend in the given tax year, can be granted the right of
profit compensation in the next years, but not later then within three next tax years. Granting of particular priviledges can
be made dependent on submitting additional statements for the partnership, deadline or fulfillment of condition. The
shareholder can execute special rights granted him/her, related to the priviledged share, after the end of the tax year,
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during which he/she has brought his/her contribution to the company capital. As indicated above, personal rights can be
granted only to an individually designated shareholder and they can be related to e.g., right of election or dismissing of the
Board members or of the Supervisory Board members or right of obtaining designated statements from the partnership.
Granting of personal priviledges can be made dependent on submitting additional statements for the partnership, deadline
or fulfillment of condition. Limitations regarding the scope and execution of rights resulting from the priviledged shares
should be applied to the rights granted to the shareholder.
The described changes of rights of shareholders, i.e. issuing shares with special rights and granting personal rights to an
individually designated shareholder, must be included in the Status of the Partnership, thus an appropriate change in the
Status is necessary. According to art. 430 § 1 of the Commercial Companies Code, change of the Status requires a resolution
of the general assembly and an entry in the register to be made. The resolution which changes the Status should include an
indication of priviledged shares or a respective designation of the entity, which is granted with personal rights, type of
share priviledges and potential conditions, which have to be met in order of share priviledges or personal rights to be
granted. The resolution related to the change of Status is made with a majority of three fourths of votes, with the
resolution related to the change of Status, which increases the statements of the shareholders or which diminshed the
rights granted personally to particular shareholders, according to art. 354 of the Commercial Companies Code, requires
permission of all shareholders it is related to (art. 415 of the Commercial Companies Code). The Status of the Issuing Party
does not create more severe condtions of making resolutions related to changes of Status. If the change of the Status is not
related to an increase of the company capital after the resolution is made by the general assembly, the board has the time
of 3 months to register the change of Status to the Register Court (art. 430 § 2 of the Commercial Companies Code).
21.2.5. Description of rules defining the method of calling for ordinary general assemblies of shareholders
and extraordinary general assemblies of shareholders, including the rules of participation in the
assemblies
The method of calling for General Assemblies and the rules of participation in the assemblies are defined by respective
statements of the Status and of the Commercial Companies Code and other legal regulations.
An Ordinary General Assembly should take place within six months after the end of each tax year (art. 395 § 1 of the
Commercial Companies Code). An Extraordinary General Assembly is called for in cases defined in the Commercial
Companies Code, as well as when the organs and people entitled to call for General Assemblies deem it necessary (art. 398
of the Commercial Companies Code).
The General Assembly is called for by the Board (art. 399 § 1 of the Commercial Companies Code). According to § 10 p. 3 of
the Status, an Extraordinary Assembly is called for by the Board, on its own initiative or by a written application of the
th
Supervisory Board or by an application of the shareholders, owning at least 1/20 part of the share capital. The Supervisory
Board has the right to call for an Ordinary General Assembly, if the Board does not call for it within the timeframe specified
in the regulations, as well as for an Extraordinary General Assembly, when it is deemed necessary and when the Board does
not call for a General Assembly within two weeks from the date of raising a proper task by the Supervisory Board (art. 395
§ 2 of the Commercial Companies Code).
A shareholder or shareholders representing at least a tenth part of the company capital can demand calling for an
Extraordinary General Assembly, as well as to include particular issues in the order of meeting of the next General
Assembly. Such task should be submitted in a written form to the Board no later than a month before the proposed date of
the General Assembly (art. 400 § 1 of the Commercial Companies Code). If an Extraordinary General Assembly is not called
for within two weeks from the date of task submission to the Board, the register court can entitle the Shareholders
presenting this task to call for an Extraordinary General Assembly, after having the Board called for a statement. The Court
designates the chairman of the Assembly. The Assembly makes the resolution, if the costs of gathering and meeting of the
Assembly is to be paid by the Partnership (art. 401 of the Commercial Companies Code).
The Board is responsible for preparation and management of the General Assembly. This obligation includes all duties of
the Board resulting from legal regulations, as well as all other organisational actions necessary for gathering and smooth
management of the General Assembly. The General Assembly is called for by a single notification in the Court and Economic
Monitor, respective fot the Partnership. The notification should be published at least three weeks before the date of the
General Assembly. The notification should contain the date, time and place of the General Assembly, together with the
detailed order of the meeting. In the case of a planned Status change, currently effective statements should be called upon,
together with the contents of proposed changes. The notification can contain the project of a new, uniform text of the
Status with a list of new or changes statements of the Status, if it is justified by the wide scope of intended changes (art.
402 of the Commercial Company Code). Additionally, the General Assembly of the public partnership is called for using a
notification published on the website of the partnership and in the way defined for publication of current information,
according to the regulations related to public offers and conditions of introduction of financial instruments to an organised
circulation system, and related to public partnerships. The notification should be published at least twenty six days before
1
the date of the general assembly (402 of the Commercial Companies Code).
Page 202
The General Assembly takes place in the office of the Partnership. A General Assembly of a public partnership can also take
places in a location of an office of the stock exchange managing company, where the shares of the Partnership are
circulated (art. 403 of the Commercial Companies Code).
3
The public partnership manages its own website (402 of the Commercial Companies Code) and presents there, from the
date of the general assembly meeting:
 Notification about calling for a general assembly,
 Information about the total number of shares in the partnership and the number of votes from these shares on the
day of notification, and if the shares are of different types – also about the division of shares into particular types and a
number of votes from a particular type of shares,
 Documentation which is to be presented to the general assembly,
 Resolution projects, or, if no resolutions are planned to be made, notes of the board or of the supervisory board of the
partnership, related to issues included in the order of meeting before the date of the general assembly,
 Forms, which allow execution of voting rights through a procurator or via correspondence, if they are not sent directly
to all shareholders.
The right of participation in a general assembly of a public partnership is held only be people being the shareholders of the
partnership, sixteen days before the date of general assembly (date or registration of participation in general assembly).
The date of registration of participation in the general assembly is uniform for people entitled by shares to bearer and by
1
registered shares (406 of the Commercial Companies Code). People entitled by registered shares and temporal certificates,
as well as pledgers and users, which hold the voting right, are entitled to participation in the general meeting of a public
2
company, if they are registered in the share book on the day the participation in the general assembly is registered. (406 of
the Commercial Companies Code). Shares to bearer in the form of a document give the right of participation in a general
assembly of a public partnership, if the share documents are submitted to the partnership no later than on the day of
registration of participation in the general assembly and if they are not withdrawn by the end of this day. Instead of the
shares, a declaration can be submitted, issued as a proof of shares submission to a notary, a bank or an investment
company located (or having a branch office) on the teritory of a European Union member state or a country, which is a
party of the agreement on the European Economic Area, indicated in the notification about the call for a general assembly.
This declaration lists numbers of shares documents and it states, that the shares documents will not be released earlier
than after the end of the day of registration of participation in the general assembly. The entity managing a securities
account issues a registered proof about the right of participation in a general assembly on resuest on the party entitled by
dematerialised shares to bearer of the public partnership, registered not earlier than the notification of the call for a
general assembly has been published, and not later than on the first working day after the registration of participation in a
3
general assembly (406 of the Commercial Company Code).
The following entities hold the right to participate in a General Assembly with voting rights:
 Shareholders of registered shares, if they are registered in the share book at least a week before the date of the
General Assembly,
 Shareholders of shares to bearer, if they sumbit their shares to the Board of the Partnership at least a week before the
meeting of the General Assembly, and if they do not withdraw the shares before the General Assembly is finished.
Instead of shares, certificates of proof of shares deposit (at a notary, in a brokerage house, etc.) can be submitted, if
they list the number of shares and a statement, that the shares will not be released before the end of the General
Assembly,
 Procurators of the shareholders, under the condition of earlier submission of a written mandate. A Board Member or
an employee of the Partnership cannot be a Procurator during the General Assemly. Regulations on execution of
voting rights by procurator are applied to execution of voting rights by another representatives (art. 412 of the
Commercial Company Codes).
Besides, the right of participation in the General Assembly is held by:
 Board and Supervisory Board Members,
 Advisors and experts invited by the organ calling for a General Assembly,
 The notary recording a protocol of the General Assembly.
The list of shareholders entitled to participation in a General Assembly, signed by the Board and containing surnames and
names or companies (names) of the entitled parties, their address (office location), number, type and numbers of shares
and the number of votes they are entitled to, should be laid out in the office of the Board for three working days before the
meeting of the General Assembly takes place. A person can present a correspondence address instead of the address of
residence. A Shareholder can browse the list of shareholders in the office of the Board and request a copy of the list for a
return of costs of its preparation. A Shareholder can demand a copy of applications related to issues included in the order
of meeting, within one week before the General Assembly (art. 407 of the Commercial Companies Code).
People designated by the Board, create a list of presence on the basis of the list of shareholders entitled to participation in
the General Assembly, which is laid out at the entrance to the assembly hall. Shareholders arriving at the General Assembly
confirm their presence by signing the presence list and they receive voting cards. The procurators sign the list using their
names and surnames at their mandators’ names with a note, that they act as procurators.
Page 203
Information about the date, time and place of the General Assembly of a public Partnership, together with its detailed
order of meetings, as well as the date and time – a deadline for submission of registered deposit certificates or certificaties
about having the shares deposition, with an indication of place where they are to be deposited, and in the case of intended
Status change – with an indication currently effective statements and contents of proposed changes or with a project of a
new uniform text of the Status with a list of new or changed statements, should be made available to the public at least 22
days before the date of the General Assembly. In the same mode, at least 8 days before the date of the General Assembly,
the contents of resolution projects and appendices to the projects, which are to be discussed by the General Assembly,
significant in relation to the resolutions made, which have not been previously made available to the public, should be
made available to the public.
The Rules of the General Assembly also define in the details rules of making breaks in the meetings and of resuming the
meetings. The Rules of the General Assembly are available on the website of the Partnership: www.rankprogress.pl.
21.2.6. Description of the statements of the Statuts or rules of the Issuing Party, which could case a delay,
postponing or cancellation of control change over the Issuing Party
The Status and the rules of the Issuing Party do not contain statements, which could cause a delay, postponing or
cancellation of control change over the Issuing Party.
21.2.7. Indication of statements of the Status or rules of the Issuing Party, if such exist, which regulate the
threshold value of owned shares, which, if exceeded, makes it necessary for the shareholder to
reveal the level of owned shares
The Status of the Issuing Party and rules effective in the Partnership do not contain statements regulating the threshold
value of owned shares, which, if exceeded, makes it necessary for the shareholder to reveal the level of owned shares.
However, such duties result from the Act on Public Offer.
21.2.8. Description of conditions placed through powers of Status statements or of rules of the Issuing
Party, which govern capital changes, if this rules are more strict than it is required by law
The Status of the Partnership or rules effective in the Partnership do not contain statements related to capital changes,
which would be more strict than those defined by the requirements of the Commercial Companies Code.
22. Significant contracts
Sumary of all significant contracts other than contracts signed in normal activity mode, where the Issuing Party or
companies from the Group, are parties.
22.1. Continued loan contracts
1.
th
o
Contract on foreign currency investment loan dated December 5 , 2005 with BZ WBK S.A., with Annexes N 1 – 16.
th
On the basis of contract signed on December 5 , 2005, with annexes (1-16), Bank Zachodni WBK S.A. in Wrocław granted
the Issuing Party a foreign currency investment loan with value of up to 20 000 000 EUR.
st
The Issuing Party obliged to pay the used loan before August 31 , 2014, with the provision that the final loan payment
st
deadline can be extended to August 31 , 2016, if the Issuing Party meets additional conditions.
The Parties have also agreed, that the Bank granted the said loan for funding investment projects finished as of November
th
20 , 2007, and for funding the economic activity of the Receiving Party.
The used amount of loan as evidenced on the Loan Account has an interest rate equal to the variable EURIBOR rate for
monthly interbank deposits in Euro, increase by the maring of the bank, which equals to 4,00 percent points (Margin).
Additionally, the Parties have decided, that starting on the first day of interest period, following the IRS transaction date
(transaction securing the interest rate risk), the Margin will be lowered to the level of 3,50 percent points, with the IRS
st
transaction to be performed before December 31 , 2009.
Interests and capital installments on loan are paid at the end of each month, with the capital rate being equal and paid in an
amount, which reflects the yearly depreciation rate of 1,5%. Additionally, BZ WBK has the right to take 80% of the surplus
defined as net income from rent, decreased by total yearly loan installment and with a currently effective tax rate of
income tax from legal entities, for the payment of the last capital installment.
In relation to the granted loan, the Issuing Party has provided the following legal protection in order to secure the claims of
the Bank:
 Total normal mortgage of 20 000 000 EUR on the right of perpetual use of the real estate located at ul. NMP 6 in
o
Legnica (MR N 66547), on a participation in 3097/10000 in the right of perpetual use of a real estate located at ul.
o
NMP 9 in Legnica (MR N 43810), on real estates forming eight utility premises, located in Legnica, at ul. NMP 3, 4, 5, 6,
10 12, 1.2 and 9 (MR 64222, 64223, 64224, 64225, 65948, 65949, 65950, 70428) and on a real estate forming an
unhoused ground, located at ul. Grodzka in Legnica (MR 44733), with cessation of rights from the insurance,
Page 204



Total bail mortgage of up to 1 000 000 EUR on the right of perpetual use of a real estate located at ul. NMP 6 in Legnica
o
(MR N 66547), on a participation in 9968/10000 in the right of perpetual use of a real estate located at. NMP 9 in
o
Legnica (MR N 43810), on real estates forming eight utility premises, located in Legnica, at ul. NMP 3, 4, 5, 6, 10 12,
1.2 and 9 (MR 64222, 64223, 64224, 64225, 65948, 65949, 65950, 70428) and on a real estate forming an unhoused
ground, located at ul. Grodzka in Legnica (MR 44733), with cessation of rights from the insurance,
Cessation of active debt from the entirety of rental contracts for the area of Galeria Piastów at ul. NMP 9 in Legnica,
Financial pledge on a separate account with a blockade of assets to the amount of 700 000 PLN; if the values of the
DSCR factor drops below 1,2, the amount of blockade of assets on the separate account will be raised up to 1 700 000
PLN
The Issuing Party has also obliged e.g. to maintain financial indicators at the following levels:
 LTV (loan to value – ratio of loan granted to the market value of protection) not higher than 75%,
 DSCR (debt service coverage ratio – indicator of covering payments resulting from loans with current financial income)
not lower than 1,2 measured quarterly, starting from the data for 12.2006, on the basis of income from rental
contracts of area in Galeria Piastów and exploitation cost of this object.
Within the claims of the Bank by virtue of loan granting, the Issuing Party has submited itself to execution on the basis of
bank writ of execution. After the potential issue of bank writ of execution, the debt of the Bank is subjected to a variable
interest rate equal to a double level of interest rate of loan on securities of the NBP.
The Issuing Party has also obliged to inform the Bank in a written form about actions related to issue of changeable bonds,
overtakes of other entities or fusions with other entities and about changes of Status, which would not be in conforimity
with the contract.
In the opinion of the Issuing Party, as of the date of Prospectus approval, the Issuing Party currently fulfills its duties
resulting from the contract, thus no risk of contract termination becuase of the Issuing Party exists.
2.
Contract on investment loan for capital release from an implemented investment of ground purchase (i.e. Equity
th
Release) signed with BZ WBK S.A. in Wrocław on January 11 , 2008, with Annexes 1 – 4.
th
On January 11 , 2008, Bank Zachodni WBK S.A. in Wrocław granted the Issuing Party a loan in zlotys (with Annexes 1 – 4),
with the value of 30 000 000 PLN, designed for capital release from an implemented investments of ground purchase (i.e.
Equity Release) through funding of increase of value of real estates located in Wrocław at ul. Białowieska, including in
o
mortgage registers N WR1K/00122955/0, WR1K/00122953/6, WR1K/00122952/9, WR1K/00122957/4, WR1K/00121781/2,
o
which will be used for the purchase of real estates located in Katowice at ul. Olimpijska, included in mortgage register N
KA1K/00039722/1.
The Issuing Party is obliged to finally pay the entirety of the debt, i.e. the amount of 30 000 000 PLN by virtue of loan on
st
January 31 , 2010. The interest rate is the loan is defined according to the variable rate, which is a sum of the WIBOR rate
for 1-month interbank deposits and the margin of the Bank equal to 3,50 percent point. The interests are paid monthly, at
the end of each month.
The loan is protected with:
1. Income to the current account form a protection of the loan granted on the basis of this contract and they cannot be
cessated to other creditors.
2. Total normal mortgage of 30 000 000 PLN for capital protection and bail mortgage of up to 1 500 000 PLN for
protection of intersts, on the following real estates:
 Perpetual use and onwership rights to the buildings, located in Wrocław at ul. Białowieska, parcel No 3/7, included
o
in mortgage register N WR1K/00122955/0,
 Perpetual use of real estate located in Wrocław at ul. Białowieska, parcel 2/3, included in mortgage register N o
WR1K/00121781/2,
 Perpetual use and ownership rights to the buildings of the real estate located in Wrocław at ul. Białowieska,
o
o
parcel N 3/5, included in mortgage register N WR1K/00122953/6,
o
o
o
o
 Perpetual use and ownership rights to the buildings of the real estate housed with warehouse buildings, parcels
74/22, 74/24, 74/29, 74/30, 74/40, 92/11, 74/43, located in Katowice at ul. Olimpijska, included in mortgage
o
register N KA1K/00039722/1.
3. Bail of 600 000 PLN.
Additionally, shareholders of the Issuing Party, Jan Mroczka and Andrzej Bartnicki were obliged not to make any changes of
owenrship in the entire loan period, which would cause to number of votes owned by them during the general assembly to
become lower than 60% of the total number of votes.
Page 205
The Issuing Party did not make payment of the loan granted by virtue of the said contract before the deadline of January
st
th
31 , 2010. As applied for by the Issuing Party, the loan committee of BZ WBK S.A. bank, which held a meeting on April 8 ,
2010, approved conditions of further cooperation discussed with the Issuing Party, covered by the said loan contract,
th
according to which the deadline of loan payment has been extended to June 30 , 2010. The payment is about to take place
as a result of obtaining financial assets by the Issuing Party from the sale transaction of Twierdza Commercial Centre in
Kłodzko, which is mentioned in p. 5.2.1.3 Part III of this Prospectus.
The Issuing Party has already taken proper actions in order to sell Twierdza Commercial Centre, e.g. it has signed a letter of
intention with a potential investor, which defines price calculation, schedule of sale execution, payment conditions and
deadlines. As a consequence, the Issuing Party does not predict any significant risk related to a termination of the contract
caused by the Issuing Party.
3.
th
Contract on a bank loan in zlotys for current business activity signed on March 12 , 2008 with Deutsche Bank PBC
o
S.A. in Warsaw, Legnica Office, with Annexes N 1 – 6.
th
On the basis of the contract dated March 12 , 2008 (with Annexes 1-6), Deutsche Bank PBC S.A. in Warsaw, Legnica Office
granted the Issuing Party a bank loan in zlotys in the current account, with the value of 5 000 000 PLN, designed for funding
the current business activity of the Issuing Party.
th
th
This loan was granted for the period from March 12 , 2008 to September 17 , 2010. The Issuing Party is obliged to pay the
th
entire debt by virtue of the loan before September 16 , 2010.
The interest rate of the loan is a variable one and it is a sum of WIBOR rate for 1-month interbank deposits and a margin of
the Bank, equal to 2,5 percent point. The Bank calculates and collects interests on the loan in monthly current periods, on
the last day of the month, with the exception of the last interest rate, calculated on the date of return of the amount of
used lonan. Payment of the debt of the Issuing Party by virtue of the loan has to have an equal position in relation to other
funding sources of the Issuing Party.
 An irrevocable mandate for the Bank to manage the current account of the Issuing Party;
 Declaration of the Issuing Party on submission to execution on the basis of art. 96-98 of the Act dated August 29th,
1997– Banking Law;
 Deposits of monetary assets made by MB Progress Capital Limited through the powers of art. 102 of the Act dated
th
August 29 , 1997– Banking Law, on an account in the Bank, with a maximum value of 5 075 000 PLN.
In the opinion of the Issuing Party, as of the date of Prospectus approval, the Issuing Party fulfills its obligations resulting
from the contract, thus no risk of contract termination because of the Issuing Party exists.
4.
th
Contract on an investment loan with BZ WBK S.A. in Wrocław dated June 5 , 2008, with annexes 1 – 7.
th
On June 5 , 2008, Bank Zachodni WBK S.A. in Wrocław signed with the Issuing Party a contract with Annexes (1 – 7) on an
investment loan for up 98 530 000 PLN, designed for construction of a commercial-service gallery (Galeria Piastów 2), a
cinema object and a commercial-service-apartment object located in Legnica at ul. Grodzka, for which a mortgage register
o
o
MR N LEIL/00044733/3 is maintained, and at ul. Najświętszej Marii Panny 18a, for which a mortgage register MR N
LEIL/00044707/2 is maintained (Expansion of Galeria Piastów), and for financing interest rates until the date of the finish of
construction works of the investment, funding the preparatory commission and for total payment of the bank loan granted
o
on the basis of contract on investment loan for capital release from the implemented investment (i.e. Equity Release) N
th
K0005116 dated April 4 , 2008.
st
The Issuing Party obliged to pay the used loand before August 31 , 2014, with the restriction, that the final deadline of loan
st
payment may be extended until August 21 , 2016, if the Issuing Party fufills some additional conditions.
The used amount of loan is evidenced on a loan account in Euro, with interest equat to a variable EURIBOR rate for one
month interbank deposits in Euro, increased by the margin of the Bank, equal to 4,00 percent points. Additionally, the
Parties decided, that from the first day of interest period, starting after the date the IRS transaction is made (a transaction
of protection of the interest rate risk), the margin will be lowered to the level of 3,50 percent point, with the IRS transaction
st
to be made before December 31 , 2009.
The used amount of loan is evidenced on a loan account in Euro, with interest equat to a variable EURIBOR rate for one
month interbank deposits in Euro, increased by the margin of the Bank, equal to 4,00 percent points. From the first day of
the interest period starting after the date of the aforementioned IRS Transaction, the margin will be lowered to the level of
3,50 percent point.
The interest and capital installments are paid at the end of each month, with the capital installments being equal and due
to be paid with a value reflecting a yearly loan depreciation rate of 1,5%. Aditionally, BZ WBK has the right to collect 80% of
Page 206
the surplus defined as net income from rent minus the total yearly loan installment and the current tax rate of income tax
on legal entities, for the payment of the last capital installment.
The Issuing Party has provided protection for the claims of the Bank, in the form of:
2.
3.
Total normal mortgage of 27.852.145,79 EUR for the capital protection and a total bail mortgage of up to
13.926.072,89 EUR for the protection of loan amount expressed in EUR and evidenced on the Currency Loan Account,
on:
 Participation in perpetual use right of a ground parcel designated with a number 243 and 836/1 with area of
0,3033 ha, totalling 3097/10000 parts and ownership of a building – commercial pavillion, with the exception of
o
utility premise N 2 and common parts of the building, located in Legnica, at ul. Najświętszej Marii Panny 9,
o
registered in mortgage register MR N LE1L/00043810/0 maintained by the District Court in Legnica, VI Mortgage
Registers Department, assigned to Rank Progress Spółka Akcyjna located in Legnica,
 Premise real estate located in Legnica, Lower Silesian Voivodeship, At ul. Najświętszej Marii Panny 9, namely, a
o
o
utility premise designated with N 3, included in the mortgage register MR N LE1L/00064222/4 maintained by the
District Court in Legnica, Mortgage Registers Department. Rank Progress Spółka Akcyjna located in Legnica is the
owner of this real estate,
o
o
o
o
o
o
o
o
utility premise designated with N 10, included in the mortgage register MR N LE1L/00065948/6 maintained by
the District Court in Legnica, Mortgage Registers Department. Rank Progress Spółka Akcyjna located in Legnica is
the owner of this real estate,
o
o
o
o
utility premise designated with N 1.2, included in the mortgage register MR N LE1L/00065950/3 maintained by
o
o
 Right of perpetual use of a real estate covering ground parcels numnber 812 and 813 with a total area of 0,1339
o
ha, located in Legnica, at ul. Najświętszej Marii Panny 6, included in the mortgage register MR N
LE1L/00066547/2, maintained by the District Court in Legnica, Mortgage Registers Department, assigned to Rank
Progress Spółka Akcyjna located in Legnica,
 Ground real estate, covering a ground parcel designated with the number 789/1, with area of 0,5365 ha, located
o
in Legnica, at ul. Grodzka, included in the MR N LE1L/00044733/3, maintained by the District Court in Legnica,
Mortgage Registers Department,
 Real estate located in Legnica, at ul. Grodzka, parcel No 837, for which the District Court in Legnica, Mortgage
Registers Department maintains a mortgage register number LE1L/00063592/1,
 Real estate located in Legnica, at ul. Najświętszej Marii Panny No 18A, parcel No 296/1, for which the District Court
in Legnica, Mortgage Registers Department maintains a mortgage register number LE1L/00044707/2,
 Real estate located in Łagów, municipality of Zgorzelec, for which the District Court in Zgorzelec, Mortgage
Registers Department maintains a mortgage register number JG1Z/00039600/9,
Total normal mortgage of 6 148 289,91 PLN for the capital protection and total bail mortgage of up to 3 074 144,96
PLN for the protection of interests on the amount of loan expressed in PLN and evidenced in the Loan Account, on:
 Participation in the perpetual use right for the ground parcel deisgnated with the numbers 243 and 836/1 with
the area of 0,3033 ha, totalling 3097/10000 parts and ownership of a building – commercial pavillion, with the
Page 207
o
4.
5.
6.
7.
8.
exception of utility premise N 2 and common parts of the building, located in Legnica, at ul. Najświętszej Marii
o
Panny 9, included in the mortgage register MR N LE1L/00043810/0, maintained by the District Court in Legnica,
VI Mortgage Register Department, assigned to Rank Progress Spółka Akcyjna located in Legnica,
 Premise real estate located in Legnica, Lower Silesian Voivodeship, at ul. Najświętszej Marii Panny 9, namely, a
o
o
District Court in Legnica, Mortgage Register Department. Rank Progress Spółka Akcyjna located in Legnica is the
o
o
o
o
o
o
o
o
the District Court in Legnica, Mortgage Register Department. Rank Progress Spółka Akcyjna located in Legnica is
o
o
o
o
o
o
o
o
Cessation of rights of a investment construction risks insurance, and after its finish – cessation of rights of Galeria
Piastów 2 insurance, within 14 days from the date the construction of Galeria Piastów 2 is finished.
Cessation of active debts from current and future rental contracts for the ares of Galeria Piastów 2.
Contract on assets blockade on the Auxiliary Account.
Additional protection in the form of submission of a loan granted to the Receiving Party by HIT Zarząd Majątkiem
Polska Legnica 1 Sp. z o.o.to this loan.
Submission of a loan granted to the Receiving Party by KMM Sp. z o.o. located in Zamość, ul. Kiepury 6/8.
Additionally, the Issuing Party, in relation to the aforementioned IRS Contract, in particular to:
 Active debt by virtue of interests, which the Customer will be obliged to pay in amounts and using rules defined in the
IRS Contract, including stipulated interest on delay,
 Active debts resulting from the costs of the Bank, if the IRS contract is terminated before its validity period because of
circumstances, which entitle the Bank to termination of the IRS contract on the basis of frame contract, including costs
resulting from the contract signed by the Bank on the monetary market, with the contents respective to the initial
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
obligation of the Customer to the bank, in order to secure the execution of benefits of the Bank to third parties,
resulting from transactions made as a result of the signed IRS contract,
Active debts by virtues of reparation claims for not executing or for an improper execution of obligation by the
Customer, if the amount of actual damage of the Bank exceeds the amount of stipulated interest for delay and other
amounts paid by the Customer,
Constitutes a total bail mortgage of up to 4 036 960,62 EUR on:
 Participation in the perpetual use right for the ground parcel deisgnated with the numbers 243 and 836/1 with the
area of 0,3033 ha, totalling 3097/10000 parts and ownership of a building – commercial pavillion, with the exception
o
of utility premise N 2 and common parts of the building, located in Legnica, at ul. Najświętszej Marii Panny 9, included
o
in the mortgage register MR N LE1L/00043810/0, maintained by the District Court in Legnica, VI Mortgage Register
Department, assigned to Rank Progress Spółka Akcyjna located in Legnica,
 Premise real estate located in Legnica, Lower Silesian Voivodeship, at ul. Najświętszej Marii Panny 9, namely, a utility
o
o
premise designated with N 3, included in the mortgage register MR N LE1L/00064222/4 maintained by the District
Court in Legnica, Mortgage Register Department. Rank Progress Spółka Akcyjna located in Legnica is the owner of this
real estate,
o
o
real estate,
o
o
real estate,
o
o
real estate,
o
o
real estate,
o
o
real estate,
o
o
premise designated with N 1.2, included in the mortgage register MR N LE1L/00065950/3 maintained by the District
real estate,
o
o
real estate,
 Right of perpetual use of a real estate covering ground parcels numnber 812 and 813 with a total area of 0,1339 ha,
o
located in Legnica, at ul. Najświętszej Marii Panny 6, included in the mortgage register MR N LE1L/00066547/2,
maintained by the District Court in Legnica, Mortgage Registers Department, assigned to Rank Progress Spółka Akcyjna
located in Legnica,
 Ground real estate, covering a ground parcel designated with the number 789/1, with area of 0,5365 ha, located in
o
Legnica, at ul. Grodzka, included in the MR N LE1L/00044733/3, maintained by the District Court in Legnica, Mortgage
Registers Department,
 Real estate located in Legnica, at ul. Grodzka, parcel No 837, for which the District Court in Legnica, Mortgage Registers
Department maintains a mortgage register number LE1L/00063592/1,
 Real estate located in Legnica, at ul. Najświętszej Marii Panny No 18A, parcel No 296/1, for which the District Court in
Legnica, Mortgage Registers Department maintains a mortgage register number LE1L/00044707/2,
The Issuing Party has also obliged i.e. to maintain the financial indicators at the following levels:
 LTV (loan to value – ratio of loan granted to the market value of the protection) not higher than 70%,
 DSCR (debt service coverage ratio – indicator of covering of payments resulting from the loans with current financial
income) calculated only on the basis of income from rents of the area of Galeria Piastów 2 and on the basis of
rd
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exploitation costs of Galeria Piastów 2 na at the level not lower than 1,05 in the 3 and 4 quarters of 2009 and in the
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nd
1 and 2 quarters of 2010, and 1,10 in the following periods,
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Within the claims of the Bank by virtue of loan granting, the Issuing Party has submited itself to execution on the basis of
bank writ of execution. After the potential issue of bank writ of execution, the debt of the Bank is subjected to a variable
interest rate equal to a double level of interest rate of loan on securities of the NBP.
The Issuing Party has also obliged to inform the Bank in a written form about actions related to issue of changeable bonds,
overtakes of other entities or fusions with other entities and about changes of Status, which would not be in conforimity
with the contract.
ownership in the entire loan period, which would cause to number of votes owned by them during the general assembly to
Additionally, Jan Mroczka and Andrzej Bartnicki obliged not to use the right to dividend without a permission from the
Bank, and such a permission would be granted by the Bank under the condition that the dividend will not exceed 25% of the
consolidated net profit of the Issuing Party and 50% of the unitary net profit of the Issuing Party revealed for the tax year
preceeding the tax year when the dividend is paid, the indicator defined as an amount of profit held for the tax year
preceeding the tax year when the dividend is paid, related to the sum of capital installments assigned to the tax year when
the dividend is paid will not be lower than 1,2 and no violations of conditions of loan contracts signed by Rank Progress S.A.
and BZ WBK took place.
5.
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Contract on a revolving current loan signed with BZ WBK S.A. in Wrocław on June 6 , 2008 with Annexes 1 and 2.
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On June 6 , 2008, Bank Zachodni WBK S.A. in Wrocław signed a contract (with Annexes 1 and 2) with the Issuing Party on a
revolving current loan of up to 7 000 000 PLN, assigned for funding settlements by virtue of VAT tax related to the
o
expansion of Galeria Piastów, located in Legnica at ul. Grodzka, for which a mortgage register MR N LEIL/00044733/3 is
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maintained, and at ul. Najświętszej Marii Panny 18a, for which a mortgage register MR N LEIL/00044707/2 is maintained.
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The Issuing Party was obliged to pay the entirety of the debt by virtue of the loan on March 31 , 2010.
The interest rate of the loan has been defined on the basis of variable interest rate, which is a sum of WIBOR rate for one
month interbank deopsits in PLN, increased by the margin of the Bank, equal to 3,50 percent point.
1. Total bail mortgage of up to 7 300 000 PLN for capital and interest protection, on:
 Participation in the perpetual use right for the ground parcel deisgnated with the numbers 243 and 836/1 with
the area of 0,3033 ha, totalling 3097/10000 parts and ownership of a building – commercial pavillion, with the
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exception of utility premise N 2 and common parts of the building, located in Legnica, at ul. Najświętszej Marii
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Panny 9, included in the mortgage register MR N LE1L/00043810/0, maintained by the District Court in Legnica,
VI Mortgage Register Department, assigned to Rank Progress Spółka Akcyjna located in Legnica,
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o
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
Premise real estate located in Legnica, Lower Silesian Voivodeship, at ul. Najświętszej Marii Panny 9, namely, a
o
o
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Registers Department maintains a mortgage register number JG1Z/00044433/5.
2. Contracts on assets blockade on the Auxiliary Account.
ownership in the entire loan period, which would cause to number of votes owned by them during the general assembly to
Additionally, Jan Mroczka and Andrzej Bartnicki obliged not to use the right to dividend without a permission from the
Bank, and such a permission would be granted by the Bank under the condition that the dividend will not exceed 25% of the
consolidated net profit of the Issuing Party and 50% of the unitary net profit of the Issuing Party revealed for the tax year
preceeding the tax year when the dividend is paid, the indicator defined as an amount of profit held for the tax year
preceeding the tax year when the dividend is paid, related to the sum of capital installments assigned to the tax year when
the dividend is paid will not be lower than 1,2 and no violations of conditions of loan contracts signed by Rank Progress S.A.
and BZ WBK took place.
The Issuing Party did not make payment of the loan granted by virtue of the said contract before the deadline of January
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th
31 , 2010. As applied for by the Issuing Party, the loan committee of BZ WBK S.A. bank, which held a meeting on April 8 ,
2010, approved conditions of further cooperation discussed with the Issuing Party, covered by the said loan contract,
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according to which the deadline of loan payment has been extended to June 30 , 2010. The payment is about to take place
as a result of obtaining financial assets by the Issuing Party from the sale transaction of Twierdza Commercial Centre in
Kłodzko, which is mentioned in p. 5.2.1.3 Part III of this Prospectus.
The Issuing Party has already taken proper actions in order to sell Twierdza Commercial Centre, e.g. it has signed a letter of
intention with a potential investor, which defines price calculation, schedule of sale execution, payment conditions and
deadlines. As a consequence, the Issuing Party does not predict any significant risk related to a termination of the contract
caused by the Issuing Party.
6.
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Contract on a loan in zlotys for current business activity dated September 17 , 2008 with Deutsche Bank PBC in
Warsaw, Legnica Office, with Annexes 1 – 3.
th
On the basis of contract dates September 17 , 2008 (with Annexes 1 – 3), Deutsche Bank PBC S.A. in Warsaw, Legnica
Office, granted the Issuing Party a renewable current loan in zlotys, with the total value of up to 13 500 000 PLN, designed
for funding the current business activity of the Issuing Party.
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The loan was granted for the period from March 12 , 2008, to September 17 , 2010. The Issuing Party is obliged to pay the
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entirety of the debt by virtue of loan before September 16 , 2010.
The interest rate of the loan is a variable one and it is a sum of WIBOR rate for 1-month interbank deposits and a margin of
the Bank, equal to 2,5 percent point. The Bank calculates and collects interests on the loan in monthly current periods, on
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the last day of the month, with the exception of the last interest rate, calculated on the date of return of the amount of
used loan. Payment of the debt of the Issuing Party by virtue of the loan has to have an equal position in relation to other
funding sources of the Issuing Party.
 An irrevocable mandate for the Bank to manage the current account of the Issuing Party;
 Declaration of the Issuing Party on submission to execution on the basis of art. 96-98 of the Act dated August 29th,
1997– Banking Law;
 Deposits of monetary assets made by MB Progress Capital Limited through the powers of art. 102 of the Act dated
th
August 29 , 1997– Banking Law, on an account in the Bank, with a maximum value of 13 500 000 PLN.
7.
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Investment loan contract dated September 30 , signed with BZ WBK S.A. with annexes N 1 – 6.
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On the basis of the contract signed on September 30 , 2008 with Annexes (1-6), Bank Zachodni WBK S.A. in Wrocław
granted the dependent company of the Issuing Party, E.F. PROGRESS V Sp. z o.o., an investment loan with the amount of up
to 68 932 000 PLN
st
The dependent company of the Issuing Party obliged to pay the amount of used loan before September 1 , 2013, with the
st
restriction, that the final payment deadline can be extended to Septmerber 1 , 2016, if the dependent company of the
th
Issuing Party fulfills additional conditions. On April 8 , 2010, the loan committee of BZ WBK S.A. approved modified loan
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conditions, which predict a shorter loan payment period ending on December 31 , 2010, with the loan payment is about to
take place as a result of planned sale of Twierdza Commercial Centre in Kłodzko (ths Issuing Party has signed a letter of
intention with a potential investor), or by means of payment using assets from another loan obtained from another bank.
Additionally, the Parties have agreed that the Bank granted the said loan for funding:
 Construction of Twierdza Commercial Centre,
 Interest of this loan, from the Day of the end of construction works,
 Preparatory commission,
 Interests on loan granted by the Contract on a revolving current loan No K0006246 dated September 30th, 2008, until
the date of the end of construction works,
 Preparatory commission on the loan granted by the Contract on a revolving current loan No K0006246 dated
th
September 30 , 2008.
The used amount of loan is subjected to interest equal to a variable EURIBOR rate for one month interbank deposits in PLN,
increased by the margin of the Bank, equal to 4,00 percent points. From the first day of the interest period starting after the
date of the IRS Transaction (transaction of protection of the interest rate risk), the margin will be lowered to the level of
3,50 percent point.
The used amount of loan is evidenced on a Currency Loan Account in Euro (related to renomination of the loand), is
subjected to interest rate equal to a variable EURIBOR rate for one month interbank deposits in Euro, increased by the
margin of the Bank, equal to 4,00 percent points. From the date of the aforementioned IRS Transaction, the margin will be
lowered to the level of 3,50 percent point.
The interest and capital installments are paid at the end of each month, with the capital installments being equal and due
to be paid with a value reflecting a yearly loan depreciation rate of 1,5%. Aditionally, BZ WBK has the right to collect 60% of
the surplus defined as net income from rent minus the total yearly loan installment and the current tax rate of income tax
on legal entities, for the payment of the last capital installment. The level of the surplus can be increased up to 80%
maximum, if the conditions of the contract are not met.
The dependent company of the Issuing Party has provided the following protection for the claims of the Bank, related to
the loan granted:
1. Total bail mortgage of up to 24 466 884,02 Euro for the protection of capital and interests on the loan, on real estates
on which the investment is being implemented, for which the District Court in Kłodzko, Mortgage Registers
Department, maintains the mortgage registers with the following numbers:
a. SW1K/00080327/1 for a ground real estate, covering a ground parcel designated with the number 6/1, Ustronie
area, located in Kłodzko,
b. SW1K/00080390/3 for the right of perpetual use of a ground real estate, covering a ground parcel designated with
a number 3/3, Ustronie area, located in Kłodzko,
c. SW1 K/00005954/6, for a ground real estate, covering a ground parcel designated with the number 5/2, Ustronie
area, located in Kłodzko, at ul. Noworudzka,
d. SW1K/00080299/5, for a ground real estate, covering ground parcels designated with numbers 5/3 and 5/4,
Ustronie area, located in Kłodzko.
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2.
3.
4.
5.
6.
7.
Total normal mortgage equal to 11 957 935,12 PLN for the protection of capital and a total bail mortgage of up to 6
000 000.00 PLN for the protection of interest on the loan amount expressed in zlotys and evidenced on the loan
account, on real estates on which the investment is being implemented, for which the District Court in Kłodzko,
Mortgage Registers Department, maintains the mortgage registers with the following numbers:
e. SW1K/00080327/1 for a ground real estate, covering a ground parcel designated with the number 6/1, Ustronie
area, located in Kłodzko,
f. SW1K/00080390/3 for the right of perpetual use of a ground real estate, covering a ground parcel designated with
a number 3/3, Ustronie area, located in Kłodzko,
g. SW1 K/00005954/6, for a ground real estate, covering a ground parcel designated with the number 5/2, Ustronie
area, located in Kłodzko, at ul. Noworudzka,
h. SW1K/00080299/5, for a ground real estate, covering ground parcels designated with numbers 5/3 and 5/4,
Ustronie area, located in Kłodzko.
Cessation of rights from the investment construction risk insurance, and after its termination – cessation of rights from
the insurance of Twierdza Commercial Centre within 14 days from the Day the construction works of Twierdza
Commercial Centre are finished.
Cessation of active debt from the entirety of rental contracts for the area of Galeria Piastów at ul. NMP 9 ina Legnica.
Cessation of active debts from existing and future rental contracts for the utility area of Twierdza Commercial Centre
Register pledge on the shares of EF Progress V Sp. z o.o.
A guarantee issued by Rank Progress S.A., for the Bank, that it will pay the interests and the capital of this loan until
E.F. Progress V Sp. z o.o obtains full ability to manage the interests and the capital.
The dependent company of the Issuing Party has also obliged i.e. to maintain the financial indicators at the following levels:
 LTV (loan to value – ratio of loan granted to the market value of the protection) not higher than 65%,
 DSCR (debt service coverage ratio – indicator of covering of payments resulting from the loans with current financial
income) not lower than 1,2 on the basis of income from rental contracts of the area Twierdza Commercial Centre and
the costs of the Receiving Party (E.F. Progress V Sp. z o.o.), excluding the interests and unexecuted currency rate
differences.
Within the claims of the Bank by virtue of loan granting, the dependent company of the Issuing Party has submitted itself to
execution on the basis of bank writ of execution. At the moment the Bank issues the writ of execution, it will convert the
currency of the foreign currency loan from Euro to PLN, at the rate for BZ WBK S.A currencies, effective in the moment of
conversion.
Additionally, issuing any loans by the E.F. Progress V Sp. z o.o., including those to the dominating unit, require a permission
from BZ WBK. A permission is also required for dividend payment by E.F. Progress V Sp. z o.o. Appropriate statementsobligations about cancellations of dividend payments were given to BZ WBK by the Board of the dominating unit Rank
Progress S.A. and separately, by other main shareholders of the dominating unit i.e. by Jan Mroczka and Andrzej Bartnicki.
The obligations covered in these declarations cannot be exempted without the permission of the BZ WBK. Currently, the
Boards of the Issuing Party and of its dependent entity have started negotiations with BZ WBK in order to exempt a part of
financial surplus from the duty of obtaining permission of the BZ WBK for the payment of dividend.
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8. Investment loan contract dated February 24 , 2010, signed with PKO BP S.A.
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By virtue of contract signed on February 24 , 2010, Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna located
in Warsaw granted the dependent company of the Issuing Party - Rank Müller Jelenia Góra Sp. z o.o. with an
investment loan of up to 28 500 000 PLN.
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The dependent company of the Isssuing Party obliged to pay the entire amount of loan used before February 1 , 2032.
The payments will be made monthly, starting from May 2011.
The parties have also agreed, that the Bank granted the said loand for funding of costs related to the construction of a
commercial gallery named „Pasaż Grodzki” in Jeleniej Górze, at ul. Grodzka – Jasna.
The amount of loan used is a subject to a variable interest rate WIBOR for interbank 3-month deposits in PLN,
increased bz a bank margin of 3,75 percent.
Interest rates on the amount used are calculated curently, during each settlement period and are paid on the last day
od each settlement period.

Loan payment is protected as follows:
Normal stipulated mortgage of 28 500 000,00 PLN protecting the main active debt (capital) of the loan and a bail
contract of up to 5 700 000,00 PLN protecting the additional debts, i.e. interest rates, fees and costs, on a perpetual
use of ground on which the investment– Galeria „Pasaż Grodzki” is implemented, and which is located in Jelenia Góra
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at ul. Grodzka – Jasna, for which the District Court in Jelenia Góra maintains a mortgage register MR N
JG1J/00059789/0,
Transfer of a monetary active debt from an insurance contract (renewable in the entire loan period) of the real estate
– subject of the investment,
Transfer of monetary active debts from current rental contracts for area in „Pasaż Grodzki” gallery in Jelenia Góra
(renewable in the entire loan period),
Clause of deduction of Bank’s active debts from a current account maintaned by PKO BP S.A. and other accounts of the
debtor, maintained by PKO BP S.A.,
Blank bill of the debtor with a billing declaration,
Aval for the debtor from the Issuing Party,
Transfer of monetary active debts from future rental contracts in the „Pasaż Grodzki” gallery in Jelenia Góra
(renewable in the entire loan period), immediately after they are signed,
Register mortgage on share of „Rank Müller Jelenia Góra” Sp. z o.o. owned by: E.F. Progress II Spółka z o..o and by
Paweł Müllera under the condition, that 100% of shars will be covered by this mortgage during the loan period.
Within the scope of Bank’s claims resulting from the virtue of loan granting to a dependent company of the Issuing
Party, it has subjected to an execution on the basis of bank’s writ of execution.
According to the Issuing Party, as of the date of Prospectus Approval, the dependent company of the Issuing Party
currently fulfills its duties resulting from the contract, thus there is no risk of contact termination because of the
actions of the dependent company.
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9. Current loan contract dated February 24 , 2010, signed with PKO BP S.A.
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By virtue of contract signed on February 24 , 2010, Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna located
in Warsaw granted the dependent company of the Issuing Party - Rank Müller Jelenia Góra Sp. z o.o. with a
current loan of up to 6 300 000 PLN.
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The loan is granted for the period from February 24 , 2010 to August 31 , 2011.
The parites have also agreed that the Bank has granted the said loan for funding VAT tax resulting from investment
expenses, related to the construction of a commercial gallery named „Pasaż Grodzki” in Jelenia Górze at ul.
Grodzka – Jasna.
The amount of loan used is a subject to a variable interest rate WIBOR for interbank 3-month deposits in PLN,
increased bz a bank margin of 3,75 percent.
Interest rates on the amount used are calculated curently, during each settlement period and are paid on the last day
od each settlement period.

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Loan payment is protected as follows
By own blank bill of the debtor with an aval,
Aval of the bill by the Issuing Party,
Clause of deduction of Bank’s active debts from a current account maintaned by PKO BP S.A. and other accounts of the
debtor, maintained by PKO BP S.A.,
Normal stipulated mortgage of 28 500 000,00 PLN protecting the main active debt (capital) of the loan and a bail
mortgage of up to 5 700 000,00 PLN protecting the additional debts, i.e. interest rates, fees and costs, on a perpetual
use of ground on which the investment– Galeria „Pasaż Grodzki” is implemented, and which is located in Jelenia Góra
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at ul. Grodzka – Jasna, for which the District Court in Jelenia Góra maintains a mortgage register MR N
JG1J/00059789/0,
przelewem wierzytelności pieniężnej z umowy ubezpieczenia.
Within the scope of Bank’s claims resulting from the virtue of loan granting to a dependent company of the Issuing Party, it
has subjected to an execution on the basis of bank’s writ of execution. According to the Issuing Party, as of the date of
Prospectus Approval, the dependent company of the Issuing Party currently fulfills its duties resulting from the contract,
thus there is no risk of contact termination because of the actions of the dependent company.
22.2. Other loan contracts
1.
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Contract on investment loan dated November 17 , 2006 signed by BZ WBK S.A. in Wrocław, and the Issuing Party.
On the basis of the contract, the bank granted the Issuing Party an investment loan of 21 330 000 PLN for funding 90% of
the net purchase price of a ground located in Wrocław.
The Issuing Party was obliged to pay the bank its interest by virtue of the granted loan. The used amount of the loan was
subjected to an interest rate according to the variable WIBOR rate for one month interbank deposits, increased bz the
margin of the bank, equal to 2 percent points. The margin was supposed to be lowered to 1,8 percent point from the date
of an effective approval of a spatial development plan for the housing, including the credited ground. The change of loan
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interest rate was effected on the 28 dazy of the months in the settlement periods, with the first change of interst rate
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taking place on December 28 , 2006.
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The Issuing Party obliged to a one-time payment of the amount of used loan until May 15 , 2008.
The loan, which is mentioned in this point, was overtaken by the Jogra 2 Sp. z o.o. company in the mode indicated in p.
6.4.1. sp. 2 „Sales Contract of Shares of Jogra 2 Sp. z o.o.” Part III of this Prospectus, thus the Issuing Party is exempted from
its payment.
2.
nd
Contract on a current loan, signed on December 22 , 2006 in Wrocław, between BZ WBK S.A. in Wrocław, and the
Issuing Party.
On the basis of the contract, the bank granted the Issuing Party a current loan of 5 500 000 PLN.
The loan was granted as a funding on purchase of real estates, where the Issuing Party planned to implement in the future
investments in commercial centres and apartment buildings. The loan could also be used for VAT payments, related to the
purchased real estates, up to the mount of 1 500 000 PLN.
The Issuing Party paid the bank the interest by virtue of loan use. The used amount of loan was subjected to a variable
WIBOR interest for one month interbank deposits, increased by the margin of the bank, equal to 1,75 percent point.
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The loan was entirely paid on April 6 , 2007.
3.
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Contract on a current loan, signed on January 24 , 2007, between BZ WBK S.A. in Wrocław, and the Issuing Party.
On the basis of the contract, the Bank granted the Issuing Party a current loan of 7 050 000 PLN for the release of own
assets invested in the purchase of a ground located in Wrocław.
The Issuing Party paid the bank the interest by virtue of loan use. The used amount of loan was subjected to a variable
WIBOR interest for one month interbank deposits, increased by the margin of the bank equal to 2 percent points. The
margin was about to be lowered to 1,8 percent point from the day of effective approval of spatial development plan,
enabling the construction of housing covering the credited ground.
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The Issuing Party obliged to a one-time payment of the used amount of loan before January 23 , 2008.
The loan mentioned in this point was overtaken by the Jogra 2 Sp. z o.o. company in the mode indicated in p. 6.4.1. sp. 2
„Sales Contract of Shares of Jogra 2 Sp. z o.o.” Part III of this Prospectus, thus the Issuing Party is exempted from its
payment.
4.
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Contract on a loan in zlotys, in a form of a renewable line, with ING Bank Śląski S.A. dated August 24 2007.
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On August 24 , 2007, ING Bank Śląski S.A. in Katowice signed with the Issuing Party a contract on a loan in zlotys, in a form
of a renewable line. The acceptable level of debt was defined as 7 500 000 PLN.
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The loan was granted from August 24 , 2007, until the payment date, which was defined as August 23 , 2008. According to
the contract, the loan was designed for:
 Funding of purchases of new real estates,
 Funding current assets of the Issuing Party within its business activity. A maximum amount of 1 500 000 PLN could be
assigned to this issue.
The use of the loan was limited to:
 Up to the level of mortgage entries on the behalf of the Bank in such a way, that the amount of used loan could not be
higher than 90% of the mortgage,
 The bank accepted a possibility of purchasing new real estates and creation of protection in a form of mortgage on
these real estates. In that case, the maximum amout of credit start could be increased by 90% of the value of entries
on the purchased real estate. Each time, a transaction of this type required a permission from the bank, wchich
accepted the purchase price and the level of mortgage entry,
 The level of mortgaged, unconditional active debts, namely active debts that do not contain conditions suspending the
execution of the contract. In the case of active debt drop to the level below 40% of the loan coverage (monthly
monitoring), within one months from the acknowledgement of the above, the Issuing Party was obliged to pay a part
of the loan, which would enable the aforementioned condition of the level of loan coverage with mortgaged real
estates to be met or to supply the protection up to the required level.
The interest rate of the loan was a variable type and it was a sum of WIBOR rate for 1-month interbank deposits and a
margin of the bank equal to 0,80 percent point p.a. The interest rate of the loan was determined on the day of first start of
the loan and it was changed on a monthly basis, starting from the first date of the first start of the loan.
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The loan, which is mentioned in this point, is replaced with a current loan, granted on the basis of a contract on a current
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loan signed with ING Bank Śląski S.A. on August 29 , 2008, with Annexes N 1 – 3 and on the basis of Restructurisation
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Contract dated September 18 , 2009, with Annex N 1. This contract is described in p.6 below.
5.
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Contract on loan in zlotys for investment funding dated September 13 , 2007, with ING Bank Śląski S.A.
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On September 13 , 2007, in Wrocław, ING Bank Śląski S.A. in Wrocław granted the Issuing Party a loan in zlotys, equal to
7 500 000 PLN, designed for funding and refunding of the investment, namely, real estate purchase of up to 80% of the
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purchase price. The loan was granted for the period from September 13 , 2007, to February, 28 , 2009. The first start of
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the loan was designed for payment of the loan granted by the Bank on the basis of the contract N 8932007001000649/00
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on a loan in zlotys in the form of a renewable line, dated August 24 , 2007, with later changes, up to the amount of 7 500
000 PLN. The start of the loan for investment funding was made directly to the account of the seller, while start of the loan
for refinancing was made to the basic account of the Issuing Party.
The Issuing Party was obliged to pay the entirety of the debt by virtue of the loan in equal capital installments, paid on the
st
last day of each month, starting from March 31 , 2008. The level of the installments was dependent on the level of loan
use.
the loan and it will be changed on a monthly basis, starting from the first date of the first start of the loan. The Bank will
caluclate and collect the interest rates in monthly settlement periods.
The credit mentioned in this point was replaced with a current credit, granted on the basis of contract on a current loan,
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signed with ING Bank Śląski S.A. on August 29 , 2008, with Annexes 1 – 3 and on the basis of Restructurisation Contract
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dated September 18 , 2009, with Annex No 1. This contract is described in p.6 below.
6.
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Contract on a current loan with ING Bank Śląski S.A. dated August 29 , 2008, with Annexes N 1 – 3 and the
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Restructrisation Contract dated September 18 , 2009, with Annex N 1.
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On August 29 , 2008, the Issuing Party signed with ING Bank Śląski S.A. in Katowice a contract on a non-renewable current
loan, which was granted to the Issuing Party, in the amount of 11 377 000 PLN.
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The loan was granted from August 29 , 2008, until the payment date, which was December 11 , 2009. According to the
loan contract, the loan was designed for:
 Payment of a current loan granted to the Receiving Party by the Bank on the basis of Contract No
8932007001000649/00 dated 24.08.2007, with later changes,
 Payment of an investment loan granted to the Receiving Party by the Bank on the basis of Contract No
8932007001000712/00 dated 13.09.2007 r.
the loan and it will be changed on a monthly basis, starting from the first date of the first start of the loan. Equal capital
installments of 323 000 PLN were paid monthly – at the end of each month.
The bank caluclated and collected interests on the amount of used loan, in monthly settlement periods. The interests were
collected as down payments, on the first working day after the end of each settlement period.
The Issuing Party granted the Bank with a written statement of submission to execution, independently from creation of
the aforementioned loan payment protection.
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The loan was fully paid on December 11 , 2009.
7.
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Contract on a revolving current loan, signed with BZ WBK S.A. on September 30 , 2008, with Annexes N 1 – 6.
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On the basis of contract dated September 30 , 2008, with Annexes (1-3), Bank Zachodni WBK S.A. in Wrocław granted the
dependent company of the Issuing Party – E.F. PROGRESS V Sp. z o.o., a current loan with a value of up to 7 000 000 PLN.
The Bank granted the said loan for funding of VAT tax related to the construction of Twierdza Kłodzko Gallery.
The used amount of load was subjected to a variable WIBOR rate for one month interbank deposits in PLN, increased by the
margin of the Bank, equal to 3,50 percent points.
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The loan was fully paid on November 30 , 2009.
8.
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Contract on a current loan with PKO BP S.A. signed on December 2 , 2008, with Annexes N 1 – 4.
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On the basis of the contract, the bank granted the Issuing Party with a loan for real estate purchase, with the value of 2 700
000 PLN.
The loan was granted for the period from 2.12.2008 to 31.10.2009. Its reference rate was WIBOR-S, which is defined as an
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arithmetic average of WIBOR 1M quotations calculated by PKO BP S.A. from the qutations from the 25 day of the previous
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month to the 24 day of the current month, with a two-digit accuracy, which was effective as a reference rate from the first
day of the next month. The margin of the bank was equal to 2,35 percent point. The interest rates were paid monthly, at
the end of each months.
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The loan was fully paid on November 2 , 2009.
22.3. Insurance policies
Below, insurance contracts are presented, where the Issuing Party is a party of the contract.
Table: Insurance contracts, where the Issuing Party and its dependent companies are a party of the contract.
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N Insuring Party name
Insurance range
Insurance subject
Insurance period
Insurance value
1. Towarzystwo
Ubezpieczeń Allianz
Polska S.A.
and
Sopockie Towarzystwo
Ubezpieczeń ERGO
HESTIA S.A
Insurance of assets
10 Buildings and
constructions of
Galeria Piastów I,
Galeria Piastów II,
apartments, Galeria
Piastów III,
Until
7.11 2010
223 000 000 PLN
10 Fixed assets
5 000 000 PLN
10 Low value assets
1 000 000 PLN
10 Window glass,
breaking
150 000 PLN
10 Cash
50 000 PLN
10 Machines, from
electric damage
2. Towarzystwo
Insurance of machines from damage
Ventillation systems,
moving stairs, lifts, air
conditioning
Insurance of electronic equipment on the basis
of all risks
Portable electronic
devices
Polska S.A.
1 000 000 PLN
Until 7.11.2010
4 000 000 PLN
and
Ubezpieczeń ERGO
HESTIA S.A
3. Towarzystwo
Polska S.A.
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Until 23.04.2010 r.
40 895 PLN
4. Powszechny Zakład
Ubezpieczeń S.A.
Insurance of assets from fire and other elements
5. Sopockie Towarzystwo Insurance of assets from Ubezpieczeń ERGO
fire and other random
HESTIA S.A.
evets
Ubezpieczeń S.A.
Buildings and
constructions
(“Kamienica”)
until 25.06.2010 r.
7 000 000 PLN
Building (“Browar”)
until 23.04.2010 r.
1 000 000 PLN
Until 9.08.2010 r.
7 800 000 PLN
10 000 euro
Insurance of assets from 10 Buildings and
fire and other random
constructions
events
(„Fortepiany”)
Ubezpieczeń S.A.
Insurance, services of
accounting books
management
until 7.03.2010 r.
Ubezpieczeń S.A.
CR insurance related to
the activity-real estate
management
Until 12.08.2010 r.
9. Towarzystwo
Polska S.A.
(guarantee amount)
(guarantee amount)
Insurance of assets of 10 buildings and
the Partnership
constructions
until 31.03.2010 r.
E.F. Progress V
Sp. z o.o.
50 000 PLN
76 500 000 PLN
3 500 000 PLN
10 fixed assets
and
250 000 PLN
10 low value assets
Ubezpieczeń Ergo
Hestia S.A.
10 window glass,
breaking
100 000 PLN
10 machines, from
electric damage
250 000 PLN
(„Galeria Twierdza”)
10. Towarzystwo
Polska S.A.
Civil responsibility of the Partnership
Insurance by virtue of
business activity
until 31.03.2010 r.
Insurance by virtue of
business activity or
assets use
until 19.11.2010
10 000 PLN
(guarantee amount)
E.F. Progress V
Sp. z o.o.
and
Ubezpieczeń Ergo
Hestia S.A.
11. Towarzystwo
Polska S.A.
Civil responsibility of the
by virtue of business
activity or assets use
Rank Progress S.A.
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10 000 000 PLN
(guarantee amount)
and
E.F. Progress I
Sp. z o.o.
Ubezpieczeń Ergo
Hestia S.A.
E.F. Progress II
Sp. z o.o.
E.F. Progress III
Sp. z o.o.
E.F. Progress IV
Sp. z o.o.
E.F. Progress V
Sp. z o.o.
E.F. Progress VI
Sp. z o.o.
E.F. Progress VII
Sp. z o.o.
Rank Prosper Skarżysko
Kamienna Sp. z o.o.
Hit Zarząd Majątkiem
Legnica 1 Sp. z o.o.
Rank Müller Sp. z o.o.
Insurance policies, listed in p. 1 and 9 of the above table are subjects of cessation to the proper banks, in relation to
protections created by the Issuing Party by virtue of loans granted by these banks.
All vehicles owned by the Issuing Party are duly insured from the civil responsibility related to travels of these vehicles,
according to the rules and in the scope defined by law.
22.4. Other contracts
1.
Contract with the President of the City of Legnica.
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On August 23 , 2007, the Issuing Party („Investor”) signed a contract with the President of the Citz of Legnica („Manager”),
on the basis of art. 16 p. 2 of the Act on public roads, in order to define detailed conditions of construction and
reconstruction of roads related to the construction of a commercial-service object in Legnica, e.g. on the parcels included in
the MR LE1L/00033937/3 oraz LE1L/00055738/8.
On the basis of the aforementioned contract, the Issuing Party obliged to e.g. implementation and covering expenses of
construction and reconstruction of the streets present in the vinicity of the aforementioned real estate, i.e. to a
construction of a part of a road from ul. Spółdzielcza to ul. Zamiejska, to a construction of a missing part of the road, from
the designed road SAG013, to the back side of CH AUCHAN, and to implement a project of traffic lights at the junction of
the Nowodworska and Spółdzielcza street. Once the aforementioned duties are executed, the Issuing Party obliged to
return all performed works for free.
The Manager obliged to, e.g. permit the Investor to use the real estates necessary to perform the aforementioned works
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and construction works, and to dispose on the behalf of the Investor the parcel N 271/1, for the improvement of
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management conditions of real estates owned by the Investor, and the parcel N 272/4 in exchange for a part of parcel N
270, which is owned by the Investor and which is occupied with a rain collector. Once the investment is finished, the
Manager obliged to overtake the communication layout implemented by the Investor.
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The Issuing Party performed the works covered by the aforementioned contract, and on November 6 , 2009, it obtained
the permission to use the said investment.
2.
Obligation to the City of Kalisz.
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On the basis of statement dated September 11 , 2007, the Issuing Party obliged to construct an underground parking lot
for at least 250 parking places for cars and to prepare a public square on the ground of the parcel, in a form and using rules
specified in a separate agreement (Investment), while the aforementioned parking lot will be constructed on a real estate
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located in Kalisz, Plac Nowy Rynek, owned by the City of Kalisz. The condition of implementation of the Investment is a
transfer of the said real estate to the Investor for its use for construction works. Once the construction of the parking lot is
completed, the Issuing Party transfers it back to the City of Kalisz for free, and in exchange, it will be open to the customers
of the Galeria „Tęcza” Commercial Centre, which is being constructed by the Issuing Party.
3.
Agreement between the President of the City of Jastrzębie Zdrój and the Issuing Party, Stanisław Bielaszka and
Władysława Bielaszka.
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On September 14 , 2007, President of the City of Jastrzębie Zdrój has reached an agreement with the Issuing Party and
with Stanisław Bielaszka and Władysława Bielaszka, on the basis of art. 16 p. 2 of the Act on public roads, which defined the
detailed conditions of construction of a road connecting the Podhalańska, Małopolska and Cieszyńska street, with a
reconstruction of the roundabout at the junction of the Podhalańska and Cieszyńska streets, along with technical
infrastructure („Investment”). The said reconstruction is related to the investments planned by the Issuing Party and by
Stanisław Bielaszka and Władysława Bielaszka, which are constructions of commercial-service centres in Jastrzębie Zdrój.
Additionally, the aforementioned entities have defined in a separate agreement the mutual methods of settlements of
expenses on the investments.
On the basis of the contract, the Issuing Party, together with Stanisław Bielaszka and Władysława Bielaszka obliged to
execute, e.g., the following works within the scope of the Investment: designing a construction project and an executive
documentation necessary for the implementation of the investment, the decision on permission for counstruction works
and execution of the Investment at their own cost. After the said works are finished, the Issuing Party and Stanisław
Bielaszka and Władysława Bielaszka obliged to transfer the implemented Investment the manager of the road and to cover
the expenses spent by the manager of the road for purchase or expropriation of real estates for the construction of the
designed road. Additionally, the Issuing Party and Stanisław Bielaszka and Władysława Bielaszka declared readiness to cover
the maintenance costs and costs of current maintenance and repairs of the designed road in the period of at least 10 years,
starting from the date of overtake of the designed road by the road manager.
In the said agreement, the road manager obliged, e.g., to apply to a proper organ and to obtain a final and legally effective
decision on the definition of road location, and also to prepare a release-receive protocol at the end of the investment.
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Additionally, the Issuing Party signed an agreement with Carrefour Polska Sp. z o.o. on May 18 , 2009, on the basis of which
Carrefour Polska Sp. z o.o. overtook the rights and duties of the Issuing Party from the said contract, including the duty of
sharing with Władysław Bielaszka the maintenance costs of the aforementioned road within 10 years from its reception by
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the City of Jastrzębia Góra. Additionally, works covered by the aforementioned contract have been done, and on August 6 ,
2009, a permission to use the said investment was given.
4.
Issue of Bonds to bearer Series A.
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On the basis of the Resolution of the Board made on December 7 , 2009, and of the resolution of the Supervisory Board
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made on December 3 , 2009, the Issuing Party issued 24 760 of normal bonds to bearer Series A, with a nominal price and
an issue price of a 1000 PLN each, with the total nominal value of 24 760 000 PLN.
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The bonds have been obtained by 15 entities, and their allocation was made on December 9 , 2009.
The bonds have been issued as Secured bonds. The protection of the bonds has a form of bail mortgages (up to the level of
120% of the value of issued Bonds) on:
 Perpetual use of a ground real estate located in Katowice, Bogudzice – Zawodzie, at ul. Olimpijska, covering parcels
74/22, 74/24, 74/29, 74/30, 74/40, 92/11 and 74/43 with a total area of 0,8410 ha, designated with a morgtgage
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register N KA1K/00039722/1, managed by XI Mortgage Registers Department of the District Court Katowice-Wschód
in Katowice, which is owned by the Treasure of the State, with the perpetual user until 5.12.2089 being Rank Progress
S.A. located in Legnica. Currently, the real estate has a total normal mortgage of 30 mln PLN and a total stipulated bail
mortgage of up to 1,5 mln PLN, registered on the behalf of Bank Zachodni WBK S.A.,
 Perpetual use of a real estate housed with industrial buildings, located in Legnica, at ul. Senatorski, covering parcels
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594/5, 594/6, 594/7 and 594/8 with a total area of 10.797 sq.m., designated with a mortgage register N
LE1L/00047392/1, managed by the VI Mortgage Registers Department of the District Court in Legnica, which is owned
by the Treasure of the State, with the perpetual user until 5.12.2089 being Rank Progress S.A. located in Legnica.
Currently, the real estate has a total stipulated bail mortgage of up to 17.065.500 PLN, registered on the behalf of ING
Bank Śląski S.A.,
 Perpetual use of housed real estate located in Legnica at ul. Witelona, covering the parcel No 361 with the area of
0,8601 ha, designated with a mortgage register LE1L/00043909/1, managed by the VI Mortgage Registers Department
of the District Court in Legnica, which is owned by the Treasure of the State, with the perpetual user until 5.12.2089
being Rank Progress S.A. located in Legnica. Currently, the real estate has a stipulated bail mortgage of up to 8 642 500
PLN, registered on the behalf of ING Bank Śląski S.A.,
 Perpetual use of real estate housed with a service building located in Legnica at ul. Złotoryjska, coverin the parcels N o
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338/1 and 338/2 with a total area of 1076 sq.m., designated with a mortgage register N LE1L/00046156/8, managed
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by the VI Mortgage Registers Department of the District Court in Legnica, which is owned by the Municipality of
Legnica, with the perpetual user until 13.01.2097 being Rank Progress S.A. located in Legnica. Currently, the real estate
has a total stipulated bail mortgage of up to 17 065 500 PLN, registered on the behalf of ING Bank Śląski S.A.
The interest rate of the Bonds will be calculated on the basis of constant interest rate of 12% starting from the allocation
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date. The interests will be paid on: March 9 , 2010, June 9 , 2010, September 9 , 2010 and on the purchase date, or in the
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case of an earlier purchase. The purchase of bonds will be made by the Partnership on December 9 , 2010, where the
purchase will take place at the nominal value of purchased Bonds.
Each of the Bondholders can submit a written declaration to the Issuing Party, that the Bonds immediately become due and
payable, and the Issuing Party is obliged to an instataneous purchase of the Bonds, in case one of the following events take
place:
 The Issuing Party delays the payment of interest from the Bonds for at least 7 days,
 In a case of a loss or a free disposal of balance assets of the Issuing Party with a significant value, with that loss or a
free disposal of assets with a significant value can have a significant, negative effect on the financial situation of the
Issuing Party and its ability to execute or to fulfill the duty of interest payment or of purchase of Bonds, according to
this resolution. By the term „assets with significant value” one has to understand assets, which form at least 10% of
value of the total assets of the Issuing Party. The loss of assets as understood by this resolution does not take place, if
this loss is compensated by benefits from the insurace, in total or in part which would cause the own capital of the
Issuing Party to be diminished by no more than 30% of their value, according to the last published financial report,
 In a case of paid disposal of assets with a significant value as understood accroding to point a), if the total own assets
of the Issuing Party at the end of the year are reduced by more than 20% as a result of such paid disposal,
 In a case, when (i) execution or fulfillment of the Bonds purchase duty by the Issuing Party, according to this Resolution
or of other significant obligations resulting from this Resolution, will contradict the law, or (ii) the validity of the Bonds
will be questioned by the Issuing Party,
 The Issuing Party becomes bankrupt or if a agreement or bankruptcy proceeding is started, or if it will hold on
payments of undisputed obligations to financial informations by virtue of bank loans, loans, guarantees or warranties
or other obligations of similar nature, with their value exceeding 1 000 000 PLN, for a period longer than 21 working
days,
 The Issuing Party delays payment of undisputed obligations with a value equal to or exceeding 15% of own capital of
the issuing Party, according to the last published financial report by more than 30 days, against the Bondholders or
other entities entitled by virtue of debt instruments, and by virtue of securities of a similar nature, issued in Poland or
outside its borders, with the exception of debt securities forming a protection of contracts signed by the Issuing Party
or which form a protection of its commercial obligations,
 If the Issuing Party creates a Debt after issuing a Bond Purchase Offer to the Investors. The Debt mentioned in the
previous sentence, is the total amount of obligation to be paid, resulting from bank loan contracts and loan contracts
(however, with exception of unused parts of loan limits resulting from loan constracts signed before issuing the Bond
Purchase Offer to the Investors), bonds and debt securities, and securities of similar nature (exlcuding debt securities
forming a protection of contracts signed by the Issuing Party or forming a protection of its commercial obligations),
warranties granted to financial institutions, minus the value of monetary and debt securities issued by the Treasure of
the State, National Bank of Poland in an amount causing the total amount of Debt related to the own capital of the
Issuing Party to exceed 3 in a consolidated financial report of the Capital Group of the Issuing Party.
22.5. Contracts signed between the shareholders of the Issuing Party
The Partnership does not know about any contracts signed between its shareholders.
22.6. Contracts, where the shareholders or bound entities are a party, in a case, when they are
significant for the Issuing Party or its business activity
The Partnership does not know about any contracts, where the shareholders and bound entities are a party, and which are
significant for the Issuing Party or its business activity.
23. Information of third parties and declarations of experts and declarations on any
engagement
With the exception of information obtained from the following sources:
 „Marketbeat Polska – Autumn 2009” – a report prepared by Cushman & Wakefield Polska Sp. z o.o.,
 „Commercial market 2009” – a report prepared by Knight Frank Sp. z o.o.,
 „Forecast of office real estate market development in Poland: Back to the future?” – a report prepared by the Institute
of Studies on the Market Economy,
 „Commercial centres in medium-sized cities of Poland” – a report prepated by DTZ Polska Sp. z o.o.,
in the Issue Prospectus no information of third parties or declarations of experts are published.
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During the preparation of the Prospectus, the aforementioned information were used and they have been precisely quoted.
To the best of the knowledge of the Issuing Party or in the best of his judgements, no important facts were omitted, which
could cause the quoted information to become imprecise or which would cause confusion.
24. Documents made available for browsing
In the vaildity period of the Issue Prospectus, the following documents, or their copies, are made available for browsing in
the office of the Issuing Party:
 The Issue Prospectus,
 The Status of the Issuing Party,
 Rules of the General Assembly, the Supervisory Board and the Board,
 Estimated operates defining the market value of the real estates, the summary of which is included in an Appendix to
the Prospectus,
 Historical financial information of the Capital Group of the Issuing Party and of the Issuing Party and its dependent
companies for the tax years 2006-2008,
 Mid-year financial information for the period from January 1st to June 30th, 2009 of the Issuing Party and its dependent
companies.
Additionally, the Prospectus will be made available in an electronic form on the website of the Issuing Party
(www.rankprogress.pl) and on the website of the Offering Party (www.idmsa.pl).
25. Information on shares of other companies
Below, in the table, shares of other companies owned by the Issuing Party are presented.
Table: Shares of other companies owned by the Issuing Party.
N
Entity name
Location
% of shares owned by
the Partnership
% of votes at the
General Assembly of
Partners
1
HIT Zarząd Majątkiem Polska Legnica 1 Sp. z
o.o.
Legnica
100%
100%
2
Zamość
100%
100%
3
Legnica
100%
100%
4
Legnica
100%
100%
5
Legnica
100%
100%
6
Legnica
100%
100%
7
Legnica
100%
100%
8
Legnica
100%
100%
9
Legnica
100%
100%
10
Legnica
100%
100%
Nicosia,
Cyprus
100%
100%
Jelenia Góra
54%
50%
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11
12
Rank Müller Jelenia Góra Sp. z o.o.*
*) The Rank Müller Jelenia Góra Sp. z o.o. is an entity related to the dependent company of the Issuing Party „E.F. Progress II” Sp. z o.o., which owns 54% of shares and 50% of votes at the Assembly of Partners.
1.
„HIT Zarząd Majątkiem Polska Legnica 1 Sp. z o.o.” limited partnership
The Company was founded by an authenticated deed dated 25.04.1995, and the legal predecessor of the Issuing Party
purchased it on the basis of shares purchase contract dated 21.09.2004.
The Company runs its business activity as a company named „HIT Zarząd Majątkiem Polska Legnica 1”, limited liability
company located in Legnica. The company capital of the partnership totals 24 475 000 PLN. The Issuing Party is the only
shareholder of the partnership.
Real estate rents on its own account form the subject of the business activity of the partnership.
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The partnership has not paid dividend in the last tax year.
2.
Spółka „KMM” Sp. z o.o. in liquidation.
The Partnership was founded by an authenticated deed dated 15.07.1995, and the legal predecessor of the Issuing Party
purchased it on the basis of shares purchase contract dated 13.12.2004.
The Partnership runs its business activity as a company named „KMM” Spółka z ograniczoną odpowiedzialnością (limited
liability company) located in Zamość. The company capital of the partnership totals 57 000 PLN. The Issuing Party is the only
shareholder of the partnership.
The main subject of the partnership’s activity is construction, real estate management as well as retail and wholesale trade.
The partnership has not paid dividend in the last tax year.
nd
On September 2 , 2009, a resolution on the liquidation of the company was made. An appropriate notification was
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published in the CaEM on October 13 , 2008 (N 200, 3049), the basis of this decision of the Shareholders Assembly was
lack of perspectives for further business activity of the company, let alone its development. In addition, the Shareholders
Assembly was convinced that further existence of the partnership is not necessary because it has reached the goals
predicted by the shareholders. Jan Mroczka was designed as the liquidator of the company. Currently, the Liquidator
performs actions required to liquidate the company and to finally erase it from the register.
3.
„E.F. Progress I” Sp. z o.o. Partnership
The legal predecessor of the Issuing Party created a limited liability partnership by an authenticated deed dated November
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st
13 , 2006, created in Legnica. On December 1 , 2006, the Register Court of Wrocław-Fabryczna in Wrocław, IX Economic
Department for the National Court Register performed the registration of the partnership. The partnership runs its business
activity as a company named „E.F. Progress I” The company capital of the partnership totals 61 000 PLN. The Issuing Party is
the only shareholder of the partnership.
The main subject of the business activity of the partnership is ground preparation for construction, construction of
complete buildings and constructions, or parts thereof, land and water engineering, implementation of construction
installations, execution of finishing construction works, purchases and sales of real estates on own account, rents of real
assets on own account, other commercial activity, not classified elsewhere.
The Partnership runs a business activity, namely – in the first stage – construction, and in the second stage – managemenr
of „Tęcza” Gallery in Kaliszu. As of the date of Prospectus approval, the partnership was running an activity, e.g. signing
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rental contracts in the aforementioned Commercial Centre. On October 28 , 2009, the partnership signed a contract with
P.B. Cezbed Sp. z o.o. on the general contractor of the investment within the aforementioned Commercial Centre, valued in
total at 67,9 mln PLN, these construction works have begun in December, 2009.
The partnership has not paid dividend as of the date of Prospectus approval.
4.
„E.F. Progress II” Sp. z o.o. Partnership
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activity as a company named „E.F. Progress II” The company capital of the partnership totals 3 102 000 PLN. The Issuing
Party is the only shareholder of the partnership.
This Partnership participates in the „Rank Müller Jelenia Góra” Sp. z o.o., Partnership as the Partner, with the latter
partnership planned to run a business activity in the field of construction and management of a commercial-service object
in Jelenia Góra –Pasaż Grodzki.
5.
Spółka „E.F. Progress III” Sp. z o.o.
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13 , 2006, created in Legnica. On November 23 , 2006, the Register Court of Wrocław-Fabryczna in Wrocław, IX Economic
activity as a company named „E.F. Progress III” The company capital of the partnership totals 2 518 500 PLN. The Issuing
Party is the only shareholder of the partnership.
The Partnership will run an activity, namely – in the first stage – construction, and in the second stage – management of a
Commercial Centre in Zamość. As of the date of Prospectus Approval, the partnership was performing a business activity of
constructing the said site (the construction will start at the break of May and June 2010 and it is planned to end by February
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2011) and of signing rental contracts for the said site. On April 26 , 2010 the company has signed a contract on general
contractory works with ERBUD S.A. within the said site, with the total value of 47,0 mln PLN net.
6.
„E.F. Progress IV” Sp. z o.o. Partnership
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13 , 2006, created in Legnica. On November 24 , 2006, the Register Court of Wrocław-Fabryczna in Wrocław, IX Economic
activity as a company named „E.F. Progress IV” The company capital of the partnership totals 90 200 PLN. The Issuing Party
is the only shareholder of the partnership.
The Partnership was planned to perform a business activity, which was the construction of a Commercial Centre in Stargard
Szczeciński, and in order to do this, it purchased a number of real estates. However, the Partnership did not obtain funds
for implementation of the investment, thus the Board of the Issuing Party withdrew from the implementation. It resulted in
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lodging in a bankruptcy application with a possibility of announcing an agreement, on August 14 , 2009. wniosku o
ogłoszenie upadłości z możliwością ogłoszenia układu. A proceeding in this case is underway in the District Court in Legnica.
7.
„E.F. Progress V” Sp. z o.o. Partnership
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Department for the National Court Register performed the registration of the partnership.
The partnership runs its business activity as a company named „E.F. Progress V” The company capital of the partnership
totals 8 069 750 PLN. The Issuing Party is the only shareholder of the partnership.
In the period of 2008-2009, the partnership ran its business activity, related to the construction of „Twierdza” Commercial
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Centre in Kłodzko and to commercialisation of this object. The Centre was opened on April 4 , 2009, and since then the
partnership runs a business, namely, manages and supervises the Commercial Centre.
8.
„E.F. Progress VI” Sp. z o.o. Partnership
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The legal predecessor of the Issuing Party created a limited liability partnership by an authenticated deed dated July 14 ,
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2008, created in Legnica. On September 18 , 2008, the Register Court of Wrocław-Fabryczna in Wrocław, IX Economic
activity as a company named „E.F. Progress VI” The company capital of the partnership totals 61 000 PLN. The Issuing Party
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The Partnership will run its business activity, namely, in the first stage – the construction, and in the second stage –
management of a commercial-service object „Galeria Świdnicka” in Świdnica. As of the date of Prospectus approval, the
partnership was runinng its business activity, which was signing rental contracts in the aforementioned Commercial Centre.
9.
„E.F. Progress VII” Sp. z o.o. Partnership
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The legal predecessor of the Issuing Party created a limited liability partnership by an authenticated deed dated July 14 ,
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2008, created in Legnica. On September 5 , 2008, the Register Court of Wrocław-Fabryczna in Wrocław, IX Economic
activity as a company named „E.F. Progress VII” The company capital of the partnership totals 53 000 PLN. The Issuing Party
The Partnership runs business activity, namely, in the first stage – the construction, and in the second stage – management
of Twierdza II Commercial Park in Kłodzko. As of the date of Prospectus approval, the partnership runs an activity, which is
construction of the aforementioned object and signing rental contracts in the aforementioned object. Additionally, on June
th
29 , 2009 the partnership has signed a contract with ERBUD S.A. on the general contractor of the investment within the
aforementioned Commercial Park, with the total value of 16,0 mln PLN.
10. Foundation of Rank Prosper Skarżysko Kamienna Sp. z o.o. partnership
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On the basis of an authenticated deed dated May 15 , 2008, created in Legnica, The Issuing Party founded a limited liability
partnership. On 18.09.2008, the Register Court of Wrocław-Fabryczna in Wrocław, IX Economic Department for the
National Court Register performed the registration of the partnership.
The partnership runs its business activity as a company named „Rank Prosper Skarżysko Kamienna” Spółka z organiczną
odpowiedzialnością (limited liability company). The company capital of the partnership totals 50 500 PLN. The Issuing Party
Until the date of Prospectus approval, the Partnership has run an activity with intention to buy real estates in Skarżysko
Kamienna, which will form the base for future construction of a commercial centre.
Until the date of Prospectus approval, the Partnership did not perform its business acitivity and it has not paid dividend.
11. Foundation of Colin Holdings Limited partnership.
st
On March 31 , 2009, according to art. 113 of the Cyprus act Partnership Law, a Colin Holdings Limited Partnership was
created. The Partnership was registered in the company register maintained by the Minister of Trade, Industry and Tourism
(Partnership Registration Department).
The Partnership runs its business activity as a company named „Colin Holdings Limited” located in Nicosia, and its Company
capital totals 1 000 Euro. The Issuing Party is the only shareholders of the partnership.
The main subject of the partnership’s activity is trade activity, advisory activity (in Cyprus and abroad), economic advisory
services, financial activity, investment activity, managerial activity (also related to foreign entities), activity within the field
of representation of other entities, cooperation with other entities, support of other entities within the group, purchasing
Page 225
shares and participations in other companies, overtakes of other companies, accepting contributions in the form of fixed
and volatile assets in exchange for shares, assets division, disposal of company assets, accepting payment in the form of
shares, allocation of shares and securities and salaries for purchased assets and services, creating branch offices,
foundation and ownership of other partnerships, activity through agents, performing the duties of a secretary, an agent,
and others, transportation services, transportation means trade, toruism activity, construction activity, management of
fixed assets, granting guarantees and warranties, purchases and sales of securities, issuing and negotiations of payment
instruments, allocation of monetary assets, issues of securities, charity support, benefits for the managerial staff, patent
reception and similar, covering costs of company marketing and foundation, covering initial and other expenses, and the
partnership is entitled to runing any additional activity leading to implementation of one or all of the aforementioned goals.
As of the date of Prospectus approval, the Partnership did not perform its business acitivity and it has not paid dividend.
12. „Rank Müller Jelenia Góra” Sp. z o.o. Partnership
rd
On the basis of an authenticated deed dated July 3 , 2007, created in Legnica, „E.F. Progress II” Sp. z o.o. has signed a
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limited liability contract with a third person. On Octobe 17 , 2007, the Register Court of Wrocław-Fabryczna in Wrocław, IX
Economic Department for the National Court Register performed the registration of the partnership.
The Partnership runs this business activity as a company named „Rank Müller Jelenia Góra” Sp. z ograniczoną
odpowiedzialnością (limited liability partnership), located in Jelenia Góra. Company capital of the partnership equals
7.702,8 PLN. The company capital was obtained in 54% by „E.F. Progress II” Sp. z o.o., and in 46% by the third person.
The Partnership runs a business activity, namely, in the first stage – construction, and in the second stage – management of
the commercial object „Pasaż Grodzki” in Jelenia Góra. As of the date of Prospectus approval, the partnership runs its
activity, namely, construction of the aforementioned object (the construction was started in July 2009 and it is supposed to
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have ended by October, 2010) and signing rental contracts in the aforementioned object. On June 29 , 2009, the
partnership has signed a contract with ERBUD S.A. on the general contractor within the aforementioned object, with the
total net value of 32,0 mln PLN.
Page 226
IV. QUOTATION DOCUMENT
1. Responsible people
Personal data of people responsible for the informations included in the Prospectus and their proper statements have been
included in p. 1. Part III of the Prospectus „Registration Document”.
2. Risk factors, which are significant for securities offered or accepted for
circulation
The description of risk factors, which are significant for the offered shares and for the needs of evaluation of market risk
related to these shares, has been included in p. 3 Part II of the Prospectus „Risk Factors”.
3. Basic information
3.1.
Current capital declaration
The Board of the Partnership declares that in its opinion, the Capital Group of the Issuing Party has adequate monetary
flows as of the date of Prospectus approval, which guarantee the level of current capital, understood as the ability to obtain
access to monetary assets or other liquid assets in order to pay own obligations within deadlines, adequate to cover own
needs within the period of 12 months from the date of approval of the Issue Prospectus. The Issuing Party does not know of
any problems with the current capital, which can take place in the future.
3.2.
Declaration on capitalisation and debt
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Financial data, presenting the value of own capital and debt have been defined as of November 30 , 2009, on the basis of
data from the last consolidated balance of the Capital Group of the Issuing Party.
Table: Information about the capitalisation and the debt of the Issuing Party (tys. PLN).
Details
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February 28 , 2009
Total short-term debt
147 822
- guaranteed
0
- secured
97 763
a) bank loans
70 073
b) leasing
769
- not guaranteed/not secured
50 059
Total long-term debts (excluding the current part of the long-term debt)
- guaranteed
252 810
0
- secured
252 568
a) bank loans
252 210
b) leasing
358
- not guaranteed/not secured
242
Own capital
218 101
- company capital
3 250
- reserve capital
40 913
- profit (loss) from previous years
163 346
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- net profit (loss)
10 592
TOTAL
A. Monetary assets
2 265
B. Equivalents of monetary assets
0
C. Securities
0
D. Viability (A+B+C)
2 265
E. Current financial active debts
0
F. Short-term debts in banks
54 115
G. Current part of the long-term debt
15 958
H. Other short-term financial debt
27 690
I. Short-term financial debt (F+G+H)
97 763
J. Total short-term financial debt (I-E-D)
95 498
K. Long-term bank loans and loans
252 210
L. Issued bonds
0
M. Other long-term financial debt
358
N. Net long-term financial debt (K+L+M)
252 568
O. Net financial debt (J+N)
348 066
Below, additional informations updating the numercial data presented above, in the field of significant changes:
1. The Group of the Issuing Party has conditional obligations, including bills and declarations of submission to execution
as protections of loan and leasing contracts:
 Obligation to the City of Kalisz, on the basis of a declaration dated September 11th, 2007, related to the
construction of an underground parking lot for 250 parking places on a real estate located in Kalisz, Plac Nowy
Rynek. The condition of execution of the obligation is transfer of the mentioned real estate to the Issuing Party,
for use for the construction. Once the construction of the parking lot is completed, the Issuing Party will transfer it
to the City of Kalisz for free, and in exchange, it will be free to use for the customers of „Tęcza” Commercial
Centre, which is being constructed by the Issuing Party,
 Obligation to the City of Zamość on the basis of a contract signed on February 17th, 2010 to construct and modify
the road system adjacent to the planned Commercial Centre in Zamość located at the ul.
Kilińskiego/Przemysłowa.
 A bill forming a protection of a current leasing contract for a scissor jack Dingli JCPT contract No WP5/00007/2009
granted by BZ WBK Finance & Leasing S.A., with the payment remaining by this virtue, equal to 27 741,19 PLN,
 A bill forming a protection of a current leasing contract for a sound system Samson L-3200 contract No
WP5/00008/2009 granted by BZ WBK Finance & Leasing S.A., with the payment remaining by this virtue, equal to
53 556,51 PLN,
 A bill forming a protection of a current leasing contract for a LED display Virtual Pixel PH12 contract No
128 652,25 PLN,
 A bill forming a protection of a current leasing contract for a lighting system ADJ AccuSpot 250 contract No
23 380,24 PLN,
 Own blank bills, forming a protection of a current leasing contract for a Bentley Continental GT car contract No
ZP5/00010/2008 granted by BZ WBK Leasing S.A., with the payment remaining by this virtue, equal to 293 942,93
PLN ,
 A bill forming a protection of a current leasing contract for a Mercedes CL 63 AMG car contract No
ZP2/00007/2008 granted by BZ WBK Leasing S.A., with the payment remaining by this virtue, equal to 214 67,30
PLN,
 Own blank bill forming a protection of a current leasing contract for a track digger Caterpillar 330 CLN contract No
32 293,61 PLN,
 Own blank bills forming a protection of a current leasing contract for a Niftylift Nifty 170 hydraulic jack, contract
o
N ZP5/00016/2007 granted by BZ WBK Leasing S.A., with the payment remaining by this virtue, equal to 33
048,02 PLN,
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
o
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According to an authenticated deed N 16661/2008 dated December 8 , 2008, obliged to construct a cinema on
the parcel number 3/2 in Kłodzko, with a minimum number of 500 seats, which will also include a conferenceexhibition hall. The Issuing Party obliged to construct the cinema and to obtain a permission for its use no later
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than June 30 , 2013. If the aforementioned deadline is exceeded, the Issuing Party is obliged to pay the Urban
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Municipality of Kłodzko a sitpulated penalty of 5 000 000 PLN by September 30 , 2013.
 Own blank bill forming a protection of potential claims of Focus Park Piła Sp. z o.o. relation to the order contract
nd
signed on December 2 , 2009, together with the contract for transfer of rights and duties. This bill was issued on
rd
December 23 , 2009 and it can be filled up to the maximum value of 17 297 523,85 PLN.
 Own blank bill forming a protection of loan contract signed by the dependent company Rank Müller Jelenia Góra
th
Sp. z o.o. with PKO BP S.A. on February 24 , 2010.
The Issuing Party has an indirect debtm in the form of:

Warranty of a bill of 825 000 PLN issued by Adam Morgaś (Buyer) as a protection of contract signed with Cezary
Wielgus (Seller) on the sale of 30% of shares in the GLOBAL-In Bogdan Rzążewski i Wspólnicy Spółka Jawna company,
located in Lublin,

Warranty of a bill of 530 000 PLN issued by Adam Morgaś (Buyer) as a protection of contract signed with Cezary
Wielgus (Seller) on the sale of 30% of shares in the GLOBAL-In Bogdan Rzążewski i Wspólnicy Spółka Jawna company,
located in Lublin.
As of the date of Prospectus approval, by virtue of the aforementioned contracts, the remaining payment of Adam Mogaś
to the Sellers totalled 400 000 PLN.
The following assets form the protection of the secured obligations:
1. The real estate of Galeria Piastów (parcels 243, 836/1, 812, 813, 789/1) located in Legnica at ul. NM Panny 9, forms a
o
protection o an investment loan N K000043, granted in the amount of 20 000 000 EUR by BZ WBK S.A., investment
o
o
loan N K0005583 granted in the amount of 27 067 994,19 EUR by BZ WBK S.A. and a revolving current loan N
K0005582 granted in the amount of 7 000 000 PLN by BZ WBK S.A.
2. The real estate of Galeria Piastów (parcels 837 and 296/1) located in Legnica at ul. NM Panny 9, NM Panny 20A and ul.
Św. Piotra 11 forms a protection of an investment loan K0005583 granted in the amount of 98 530 000 PLN by BZ WBK
o
S.A. and a revolving current loan N K0005582 granted in the amount of 7 000 000 PLN by BZ WBK S.A.
3. Cessation of active debts from the entirety of rental contracts of the area in Galeria Piastów I located in Legnica at ul.
o
NM Panny 9, forms one of the protections of the investment loan N K0000432, granted in the amount of 20 000 000
EUR by BZ WBK S.A.
4. Cessation of active debts from the entirety of rental contracts of the area in Galeria II located in Legnica at ul. NM
o
Panny 9 and NM Panny 20A forms one of the protections of the investment loan N K0005583 granted in the amount
of 98 530 000 PLN by BZ WBK S.A.
5. Financial pledge on a separated account with a blockade of assets to the amount of 700 000 PLN forms one of the
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protections of the investment loan N K0000432 granted in the amount of 20 000 000 EUR by BZ WBK S.A.
6. The Issuing Party made an application on making a mortgage register entry on the real estates located in Zgorzelec
o
(parcels N 630, 631, 632 and 516) by the virtue of protection of the investment loan K00005583 granted in the
amount of 98 530 000 PLN by BZ WBK S.A. This protection has not been yet registered by the Court as of the date of
Prospectus approval.
7. Ground real estate located in Wrocław at ul. Białowieska (parcels 3/4, 3/5, 3/7 i 3/15) forms one of the protections of
o
the investment loan N K0004564 in the amount of 30 000 000 PLN granted by BZ WBK S.A.
8. Housed real estate located in Katowice at ul. Olimpijska (parcels 74/22, 74/24, 74/29, 74/30, 74/40, 92/11, 74/43)
o
forms one of the protections of the investment loan N K0004564 in the amount of 30 000 000 PLN granted by BZ WBK
S.A. and is a subject of protection of rights from the Series A Bonds of the Issuing Party with a total nominal value of
th
24 760 000 PLN, obtained by the Bondholders on December 9 , 2009.
9. Kaucja w wysokości 600 tys. PLN stanowi jedno z zabezpieczeń kredytu inwestycyjnego nr K0004564 w kwocie 30 000
tys. PLN udzielonego przez BZ WBK S.A.
10. Housed real estate located in Legnica at ul. Senatorska 21 (parcels 594/5, 594/6, 594/7, 594/8) is a subject of
protection of rights from the Bonds of the Issuing Party Series A with a total nominal value of 24 760 000 PLN obtained
th
by the bondholders on December 9 , 2009.
11. Housed real estate located in Legnica at ul. Witelona 6 (parcel 361) is a subject of protection of rights from the Bonds
of the Issuing Party Series A with a total nominal value of 24 760 000 PLN obtained by the bondholders on December
th
9 , 2009.
12. Housed real estate located in Legnica at ul. Złotoryjska 63 (parcels 338/1 and 338/2) is a subject of protection of rights
from the Bonds of the Issuing Party Series A with a total nominal value of 24 760 000 PLN obtained by the bondholders
th
on December 9 , 2009.
13. Housed real estate located in Kłodzko at ul. Noworudzka 2 (parcels 6/2, 6/3, 6/4, 6/5, 6/6, 5/2, 5/3, 5/4 and 3/3) forms
o
a protection of the investment loan N K0006245 granted in the amount of 68 932 000 PLN by Bank Zachodni WBK S.A.
14. Unhoused real estate located in Opole – Gosławice, at ul. Sieradzka (parcels 158 - 164, 132/13 and 166/3) forms a
protection of return of pre-payments granted by Carrefour Polska in the amount of 4 600 000 PLN.
15. Unhoused real estate located in Opole – Turawa, Zawada area (parcels 253/3, 566/3 and 569/3) forms a protection off
the active debt by virtue of potential claims for payment of salary due to Erbud S.A.
16. Unhoused real estate located in Grudziądz at ul. Konarskiego (parcels 3/1, 3/3, 4/1 and 3/101) forms a protection of
obligations of E.F. Progress I Sp. z o.o. against PSS Społem w Kaliszu.
Page 229
17. Unhoused real estate located in Legnica at al. Piłsudskiego/ul. Jaskółcza (parcel 157) forms a protection of potential
obligations against PSS Społem w Kaliszu, related to the sale of a non-apartment premise.
18. Unhoused real estate located in Legnica at Al. Piłsudskiego/ul. Jaskółcza (parcel 154) forms a protection of obligations
of E.F. Progress I against PSS Społem w Kaliszu, and related to the sale of a non-apartment premise.
19. Housed real estate located in Kalisz at ul. 3-Maja, Nowy Rynek (parcel 26/2) forms a protection of obligations of E.F.
Progress I against PSS Społem w Kaliszu, related to remaining sale price.
20. Unhoused real estate located in Brzed at ul. Trzech Kotwic 11C forms a protection of obligations of E.F. Progress I
against PSS Społem w Kaliszu, related to remaining sale price.
21. Leasinged, assets, which are listed in the balance of the Issuing Party, but which are a property of the leasing granting
party until the time of leasing payment:
 Hydraulic jack Niftylift Nifty 170,
 Track digger Caterpillar 330 CLN,
 Volkswagen Jetta vehicles, 11 cars,
 Mercedes CL 63 vehicle,
 Bentley Continental GT vehicle,
 Mercedes-Benz CLS 320 vehicle,
 Scissor jack Dingli JCPT,
22. Additionally, the Issuing Party has submitted to proper courts applications for making entries in mortgage registers for
the real estates located in points 10, 11 and 12 as a protection of rights from Series A Bonds of the Issuing Party with a
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total nominal value of 24 760 000 PLN, obtained by Bondholders on December 9 , 2009. This protection has not yet
been registered by the courts as of the date of Prospectus approval.
3.3.
Interests of persons and legal entities engaged in the issue or in the offer
As of the date of Prospectus approval, the entities engaged in the Public offer of Shares of the Issuing Party are – with the
exception of the Issuing Party, which is interested in the success of issue of Series C Shares– all its current shareholders,
especially shareholders owning large packages of shares of the Issuing Party, i.e. Andrzej Bartnicki, Jan Mroczka and MB
Progress Capital Limited, who are interested in the increase of value of shares owned by them.
An entity engaged in the Public Offer, is also the Offering Party – Brokerage House IDMSA, because its salary depends on
the success of the Public Offer. The Offering Party indirectly owns shares of the Issuing Party, through the IDEA Y FIZ
Aktywów Niepublicznych fund located in Warsaw, represented by IDEA TFI Spółka Akcyjna – a dependent entity of the
Offering Party, which entitle to use less than 5% of votes at the GA. Because of the above, the Offering Party is interested in
obtaining the highest possible price of Series C Shares and to obtain the highest possible number of shares obtained by the
Investors through the Public Offer.
An entity engaged in the Public Offer is also the Financial Advisor– PROFESCAPITAL Sp. z o.o., because its salary depends on
the success of the Public Offer. The Financial Advisor does not own shares of the Issuing Party.
Paweł Puterko, a member of the Supervisory Board of the Issuing Party, is also a Board Chairman and a shareholder of
PROFESCAPITAL Sp. z o.o. acting as a financial advisor to the Issuing Party, however, the Issuing Party thinks that Paweł
Puterko does not perform any private activities or other duties, which would result in conflict with the interest of the
Issuing Party
None, even a potential, conflict of interest exists between the entities metioned above, i.e. in relation to the Issuing Party,
the Offering Party and the Financial Advisor, which could appear in relation to the preparation and execution of the Series C
Shares Public Offer.
3.4.
Goals of the Public Offer and the description of use of the monetary income
The main goal of the Public Offer is to obtain assets, which will allow the Issuing Party to implement the assumed strategy
and to develop its current activity. The Issuing Party plans to use net income from the issue of New Shares on:

Increasing capital in its intended companies, which will use thus obtained assets to fund its own contribution to the
investment projects managed by the Capital Group,

Supplementing of own contribution to the Galeria Piastów investment in Legnica,

Payment of current loan taken in BZ WBK S.A.
The Issuing Party intends a maximum period of use of obtained assets equal to 9 months from the date of their income to
the Partnership. The Board of the Partnership predicts to obtain a net amount of up to 51 mln PLN from the issue of Series
C Shares, with the assumption that all Offered Shares are obtained by the Investors, at their maximum price
The Issuing Party plans to assign the income from the issue to the following goals:
Table: The goals of Series C Shares issue.
Page 230
o
N
Partnership managing the
investment
Investment expenses and loan payments
Amount
(in tys. PLN)
Investment expenses
1
"Galeria Tęcza" commercial gallery in Kalisz
23 000
2
„Twierdza Zamojska” commercial centre in Zamość
14 000
3
"Pasaż Grodzki" commercial gallery in Jelenia Góra
4
5
6
"Twierdza II" commercial park in Kłodzko
„Galeria Świdnicka” commercial gallery in Świdnica
"Galeria Piastów" commercial gallery in Legnica
Rank Müller Jelenia Góra
Sp. z o.o.
Rank Progress S.A.
Total
2 000
4 000
6 000
2 000
51 000
The projects have been ordered according to the priority of their implementation.
o
Informations on financial and technical parameters of the aforementioned projects with N s 1 to 5, along with information
on total expenses on particular investments can be found in p. 6.1.1.5 Part III of the Prospectus „Registration Document”.
o
Informations related to the investment N 6 i.e. „Galeria Piastów” in Legnica have been presented in p. 5.1.7 and 8.1 Part III
of the Prospectus „Registration Document”. Informations related to the current loan on VAT granted by BZ WBK are
presented in p. 22.1.5 Part III of the Prospectus „Registration Document”
The value of planned investment expenses of the Issuing Party in the period of 2010-2012 will total 500,1 mln PLN, with the
entire amount related to investments in commercial objects.
Assets for funding the investment projects planned for the period of 2010-2012, described in p.5.2.2., 5.2.3 and 8.1.3 Part III
of the Prospectus „Registration Document” will come from:

Issue of New Shares – 49 mln PLN;

Monetary income from current and investment activity – 52,9 mln PLN;

Bank loans – 398,2 mln PLN.
The Issuing Party assumes, that the participation of debt funding in the funding of planned development projects will reach
about 70%.
The investment goals indicated above and investment expenses related to them will be implemented independently. The
Issuing Party plans the implementation of these goals in the period of 2010-2012. In the opinion of the Issuing Party, assets
obtained from the issue of New Shares, supplemented with debt funding and own assets from operational and investment
activity will be adequate to implement the goals of the issue.
If the final amount of assets obtained in the issue of New Shares will be lower than assumed by the Issuing Board, the
amount of expenses on implementation of the issue goals will be supplemented from other sources (own assets of the
Issuing Party, bank loans or leasing), and if these assets are still not enough, the implementation time of the investment
project will be extended.
As of the date of Prospectus approval, the Issuing Party does not predict a change of the issue’s goa ls. However, if it
turns out that the implementation of planned investments is impossible or ineffective, the Board of the Issuing Party
does not exclude assets transfers between the aforementioned goals of issue of series C shares, or implementation of
other investments. Potential changes related to transfers of the assets will be made by the Board of the Issuing Party as
a resolution and passed on to the general public in current reports, immediately after such a resolution is made. In a
case when a resolution on assets transfer had been made before the rights to series C shares are introduced to the stock
exchange circulation, a proper information will be announced to the general publis, also by publication of an annex to
the Prospectus, approved by the KNF. The Annex will be made available to the general public in the same way as the
Prospectus was published.
4. Informations on securities offered or approved for circulation
4.1.
Type and group of the Offered Shares and approved for circulation
On the basis of this Prospectus, the Issuing Party plans to apply for approval for circulation on the regulated market of the
GPW in Warsaw:
 16.250.960 normal shares to bearer, Series B with a nominal value of 0,10 PLN (ten groszy) each,
 no more than 4.643.130 normal shares to bearer, Series C with a nominal value of 0,10 PLN (ten groszy) each,
 no more than 4.643.130 rights to Series C Shares (PDA).
Page 231
On the basis of this Prospectus, 4.643.130 normal shares to bearer, Series C is offered, with a nominal value of 0,10 PLN
(ten groszy) each, offered by the Partnership within the public offer, with exclusion of subscription rights for current
shareholders.
The shares are participation securities, incorporating the rights of a shareholder of a stock partnership. The rights to Series
C Shares (PDA) are securities through the powers of art. 3 p. 1 ch. a) of the Act on Financial Instruments Circulation. PDA
will be allocated to subscribers of Series C Shares, which have been allocated Series C Shares, and they wil be registered on
a secrities account of their owners. After the registration of the increase of company capital of the Issuing Party through the
issue of Series C Shares by the court takes place, PDA owners will obtain Series C Shares in a number equal to the number of
PDA registered on their securities accounts.
4.2.
Legal regulations which formed the basis for creation of offered securities or securities
approved for circulation
According to art. 431 § 1 related to art. 430 c.c.c. an increase of the company capital requires a resolution of the General
Assembly to be made. Such resolution, through the powers of art. 415 c.c.c., must be made by the majority of three fourths
of votes made in order to be valid. The resolution on the increase of company capital cannot be subitted to the register
court after more than six months from the date it was made, and in the case of new issue shares being a subject of a public
offer included in an issue prospectus or an information memorandum, on the basis of regulations of public offers and of the
conditions of introduction of financial instruments to an organised circulation system – after twelve months from the date,
respectively, of Prospectus approval or an information memorandum or from the date the identity of information
contained in the information memorandum with information required from an issue prospectus and no later than one
month from the date of shares assignment, whereas the application for Prospectus or informative memorandum approval
or the application for a confirmation of identity of infromation contained in the information memorandum with the
information required from an issue prospectus cannot be submitted later than four months since the date the resolution on
the increase of the company capital was made (art. 431 § 4 c.c.c.).
4.3.
Indication, if the securities offered or approved for circulation are registered securities,
securities to bearer or if they have a dematerialised form
Series B Shares approved for circulation are normal shares to bearer, which currently have a form of a document. The
documents of these shares will be placed in the deposit of the brokerage house before the contract with NDS is signed.
Once the contract with NDS is signed, the series B shares will be dematerialised, and the register of securities will be
managed by the National Deposit of Securities S.A. located in Warsaw, at ul. Książęca 4.
Offered Series C Shares are normal shares to bearer. Rights to the Series C Shares are securities, the result of which is the
right to obtain Series C Shares, which do not have the form of document, created at the moment of share allocation and
evoked at the moment, when the shares are registered in the securities deposit, or on the day, when the decision of the
register court refusing the entry of an increase of the company capital to be made in the business entities register of the
National Court Register, comes into effect..
Series C Shares and Rights to Series C Shares will not have a form of a document. The register of securities will be managed
by the National Securities Deposit S.A., locaed in Warsaw, at ul. Książęca 4.
4.4.
Currency of the issued securities
Polish zloty (PLN) is the currency of the issued securities.
4.5.
Rights, including all limitations of these rights, related to the securities and procedures of
execution of these rights
Rights related to the Shares are defined by the Commercial Companies Code, the Status, the Act on Financial Instruments
Circulation, Act on Public Offer and Public Partnerships and by other legal regulations. In order to obtain more detailed
information, one has to use the advice of people and entities approved to tax advisory services, financial advisory services
and legal advisory services.
Assets-related rights, related to the shares of the Partnership
1.
Right to dividend – participation in the profit of the Partnership listed in the financial report, studied by an expert
auditor, designed by the General Assembly to be paid to the shareholders (art. 347 CCC). The profit is divided
proportionally to the number of shares. The Status does not predict any priviledges related to this law, which
means, that each of the shares has assigned the same dividend. The shareholders, who were the holders of shares
on the date of resolution on profit division, are entitled to the dividend. An Ordinary General Assembly of a public
partnership defines the dividend day and the payment date. The dividend day may be defined on the day the
resolution is made or within next three months, starting from this day (art. 348 CCC). When deciding the date of the
dividend day, the General Assembly should take into account regulations of the National Deposit of Securities and
of the Stock Exchange. The Issuing Party is obliged to inform the National Deposit of Securities about the amount of
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dividend allocated to each share, together with the date of the dividend day and the payment date, sending
immediately, but no later than 10 days before the dividend day, a resolution of a proper organ of the Partnership,
competent in this issues. The payment date can be set no earlier than on the tenth day after the dividend day. The
National Deposit of Securities passes these information to all direct participants. Direct participants define the
number of securities granting them the right to dividend, present on the accounts managed by them and send to
the National Deposit of Securities the information about:

The amount of monetary assets, which should be transferred to the participant as a result of dividend
payment,

Total amount of input income tax on legal entities, which should be collected by the issuing party from
dividends paid through a participator,

The number of securities accounts managed for people, who are tax-payers of tax on legal entities.
2.
3.
4.
5.
6.
7.
On the payment day, the issuing party is obliged to leave assets assigned to the execution of the right to dividend at
the disposal of the National Deposit of Securities. As a result of the resolution of assigning profit for division, the
shareholders are granted a claim for dividend payment. This claim becomes due on the day indicated in the
resolution of the General Assembly is a subject to limitation according to general rules. Legal regulations do not
define the time, when the right to dividend ceases to exist. In the case of tax-payers which do not have an office or
the board located on the territory of the Republic of Poland, which are a subject to the income from dividend, the
rates resulting from agreements signed by the Republic of Poland in order to prevent a double taxation, or which
provide exemption from the tax, according to these agreements are applied, only after a so called residence
certification is presented, issued by the proper tax administration. The residence certificate has to prove if the given
entitiy is included in the scope of agreement on avoiding double tax, i.e. it is entitled to use lower, preferential tax
rates or to be exempted from tax. In the case, when doubts exist, the tax-payer will deduct the tax in amount
predicted by the act. If a non-resident proves, that the decisions of the international agreement predicting a
reduction of the national tax rate (including a total exemption) apply to him/her, he/she will be entitled to claim an
overpayment statement and to return of tax, which was not due, directly from the tax office. The amount assigned
for division between shareholders cannot exceed the profit for the last tax year, increased by undivided profits from
the previous years and by amounts transferred from reserve capitals created from the profits, which can be
assigned to the dividend payment. Uncovered losses, own shares and costs, which according to the Status or to the
act should be spent from the profit for the last tax year on reserve capitals (art. 348 § 1 CCC), should be deducted
from this amount. The law, which is effective in Poland, does not introduce other regulations regarding the dividend
rate or the methods of its calculations, frequency and cumulative or a non-cumulative nature of payments. No right
other than the right of participation in the profits of the Issuing Party is related to the shares of Issuing Party, in
particular, the Status of the Issuing Party does not predict an award of participation in the profits of the Partnership
by issuing nominal foundation certificates, in order to pay for services made during the formation of the
Partnership, or by issuing use certificates in exchange for redeemed shares.
Right of subscription - Priviledged rights of subscription for new shares related to the number of owned shares.
According to the conditions specified in art. 433 CCC, the shareholders can be stripped of the right of subscription,
partially or totally, in the interest of the Partnership, through the powers of a resolution of the General Assembly.
This resolution is made by a majority of at least four fifths of votes. The rule, that 4/5 of the votes is necessary, is
not applied, if the resolution on increase of company capital states, that the new shares are about to be obtained in
their entirety by a financial institution (a subissuing party), with the obligation of offering them later to the
shareholders in order to let them execute the right of subscription on the conditions specified in the resolution, or if
the resolution states that the new shares are to be obtained by the subissuing party, if the shareholders holding the
right of subscription, do not obtain a part of all of shares offered them. The stripping of the shareholders of the
right of subscription can take place in a case, when it has been announced in the order of meeting of the General
Assembly.
Right of participation in the assets of the Partnership after satisfaction or security of the creditors is obtained in the
case of its liquidation. According to art. 474 § 2 CCC, the assets remaining after the satisfaction or security of the
creditors is obtained, is divided by the shareholders, proportionally to payments for the company capital, made by
each of them. The Status of the Issuing Party does not predict any priviledges in this field.
Right of disposal of owned shares. The status of the Issuing Party does not provide any limitations in this field.
Right of duty on the owned shares using a pledge or a usage. In the period, when shares of the public partnership,
which have a pledge or a usage created, are registered on securities accounts in a brokerage house or in a bank
managing securities accounts, the shareholder is entitled to the right of vote from these shares (art. 340 § 3 CCC).
Shares of the Partnership can be redeemed. The shares can be redeemed by lowering the company capital, by
shares purchase (with permission of the shareholder) by the Partnership.
Right of changing registered shares to shares to bearer. The change of registered shares to shares to bearer can be
done by request of the shareholder (art.334 CCC related to § 3.2.5 of the Status of the Partnership). The change of
registered shares to shares to bearer causes loss of the priviledges.
Corporate rights related to the shares of the Partnership:
The following corporate rights are related to the shares of the Partnership:
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1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
Right of participation in the General Assembly (art. 412 CCC) and voting rights during the General Assembly (art. 411
§ 1 CCC), with the right of participation in the General Assembly of the public partnership is held only be people,
who are shareholders of the Partnership, sixteen days before the date of the General Assembly (date of registration
1
of participation in the General Assembly) (art. 406 CCC), which requested a nominal certificate of the right of
participation in the General Assembly to the entity, which manages the securities account (art. 406 3 CCC). Each
share entitles to one vote during the General Assembly (art. 411 CCC).
Right of submission of an application for the call for an Extraordinary General Assembly and of submission of
application for including particular issues in the order of meeting of this Extraordinary General Assembly, granted to
the shareholders owning at least one twentieth of the company capital of the Partnership (art. 400 § 1 CCC).
Right of submission, within 21 days before the set date of the General Assembly, an application for including
particular issues in the order of meeting of this General Assembly, granted to the shareholders owning at least one
twentieth of the company capital of the Partnership (art. 401 § 1 CCC).
Right of submission of resolution projects to the Partnership, in a written form or using telecommunication means,
related to the issues included in the order of meeting of the General Assembly, or issues, which are to be included
in the order of meeting, granted to the shareholders owning at lease one twentieth of the company capital of the
Partnership (art. 401 § 4 CCC).
Right of submission of resolution projects during the General Assembly, related to the issues included in the order
of the meeting.
Right of charging the resolutions of the General Assembly, according to the rules specified in art. 422-427 CCC.
Right of demand of election of the Supervisory Board in separated groups according to 385 § 3 CCC by an
application of the shareholders representing at least one fifth of the company capital, the election of the
Supervisory Board should be performed by the next General Assembly, by voting in separate groups.
Right of demand of study of a particular issue related to the foundation of the public partnership or to the
management of its affairs by an expert (auditor for special cases), to be paid by the Issuing Party; a resolution on
this issue is made by the General Assembly, due to an application of a shareholder or shareholders owning at least
5% of the total number of votes during the General Assembly (art. 84 and 85 of the Acnt on Public Offer). In order to
perform this, the Shareholders can demand an Extraordinary General Assembly to be called for, or demand to
include the issue of this resolution in the order of meeting of the next General Assembly. If the General Assembly
does not make a resolution according to the contents of the applications, or if it makes such a resolution with a
violation of art. 84 p. 4 of the act, the applying shareholders can claim for assgning a specified entity as an auditor
for special cases to the Register Court, within 14 days from the date of the resolution.
Right of obtaining information about the Partnership in the scope and in the way defined by legal regulations,
especially by art. 428 CCC, during the meeting of the General Assembly, the Board is obliged to reveal information
related to the Partnership to a shareholder demanding such information, if it is justified for the evaluation of the
issue included in the order of meeting. A Shareholder, which was refused the demanded information during the
meeting of the General Assembly, and who raised an objection to the protocol, can submit an application to a
Register Court for obliging the Board to reveal said information (art. 429 CCC).
Right to a registered deposit certificate, issued by the entity managing the securities account, according to the
regulations on the circulation of financial instruments, to which shareholders of public partnership, owning
dematerialised shares are entitiled, with the right of this shareholder to a registered certificate of the voting right in
a general assembly of a public partnership (art. 328 § 6 CCC).
Right of demand of issuing extracts of the report of the Board on the activity of the Partnership and of the financial
report with an extract of the report of the Supervisory Board and of the opinion of the expert auditor, no later than
fifteen days before the meeting of the General Assembly (art. 395 § 4 CCC).
Right to browse the list of shareholders entitled to participation in the General Assembly, in the office of the Board,
and to demand a copy of the list for a return of costs of this copy (art. 407 § 1 CCC). The shareholder can also
demand a free copy of the shareholders list, sent via e-mail, giving the address, to which the said list should be sent
(art. 407 § 11 CCC).
Right to demand extracts of applications of the issues included in the order of meeting, a week before the meeting
of the General Assembly (art. 407 § 2 CCC).
Right to submit an application for checking the presence list during the General Assembly by a special committee
elected for this issue, consisting of at least three people. The application can be submitted by the shareholders
owning one tenth of the company capital represented during this General Assembly. The applicants have the right
to select one committee member (art. 410 § 2 CCC).
Right to browse the protocol book and to demand extracts of resolutions, testified by the Board (art. 421 § 2 CCC).
Right to lodge in a charge for reparations of damage done to the Partnership, according to the rules specified in art.
486 and 487 CCC, if the Partnership does not lodge in a charge for reparation of the damage done to it within one
year from the date of revelation of the damaging action.
Right to browse documents and to demand a free access (in the office of the Partnership) of extracts of the
documents mentioned in art. 505 § 1 CCC (in a case of parnterships fusion), in art. 540 § 1 CCC (in a case of
Partnership division) and in art. 561 § 1 CCC (in a case of Partnership transformation).
Right to browse the share book and to demand an extract, for return of the costs of extract preparations (art. 341 §
7 CCC).
Right to demand, that a commercial company, which is a shareholder of the Issuing Party, revealed information
about the fact, if it is dominant or dependent to a specified commercial company or a cooperative being a
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shareholder of the Issuing Party, or if such relation of dominance or dependency ceased to exist. The shareholder
can also demand the number of shares or votes owned by this commercial company (also as a pledger, user or on
the basis of agreements with other parties) to be revealed. The demand of information revelation and the
responses should be placed in a written form (art. 6 § 4 and 6 CCC).
Statements related to share change
According to § 3.2.5 of the Status of the Partnerhip, shares to bearer cannot be changed into registered shares.
4.6.
Basis of issue of offered or approved securities
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o
On November 9 , 2009, the Extraordinary General Assembly made a Resolution N 15/11/2009 on the increase of company
capital of the Partnership by issue of normal shares to bearer, Series C, excluding subscription rights of the current
shareholders and on the change of the Status of the Partnership. The resolution was made after the General Assembly got
acquainted with the Opinion of the Board, in which the Board suggested an implementation of the Issue of Series C Shares
th
with exclusion of the subscription rights, within a public offer, under conditions specified by the act dated July 29 , 2005 on
public offer and on the conditions of introduction of financial instruments to an organised circulation system and on public
partnerships. The Opinion of the Board also included a suggestion of setting the issue price of Series C shares on the basis of
a analysis of demand for shares of a new issue, performed by the Board of the Partnership and by a financial advisor, i.e.
after presenting an offer of the partnership to the potential investors, they will be able to submit declarations of interest in
purchasing Series C shares, and on the basis of a summary of many such offers, the Board of the Partnership will obtain
information about the market evaluation of Series C shares, and it will defined the issue price on the basis of this
information.
th
On November 9 , 2009, the Extraordinary General Assembly of the Issuing Party made a resolution on the subject of
Offered Shares, with the following content:
o
„Resolution N 15/11/2009
of the Ordinary General Assembly of Rank Progress S.A.
dated 9.11.2009
on the issue of increase of company capital of the Partnership by an issue of normal shares to bearer, Series C with
exclusion of the subscription right
of current shareholders and on the change of the Status of the Partnership
I.
Increase of the company capital
§ 1.
o
The Ordinary General Assembly of Rank Progress Spółka Akcyjna located in Legnica revokes in its entirety the resolution N
o
6/01/2008 on the increase of company capital, dated April 22th, 2008 and the resolution N 7/01/2008 on the approval of
application for approval and introduction Series B and C shares and rights to Series C Sharesto the circulation on a regulated
market and on dematerialisation of Series B and C shares and of rights to Series C shares, dated April 22nd 2008.
§ 2.
Acting through the powers of art. 431 § 1, art. 432 § 1, art. 433 § 2 and art. 310 § 2 in relation to the art. 431 § 7 of the
Commercial Companies Code, the Ordinary General Assembly of Rank Progress Spółka Akcyjna located in Legnica decides to
increase the company capital of the Partnership from the amount of 3.250.192 PLN (in words: three millions two hundred
and fifty thousands ninety two zlotys) to the amount not greater than 3.714.505 PLN (in words: three millions seven
hundred and fourteen thousands five hundred and five zlotys), i.e. by the amount not grater than 464.313 PLN (in words:
four hundred and sixty four thousands three hundred and thirteen zlotys).
§ 3.
The increase of the company capital will take place by issue of no more than 4.643.130 (in words: four millions six hundred
and fourty three thousands one hundred and thirty) new Series C Shares with a nominal value of 0,10 PLN (in words: ten
groszy) each.
§ 4.
Series C Shares will be totaly covered with monetary assets before the registration of the capital increase takes place.
§ 5.
1.
Series C Shares will be normal shares to bearer.
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2.
Series C Shares will not have granted any special priviledges.
§ 6.
Series C Shares will participate in dividend starting from payments from profits, which will be assigned for division for the
tax year ending on the day of December thirty first, the year two thousand and nine (31.12.2009), i.e. from the day of
January the first, the year two thousand and ten (01.01.2009).
§ 7.
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The Issue of Series C shares will be performed in the public offer mode as understood by the act dated July 29 , 2005 on
public offer and conditions of introducing financial instruments to an organised circulation system and on public
partnerships (Dz.U.2005.184.1539 with later changes).
§ 8.
Series C Shares and rights to Series C Shares („PDA”) will be submitted for approval and introduction to circulation on the
regulated market of Stock Exchange in Warsaw S.A. Series C Shares are subject to dematerialisation as understood by
th
regulations of the of the act dated July 29 , 2005, on the circulation of financial instruments.
§ 9.
On the basis of art. 310 § 2 in relation to art. 431 § 7 of the Commercial Companies Code, the Board of the Partnership is
authorised and obliged to submit a statement about the level of increased company capital of the Partnership before the
increase of company capital is submitted for registration – the increase will be made in the range specified in § 1 of this
resolution, in the amount corresponding to the number of shares obtained as a result of public subscription.
II. Right of subscription
§ 10.
1.
On the basis of art. 433 § 2 of the Commercial Company Code, in the interest of the Partnership, the right of
subscription to the Series C Shares is entirely excluded for the current shareholders. The Series C Shares will be
obtained through an open subscription. The Board presented an opinion to the General Assembly of the
Partnership, which justifies the reasons for exclusion of current shareholders from the right of subscription to the
Series C Shares and which indicates a method of determination of the issue price for Series C Shares.
2.
According to the opinion of the Board, the justification of excluding current shareholders from the right of
subscription of Series C Shares lies in the fact, that they will be offered to external investors as an open subscription,
in conditions of public circulation of securities, which is the best method for obtaining financial assets necessary for
the Partnership and which will enable an improvement of the market position of the Partnership, an increase of its
reliability and increase of the dynamics of development.
3.
The issue price of Series C shares will be defined on the basis of analysis of demand for new shares, performed by
the Board of the Partnership and by a financial advisor. Once the offer of the partneship is presented to the
potential investors, they will be able to submit declarations of interest in purchasing Series C shares, and on the
basis of a large number of declarations, the Board of the Partnership will obtain information about the market
evaluation of Series C shares, and on this basis it will define the market price.
4.
An Ordinary General Assembly, after having acquainted with the opinion of the Board, it approves the
aforementioned opinion and accepts its text as a justification of exclusion of right to subscription required bu the
Commercial Companies Code.
III. Board Authorisations
§ 11.
The Ordinary General Assembly authorises the Board of the Partnership to:
1)
2)
3)
Defining the issue price of Series C Share,
Defining the dates of opening and closing of the Series C Shares subscription,
Allocating Series C shares in tranches and defining rules of transfers between tranches,
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4)
5)
6)
7)
8)
Defining methods and conditions of making subscriptions for Series C Shares and of signing contracts with subjects
entitled to accepting such subscriptions, as well as to defining places, where the subscriptions for Series C shares
will be accepted,
Defining other rules of allocation and distribution of Series C Shares,
Allocating Series C Shares,
Signing a contract on investment subissue or service subissue, if the Board deems it appropriate,
Submitting a declaration on the amount of obtained company capital in order to adjust the level of company capital
listed in the Status of the Partnership, according to the contents of art. 310 § 2 and § 4 in relation to art. 431 § 7 of
the Commercial Companies Code.
IV. Change of the Status of the Partnership
§ 12.
Because of the increase of company capital as a result of the issue of Series C Shares, the Status of the Partnership is
changed in such a way, that the § 3.2.1 of the Status of the Partnership is changed, and obtains the following wording:
„3.2.1
The company capital equals no more than 3.714.505 PLN (in words: three millions seven hundred and
fourten thousands five hundred and five zlotys) and it is divided into:
a)
16.250.960 (in words: sixteen millions two hundred and fifty thousands nine hundred and sixty)
registered Series A shares with nominal value of 0,10 PLN (in words: ten groszy) each, with numbers
from 00000001 to 16.250.960,
b)
16.250.960 (in words: sixteen millions two hundred and fifty thousands nine hundred and sixty)
normal shares to bearer, Series B with a nominal value of 0,10 PLN (ten groszy) each, with numbers
from 00000001 to 16.250.960,
c)
no more than 4.643.130 (in words: four millions six hundred and fourty three thousands one hundred
and thirty) normal shares to bearer, Series C, with a nominal value of 0,10 PLN (ten groszy) each, with
numbers from 00000001 to 4.643.130.”
V. Uniform text of the Status of the Partnership
§ 13.
On the basis of art. 430 § 5 of the Commercial Companies Code, the Supervisory Board is authorised to define a uniform
text of the Status of the Partnership, including the change resulting from this Resolution, after the Board has submitted a
statement on the level of obtained company capital of the Partnership.
§ 14.
The resolution becomes effective on the day of registering an entry in the business entity register of the National Court
Register.”
Appendix number 1 to the Resolution 15/11/2009
Of the Ordinary General Assebmly
dated 9.11.2009
Opinion of the Board of Rank Progress Spółka Akcyjna
On the total exclusion of right of subscription
of current shareholders in relation to Series C Shares
and on the definition of issue price of new issue shares
The Board of the Partnership, acting through the powers of art. 433 § 2 of the Commercial Company Code presents below
its opinion on the issue of total exclusion of right of subscription of the Series C shares of the Partnership ("Shares") and on
the issue of defining the issue price of these shares.
By issuing new Series C shares, the Partnership intends to obtain assets necessary for the implementation of planned
investments and for the develpoment of the Partnership within the scope of its business activity. Because of the limited
options of funding by the current shareholders, the decision on exclusion of the right of subscription for Series C Shares for
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these investors is justified and it serves the interests of the Partnership. The exclusion of right of subscription will enable to
obtain new investors and an accumulation of capital in the Partnership as well as strengthening its position against the
competition. Acquisition of new investors by the Partnership will allow to increase its reliability and to increase the
dynamics of the development.
The exclusion of right of subscription to Series C Shares does not exclude these shares to be obtained by current
shareholders, thus one has to assume that the exclusion of the right of subscription does not work against the interests of
current shareholders as it serves the interest of the Partnership.
Becaus of the above, the Board of the Partnership recommends their shareholders voting for the total exclusion of right of
subscription to Series C Shares, to which the current shareholders of the Partnership are entitled.
The issue price of Series C shares will be determined on the basis of analysis of demand for new shares, performed by the
Board of the Partnership and by a financial advisor. Once the offer of the partneship is presented to the potential investors,
they will be able to submit declarations of interest in purchasing Series C shares, and on the basis of a large number of
declarations, the Board of the Partnership will obtain information about the market evaluation of Series C shares, and on
this basis it will define the market price.
th
o
Additionally, on November 9 , 2009, the Ordinary General Assembly of the Issuing Party made the Resolution N
16/11/2009 regarding the approval of application for approval and introduction of Series B and C shares and rights to Series
C Shares to circulation on the regulated market and on the dematerialisation of Series B and C shares and of rights to Series
C shares, with the following content:
o
„Resolution N 16/11/2009
of the Ordinary General Assembly of Rank Progress S.A.
date 9.11.2009
on the expression of approval for application for approval and introduction
to circulation in the conditions of public securities market
on the Stock Exchange in Warsaw S.A. of Series B and C shares
and on dematerialisation of Series B and C shares.
th
Acting on the basis of art. 12 af the Act dated July 29 , 2005 on public offer and on conditions of introduction of financial
o
instruments to an organised circulation system and on public partnerships (Dz.U. N 184 pos. 1539 with changes) in relation
th
o
to art. 5 p. 1 – 5 of the Act dated July 29 , 2005, on the circulation of financial instruments (Dz.U. N 183 pos. 1538 with
changes), the Extraordinary General Assembly of the Issuing Party decides as follows:
§ 1.
Approval for introduction
1.
The Extraordinary General Assembly of the Partnership approves the application for approval and introduction of
Series B and C shares and of rights to Series C shares for circulation on the Stock Exchange in Warsaw S.A. on the
th
o
basis of regulations of the act dated July 29 , 2005 on the circulation of financial instruments (Dz. U. N 183, pos.
1538 with changes).
2.
The Ordinary General Assembly of the Partnership approves the implementation of dematerialisation of shares of
th
the Partnership, series B and C, according to the regulations of the Act dated July 29 , 2005 on the circulation of
financial instruments.
3.
In the case of Series B and C shares issue, the Ordinary General Assembly approves submission of this shares to a
deposit managed by the National Deposit of Securities S. A. in Warsaw.
§ 2.
Board Authorisation
1.
2.
The Ordinary General Assembly of the Partnership authorises the Board of the Partnership to undertake all actual
and legal actions, which will lead to approval and introduction of Series B and C Shares of the Partnership and rights
th
to Series C Shares to circulation on the Stock Exchange in Warsaw S.A., according to the act dated July 29 , 2005, on
financial instruments circulation.
The Ordinary General Assembly of the Partnership authorises the Board of the Partnership to undertake all legal and
organisational actions, leading to the dematerialisation of Series B and C shares, especially to signing contracts with
the National Deposit of Securities S.A. in Warsaw on the registration of Series B and C shares and rights to Series C
shares in the deposit.
Page 238
3.
In the case of release of Series B and C shares, the Extraordinary General Assembly of the Partnership authorises the
Board of the Partnership to submit these shares in a deposit managed by the National Deposit of Securities S.A. in
Warsaw.
§ 3.
The Resolution becomes effective on the day it is made.”
4.7.
Predicted date of the new issue
nd
The Issuing Party plans to perform the issue of Series C shares in the 2 quarter of 2010.
4.8.
4.8.1.
Limitations of freedom of securities transfers
Limitations of freedom of securities transfers resulting from the CCC or from the Status of the
Partnership
The Commercial Companies Code and the Status of the Partnership do not predict any limitations regarding the transfers of
any shares within the Partnership. The Partnership also does not know anything about any contracts signed on the basis of
art. 338 § 1 of the Commercial Companies Code, which would create transfer limitations for any shares of the Partnership
or for a part of shares of the Partnership. The Partnership also does not know anything about any contracts signed on the
basis of art. 338 § 2 of the Commercial Companies Code, which would create any pre-emption rights or any other
priviledged rights related to any shares of the Partnership.
4.8.2.
Act on Circulation of Financial Instruments and Acts on Public Offer
Circulation of shares of the Issuinf Party, as they are shares of a public partnership, is a subject to limitations
defined in the Act on Public Offer and in the Act on Circulation of Financial Instruments.
According to art. 19 af the Act on Circulation of Financial Instruments, if the act does not state otherwise:
a. Securities covered by an approved issue prospectus can be a subject of circulation on a regulated market only
after they have been approved for such circulation,
b. Making a public offer or performing circulations of securities or other financial instruments on the regulated
market have to be performed by an intermediate investment agent.
According to art. 159 p. 1 of the Act on Circulation of Financial Instruments, members of the board, supervisory board,
procurators or mandatees of the Issuing Party or Offering Party, their employees, expert auditors or other people remaining
in the order relation or other legal relation of a similar character, cannot purchase or dispose on own account or on the
account of a third party/person, issues of the issuing party, derivative rights to the shares of the issuing party and other
financial instrumentrs related to them and to perform, on own account or on the behalf of a third party/person, other legal
actions which would or could cause management of such financial instruments during the closed period, which is
mentioned in art. 159 p. 2 of the Act on Circulation of Financial Instruments. People mentioned in the previous sentence,
cannot, acting as an organ of a legal entity, undertake actions during this closed period, which are meant to lead to
purchase or disposal by this person, on own account or on the account of a third party/person, shares of the issuing party,
derivative rights related to the shares of the issuing party or other related financial instruments or to undertake actions,
which would or could result in management of such financial instruments by this legal entity, on its own account or on the
account of a third party/person (art. 159 p. 1a of the Act on Circulation of Financial Instruments). The closed period is:
a. The period from the moment a person obtains secret information related to the issuing party or to the financial
instruments, which meet the conditions specified in art. 156 p. 4 of the Act on Circulation of Financial
Instruments, to the moment this information is revealed to the general public,
b. In the case of a yearly report – two months before the release of the report to the general public or the period
between the end of the current year to the release of this report to the general public, if this period is shorter
than the first one mentioned, unless the person did not have access to the financial data, which were used as the
basis for the report,
c. In the case of a half-year report – a month before the report is revealed to the general public or the period from
the end date of the given half of a year to the release of the report to the general public, if this period is shorter
than the first one mentioned, unless the person did not have access to the financial data, which were used as the
basis for the report,
d. In the case of a quarterly report– two weeks before the report is revealed to the general public or the period from
the end date of the given quarter to the release of this report to the general public, if this period is shorter than
the first one mentioned, unless the person did not have access to the financial data, which were used as the basis
for the report.
Regulations of p. 1 and 1a art. 159 p. 1 of the Act on Circulation of Financial Instruments are not applied to the actions
performed:
a. By an entity performing a brokerage activity, whom the person mentioned in art. 156 p. 1 sp. 1 ch. a of the Act on
Circulation of Financial Instruments, ordered management of a financial instruments portfolio in a way, which
excluded an intervetion of this person into investements decisions made on its account, or
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b.
c.
d.
e.
f.
In execution of a contract obliging to a purchase or to a disposal of shares of the issuing party, derivative rights
related to the shares of the issuing party or other financial instruments related to them, signed in a written form,
with a confirmed date before the start of the given closed period, or
As a result of submission by a person mentioned in art. 156 p. 1 sp. 1 ch. a of the Act on Circulation of Financial
Instruments, an entry in response to a call for subscription for sale or exchange of shares, according to the
regulations of the act on public offer, or
In relation to a duty of announcement of a call for subscription for sale or exchange of shares, according to the
regulations of the act on public offer, given by the person mentioned in art. 156 p. 1 sp. 1 ch. a of the Act on
Circulation of Financial Instruments, or
In relation to execution of a right to subscription by a current shareholder of the issuing party, or
In relation to an offer aimed at employees or people being memebers of the statutory organs of the issuing party
under the condition that the information about such an offer was publicly available before the start of the given
closed period.
According to art. 160 p. 1 of the Act on Circulation of Financial Instruments, people who are members of managerial or
supervisory organs of the issuing party, or who are procurators, other people being a part of the managerial staff within the
structure of the issuing party, who have constant access to secret informations directly or indirectly related to this issuing
party and competences in the field of making decisions, which influence its development and the perspectives of its
business activity, are obliged to inform the Financial Supervision Committee about transactions of purchase or sale of
shares of the issuing party, derivative rights related to the shares of the issuing party and other financial instruments
related to these securitioes, approved for circulation on a regulated marked or being a subject of the procedure of approval
for circulation on such a market, made by these people and their relatives, which are mentioned in art. 160 p. 2 of the Act
on Circulation of Financial Instruments, on thwir own account.
According to art. 69 of the Act on Public offer, everyone:
 Who obtained or exceeded 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3 %, 50%, 75% or 90% of the total number of votes in
a public partnership,
 Who had at least 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3 %, 50%, 75% or 90% of the total number of votes in this
partnership and who as a result of lowering its share pool obtained, respectively 5%, 10%, 15%, 20%, 25%, 33%, 33 1/3
%, 50%, 75% or 90% or less, of the total number of votes,
 Who is a subject of a change of currently owned share of more than 10% of the total number of votes, by at least 2% of
the total number of votes in a public partnership, the shares of which are approved for circulation on the market of
official stock exchange quotations, by at least 5% the total number of votes in a public partnership, the shares of which
are approved for circulation on another regulated market, or
 Who is a subject of change of currently owned shares of more than 33% of the total number of votes, by at least 1% of
the total number of votes,
Is obliged to inform the Financial Supervision Committee and the partnership about the fact within 4 working days from the
day he/she got to know about the change of share in the total number of votes, or about which he/she could get to know
while keeping a proper meticulity, and in a case of a change resulting from a purchase of shares of a public partnership in a
transaction made on a regulated market – not later than within 6 session days from the transaction date (session days are
defined by the company managing the regulated market, according to the regulations of the Act on Circulation and which
are announced by the Financial Supervision Committee as a publication on its website).
According to art. 69a p. 1 of the Act on Public Offer, the duty of notification is also related to an entity, which reached or
exceeded a specific threshold of the total number of votes, in relation to: (i) occurence of a legal event other than a legal
action, (ii) purchases or disposals of financial instruments, which result in unconditional right or duty of purchase of already
issued shares of a public partnership, (iii) direct purchase of shares of the public partnership.
The duty of notification also arises in a case, when the voting rights are related to the securities, which form the subject of
the protection. However, this is not the case, when the entity, for which the protection has been created, has the right to
execute the voting right and declares the intention of execution of this right – in this case, the voting rights are treated as
owned by the entity, for which the protection was created (art. 69a p. 3 of the Act on Public Offer).
The notification should contain information about: (i) the date and type of the event which causes the change of share,
related to by the notification, (ii) the number of shares owned before the share change and their percentage in the
company capital of the partnership, as well as about the number of votes from these shares and their percentage in the
total number of votes, (iii) the number of currently owned shares and their percentage in the company capital, as well as on
the number of votes from these shares and their percentage in the total number of votes, (iv) entities dependent on the
shareholder making the notification, and also (v) about third persons, with whom the said entity signed a contract on
transfer of the right of execution of voting right (art. 69 p. 4 of the Act on Public Offer). If the entity obliged to make the
nofitication owns shares of different types, then the notification should include informations mentioned in p. (ii) and (iii),
separately for each share type (art. 69 p. 4a of the Act on Public Offer).
If the notification is submitted in relation to reaching or exceeding 10% of the total number of votes, it should additionally
include information on intention of further increase of participation in the total numer of votes within 12 months from the
date of notification submission and of the goal of this increase. If these intentions change, the Financial Supervision
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Committee and the partnership have to be informed about the change immediately, but not later than within 3 working
days from this change.
A notification made by an entity, which reached or exceeded a specific threshold of the number of votes as a result of
purchase or disposal of financial instruments, from which an unconditional right or duty of purchase already issued shares
results, should contain additional information about: (i) the number of votes and their percentage owned by the owner of
the financial instrument as a result of shares purchase, (ii) day or date, when the purchase of shares is taking place, (iii)
expiration date of the financial instrument.
The notification can be created in English (art. 69 p. 4b of the Act on Public Offer).
The duty of notification does not exist in a case, when after a settlement of several transactions made on a regulated
market on the same day, in the securities deposit, the total change of participation in the total number of votes in the
public partnership at the end of the settlement day does not cause the number of vote to reach, or to exceed, the threshold
of the total number of votes, which causes these duties to arise.
According to art. 72 of the Act on Public Offer, a purchase of shares of a public partnership in a number causing the
participation in the total number of votes to increase by more than 10% of the total number of votes in a period shorter
than 60 days by an entity, which has the particpation in the total number of votes lower than 33%, or by more than 5% of
the total number if votes in a period shorter than 12 months, by an entitiy, which has the participation in the total number
of votes in this partnership of at least 33%, can take place only by an announcement of a call for subscription for sale or
exchange of these shares, in the number not less, than, respectively, 10% or 5% of the total number of votes,
According to art. 73 and 74 of the Act on Public Offer, exceeding:
 33% of the total number of votes in a public partnership can take place only as a result of announcing a call for
subscription for sale or exchange of shares of this partnership, guaranteeing to reach 66% of the total number of votes,
with an exception, when exceeding 33% of the total number of votes will take place as a result of announcing a call,
which is metioned below (art. 73 p. 1 of the Act on Public Offer),
 66% of the total number of votes in a public partnership can take place only as a result of announcing a call for
subscription for a sale or exchange of all remaining shares of this company (art. 74 p. 1 Act on the Public Offer),
where in the case, when these thresholds have been exceeded as a result of an indirect purchase of shares, obtaining new
issue shares, purchase of shares as a result of public offer or if they are brought to the partnership as a non-monetary
contribution, a fusion or a division of a partnership, a change in the Status of the Partnership, expiration of priviledges of
the shares or as a result of a legal event other than a legal action, the shareholder or the entity which has indirectly
purchased the shares is obliged, within 3 months from exceeding the appropriate threshold, or until the announcement of a
call for subscription for sale or exchange of shares of this partnership in a number causing 66% of the total number of votes
to be reached (related to exceeding the threshold of 33%) or all other shares of the partnership (related to exceeding the
threshold of 66%), or until the disposal of shares in a number causing no more than 33% of the total number of votes to be
reached (related to exceeding the threshold of 33%), unless in this period the participation of the shareholder or of the
entitiy, which indirectly purchased the shares, in the total number of votes drops down to, respectively, no more than 33%
or 66% of the total number of votes as a result of the company capital increase, change in the status of the partnership or
of expiration of priviledged of its shares (art. 73 p. 2 and art. 74 p. 2 of the Act on Public Offer). The duty specified in art. 73
p. 2 of the Act on Public Offer and art. 74 p. 2 of the Act on Public Offer, is also applied to the case, when the threshold of,
respectively, 33% or 66% of the total number of votes in a public partnership has been exceeded as a result of inheritance,
which caused the participation in the total number of votes to be further increased, within the three months period starting
on the day of the event causing the increase in the total number of votes (art. 73 p. 3 and art. 74 p. 5 of the Act on Public
Offer).
Duties, which are mentioned in art. 72 of the Act on Public Offer, do not arise as a result of purchases of shares on the
original market, as a part of their introduction to the partnership as a non-monetary contribution or in a case of partnership
fusion or division (art. 75 p. 1 of the Act on Public Offer).
According to art. 75 p. 2 of the Act on Public Offer, duties indicated in art. 72 and 73 of the Act on Public Offer do not arise
in the case of purchasing shares from the Treasury of the State as a result of the first public offer and within 3 years from
the final date of sale of shares from the first public offer by the Treasury of the State. According to art. 75 p. 3 of the Act on
Public Offer, duties mentioned in art. 72-74 of the Act on Public Offer do not arise in the case of shares purchase:
a. of a partnership, whose shares are introduced only to an alternative circulation system, or which are not a subject
of an organised market,
b. from an entity being a part of the same capital group, (in this case, the art. 5 of the Act on Public Offer is not
applied),
c. in the mode specified by the regulations of bankruptcy and reparation law and during an execution proceeding,
d. according to a contract on a creation of a financial protection, signed by authorised entities under conditions
nd
o
specified in the act dated April 2 , 2004, on some financial protections (Dz. U. N 91, pos. 871),
e. dutied with a mortgage in order to satisfy the pledger entitled, on the basis of other acts, to using a satisfaction
mode, namely, overtaking the subject of the mortgage,
Page 241
f.
as a result of inheritance, with the exception of situations mentioned in art. 73 p. 3 and art. 74 p. 5 of the Act on
Public Offer.
According to art. 75 p. 4 of the Act on Public Offer, the subject of circulation cannot be dutied with a mortgage until the
subject expires, with the exception of a case, when purchase of these shares is a result of an execution of a contract on
nd
o
creation of a financial protection, as understood by the act dated April 2 , 2004 on some financial protections (Dz. U. N 91,
o
o
pos. 871 and Dz.U. dated 2005 N 83, pos. 719 and N 183, pos. 1538).
According to art. 76 of the Act on Public Offer, as an exchange of shares being a subject of a call for subscription for
exchange of shares, only the following instruments can be purchased: (i) dematerialised shares of other partnership,
deposit papers and mortgage bonds and (ii) bonds issued by the Treasure of the State.
In the case of a call mentioned in art. 74 of the Act on Public Offer, only dematerialised shares of another partnership or
other dematerialised disposable securities granting the right of vote in the partnership can be purchased in exchange for
shares being a subject of the call for subscription for shares exchange (art. 76 p. 1a of the Act on Public Offer).
In a case when all remaining shares of the partnership are a subject to the call, the call must provide an option of shares
sale through an entity responding to this call, at the price defined according to art. 79 p. 1-3 of the Act on Public Offer.
According to art. 77 p. 1 of the Act on Public Offer, the announcement of the call takes place after a protection with a value
not less than 100% of the value of shares subjected to the call is created, and the creation of protection should be
evidenced with a statement from the bank or from other financial institution granting the protection or mediating in its
granting. The call is announced and implemented through a brokerage entity acting on the territory of Republic pd Poland,
which is obliged to simultaneously inform, not later than 14 working days before the day the subscriptions are started, the
Financial Supervision Committee and a company managing the regulated market, on which the shares are quoted, about
the intention of announcement and appending the contents of the call (art. 77 p. 2 of the Act on Public Offer). Resignment
from this call is unacceptable, unless another entity announced a call for the same shares after its announcement, and a
resignment from a call announced for all remaining shares of that partnership is acceptable only then, when another entity
announced a call for all remaining shares of that partnership at a price, which is not lower than in this call (art. 77 p. 3 of the
Act on Public Offer). After the announcement has been made, the entity obliged to announce the call, and the board of the
partnership the call is related to, reveals an information about this call, together with the call’s content, respectively, to the
representatives of company organisations associating employees of the partnership, and if no such associations exist –
directly to the employees (art. 77 p. 5 of the Act on Public Offer). After the receipt of the announcement, the Financial
Supervision Committee can make a request of making necessary changes or additions in the contents of the call or of
making explanations regarding this content, no later than 3 working days before the subscriptions are started, within the
period specified in the request, but of at least 2 days (art. 78 p. 1 of the Act on Public Offer). The request of the Financial
Supervision Committee delivered to the entity running a brokerage activity, mentioned in art. 77 p. 2 of the Act on Public
Offer is treated as delivered to the entity obliged to announce the call. In the period between the notification of the
Financial Supervision Committee and of the company managing the regulated market, on which the given shares are
quoted, about the intention of announcing a call, and the end of the call, the entity obliged to announce the call and its
dependent entities, as well as entities which are parties of agreement made with it, related to purchases of shares of the
public partnership or to a joint voting during the general assembly of shareholders, related to important matters of the
partnership, can can purchase shares of the partnership, which the call is related to, only within this call and in a way
specified there, cannot dispose of such shares or sign contracts, which could result for them in a duty of disposal of this
shares, during the call, as well as they cannot indirectly purchase shares of the public offer, which the call is related to (art.
77 p. 4 of the Act on Public Offer).
The price of shares proposed in the call mentioned in art. 72-74 of the Act on Public Offer should be defined according to
the rules specfied in art. 79 of the Act of Public Offer:
According to art. 87 of the Act on Public Offer, duties mentioned in p. 4)-10) above, also include:
a.
b.
c.
an entity, which obtained or exceeded a threshold of a total number of votes, defined in the act, due to purchases
or disposals of deposit notes issued in relation to shares of the public partnership,
investment fund – also in a case, when reaching or exceeding of the given threshold of the total number of votes
defined in these regulations is a result of combined shares ownership by:
 other investment funds managed by the same investment fund group,
 other investment funds created outside the territory of the Republic of Poland, managed by the same entity,
an entity, in the case of which, reaching or exceeding of the given threshold of a total number of votes defined in
these regulations is a result of shares ownership by:
 a third person in his/her own name, but per order or on the behalf, of this entity, excluding shares purchased
during execution of actions mentioned in art. 69 p. 2 sp. 2 of the Act on Circulation on Financial Instruments,
 within execution of actions related to management of portfolios, which include one or more financial
instruments, according to the regulations of the Act on Circulation and of the Act on Investment Funds,
related to shares being a part of managed securities portfolios, from which this subject, as a managing party,
can execute the voting right during the general assembly and,
 by a third person, with which the subject has signed a contract, where the subject of the contract is a
transfer of the right of execution of the voting right,
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d.
e.
f.
representative, who is authorised to execute the voting right from shares of a public partnership within the
representation of the shareholder at the general assembly, if this shareholder has not given binding written
instructions related to the voting,
all combined entities, which are bound by a written or verbal agreement related to purchases of shares of a public
partnership by these entities are to a joint voting during a general assembly, or implementing a permanent policy
regarding the company, even if only one of these entities performed, or intended to perform, actions causing
these duties to arise, and
entities, which make an agreement mentioned in p. (e), owning shares of a public partnership in numbers which
guarantees to reach or to exceed the given threshold of the total number of votes, specified in these regulations.
In the cases indicated in p. (e) and (f), the duties can be performed by one of the parties of the agreement, designed by the
parties of the agreement. The existence of the agreement mentioned in p. (e), is assumed in cases of taking actions defined
in this regulation by:
 spouses, their descendants, ascendants, brothers and sisters and siblings in the same line or degree, as well as people
in the relation of adoption, protection and guardianship,
 people of the same household,
 principal or its representative, which is not an investment company, authorised to perform actions of purchases and
sales of securities within the account, and
 bound units, as understood in the act on accounting.
Additionally, the duties indicated above also arise in the case, when voting rights are bound to securities deposited or
registered in the entity, which can dispose of them at its wish. The number of votes which causes the duties listed above to
arise, include:
 on the side of the dominating unit – the number of votes owned by its dependent entities,
 on the side of the representative, who is authorised to execute the voting right according to point (d) above – the
number of shares included in the authorisation, and,
 the number of votes from all shares, even if execution of voting rights from them is limited or excluded by virtue of the
Status, a contract or a legal regulation.
According to art. 90 of the Act on Public Offer, regulations of chapter 4 of the Act on Public Offer related to significant
packages of shares of public partnerships:
a.
b.
c.
d.
are not applied in a case of purchasing shares by an investment company in order to implement tasks defined by
the rules, which are mentioned, respectively, in art. 28 p. 1 and art. 37 p. 1 of the Act on Circulation, tasks related
to an organisation of a regulated market, however, the regulation of art. 69 is not applied to a case of purchases
or disposals of shares by an investment company by virtue of implementation of the aforementioned tasks, which
together with the currently owned shares (designed for this goal) entitle to execution of less than 10% of the total
numer of votes in a public partnership, unless: (i) voting rights resulting from these shares are not executed and
(ii) the investment company, withing 4 working days from the date of the offer on implementation of tasks
related to the organisation of a regulated market signed with the issuing party, notified an organ of its country of
origin (a understood in art. 55a of the Act on Public Offer), proper for the issuing party, about the intention of
implementation of tasks related to the organisation of a regulated market, and (iii) the investment company
provides an identification shares owned for the implementation of tasks related to the organisation of a regulated
market (art. 90 p. 1 of the Act on Public Offer),
are not applied, with the exception of art. 69 and art. 70 of the Act on Public Offer and art. 89 in the scope related
to art. 69 of the Act on Public Offer in the case of purchasing shares in a short sale, which is mentioned in art. 3
p.47 of the Act on Circulation (art. 90 p. 1b of the Act on Public Offer),
are not applied in cases of purchasing shares within the security system of viability of settled transactions,
according to the rules specified by: (i) the National Deposit in rules mentioned in art. 50 of the Act on Circulation,
(ii) the partnership, to which the National Deposit has transferred execution of actions within the scope of tasks
mentioned in art. 48 p. 2 of the Act on Circulation, in the rules mentioned in art. 48 p. 15 of the Act on Circulation,
or (iii) a partnership managing a settlement chamber in rules mentioned in art. 68b p. 2 of the Act on Circulation
(art. 90 p. 1c of the Act on Public Offer),
are not applied to the dominating entity of an investment funds group and to the dominating entity of an
investment company, executing actions mentioned in p. 11 (c) second hyphen above, under the condition, that: (i)
the managing partnership of the investment company execute voting rights vestited them by virtue of managed
portfolios, independently from the dominating entity, (ii) the dominating entity does not directly or indirectly give
any instructions on the way o voting during the general assembly of the public partnership, (iii) the dominating
entity submits a declaration on fulfilling the aforementioned conditions, to the Financial Supervision Committee,
together with the list of dependent associations of investment funds, managing partnerships and investment
companies managing the portfolios with indication of proper supervision organs for these entities, with the
conditions defined in p. (i) i (ii) are taken as fulfilled, if:
 the organisational structure of the dominating entity and of the investment funds group or of the investment
company guarantees independence of execution of voting rights from the shares of the public partnership,
 people deciding on the method of execution of voting rights by the investment funds group or by the
investment company, are acting independently,
Page 243

e.
f.
the dominating entity has signed a contract on management of financial instruments portfolio with an
investment funds group with the investment funds group or with the investment company – independence is
retained in relations between this entity and the investment funds group or the investment company (art. 90
p. 1d and 1e of the Act on Public Offer),
are not applied, with the exception of art. 69 and art. 70 and art. 87 p. 1 sp. 6 and art. 89 p. 1 sp. 1 of the Act on
Public Offer – in the scope related to art. 69 of the Act on Public Offer, also in the cases of agreements on
purchases of shares of a public partnership or on joint voting during the general assembly of shareholders, related
to significant matters of the partnership, made for protection of right of the minor shareholders, in order to
execute together their rights defined in art. 84 and 85 of the Act on Public Offer and in art. 385 § 3, art. 400 § 1,
art. 422, art. 425, art. 429 § 1 CCC (art. 90 p. 2 of the Act on Public Offer),
are not applied, with the exception of art. 69 and art. 70 and art. 89 in the scope related to art. 69 of the Act on
Public Offer in a case, when a mandate for execution of voting rights from the shares of a public partnership is
granted within the representation of a shareholder at the general assembly, if this shareholder did not give
binding instructions regarding the voting, including only a single general assembly. The notification submitted in
relation to granting or receiving such a mandate should include an information regarding changes in the scope of
voting rights after the mandatee loses the ability to execute the voting right (art. 90 p. 3 of the Act on Public
Offer).
According to art. 90a of the Act on Offer, the regultion of art. 74 of the Act on Public Offer is not applied in a case of a public
partnership located in a member state other than the Republic of Poland, the shares of which: (i) are approved for
circulation on the regulated market only on the territory of the Republic of Poland, (ii) have been approved for circulation
on a regulated market on the territory of the Republic of Poland for the first time and are approved for circulation on a
regulated market in another member state which is not a country of origin of this partnership, or (iii) have been
simultaneously approved for circulation on a regulated market on the territory of the Republic of Poland and in other
member state, which is not the country of origin of this parternship – if the partnership has indicated the Financial
Supervision Committee as a supervision organ in the field of purchases of significant packages of its shares. In that case, the
subject which is purchasing shares, is obliged to announce a call for subscription for sale or exchange of all remaining shares
of the partnership, according to legal reguations of the member state, in which the office of the public partnership is
located, where the call performed on the territory of the Republic of Poland is subjected to the regulations on calls (art. 72
to art. 81 of the Act on the Public Offer and proper executive regulations issued on the basis of art. 81 of the Act on the
Public Offed) in the field of subject of benefit offered in the call, price of shares offered in the call and the procedure of
implementation of the call, especially related to the contents of the call and the mode of its announcement.
The Act on Circulation of Financial Instruments regulates the responsibility by virtue of not fulfilling duties, which are
mentioned in p. 2) and 3), in the following way:
a.
b.
The Financial Supervision Committee can place a penalty of up to 200 000 PLN as an administrative decision (art.
174 p.1 of the Act on Circulation of Financial Instruments) on a person mentioned in art. 156 p. 1 sp. 1 ch. a of the
Act on Circulation of Financial Instruments (members of the board, supervisory board, procurators and
mandatees of the issuing party, its employees, expert auditors and other persons remaining in an order relation
with the issuing party or in other legal relation of similar character), which performs actions during the closed
period, which are mentioned in art. 159 p. 1 or 1a of the Act (purchase or disposal of shares of the issuing party,
derivative rights related to the shares of the issuing party of other financial instruments related to them, on own
account or on account of a third person, and peforming, on own account or on account of a third person, other
legal actions which could or would cause disposal of such financial instruments),
The Financial Supervision Committee can place a penalty of up to 100 000 PLN as an administrative decision on a
person (members of the board of the issuing party, procurators and managerial staff members in the structure of
the issuing party, which have a constant access to secret information, as understood by the Act, directly or
indirectly related to this issuing party and who are competent within the field of making decisions influecning the
development and perspectives of the business activity of this issuing party), which has not fulfilled, or fulfilled
inadequately, the duty specified in art. 160 p. 1 of the Act on Circulation of Financial Instruments (the duty of
informing the Committee and the issuing party about transactions of purchases and sales of shares of the issuing
party and other financial instruments related to these securities, approved for circulation on the regulated market
or which are a subject of approval for circulation on such market, by these persons and their close relatives),
unless this person has ordered an authorised entity performing a brokerage activity, to manage its securities
portfolio in a way, which excludes interventions of this person on decisions made on his/her account, or when
he/she could not get to know about the execution of the transactions, if the proper care was taken (art. 175 p. 1
of the Act on Circulation of Financial Instruments).
The Act on Public Offer regulates the responsibility by virtue of not fulfillng the duties mentioned in the p. 4)-10) above, as
follows:
a.
According to art. 88a of the Act on Public Offer, the entity obliged to execute duties defined in art. 73 p. 2 and 3 or
art. 74 p. 2 and 5 of the Act on the Public Offer, cannot directly or indirectly obtain shares of the public
Page 244
b.
partnership, in which it exceeded the threshold of the total number of votes specified in these regulations before
the date the duty is executed,
According to art. 89 of the Act on Public Offer the voting right from:
 Shares of a public partnership, which are a subject of a legal action or another legal event, which causes the
given level of the total number of votes to be reached or exceeded, if this evel was reached or exceeded with
violation of duties specified in, respectively art. 69, art. 72 ust. 1 or art. 73 ust. 1 of the Act on Public Offer,
 All shares of the public partnership, if the level of the total number of votes was exceeded with violation of
duties specified in art. 73 p. 1 or art. 74 p. 1 of the Act on Public Offer, and
 Shares of the public partnership purchased in a call, at a price set with violation of art. 79 of the Act on Public
Offer,
Cannot be executed, and if it was executed against the ban – is it not included in calculation of the result of voting
on a resolution of the general assembly, with restrictions of regulations of other acts,
c.
d.
e.
According to art. 89 p. 2 of the Act on Public Offer, the entity which exceeded the level of the total number of
votes in a case, which is mentioned in, respectively, art. 73 p. 2 or 3 or art. 74 p. 2 or 5 of the Act on Public Offer,
cannot execute its voting rights from all shares of the public partnership, unless it timely fulfills all duties defined
in these regulations. The voting right executed against the ban is not included in calculations of the result of
voting on a resolution of the general assembly, with restrictions of regulations of other acts,
In a case of purchase or obtaining shares of a public parntership with violation of the ban mentioned in art. 77 p. 4
sp. 3 or art. 88a, or against the art. 77 p. 4 sp 1, the entity which purchased or obtained the shares, and its
dependent entities cannot execute its voting rights from these shares. The voting right executed against the ban is
not included in calculations of the result of voting on a resolution of the general assembly, with restrictions of
regulations of other acts,
According to art. 97 of the Act on Public Offer, everyone who:
 Purchases or disposes of securities with violation of ban mentioned in art. 67 of the Act on Public Offer,
 Does not make a timely notification mentioned in art. 69 of the Act on Public Offer, or makes such a
notification with violation of conditions specified in these regulations,
 Exceeds the specified threshold of the total number of votes without fulfilling the conditions mentioned in
art. 72-74 of the Act on Public Offer,
 Does not fulfill conditions mentioned in art. 76 or 77 of the Act on Public Offer,
 Does not announce or does not make a timely call, or does not perform a timely duty of disposal of shares in
cases described in art. 73 p. 2 or 3 of the Act on Public Offer,
 Does not announce a call or does not perform a timely call in cases mentioned in art. 74 p. 2 or 5,
 Does not announce a call or does not perform a timely call in a case mentioned in art. 90a p. 1,
 Against the request mentioned in art. 78 of the Act on Public Offer, in the period specified there, does not
introduce necessary changes or supplements in the contents of the call or does not submit explanations
regarding its contents,
 Does not make a timely payment of the difference in prices of shares, in cases defined in art. 74 p. 3 of the
Act on Public Offer,
 In the call, which is mentioned in art. 72-74 of the Act on Public Offer, proposes a price lower than those
defined on the basis of art. 79 of the Act on Public Offer,
 Directly or indirectly obtains or purchases shares with violation of art. 77 p. 4 sp. 1 or 3 or art. 88a,
 Purchases own shares with violation of mode, deadlines and conditions mentioned in art. 72-74 of the Act on
Public Offer and 79 of tha Act on Public Offer,
 Performs a forced purchase against the rules mentioned in art. 82 of the Act on Public Offer,
 Does not fulfill the request mentioned in art. 83 of the Act on Public Offer,
 Does not make documents available or does not give explanations to the auditor for special cases, against
the duty specified in art. 86 p. 1 of the Act,
 Does not fulfill the duty mentioned in art. 90a p. 3,
 Performs actions mentioned above, acting in the name or on the behalf on a legal entity or an organisational
unit, which does not have a legal identity,
The Financial Supervision Committee can place a penalty of up to 1 000 000 zlotys as a decision, and it can be
placed separately for each of the actions defined above and on each of the entities forming the agreement
related to purchases of shares of a public partnership by these entities, or to a joint voting during the general
assembly of shareholders, related to important matters of the partnership. The Financial Supervision Committee
can set in the aforementioned decision the deadline for the repeated duty execution and for execution of the
actions required by regulations, which formed the basis of the monetary penalty, and if th deadline is exceeded, it
can repeat its decision regarding the penalty.
4.8.3.
Duty of submission of intentions of concentration, resulting from the Act on Protection of
Competition and Customers
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The Act on Protection of Competition and Customers forces on the business entities the duty of notification of the intended
concentrations to the Chairman of the Office of Protection of Competition and Customers. The Act on Protection of
Competition and Customers enforces the duty of notification of the intended concentrations to the Chairman of the Office
of Protection of Competition and Customers on the business entities, if the global turnover of business activities
participating in the concentration exceeds, in the tax year preceeding the submission year, the equivalent of 1 000 000 000
EUR or the global turnover on the territory of the Republic of Poland of the business entities participating in the
concentration exceed, in the tax year preceeding the submission year, exceeds the equivalent of 50 000 000 EUR. In studies
of the value of turnover, the turnover of business entities directly pariticpating in the concentration, as well as of other
business entities belonging to capital groups of particular business entities participating inthe concentration (art. 16 of the
Act on Protection of Competition and Customers).
The notification duty is related, e.g. to takeover intentions – e.g. by purchases or obtaining shares – direct or indircet
control over the entirety, or a part, of one or more business entities, by one or more business entities. Accordint to art. 15
of the Act on Protection of Competition and Customers, execution of a concentration by a dependent entity is treated as its
execution by the dominating business entity.
The intention of concetration is not subjected to submission:
1.
If the turnover of the business entity:
 Which is about to be taken over,
 The shares or participations of which will be obtained or purchased,
Did not exceed on the territory of the Republic of Poland the equivalent of 10 000 000 EUR in any of two tax years
preceeding the submission.
2.
Which is a temporal purchase of obtaining shares by a financial institution in order to sell them bank, if the subject of
business activity of this institution is investment in shares of other business entities on its own account or on other
account, if the latter sale takes places within one year from the purchase date and if:
 The institution does not execute rights from these shares, with the exception of the right to dividend, or
 Executes these rights only to prepare the return sale of the entirety or of a part of the company, its assets, or
these shares.
3.
Which is a temporal purchase of shares by the business entity as a protection of active debts, under the conditions
that it will not execute rights from these shares, excluding the right to sell them.
4.
Being a result of a bankruptcy proceeding, excluding the cases, if the entity intending to take control is a competition,
or belongs to a capital group, which also contains competition of the business entity being overtaken.
5.
Business entities belonging to the same capital group.
The intention of concentration is submitted by the business entity who takes the control, the business entity purchasing or
obtaining shares or, respectively, a financial institution or a business entity, which purchased the shares as a protection of
active debts. The anti-monopol proceeding regarding concentrations should be finished within 2 months from the date it is
started.
Until a decision in given by the Chairman of the Office of Protection of Competition and Customers, or before the deadline
that such a decision should be made within, the business entities which are subjects to the duty of submission the
concentration intenions, are obliged to hold the concentration.
The Chairman of the Office of Protection of Competition and Customers gives (as a decision) a permission for the
concentraction or forbids the concentration. By permitting the concentraiton, the Chairman of the Office of Protection of
Competition and Customers may oblige the business entity(-ies) planning the concentration, to meet some conditions.
Decisions of the Chairman of the Office of Protection of Competition and Customers expire if the concentration is not
performed with 2 years from the approval of the concentration.
The Chairman of the Office of Protection of Competition and Customers can decide to punish the business entity with a
penalty not higher than 10% of income obtained in the tax year preceeding the year of the penalty, if this business entity
executed the concentration without his/her approval, even unintentionally.
The Chairman of the Office of Protection of Competition and Customers can also decide to punish the business entity with a
monetary penalty of up to the equivalent of 50 000 000 EUR, e.g., if it listed false data, even unintentionally, in the
application mentioned in art. 22 of the Act on Protection of Competition and Customers or in the submission of the
intention of concentration.
The Chairman of the Office of Protection of Competition and Customers can also decide to punish the business entity with a
monetary penalty of an equivalent of 10 000 EUR for each day of the delay in execution of e.g. court decisions on
concetration-related matters.
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The Chairman of the Office of Protection of Competition and Customers can decide to punish a person from a management
staff or a member of the board of the issuing party of the business entity or an association of business entities with a
monetary penalty up to fifty times his/her monthly salary, especially in a case when he/she intentionally or unintentionally
did not submit the intention of concentration.
If the concentration intention is not submitted and if the decision forbidding the concentration is not executed, the
Chairman of the Office of Protection of Competition and Customers can decide (with the conditions specified in the
decision) in particular, to order a disposal of shares which guarantee control over the business entity or entities, or
dissolution of the company, which is jointly controlled by the business entities. Such decision cannot be issued later than 5
years after the concentration. If this decision is not executed, the Chairman of the Office of Protection of Competition and
Customers can decide to divide the business entity. Such division is a subject to respective legal regulations of art. 528-550
CCC. The Chairman of the Office of Protection of Competition and Customers is granted with competences of organs of the
partnerships participating in the division. The Chairman of the Office of Protection of Competition and Customers can also
apply to the court for a cancellation of the contract or for taking other legal steps in order to reinstate the previous state.
When deciding on the values of monetary penalties, the Chairman of Office of Protection of Competition and Customers
takes into account, in particular, the period, degree and circumstances or the past violation of the regulations of the act.
o
4.8.4.
Regulation of the Council EC N 139/2004 on the control of concentration of companies
1)
Requirements regarding the control of concentration as also a result of the Regulation of the Council on
Concentration. The aforementioned Regulation regulates the so called union concenrations, i.e. those, which
exceed specified threshold of turnover of goods and services. Transactions, which are a subject of submission to
the European Committee are exempted (with some exceptions) from the duty of submission a concentration
intention to the Chairman of OPCaC. The Regulation covers only such concentrations, which result in a permanent
change in the structure of control over a business activity, resulting from: a fusion of two or more independent
business entities, overtake of direct or indirect control over the business entity or its part (e.g. by purchasing or
obtainig shares or other securities) by one or more business entities or by one or more people controlling at least
one business entity or through a formation of a common business entity, which permanently executes all
functions of an autonomic business entity. As understood in the Regulation, taking control equals to all forms of
direct or indirect acquisition of rights, which together or separately, including all legal or actual circumstances,
enable to have a decisive influence on a given business entity.
2)
Union concetrations are subjects to submission to the European Committee before their finalisation and after:
a. Signing a proper contract,
b. Announcing a public overtake offer, or
c. Purchase of the control package of shares.
3)
Submisssion of a concentration to the European Committee can also take place in a case when business entities
have the initail intention of making a union concetration. Concentration of business entities is a union one, when:
a. Total global turnover of all business entities participating in the overtake equals for the last tax year more
than 5 bn EUR, and
b. Total turnover, assigned to the European Union, of each of at least two business entities participating in the
concentration, equals at least 250 mln EUR,
Unless each of the business entities participating in the concentration obtained in the last current year more than
two thirds of its turnover for the EU in one and the same member state.
4)
The concentration of business entities also is a union one, when:
a. Total global turnover of all business entities participating in the concentration exceeds 2 500 mln EUR,
b. In each of at least three member states, the total turnover of all business entities participating in the
concentration exceeds 100 mln EUR,
c. In each of at least three EU member states qualified in the above point, total turnover of all business entities
participating in the concentration exceeds 100 mln EUR, with the total turnover of at least two business
entities participating in the concentration exceeded 25 mln EUR and
d. Total EU turnover of each of at least two business entities participating in the concetration exceeded 100 mln
EUR in the last tax year,
Unless each of the business entities participating in the concentration obtained in the last tax year more than two
thirds of its turnover for the EU in one and the same member state.
5)
The control is taken over by people or business entities, which:
a. Are holders of rights or entitled to them on the basis of proper contracts, or
b. Are not holders of such rights and are not entitled to them on the basis of proper contracts, have the rights
of execution of the rights from these contracts.
6)
According to art. 3 p. 5 of the Regulation, concentration does not take place, if:
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a.
Loan institutions or other financial institutions or insurace companies, which include transactions and
circulation of securities on own account or on other account included in their business profile, temporarily
own securities obtained in the business entity for its return sale, under the condition that:
 They do not execute voting rights related to these securities in order to define competition actions of
the company, or under the condition, that
 They execute these rights only in order to dispose of the entirety of the business entity or its part, or its
assets, or to dispose of these securities and under the condition, that such disposal is executed within
one year from the purchase date (this period can be extended in exceptional cases),
b.
The control is taken over by a person authorised by public organs, according to the law of the member state
related to liquidation, bankruptcy, lack of viability, debt redemption, agreement proceedings or similar
proceedings,
The aforementioned actions are executed by financial holdings (defined in separate regulations of the
union’s law), under the condition that the voting rights related to the holding are executed, especially those
related to issues of mandating members of supervisory or managerial organs of the companies, the shares of
which they hold, only in order to maintain the full value of these investments, and not to define, directly or
indirectly, the competition-related actions of these companies.
c.
7)
According to art. 7 p. 1 of the Regulation, the business entities are obliged to hold the concentration until the
European Committee approves such a concentration, or until the date such a decision should be given on. A
creation of a joint venture, permanently acting as an independent business entity, is a concentration which is a
subject of submission. Until the date of finish – by giving out a decision – of the study of submitted concentration
by the European Committee, the submitted transaction cannot be closed. However, this regulation in not violated,
e.g. by execution of a public offer of sale or exchange of shares submitted to the European Committee, if the
buyer does not use its voting rights resulting from the purchased shares, or uses it only in order to maintain the
full value of its investment on the basis of exemption granted by the European Committee.
8)
According to art. 14 p. 2 of the Regulation, the European Commitee can place a monetary penalty on a business
entity, of up to 10% of the total income of the business party in the previous tax year, if this business entity
executed a concentration without permission of the European Committee or against the decision of the European
Committee. Additionally, according to art. 8 p. 4 of the Regulation, in some cases, and especially in a case of
execution of a forbidden concetration, the European Committee can order to reverse the effects of concentration,
i.e. by division of the business entity or by disposal of the entirety, or a part, of assets, participations or shares.
9)
If a concentration is executed without a permission of the European Committee, it can:
a. In order to replace the state from before the concentration – order the business entities to dissolve the
concentration, in particular, by:
 A division of the combined company, or
 Disposal of all shares or accumulated assets.
b.
c.
In a case, when it is impossible to restore the state from before the concentration by division of the
combined company, the European Committee can undertake all means necessary to restore this state up to
the best possible degree.
Ordering taking of all other appropriate steps in order to assure that the business entities will execute the
dissolution of concentration or take other means in order to restore the previous state – according to the
decision of the Europan Committee.
Additionally, execution of the concentration without permission or against the decision of the European
Committee can result in placing of a monetary penalty by the European Committee on the business entity, up to
10% of the total turnover of the business entity in the previous tax year.
4.9.
Effective regulations related to mandatory offers of overtake or mandatory purchases and
buys related to securities
The Act on Public Offer introduces an institution of mandatory purchase and mandatory buy. According to art. 82
of the Act on Public Offer, a shareholder of a public partnership, who independently or together with its dependent entities
or its dominating entities and entities which are parties in an agreement signed with it, related to purchases of public
partnership shares by these entities or to a joint voting at the general assembly of shareholders, related to significant
matters for the partnership, who reached or exceeded 90% of the total number of votes in this partnership, is entitled,
within three months from reaching or exceeding this threshold, to demand all other shareholders to sell all shares owned
by them (mandatory purchase). Purchase of shares as a result of the mandatory purchase is executed without the
acceptance of the shareholders, to which the purchase demand is related. The announcement or the request of shares sale
within a mandatory purchase takes place after a protection is created with value of at least 100% of the value of shares,
which are to be subjected to the mandatory purchase, and the creation of the protection should be documented with a
bank note or a note from another financial institution acting as an intermediate in granting this protection or granting this
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protection. The mandatory purchase is announced and executed using an entity running a brokerage activity on the
territory of the Republic of Poland as an agent, which is obliged, not later than 14 working days before the starting date of
the mandatory purchase, to notifty simultaneously – the Financial Supervision Committee and the partnership managing
the regulated market, on which the given shares are quoted about the intention of the mandatory purchase, and if the
shares of the partnership are quoted on several regulated markets – all these partnerships are to be notified. The
notification has to have information about the mandatory purchase appended. Resignation from the mandatory purchase is
unacceptable.
On the basis of art. 83 of the Act on Public Offer, a shareholder of a public partnership can demand the shares
owned by him/her to be purchased by another shareholder, who reached or exceeded 90% of the total number of votes in
this partnership. This demand is submitted in a written form, within three months from the date, when reaching or
exceeding of the aforementioned threshold took places (and if the information about the threshold being exceeded was not
revealed to the general public, deadline for submission of the demands starts on the day, when the shareholder of the
public partnership, who can demand shares owned by him/her to be purchased, got to know, or when he could have got to
know with proper care taken about the fact, about reaching or exceeding of this threshold by another shareholder). The
demand of shares purchase has to be satisifed, within 30 days from its submission, in solidarity, by a shareholder who
reached or exceeded 90% of the total number of votes in this partnership and his dependent and dominating entities, and
also, in solidarity, each of the parties of the agreement on purchasing shares of the public partnership or on joint voting at
the general assembly of shareholders on the significant issues of the partnership, if the parties of this agreement own
together, with their dominating and dependent entities, at least 90% of the total number of votes.
4.10. Indication of public overtake offers in relation to the capital of the Issuing party made by
third parties within the last tax year and the current tax year
During the last tax year and the current tax year, third parties did not make any public overtake offers related to the capital
of the Issuing Party.
4.11. Taxation of income from dividend and shares sales
4.11.1. Income tax from the income by virtue of dividend
Income from shares ownership obtained by domestic persons, subjected in Poland to an unlimited tax duty
According to art. 3 p. 1 and 1a of the Act on ITOP, people are subjected to the tax duty for all their income, regardless of the
location of the sources of income (unlimited tax duty), if their place or residence is on the territory of the Republic of
Poland, i.e. they have a personal interest or economic interest centre (vital interest centre) or if they reside on the territory
of the Republic of Poland more than 183 days during the tax year. According to art. 30a of the Act on ITOP, dividends and
other income actually gained from the ownership of Shares by these people are subjected to taxation using a flat rate of
19%. This tax is collected without lowering the income by the cost of its generation.
These income is not added to other income obtained during the tax year, taxed using general rules, i.e. according to the
progressive tax rate scale provided in art. 27 of the Act on ITOP.
According to art. 41 p. 4 of the Act on ITOP, the income tax from income taxed on the basis of art. 30a of the ACT on ITOP is
collected by the payer, i.e. an entity, which pays or which leaves at the disposal of the tax-payer, dividends and other
income actually obtained from the Shares, which are equal to income taxed using a flat rate. The payer is obliged to send a
yearly declaration to the proper tax office, by the end of January of the year following the tax year. However, the payer is
not obliged to reveal registered information about the level of income to the domestic tax-payers. The tax-payers are not
obliged to list the flat rate tax collected by the payer in their yearly tax return.
Income from shares ownership obtained by domestic legal entities
According to art. 3 p. 1 of the Act on ITOP legal entities in Poland are subjected to an unlimited tax duty on all their income
regardless of the location of their sources of income, if they have an office or the board located on the territory of the
Republic of Poland. Dividends and other income actually obtained from the Shares by legal entities and capital partnerships
in organisation with their office or board located on the territory of the Republic of Poland, and also organisational units
without a legal entity (with the exception of partnerships without a legal entity), are subjected to taxation according to the
rules presented in art. 22 of the Act on ITOP. The tax rate is equal to 19%. In the case of dividends, the entire amount of
dividend obtained is the basis for taxation, with no options to lower it by costs of income generation.
According to art. 26 p. 1 of the Act on ITOP, the tax from dividends and other income actually generated from the Shares is
collected by the payer, i.e. by an entity executing payments by this virtue. The payer is obliged to send a yearly declaration
within the first month of the year after the tax year. Additionally, the payer is obliged to send to the tax-payers information
about the level of collected tax, within seven days after the month, for which the tax was collected.
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Income from dividends and other income by virtue of participation in profits of legal entites can also be exempted from
income tax using the rules defined below, in the case of sharesholders which are legal entities, owning large packages of the
Shares.
Income from Shares ownership obtained by foreign entities (people and legal entities) not subjected in Poland to the
unlimited tax duty
Dividends and other income actually generated from the Shares by entities which do not have their office or a board
located on the territory of the Republic of Poland and be people with place of residence outside Poland, will be taxed
according to the same rules as the income of domestic entities. It has to be noted, that foreign companies without a legal
entity are taxed using rules provided for legal entities, if according to the tax law of their country of origin (of the office or
the board) they are treated as legal entities and are subjected in this country to tax from their entire income, regardless of
the place of income generation (art. 1 p. 3 of the Act on ITOP).
However, except for internal Polish regulations, the incomes of aforementioned foreign entities may be subjected to the
regulations of proper agreements on avoiding double taxation, where the Republic of Poland is a party. It has to be noted,
that application of a tax rate resulting from the proper agreement on avoiding double taxation or exemption from taxation
is possible according to these agreements, under the condition that the place of residence, location of the office or of the
board of the tax-payer is documented for the needs of taxation, by obtainig a residence certificate from the entity, issued
by a proper foreign organ (art. 30a p. 2 of the Act on ITOP and art. 26 p. 1 of the Act on ITOP). The proper residence
certificate has to be presented to the payer of the income tax.
The payers are obliged to send the foreign people a registered information about the level of income by the end of
February of the year following the tax year. In the case of foreign legal entities, the information about payments made and
tax collected is sent before the end of the third month of the year following the tax year, in which the payments were
made. Foreign entities also can individually demand sending them a proper tax information within 14 days from the date of
such application.
Exemption of income from owned Shares obtained by domestic and foreign legal entities from the income tax
According to art. 22 p. 4 of the Act on ITOP, dividends and other actual income generated from the Shares by a partnership
which is a subject to the tax from all its income (regardless of the place of its generation) in the Republic of Poland or in any
European Union Member State other than the Republic of Poland, or in other state of the European Economic Area is
exempted from tax, if all the conditions presented below are met:

The income-obtaining partnership directly owns at least 10% of all Shares in the capital of the partnership which pays
the dividend or other income by virtue of participation in profits of legal entities,

The income-obtaining partnership owns the number of Shares defined in tiret (1) above for a permanent period of two
years. It has to be noted, that the exemption is also applied, when the required period of two years is over after the
date the income is obtained. However, if the condition presented above is not met, the partnership using the
th
exemption will be obliged to pay the tax before the 20 day of the month following the month, in which it has lost the
right to exemption, with the delay interest, and

The location of office of the income-obtaining partnership will be documented for the needs of taxation with a
residency certificate issued by a proper organ of the foreign tax administration (art. 26 p. 1c sp. 1 of the Act on ITOP).
Under the assumption that all conditions presented above are met, the exemption from tax is also applied in a situation,
when the dividend is received by a foreign company (as understood by art. 4a p.11 of the Act on ITOP) of a partnership
being a subject to taxation from the entirety of its income (regardless of the place of their generation) in the Republic of
Poland or in an EEA member state other than the Republic of Poland. However, the existence of the foreign company
should be documented by the company using the exemption with a certificate issued by a proper tax administration organ
of its country of origin, or by a proper tax organ of the country,
Where the company is located (art. 26 p. 1c sp 2 of the Act on ITOP). Additionally, it has to be pointed out, that the
aforementioned exemption can also be applied to the entirety of income paid to the receiving party (company), subjected
in the Switzerland to the income tax from the entirety of its income, regardless of the place of its generation, with a
specified, direct percentage in the capital of the dividend-paying company has been set at the level not lower than 25%.
Also in this case it is necessary to document the tax residency with a proper certificate issued by a proper organ of the
foreign tax administration (art. 26 p. 4c sp 2 and p. 6 of the Act on ITOP).
4.11.2. Income tax from income obtained from sales of shares
Income from Shares circulation obtained by domestic people
Art. 30b of the Act on ITOP predicts an option of application of the flat tax rate of 19% to the income from a paid dispoal of
securities. The regulations of art. 30b of the Act on ITOP does not apply, however, if the diposal of Shares by a person is a
part of the personal business activity.
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In relation to people, income from the paid disposal of Shares is defined as the difference betweeen the amount of income
from this operation (i.e. a sum of value of Shares obtained by the disposal, minus the costs of paid disposal) and the costs of
income generation, understood as expenses on Shares purchase, obtained in the tax year (it has to be noted, that the
income from the paid disposal of shares is understood as input income, even if it has not been actually obtained, and it
influences the moment of income generation). It has to be noted, however, that if the value expresseed in the price
specified in the contract of paid disposal will significantly deviate from the market value of Shares, without a justified
reason, it may be questioned by the tax organ. According to art. 30b p. 7 of the Act on ITOP, if it is impossible to identify the
disposed securities, then it has to be assumed that these are respective securities, starting from those obtained as the
earliest, with this rule applied separately for each securities account, on which the Shares are located.
After the end of the tax year, the tax-payers are obliged to list income obtained in the given year by virtue of paid disposal
th
of Shares in a separate tax return and to calculate the input income tax. This return tax has to be submitted until April 30
of the next year after the tax year (this is also the deadline for payment of the calculated tax).
It is a rule, that the information given to the tax-payers by the payer through the powers of art.39 p.3 of the Act on ITOP
should form the base of preparation of a yearly report. The payer is not obliged to collect tax and to transfer pre-payments
of tax by virtue of paid Shares disposal during the tax year..
It also has to be noted, that according to art. 9 p. 6 of the Act on ITOP, income obtained by virtue of paid disposal of
securities can be lowered by the value of loss from this source (this source includes in particular, income from paid disposal
of Shares and other securities) in the five tax years following one another, with the resitriction that the lowering income
cannot exceed 50% of this loss in any of these years.
Income from Shares circulation obtained by domestic legal entities
Income from paid Shares disposal obtained by legal entities and capital partnership in organisation, having their office or
board on the territory of the Republic of Poland, and by other organisational unit without a legal entity (with the exception
of civil law, general, partner, limited and limited-stock partnerships) are subjected to general taxation rules resulting from
the Act on ITOP, i.e. they are taxed according to the basic tax rate of 19%, including other income obtained during the tax
year, on the basisi of art. 19 p. 1 of the Act on ITOP.
In relation to legal entities, the income from paid disposal or Shares is defined as the value of Shares resulting from the
disposal price. It has to be noted, however, that if the value expressed in the price defined in the paid disposal contract will
significantly deviate from the market value of Shares, without a justified reason, it may be questioned by the tax organ. In
regard to the paid disposal of Shares, expenses on their purchase are the cost of income generation, lowering the tax basis.
Income from Shares circulation obtained by foreign legal entities
Foreign owners of Shares (i.e. such entities, which do not have an office or the board on the territory of the Republic of
Poland and people with places of residence outside Poland) are subjected to taxation in Poland by virute of paid Shares
disposal only related to the income generated on the territory of the Republic of Poland. Income from Shares sales on GPW
is treated as obtained on the territory of the Republic of Poland.
Income of foreign people is taxes according to the same rules as that of domestic ones. It has to be noted, howeverm that
forign parnterships without a legal entity are taxed according to the regulations for legal entities, if according to the tax law
of their country of location of the office or board, they are treated as legal entities and are subjected in this country to the
tax from the entirety of its income, regardless of the place of their generation (art. 1 p. 3 of the Act of ITOP).
However, in addition to Polish internal regulations, the rules of taxation of foreign people result from proper agreements
on avoiding double taxation, where the Republic of Poland is a party, and from proper foreign regulations. Usually, the
agreements on avoiding double taxation state, that profits from the sales of securities can be taxed only in that country,
where the place of residence, the office or the board of the seller is located. It is not related to the cases, when a foreign
person has the company in Poland, as understood by the proper agreement on avoiding double taxation, and the income
from paid disposal of Shares could be assigned to this company. Then, these income will be taxed in Poland, just as the
income of domestic people. It also has to be noted, that the application of tax rate resulting from the proper agreement on
avoiding double taxation or not paying the tax according to such agreement has been made clearly dependent on
documenting the tax residence of the tax-payer, by presenting the payer a proper residence certificate issued by a proper
organ of a foreign tax administration (art. 30b p. 3 of the Act on ITOP).
4.11.3. Tax from civil-legal actions
According to art. 9 p. 9 of the act on tax from civil-legal actions, sales of material rights which are financial instruments as
understood according to the regulation of Act on circulation of financial instruments to, or through financial companies, as
well as sales of these rights made within the scope of the said circulation, is exempted from the tax from civil-legal actions.
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If the aforementioned situation does not take place, the shares sale shall be subjected to taxation with a legal-civil actions
tax of 1%. The tax from legal-civil actions is to be paid within 14 days from the date of tax obligation and to provide a
declaration on tax from legal-civil actions. According to art. 4 of the Act on tax from legal-civil actions, in the case of sale,
the buyer is subjected to the tax obligation.
4.11.4. Tax from legacies and donations
Only people are subject to the tax from legacies and donations in Poland. As a rule, obtaining Shares as a result of a legacy
or a donation is a subject to this tax, with the tax rate dependent on the degree of relationship, or on any other relation
between the benefactor/bequeather and the beneficient/heir. Tax rates are progressive and they are equal to 3-20% of the
tax basis, depending on the tax group the obtaining person has been classified to. Each of the groups also has a tax-free
amount. This tax is paid within 14 days from the decision of the head of the tax office, defining the level of tax obligation.
Acquisition of Shares ownership by the closest relatives (spouses, descendants, ascendants, stepchildren, brothers and
sisters, stepfather and stepmother) is exempted from tax, under the condition of making a proper submission to the proper
head of the tax office. This exemption is applied, if at the moment of acquisition, the obtaining party was a Polish citizen or
a citizen of one of the Member States or one of the Member states of the European Free Trade Agreement (EFTA) – a party
of the agreement on EEA, or had the place of residence on the territory of Poland or of such a member state.
4.11.5. Responsibility of the payer
According to art. 30 of the Tax Ordination, the payer which did not fulfill its obligations of calculating, collecting and
payment of the tax to the proper tax office, holds the responsibility for the uncollected tax, or for the collected yet unpaid
tax with all its assets. However, this regulation does not applt, if separate regulations state otherwise, or if the tax was not
collected because of the tax-payer. In this case, the tax office gives out a decision on the responsibility of the tax-payer.
5. Information about the offer conditions
5.1.
5.1.1.
Conditions, parameters and predicted schedule of the offer and actions required during
subscription oraz działania wymagane przy składaniu zapisów
Offer parameters
On the basis of this Prospectus, 4.643.130 of Offered Shares are offered, including:

Within the Institutional Investors Tranche – 3.714.504 Series C Shares with nominal value of 0,10 PLN each, to be
obtained,

Within the Open Tranche –928.626 of Series C Shares with nominal value of 0,10 PLN each, to be obtained.
On the basis of this Prospectus, the Issuing Party wants to apply for approval for circulation on the regulated market:

16.250.960 normal shares to bearer, Series B, with a nominal value of 0,10 PLN each,

no more than 4.643.130 normal shares to bearer, Series C, with a nominal value of 0,10 PLN each,

no more than 4.643.130 rights to normal shares to bearer, Series C.
5.1.2.
Offer schedule
st
th
Submission of Purchase Declarations:
from May 21 , 2010 to May 25 , 2010, 2.00 pm
Start of Public Subscription
May 27th, 2010
Accepting subscriptions for Offered Shares:
from May 27th, 2010 to May 31 , 2010
End of Public Subscription:
May 31 , 2010
Planned allocation of Offered Shares:
Up to 6 working days after the end of public subscription
th
th
The Issuing Party holds the right to change the aforementioned deadlines. In a case of change of Public Ofer deadline and
the deadline of subscriptions for Offered Shares, a proper information will be released to the general public, by making
available an updating announcement. This announcement will be presented to the general public in the same way the
Prospectus was presented before the changed deadline. In the case of „book-building” deadline change – because of the
possibility of a significant influence on the evaluation of Offered Shares – a proper information will be revealed to the
general public in the aforementioned mode, no later than before the start of the „book-building” process.
If a change of said deadline shall significantly influence the evaluation of Offered Shares, a proper announcement will be
released to the general public by making available an Annex to the Prospectus (approved by the KNF), which will be
revealed to the genereal public in the same way as Prospectus, before the modified deadline.
After the start of accepting subscriptions, the Issuing Party holds the right to extend the deadline of accepting subscriptions
in a situation, when the total number of Offered Shares included in subscriptions, will be lower than the total number of
Offered Shares in the Public Offer. This deadline cannot be later than three months from the date of the start of the Public
Subscription. If the subscription deadline is extended, a proper information will be released to the general public, by making
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available an annex to the Prospectus, approved by the KNF. This Annex will be released to the general public in the same
way the Prospectus was published. The extension of subscription accepting period can take place only within the timeframe
of validity of the Prospectus. If the allocation date of the Offered Shares is changed, a proper information will be released to
the general public, as an updating announcement, not later than before the allocation date of the Offered Shares. The
updating announcement will be revealed to the general public in the same way the Prospectus was published.
5.1.3.
Book building
Before the start of the Public Offer, marketing actions will take place, which are known as the „book-building” process,
namely, building the demand book.
The „book-building” process is related to both tranches, in which the Shares are offered.
As a result of this actions, a „demand book” for Offered Shares will be created. The results of demand „book building” in
both tranches will be used during the determination of Issue price of the Offered Shares.
In case of significant differences in the results of the „book-building” process in both tranches, the Board of the Issuing
Party will try to set the price at the level guaranteeing obtaining all shares offered in both tranches. The issue price will be
identical in both tranches.
People who take place in the „book-building” process, will be able to use preferences in allocation of the Offered Shares,
mentione in this Prospctus (Part IV, p. 5.1.4.).
The “book-building” process is collecting Purchase Declarations from Investors interested in purchasing, on the basis of this
Prospectus, a specific number of Offered Shares at the indicated price. Purchase Declarations with price listed as
approximated to 0,01 PLN, will be accepted. Purchase Declaration is not binding for an Investor, excluding statements of p.
5.1.4, related to preferences within the Open Tranche and within Institutional Investors Tranche.
Purchase declarations which do not contain:
 number of shares expressed as multiples of 10 shares,
 number of shares being at least 100,
 price within listed price range,
 price approximated to 0,01 PLN,
 other data listed in the Purchase Declaration form,
will be treated as invalid.
The price range, in which Purchase Declaration during the „book-building” phase will be accepted is from 10,77 to 12,00
PLN per share. The maximum Issue price of Offered Shares is 12,00 PLN and it cannot be lower than the nominal price of a
share.
The Purchase Declarations will be collected through the Offering Party or through the members of distribution consortium,
if such a consortium is created. If a distribution consortium is created after the Issue Prospectus has been approved, a
proper information will be revealed to the general public by making available an annex to the Prospectus, approved by the
KNF. This Annex will be released to the general public in the same way the Prospectus was published.
During the „book-building” process, a potential Investor can submit one Purchase Declaration, defining the number of
Offered Shares and a price, at which he/she would be ready to purchase the specified number of Offered Shares. A proper
form will be made available by the Offering Party or by the members of the distribution consortium (if it is created) – a
template of Purchase Declaration form was presented in the chapter „Forms and appendices” of this Prospectus. A
submitted declaration can be withdrawn before the subscriptions start, by submitting a written statement in a CSP
accepting the Purchase Declarations. After withdrawing a submitte Purchase Declaration it is possible to submit a second
Purchase Declaration during the „book-building” process. Submission of a new Purchase Declaration without having the
previous Declaration withdrawn causes all Declarations to become invalid.
An entity managing a securities package of a third party for orders, can submit a combined Purchase Declaration, including
all managed accounts. Investment Funds Groups submit their Purchase Declarations separately, on the behalf of particular
funds managed by the Investment Funds Group.
5.1.4.
Rules of subscription submissions
Minimum and maximum size of a subscription
In both tranches, subscriptions will be accepted for number of Offered Shares not less than 50 shares, with the restriction,
that the minimum value of a subscription made in the Institutional Investors Tranche, by entities listed in the point 5.1.4.3
character i) below, is not less than a 100 000 PLN. Making a subscription for the number of Offered Shares less than 50
shares or making a subscription to the Institutional Investors Tranche by entities listed below, with a value less than 100
000 PLN will result in no allocation of shares to the Investor.
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No other limitations related to the maximum size of subscriptions exist. However, making a subscription for a number of
shares greater than the number of Offered Shares in a given Tranche will be taken as a subscription for the maximum
number of Offered Shares in the given Tranche.
General rules of subscriptions
Subscriptions for Offered Shares will be accepted in the periods indicated in p. 5.1.2 above, at the customer service points
of the Offering Party and, additionally, of other members of the distribution consortium, if such a consortium will be
created, in addition to the participation of the Offering Party.
If a distribution consortium is created after the Issue Prospectus has been approved, a proper information will be revealed
to the general public by making available an annex to the Prospectus, approved by the KNF. This Annex will be released to
the general public in the same way the Prospectus was published.
Repeated submission of a subscription will be treated as making a subscription for a number of Offered Shares resulting
from the particular subscriptions.
Subcriptions for Offered Shares made by an entity managing a securities portfolio of a third party will be treated as a
subscriptions of the parties, for which the portfolios are managed.
If the Investor plans to write Offered Shares allocated to him to a specific securities account, the Investor must submit a
deposition disposal for Offered Shares.
All consequences resulting from an improper or incomplete filling of the subscription for Offered shares or of the deposition
disposal for Offered Shares (including the lack of shares allocation) will be faced by the Investor.
It is possible to make subscriptions for Offered Shares using Internet, phone, fax and other technical means, if such a
possibility is accepted by the Status of the brokerage house accepting the subscriptions. In that case, the Investor should
have a proper contract signed with the brokerage house, where he/she will submit the subscription for Offered Shares.
Such a contract should contain, in particular, an authorisation of the brokerage house or its employees, for submission of
the subscription for shares in the name of the Investor.
Subscriptions will be accepted on 4 instances of the form. One instance of subscription for is for the Investor, one for the
Issuing Party and the remaining two – for the point which accepts the submission. The template of the subscription form
has been presented in the chapter „Forms and appendices” of this Prospectus.
Subscriptions will be accepted in two Tranches: Institutional Investors Tranche and the Open Tranche.
Subscriptions in the Institutional Investors Tranche
Shares can be purchased in the Institutional Investors Tranche by:
a. Brokerage house,
b. bank,
c. insurance company,
d. investment fund,
e. pension fund,
f. entity, managing a package of securities of a third party (asset management),
g. entity (a person, legal entity or organisational unit without a legal enity), in the name of which the subscription is
made by the entity managing a package of securities of a third party (asset management customer),
h. investment subissuing party – if a investment subissue contract is signed,
i.
other entity, purchasing shares for the amount not less than 100 000 PLN,
j.
entity, which submitted a Purchase Declaration of Offered Shares for the amount not less than 500 000 PLN.
In the case of Investors, which made a submission on the basis of nominal invitation for submission for a specified number
of offered shares, preferences are planned.
Invitations sent to entities managing securities portfolios of third parties will be treated as invitations sent to those third
parties, whose portofolios are managed.
The invitations will be sent by fax, e-mail, or any other methods agreed with the particular Investor. The invitation receipt
will be confirmed in person, by fax, phone or using other technical means, including e-mail. Invitations to submissions of
subscriptions can be directed from the start of subscription of shares until the end of subscription period. In order to use
the aforementioned preferences, the invited Investor should reply to the invitation by 14.00 the next day after the receipt
of the invitation, as well as before the end of the subscription period.
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The basis for obtaining an invitation and for definition of number of Offered Shares listed in the invitation will be the
participation in the „book-building” process and submission of Purchase Declaration of Offered Shares at a price, which will
be higher then, or equal to the final price of Offered Shares. The Board holds the right to send invitations also to other
Investors, also those not participation in the „book-building”, to send invitations related to the number of Offered Shares
other (i.e. higher or lower) than the one declared during „book-building”, as well as not to send invitations, despite the
participation in „book-building”. Sending an invitation for a higher number of Offered Shares than the number declared
during „book-building” does not mean for the Investor that it is obligatory to subscribe for a number of Shares higher than
the number indicated during „book-building”, as it only grants him/her the right to submit such an increased subscription.
Preferences related to the submission of a subscription on the basis of registered invitation mean, that in a case of making a
subscription for the number of shares listed in the registered invitation, but equal to, or greater than the number listed
during the „book-building” process, the subscription is not reduced.
In case of submitting a subscription for a number of shares greater than the number indicated in the registered invitation,
the part of the subscription related to the number of Offered Shares, exceeding the number specified in the registred
invitation, will be proportionally reduced, if Offered Shares remain in Institutional Investors Tranche, which are
unsubscribed on the basis on invitation. The remaining part of the subscription will not be reduced.
Sending invitations by the Issuing Party does not limit the rights of an Investor, including that Investor, which was sent an
invitation, and the Investor, which did not participate in the „book-building”, relatede to making subscriptions for Offered
Shares in the Open Tranche or in the Institutional Investors Tranche.
Subscription in the Open Tranche
All Investors are entitled to purchasing Offered Shares in the Open Tranche.
Preferences in allocation of the Offered Shares will be granted to those Investors, who have made Purchase Declarations for
Offered Shares in the „book-building” process, followed by making a subscription for the number of Offered Shares at least
equal to the declared number, with the final price of the Offered Shares lower than, or equal to the declared price.
These preference mean, that in a case of oversubscription of shares, the following procedure will be applied for the needs
of calculating the number of Offered Shares, which will be allocated to particular Investors:
1. The number of Offered Shares, for which a subscrption was made, which in turn is a subject for preferences, will be
multiplied by two. The number of shares listed in subscriptions which are not subjected to preferences, is multiplied by
one. In this way, „products” will be calculated for particular subscriptions.
2. Calculated „products” will be summed up. Thus, a „theoretical sum” is obtained.
3. For each subscription, its „proportional participation” in the „theoretical sum” will be calculated – i.e. participation of
the „product” in the total sum of those products.
4. The number of shares, which will be allocated to the Investor, is calculated by multiplying the „proportional
participation” by the total number of Offered Shares in the given tranche, with the restriction, that the investor cannot
have more Offered Shares allocated, that the number listed in the subscription. It means, that depending on the
number of subscriptions made, the subscription of an Investor benefitting from preferences will not be reduced or that
it will be reduced to the smaller extent than the subscription of an Investor not included in the preferences
These preferences are related only to the number of Offered Shares, which has been included in the Purchase Declaration.
A repeated submission of a subscription will be treated as submitting a subscription for the total number of Offered Shares
included in particular subscriptions. However, in order to participate in preferences resulting from the participation in the
„book-building” process, the Investor should submit and pay for the subscription of the number of Offered Shares at least
equal to the number specified in the Purchase Declaration. If the subscription is made for a number of Offered Shares
greater than indicated in the Purchase Declaration, then preferences in the allocation will be applied only to the number of
Offered Shares specified in the Declaration, while the remaining number of Shares will be allocated without preferences.
Only a single susbcription can correspond to a single Purchase Declaration. An Investor who wants to use preferences in
allocation of the Offered Shares, should present his/her owned original of the previously submitted Purchase Declaration at
the moment of making subscription and indicate the number of the Purchase Declaration on the subscription form, which
he/she intends to use in the submitted subscription. The confirmation of use of the particular Purchase Declaration takes
place by submitting a hand signature on the presented Purchase Declaration by an employee of the brokerage house and
by the Investor who submits the subscription.
If the subscription is made using technical means, the confirmation of declaration use takes place by making a proper
statement by the Investor. Especially in the case, when an Investor makes a subscription for Offered Shares via Internet,
he/she is obliged to indicated the number of Purchased Declaration on the subscription form, which he/she intends to use
in relation to the subscription being placed.
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If other technical means are used, it is advised to contact a brokerage house where the subscription will be made in order
to obtain information related to the technical form of submitting statement of Purchase Declaration use.
5.1.5.
Actions through a representative
Investors are entitled to purchasing Offered Shares via a representative. If a mandate is granted to a brokerage house, then
the rules of the brokerage house come into effect. In other case, the person acting as the representative, is obliged to
submit a written mandate of the Investor, including the mandate for submission of a subscription, and the following
information by the person of the Investor:

For personal residents: name and surname, exact address, number of the national ID or a passport number, PESEL
number,

For personal non-residents: name and surname, exact address, passport number,

For legal entities, residents: company or name, address, REGON number and an extract from a proper register
appended to the mandate,

For legal entities, non-residents: company or name, address and an extract from a proper register or a document
confirming the existence of the given entity in the given country appended to the mandate (documents prepared in a
foreign language and issued abroad should be translated into Polish by a sworn translator),

For residents, entities without a legal entity: name, address, REGON number and an extract from the proper register

For non-residents, entities without legal entity: name, address and an extract from a proper register or a document
foreign language and issued abroad should be translated into Polish by a sworn translator).
Additionally, the mandate should include the following information about the representative:

For personal residents: name and surname, exact address, national ID number or a passport number, PESEL number,

For personal non-residents: name and surname, exact address, passport number,

For legal entities, residents: company or name, address, REGON number and an extract from the proper register

For legal entities, non-residents: company or name, address and an extract from a proper register or a document
foreign language and issued abroad should be translated into Polish by a sworn translator).
The mandate document or its copy remains in the points, which accepts subscriptions. The mandate document prepared in
a foreign language should be translated into Polish by a sworn translator.
During the receipt of confirmation of purchase of Offered Shares and during the receipt of returned fees, the representative
should present the mandate for execution of the aforementioned actions with a notary-certified signature. Also a mandate
given in a written form in the presence of a person authorised by the brokerage house accepting the subscription is
accepted, which confirms data included in the mandate, as well as the authenticity of signatures of the mandator and of the
representative.
The number of mandates granted to a single representative is unlimited.
5.1.6.
Withdrawal or suspension of the offer
The General Assembly may make a resuolution on withdrawal of the offer of Series C Shares or on suspension of the offer
of Series C Shares before the Issue Prospectus is published and on withdrawal of the offer of Series C Shares or on
suspension of the offer of Series C Shares after the Issue Prospectus is published, because of important reasons.
The important reasons can include, in particular:
 A sudden change in the economical or political situation of the country, region or world, which could not be predicted
before the start of the subscription, and which could or would have a significant negative influence on the execution of
the Offer or on the activity of the Issuing Party,
 A sudden change in the economic or legal environment of the Issuing Party, which could not be predicted before the
start of the subscription, and which could or would have a significant negative influence on the execution of the Offer
or on the current activity of the Issuing Party,
 A sudden change in the financial, economic or legal situation of the Issuing Party, which could or would have a
negative inffluence on the activity of the Issuing Party and which could not be predicted before the start of the
subscription,
 Other circumstances rendering the execution of the Offer impossible or harmful to the interests of the Issuing Party or
of the Investors.
In case of a potential withdrawal from the Offer after it has been started, returns of assets paid in by the investors will be
performed in a way specified by the Investor in the subscription form, within 14 days from the announcement of the
decision of the Issuing Party on the withdrawal of the Offer. The return of said fees will be performed without interests or
claims.
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In case of a potential withdrawal from the execution of the Offer or of a suspension of an Offer, a proper information will
be released to the general public, by making a KNF-approved Annex to the Prospectus available. This Annex will be made
available to the general public in the same way as the Prospectus.
This offer is not predicted to be cancelled.
5.1.7.
Deadline, within which it is possible to withdraw a subscription
If an Annex to the Issue Prospectus is published after the start of the subscription or sale, a person who submitted a
subscription before the Annex was made available to the public, may evade the legal effects of the submitted subscription.
The evasion from legal effects of the subscription takes place in a form of a written statement, submitted in one of the CSP
of the Offering Party or of other participant of the consortium (if such a consortium exists), within 2 working days from the
day the Annex is made available. The right of evasion of legal effects of the submitted subscription does not apply to the
cases, when an Annex is published because of the mistakes in the contents of the lssue Prospectus, about which the issuing
party or the offering party decided to inform after the allocation of securities or caused by factors, which arouse, or which
became acknowledged by the issuing party or by the offering party after the allocation of the securities. The Issuing Party or
the Offering Party can execute the allocation of securities no earlier than after the deadline of evasion of the investor from
the legal effects of a submitted subscription.
5.1.8.
Methods and deadlines provided for payments for shares and supplying shares
Payments for Offered Shares are made in Polish zlotys. The full payment for Offered Shares must be made no later than on
the last day of subscription.
The full payment is understood as an amount equal to a product of the number of Offered Shares included in the
subscription and the final price of the Offered Shares.
The Shares are paid in a form of monetary contributions. Payments by this virtue should be made:
 To the bank account of the brokerage house accepting the subscriptions, with the following list: PESEL number, name
and surname (name) of the Investor and a note „payment for shares of Rank Progress S.A.”,
 To the cashier of the point accepting the subscriptions, if it allows cash payments to be made. While choosing this form
of payment, the Investors are advised to check in advance, if this CSP of choice accepts cash payments,
 Using a bank transfer or a telegraph transmssion, giving the PESEL number, name and surname (name) of the Investor
and a note „payment for shares of Rank Progress S.A.”, to the account of the house accepting the subscriptions,
 Other forms of payment, which are provided and accepted by the given Customer Service Point of the brokerage hose,
accepting subscriptions for Offered Shares. Detailed information on other possible forms of payment can be obtained
by the Investor the brokerage house accepting subscription for Offered Shares,
 The aforementioned methods, combined.
Within the scope described here, the Investor has the freedom of choice of the method of payment for shares.
Payments for Offered Shares are not subjected to interest rates. It is noted, that the full payment must be recorded on the
account of the house accepting the subscriptions no later than on the day the public subscription ends. This means, that the
Investor (especially in the case of wire transfers and money orders, as well as when using bank loans for subscriptions) has
to make the payment in a proper advance, including the time of transfer execution, loan execution or execution of other
similar actions. The Investors are advised to obtain information related to the execution time of the action in the financial
institution he/she is served by, and that he/she takes proper actions taking into account the time of their execution.
An Investor making the payment for Offering Shares via a bank should consider the possbility of the commission takeb by
the bank from cash payments and bank transfers.
It is noted, that making a payment less than the full amount will result in no allocation of shares at all.
Information about the method and deadline of supplying the shares to the Investors is presented in p. 5.2.4 below.
5.1.9.
Description of revealing to the general public informations about the results of the offer,
ineffectiveness of the offer, lack of registration of the company capital increase and methods of
return of payments made
Once the subscription is ended, the information about its results is simultaneously sent to the KNF and to the GPW, and
then – to the Polish Press Agency, according to the statements of art. 56 p. 1 of the Act on Public Offer.
If the Offer does not take place, an announcement on this event will be placed within 14 days after the closure of the Public
Offer in a general polish newspaper, in the office of the Issuing Party and in points, where subscriptions for Offered Shares
are accepted. The same announcement will contain a call to receipt of fees paid by the Investors. The paid fees will be
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returned without interests and reparations within 14 days from the publication of the aforementioned announcement, in a
way defined by the Investor in the subscription form.
If the Issuing Party does not not fulfill the duty of submission of the resolution on the increase of company capital to the
National Court Register within twelve months from the date of Prospectus approval by the KNF and no later than after one
month after the date of shares allocation, a proper information will be simultaneously submitted to the KNF and to the
GPW, and then – to the Polish Press Agency, according to the statements of art. 56 p. 1 of the Act on Public Offer, as well as
an announcement on this issue will be published, within 7 days from thed aforementioned date. All paid amounts will be
returned without interests and reparations within 14 days from the date of publication of the aforementioned
announcement.
If the court refuses to register the issue of Offered Shares – a proper information will be simultaneously sent to the KNF and
to GPW, and then – to the Polish Press Agency, according to the statements of the art. 56 p. 1 of the Act on Public Offer, as
well as an announcement on the legally effective decision of the court will be published within 7 days from the legal
effectiveness of the decision of the register court, refusing the registration of the company capital increase. The paid
amounts will be returned to the Investors, who had Offered Shares allocated, without interests and reparations, within 14
days from the publication of the announcement.
In each of the aforementioned cases, the return of paid amounts can be made, in particular:

In cash to be collected at the brokerage house accepting subscriptions,

By a bank transfer to an indicated account (with deduction of the transfer costs),

By other method, indicated by the Investor and accepted by the brokerage house accepting the subscription (after
deduction of potential costs of operations).
5.2.
5.2.1.
Rules of distribution and allocation
Intentions of major shareholders and members of management, supervisory and administrative
organs of the Issuing Party, related to participation in the subscription
To the best of the knowledge of the Issuing Party, Members of the Board, of the Superisory Board and major shareholders
do not plan to participate in the Public Offer.
5.2.2.
Informations revealed before the allocation
Subscriptions for Shares will be submitted either within the Institutional Investors Tranche or within the Open Tranche. The
list of entities entitled to shares purchase within the Institutional Investors Tranche can be found in p. 5.1.4. Part IV of the
Prospectus. All Investors are entitled to purchases of Offered Shares within the Open Tranche.
On the basis of this Prospectus, a total number of 4 643 130 Shares i offered, including:
 Within the Institutional Investors Tranche – 3 714 504 Series C Shares to be obtained, with a nominal value of
0,10 PLN each,
Within the Open Trench –928 626 Series C Shares to be obtained, with a nominal value of 0,10 PLN each.
5.2.2.1. Transfers between Tranches
The Issuing Party holds the right to perform transfers between tranches after the end of the public subscription. Only those
Offered Shares can be transferred, which have not been subscribed by Investors within the given tranche, under the
condition, that in the other tranche the demand submitted by Investors for Offered shares exceeded their supply. Such
transfer will not require an information about the transfer through the powers of art. 51 of the Act on Offer.
5.2.2.2. Allocation rules – description of subscription reductions and return of overpaid amounts
The allocation of Offered Shares will be performed by the Board of the Issuing Party within 6 working days from the end of
the public subscription. A minimum number of allocated shares is one.
The method of treating entities during the allocation of subscriptions does not depend on the fact, by which entity or
through each entitry they are made. There are also no previously defined methods of preferential treatment of particular
investor types or particular bound groups during the allocation. The only differences in treatment during allocation are a
consequence of division into tranches and the preferences in the Institutional Investors Tranches, resulting from obtaining a
registered invitations, and preferences in the Open Tranche resulting from the participation in the „book-building”.
No overallocation and no option of an additional allocation of the „green shoe” type exists.
Institutional Investors Tranche
Subscriptions for Offered Shares made in a quantity resulting from a sent invitation, will not be reduced.
Sending an invitation for a number of Offered Shares higher than the number declared in the „book-building” is not binding
the Investor with a duty of making a subscription for a higher number of Shares than listed in the „book-building” process,
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as it only entitles the Investor to use such an option. In relation to this, in a case when a subscription for a smaller number
of shares than listed in the invitation is submitted, but with the number higher than or equal to that specified during the
„book-building” process, the subscription is not reduced, either.
In a case:

Of submission of a subscription by the Investor, who was not sent an invitation,

Of making a subscription by the Investor, who did not particpate in the „book-building” process,

Of submission of a subscription by the Investor invited after the time, in which the Investor should reply to the
invitation in order to use preferences, with the time specified in the p. 5.1.4 above, or

Of submission of a subscription by the Investor invited to a number of Offered Shares lower than that specified in the
invitation, with the exception of a case, when a subscription was made for a number of shares lower than that
specified in the invitation, but greater than or equal to the number indicated during the „book-building” process,
The subscriptions will be subjected to a proportional reduction, if there are still Offered Shars in the Institutional Investors
Tranche, not obtained under the preferential conditions. Subscriptions made by an Investor invited in the part related to
the number of Offered Shares exceeding the number specified in the invitation will be subjected to a similar reduction.
Open Tranche
The number of allocated Offered Shares will be rounded down to an integer, and remaining, single Offered Shares will be
allocated to the Investors which have made subscriptions for the biggest numbers of Offered Shares, in turn. It has to be
pointed out, that in particular circumstances (a large reduction of subscriptions and small number of subscription for
shares, causing the number of shares resulting from the allocation to be lower than 1), it may result in no allocation of
Offered Shares at all.
If the total number of Offered Shares, for which the subscriptions from the Investors are made, will be greater than the
number of Offered Shares, then the subscriptions of the Investors will be subjected to a reduction. This reduction will be
proportional for all Investors, with the restrictions for participants of the „book-building” process, given below.
Preferences in allocation of Offered Shares will be granted to those Investors, who have submitted Purchase Declaration for
the Offered Shares during the „book-building” preocess, followed by a subscription for the number of Offered Shares at
least equal to the declared, with the final price of the Offered Shares lower than or equal to the declared one.
These preferences mean, that in a case of oversubscription for shares the following procedure will be applied to the needs
of calculation of the number of Offered Shares, which will be allocated to particular Investors:
1. The number of Offered Shares, for which a subscrption was made, which in turn is a subject for preferences, will be
multiplied by two. The number of shares listed in subscriptions which are not subjected to preferences, is multiplied by
one. In this way, „products” will be calculated for particular subscriptions;
2. Calculated „products” will be summed up. Thus, a „theoretical sum” is obtained;
3. For each subscription, its „proportional participation” in the „theoretical sum” will be calculated – i.e. participation of
the „product” in the total sum of those products;
4. The number of shares, which will be allocated to the Investor, is calculated by multiplying the „proportional
participation” by the total number of Offered Shares in the given tranche, with the restriction, that the investor cannot
have more Offered Shares allocated, that the number listed in the subscription. It means, that depending on the
number of subscriptions made, the subscription of an Investor benefitting from preferences will not be reduced or that
it will be reduced to the smaller extent than the subscription of an Investor not included in the preferences.
These preferences are related only to the number of Offered Shares, which has been included in the Purchase Declaration.
If in the case of allocation of Offered Shares, an Investor will not be allocated a part, or all of the Offered Shares, for which
he/she has made a subscriptions, as a result of subscription reduction or as a result of an invalid subscription made by the
Investor, as well as in a case of any other reason making it necessary to return a part or the entire amount paid by the
Investor, to the Investor, the amount paid by the Investor will be returned in a way specified by the Investor in the
subscription form, within 14 days from the allocation date. These amounts will be returned without interest rates or
reparations.
5.2.3.
Conditions of offer’s end, the earliest possible end date
The public offer of Offered Shares will be closed by the Issuing Party on the date of allocation of Offered Shares. The end of
the offer will take place within 6 working days from the end of subscription.
5.2.4.
Procedure of notifying investors about the number of allocated shares with the indication, if
circulation is allowed before this notification is sent
If at least the minimum number of shares designed to be obtained will be subscribed for and paid, the Board will execute,
within 6 working days from the date of the end of subscription, shares allocation to the subscribers, according to the
published rules of shares allocation.
Page 259
Lists of subscribers, with indications of numbers of Offered Shares allocated to each of them, will be laid out within a week
from the moment of allocation of Offered Shares and left for browsing for two weeks in the points acceptng subscriptions,
where those subscriptions have been made.
The booking of Investor’s rights to Series C Shares on the securities account indicated by the Investor, will take place
immediatiely after the registration of rights to Series C Shares in KDPW. The information about booking of rights to Series B
Shares will be passed on to the Investor by the brokerage house managing his/her securities account, according to the rules
of informing the customers, adapted by the given house.
The booking of Offered Shares allocated to the Investor on the securities account where he/she has booked the rights to
Series C Shares, will take place immediately after the registration of Series C Shares in KDPW. The information about
booking of Offered Shares will be passed on to the Investor by the brokerage house managing his/her securities account,
according to the rules of informing the customers, adapted by the given house.
The beginning of circulation of rights to Series C Shares and the Offered Shares does not depend on informing the Investor
in the aforementioned mode about the numbers of allocated and booked securities.
If the Investor does not make a disposal for deposition of shares on the indicated securities account, the shares allocated to
him/her will be deposited on the account of a sponsor of the issue.
People, who had not been allocated any shares, will be called for collection of paid amounts within two weeks from the end
of shares allocation.
5.3.
Price of shares
The issue price of Offered Shares is 12 PLN maximum and it cannot be lower than the nominal value of shares. The final
price of Offered Shares will be determined according to the opinion justifying the exclusion of rights to subscription, the
contents of which has been presented in p. 4.6 above (after the „book-building” process or on the basis of a
recommendation of a brokerage house offering Series C Shares), and sent, before the start of subscription, according to art.
54 p. 3 of the Act on Offer, i.e. to the KNF and to the general public in the same way the Prospectus was published, and in
the mode defined in art. 56 p. 1 of the Act on Offer. The issue price will be equal for both Tranches.
There are no additional costs and taxes related to the submission of subscription, with the exception of those listed in p.
5.1.8 above.
The price range, in which Purchase Declarations in the „book-buiding” phase will be accepted, is from 10,77 to 12,00 PLN
per share.
The members of the Board and of the Supervisory Board did not obtain shares of the Issuing Party within one year from the
date of Prospectus approval. As of the date of Prospectus approval, no decisions also exists, which would entitle member of
the Board and of the Supervisory Board to purchase or to obtain shares of the Issuing Party in the future, under preference
conditions.
5.4.
Positioning and guarantees (subissue)
The Issuing Party did not sign and does not plan to sign a contract on a service or investment subissue. It means that no
entities exist, which would guarantee an issue on the basis of a binding agreement. Because of the above, no commission
on guaranteeing is planned.
Information of the entities, which obliged to position the offer without a binding agreement:
 Dom Maklerski IDM S.A. located in Kraków, being an Offering Party in the Public Offer will perform positioning actions
in the form of execution of the book-building process and meetings with Investors interested in obtaining Offered
Shares. DM IDM S.A. does not collect a separate salary for the aforementioned actions. The salary of the Offering Party
is calculated from the entirety of obtained shares and no commission on shares obtained as a result of the positioning
is distinguished.
 The Issuing Party: the Board of Rank Progress S.A. will participate in meetings with Investors interested in obtaining the
Offered Shares
There are no other entities than those mentioned above, which would decide to position the offer without a binding
agreement.
If a contract on a service or investment subissue is signed, a proper information is revealed to the general public, by making
an Annex to this Prospectus, approved by the KNF, available. This Annex will be revealed to the general public in the same
way as the Prospectus.
Page 260
Dom Maklerski IDM S.A. located in Kraków, Mały Rynek 7, is the Coordinator of the entire Offer. No coordinators working
on the parts of the Offer and entities positioning this Offer in other countries are planned.
Also, no payment agents are planned. After the Issue Prospectus is approved, it is predicted that services of the National
Deposit of Securities S.A. will be used, which is the main entity offering deposit services on the Polish capital market.
6. Approval of securities to circulation and statements related to circulation
6.1.
Approval of securities for circulation
It is the intention of the Issuing Party, that the Investors can circulate obtained Offered Shares as soon, as possible. To this
end, it is planned to introduce PDA Series C and Series B and C Shares to circulation on a regulated market, immediately
after fulfilling the conditions provided by law.
The Issuing Party will take all care necessary, so that immediately after the allocation of the Offered Shares, PDA Series C is
booked on accounts in the KDPW, in the number corresponding to the number of allocated Offered Shares.
The quotation date for Series C Shares on GPW depends mainly on the date of registration of Series C Shares by the court.
Thus, the Issuing Party has limited influence in the quotation date of Series C Shares on the GPW. Because of the above, the
Issuing Party plans to submit an application to the GPW for approval of PDA series C and Series B and C shares and an
application for approval of PDA Series C for circulation on the regulated marked. Once the registration court registers the
issue of Series C Shares, the Issuing Party will immediately submit an application to the KDPW, for exchange of PDA Series C
for Series C shares, and to GPW – for introduction of Series B and C Shares to the stock exchange circulation. It is the
nd
intention of the Issuing Party that PDA Series C and Series B Shares are quoted on the regulated market, i.e. GPW, in the 2
quarter of 2010. If it is impossible to fulfill all conditions necessary for approval for circulation on the primary market, the
Issuing Party will submit proper applications for introdcution of securities to the circulation on the parallel market.
If the registration court refuses to register the issue of Series C Shares – in this case an announcement about the legally
effective court decision will be published within 7 days from the date the decision of the register court, refusing the
registration of the company capital increase, becomes legally effective. The nature of PDA circulation forms a risk, that in
the situation, where the issue of Series C Shares does not take place, the owners of PDA Series C will obtain only the refund
equal to the product of the number of PDA booked on the account of the Investor, and the issue price of Series C Shares. If
the PDA are purchased on the stock exchange market, at a price higher than the issue price of Series C Shares, the investors
are about to record a loss on the investment. The paid amounts will be returned without interests and reparations within
14 days from the publication of the aforementioned announcement.
6.2.
Regulated markets or equivalent markets, on which the same class of shares are approved
for circulation, as shares offered or approved for circulation
Shares of the Issuing Party are not approved for circulation on any regulated (or equivalent) market.
6.3.
Information about securities being the subject of subscription or positioning at the same
time, or almost at the same time, as created securities, which are a subject of approval for
circulation on a regulated market
No securities exist, which are a subject of subscription or positioning at the same time, or almost at the same time as
created securities, which are a subject of approval for circulation on a regulated market.
6.4.
Information about agents in circulation on the secondary market
No entities exist, which have a binding obligation of acting as agents in circulation on the secondary market, which
guarantee viability using quotation of purchase and sale offers.
6.5.
Stabilising actions
The Offering Party or an investment subissuing party – if a subissue offer is signed – and other entities participating in the
quotation do not plan execution of actions related to a stabilisation of the quotations of the Offered Shares before, during,
and after the execution of the Public Offer.
7. Information about the owners of securities covered by the sale
7.1.
Information about the entities offering shares for sale and numer and type of shares offered
by each of the sellers
None of current shareholders of the Partnership offers shares for sale within the public offer.
7.2.
Number and type of securities offered by each of sellers, owners of securities
Page 261
According to p. 7.1. above, it is impossible to list data regarding shares offered by entities offering securities as a part of the
public offer.
7.3.
Contracts on prohibition of „lock up” type shares sales
All current shareholders, have signed the contracts listed below with the Partnership, before the beginning of the Public
Offer, on a temporal exclusion of the right of disposal of shares owned by them („lock–up” type contracts).
th
The subject of the contract dated April 28 , 2008 (with later annexes) between Mister Jan Mroczka (Shareholder) and the
Partnership is an obligation, that in the period from the date of the contract until 9 months from the end date of public
st
subscription of the shares of the Partnership, but not longer than until March 31 , 2011 the Shareholder will not duty,
mortgage, dispose of or make any other transfer of ownership rights to 8 125 480 priviledged, registered Series A Shares of
the Partnership (consisting 25% of the company capital of the Issuing Party) and will not take any actions, the economic
result of which will be similar to the transfer or duty of rights from the shares, unless such action is approved by the
Supervisory Board of the Partnership.
th
The subject of the contract dated April 28 , 2008 (with later annexes) between Mister Andrzej Bartnicki (Shareholder) and
the Partnership is an obligation, that in the period from the date of the contract until 9 months from the end date of public
st
subscription of the shares of the Partnership, but not longer than until March 31 , 2011 the Shareholder will not duty,
mortgage, dispose of or make any other transfer of ownership rights to 8 125 480 priviledged, registered Series A Shares of
the Partnership (consisting 25% of the company capital of the Issuing Party) and will not take any actions, the economic
Supervisory Board of the Partnership.
th
The subject of the contract dated April 24 , 2008 (with later annexes) between MB Progress Capital Limited located in
Nicosia (Cyprus) (Shareholders) and the Partnership is an obligation, that in the period from the date of the contract until 9
st
months from the end date of public subscription of the shares of the Partnership, but not longer than until March 31 ,
2011. The above obligation does not related to shares being sold, until the date of approval of the Issue Prospectus related
to the public offer of Series C Shares, within a non-public sale offer of shares of Rank Progress S.A., with the restriction, that
the Shareholder sells within the pre-IPO shares not included in this obligation, as the first ones. The Shareholder will not
duty, mortgage, dispose of or make any other transfer of ownership rights to 13 674 185 of Series B shares of the
Partnership (forming ca. 42,07% in the company capital of the Issuing Party) and will not take any actions, the economic
Supervisory Board of the Partnership, or if the sale is performed within a non-public sale of shares of Rank Progress S.A.
(pre-IPO).
All other shareholders, which do not participate in the company capital of the Issuing Party in the degree greater than 10%,
have obliged to the Partnership on the basis of art. 338 § 1 c.c.c., that in the period of six months from the end date of
st
public subscription of the shares of the Partnership, but not later than March 31 , 2011, will not mortgage, dispose of or
make any other transfer of ownership rights, as well as oblige not to perform such actions in regard to a part or to all their
Shares on the behalf of any third party, unless such action is approved by the Supervisory Board of the Partnership. This
obligation includes in total, 2.576.775 Series B shares owned by the aformentioned shareholders, which is equal to 7,93% of
the total number of owned shares.
According to the submitted disposal for shares blockade, all aforementioned Shareholders obliged not the terminate their
obligations before its termination. Management of shares against the aforementioned obligation causes the responsibility
of the Shareholders against the Partnership, but against third partis (e.g. buyers) in causes legal effects.
It also has to be stressed that the said obligation of the Shareholders has a legal-civil nature and thus the issues of a
potential responsibility by virtue of not executing or inadequately executing of the obligation are regulated by the
rd
o
regulation of the Civil Law Code (Act dated April 23 , 1964 Dz. U. 1964 N 16 pos. 93 with changes). Except for the
aforementioned regulations, no other regulations exist, which are related to responsibility in a case of violation of the said
obligations by the Shareholders.
All aforementioned shares of the Issuing Party have been located in a deposit managed by the Offering Party and they have
blockades related to the exclusion of their disposal. According to the above, in the opinion of the Issuing Party no risk exists,
that the obligation signed by the shareholders will not be fulfilled.
8. Quotation costs
The net amount planned to be obtained from the issue of Series C shares equals 51 mln PLN. The estimated costs of issue of
Series C Shares include costs of preparation of Prospectus, as well as costs of preparation and implementation of the Public
Offer of Series C Shares. Taking into account the initial estimation, the costs of the Offer will reach the level of ca. 4,7 mln
PLN, with the assumption that all Offered Shares will be obtained, at the maximum price.
Page 262
The Issuing Party will publish information regarding total income from subscription for Series C Shares, as well as regarding
total costs of Offer, in a form of current report, according to the deadlines listed in the regulation on current and periodic
information.
9. Dilution
List of the shareholders of the Issuing Party is presented below:
Table: Participation of shareholders in the company capital and their number of votes at the General Assembly of the
Issuing Party before the issue of Series C Shares.
% participation
% participation in the
Number of votes at
o
Shareholder
N of shares in shareholders
number of votes at
the GA
structure
the GA
Jan Mroczka
8 125 480
25,00%
16 250 960
33,33%
Andrzej Bartnicki
MB Progress Capital
Limited
Other
8 125 480
25,00%
16 250 960
33,33%
13 674 186
42,07%
13 674 186
28,05%
2 576 774
7,92%
2 576 774
5,28%
Total
32 501 920
100,00
48 752 880
100,00
*) MB Progress Capital Limited is an investment company located in Nicosia in Cyprus, the shareholders of which are Jan
Mroczka and Andrzej Bartnicki (half of shares each), thus shares owned by MB Progress Capital Limited are indirectly owned
by Jan Mroczka and Andrzej Bartnicki.
th
o
On November 9 , 2009, the Ordinary General Assembly of the Issuing Party made a Resolution N 15 on the increase of the
company capital of the Issuing Party by issuing no more than 4 643 130 normal Shares to Bearer, Series C (Series C Shares)
with the nominal value of 0,10 PLN each, with total exclusion of the right to subscription of the current shareholders of the
Issuing Party. Series C Shares will be totally covered with monetary contributions.
th
Series C shares will be offered through a Public Offer, as understood according to the Act dated July 29 , 2005, on public
offer and conditions of introduction of financial instrumentrs to an organised circulation system and on public parnterships
o
(Dz.U. N 183, pos. 1539).
Because of the above, the amount and percentage value of dilution has been calculated in a situation, if all Series C Shares
are obtained (4 643 130 Shares).
Table:
Dilution as a result of issue od Series C Shares (purchase of Series C Shares only by new Shareholders).
% participation
% participation in the
Number of votes at
o
Shareholder
N of shares in shareholders
number of votes at
the GA
structure
the GA
Jan Mroczka
8 125 480
21,88%
16 250 960
30,43%
Andrzej Bartnicki
8 125 480
21,88%
16 250 960
30,43%
13 674 186
36,81%
13 674 186
25,61%
Other
2 576 774
6,94%
2 576 774
4,83%
New shareholders
4 643 130
12,50%
4 643 130
8,70%
32 501 920
100,00
48 752 880
100,00
MB Progress Capital
Limited
Total
*) MB Progress Capital Limited is an investment company located in Nicosia in Cyprus, the shareholders of which are Jan
Mroczka and Andrzej Bartnicki (half of shares each), thus shares owned by MB Progress Capital Limited are indirectly owned
by Jan Mroczka and Andrzej Bartnicki.
10. Additional information
10.1. Description of activity scope of the advisors
Financial Advisor
Page 263
The Financial Advisor – PROFESCAPITAL Sp z o.o. – is related to the Issuing Party to an extent resulting from a contract on
fulfilling the duty of a financial advisor of the Issuing Party during the execution of the Public Offer of Offered Shares, which
is especially related to the preparations of the Issuing Party and to the preparation and execution of the Public Offer,
including actions within the scope of investor relations and advice related to actions on the capital market. The Financial
Advisor participated in preparation of a part of the Prospectus, as indicated in p. 1.2. Pary III „Registration Document”.
The Offering Party

The Offering Party – brokerage house Dom Maklerski IDMSA located in Kratów – is related to the Issuing Party to an
extent resulting from the contract on preparation and execution of the public offer of Offered Shares, which is
especially related to the preparations of the Issuing Party and to the preparation and execution of the Public Offer. The
Offering Party participated in preparation of a part of the Prospectus, as indicated in p. 1.3. Part III „Registration
Document”.
10.2. Indication of other information in the Quotation Document, which have been studied or
browsed by authorised expert auditors who prepared a report in relation to these
No other information were present in the Quotation Document, which could have been studied or browsed by authorised
expert auditors.
10.3. Information about the expert in the Quotation Document
The Quotation Document does not contain declarations or reports of people defined as experts.
10.4. Information obtained from third parties and indication of sources of these information
No informations from third parties were obtained for the Quotation Document.
Page 264
DEFINITIONS AND ABBREVIATIONS
Below, definitions and abbreviations used in the Issue Prospectus are presented.
Offered shares
Shareholder
“A”-class office building
Financial advisor
Directive 2003/71/EC
Dividend
4.643.130 of normal shares to bearer, Series C offered to obtain according to
the rules presented in the Prospectus
Owner of the Shares of the Partnership
A building type, which has an excellent quality of interior finishes, thorough
technical service and a favourable location, with easy road access and good
access to the city transport
Directive 2003/71/EC of the European Parliament and of the Coundil, dated
th
November 4 , 2003, on issue prospectus published in relation to a public offer
or approval of securities for circulation and amending the Directive
2001/34/EC
Participation of shareholders in the yearly profit of a stock partnership,
approved by the General Assembly of Shareholders, according to the KSH
Dz.U.
Dziennik Ustaw (Monitor of Acts) of the Republic of Poland
Issuing Party, Partnership, RANK
PROGRESS, RANK PROGRESS S.A.
euro, Euro, EUR, €
Rank Progress Spółka Akcyjna located in Legnica
Investor
Legal monetary unit of some countries of the European Union since January
st
1 , 1999
Stock Exchange in Warsaw S.A. (Giełda Papierów Wartościowych w Warszawie
S.A,)
The Capital Group of the Issuing Party includes the Issuing Party and its
dependent and bound entities, i.e. HIT Zarząd Majątkiem Polska Legnica 1 Sp. z
o.o., KMM Sp. z o.o. in liquidation, E.F. Progress I Sp. z o.o., E.F. Progress II Sp.
z o.o., E.F. Progress III Sp. z o.o., E.F. Progress IV Sp. z o.o., E.F. Progress V Sp. z
o.o., E.F. Progress VI Sp. z o.o., E.F. Progress VII Sp. z o.o., Rank Prosper
Skarżysko Kamienna Sp. z o.o., Colin Holdings Limited, Rank Müller Jelenia
Góra Sp. z o.o.
A person interested in obtaining Offered Shares
KDPW, Deposit
National Deposit of Securities S.A. (Krajowy Depozyt Papierów Wartościowych)
Stock Exchange, GPW
Capital Group of the Issuing Party,
Group of the Issuing Party
th
o
Commercial Companies Code, CCC, c.c.c Act dated September 15 , 2000 – Commercial Companies Code (Dz.U. N 94,
pos. 1037 with later changes.)
KNF/FSC
Financial Supervision Committee (Komisja Nadzoru Finansowego)
KRS/NCR
National Court Register (Krajowy Rejestr Sądowy)
MR
NWZ
Mortgage register
Extraordinary General Assembly of Rank Progress S.A.
NBP
National Bank of Poland
New Shares
Offered Shares
Public Offer, Offer
Public offer of 4.643.130 normal shares to bearer, Series C with a nominal
value of 0,10 PLN
Dom Maklerski IDMSA located in Kraków, Mały Rynek 7
Offering Party, DM IDMSA
Page 265
Tax Ordinance
th
o
PKB
Act dated August 29 , 1997, Tax Ordinance (uniform text: Dz. U. of 2005 N 8,
pos. 60, with later changes)
Gross Domestic Product
PKD
Polish Classification of Business Activity
CSP, Customer Service Point
Prospectus, Issue Prospectus
Customer service points of brokerage houses, which will accept subscriptions
for Offered Shares
A security, from which the right to obtain new issue shares of the issuing party
results at the moment these shares are allocated and expiring at the moment
the shares are registere in KDPW, or on the day of legal effectiveness of a
decision of a register court refusing the registration of increase of company
capital in the business entities register.
Priviledge of priority of purchase of new shares of the partnership by its
current shareholders.
This Issue Prospectus
Supervisory Board
The Supervisory Board of Rank Progress S.A.
GPW Status
The Status of Stock Exchange in Warsaw S.A.
Resolution on Prospectus
Status
Committee Regulation (EC) N 809/2004 dated April 29 , 2004, executing the
Directive 2003/71/WC of the European Parliament and of the Council on
information contained in issue prospectuses and their form, inclusion by
reference and publication of such issue prospectuses and on advertisement
propagation
District Court for Wrocław-Fabryczna in Wrocław, IX Economic Department of
the National Court Register
Status of Rank Progress S.A.
EU
European Union
OPCaC
Office for Protection of Competition and Customers
USD
Legal monetary unit of the United States of America
Act on Supervision of Financial Market
General Assembly, GA
Act dated July 21 , 2006 on the supervision of financial market (Dz. U. of 2006
o
N 157, pos. 1119)
th
Act dated July 29 , 2005 on the supervision of capital market (Dz. U. of 2005
o
N 183, pos. 1537)
th
o
Act dated July 29 , 2005 on circulation of financial instruments (Dz. U. N 183,
pos. 1538 with later changes)
th
Act dated February 16 , 2007, on protection of competition and customers
o
(Dz.U. of 2007, N 50 pos. 331)
th
Act dated July 29 , 2005 on public offer and conditions of introduction of
financial instruments to on organised circulation system and on public
o
partnerships (uniform text: Dz. U. of 2009 N 185, pos. 1439)
th
Act dated July 26 , 1991 on income tax on people (uniform text: Dz.U. of
o
2000, N 14, pos. 176, with later changes)
th
Act dated February 15 , 1992 on income tax on legal entities (uniform text:
o
Dz.U. of 2000, N 54, pos. 654, with later changes)
th
Act dated September 9 , 2000 on tax from civil-legal actions (uniform text:
o
Dz.U. of 2007, N 68, pos. 450 with later changes)
th
o
Act dated September 29 , 1994 on accounting (uniform text: Dz. U. of 2009 N
152, pos. 1223)
nd
o
Act dated July 2 , 2004 on freedom of business activity (Dz. U. N 173, pos.
1807 with later changes)
th
Act dated May 11 , 2007, on creation and functioning of large-area
o
commercial objects (Dz. U. N 127 pos. 880)
th
o
Act dated July 7 , 1994 Construction Law (Dz. U N 89 pos. 414 with later
changes)
th
o
Act dated June 30 , 2000, Industrial Ownership Law (Dz. U N 49 pos. 508 with
later changes)
The General Assembly of Rank Progress S.A.
The Board
The Board of Rank Progress S.A.
The Stock Exchange Board
The Board of the Stock Exchange in Warsaw S.A.
Rights to Shares, PDA
Rights to subscription, PP
Register Court
Act on Supervision of Capital Market
Act on Circulation of Financial
Instruments
Act on Protection of Competition and
Customers
Act on Public Offer, Act on Offer
Act on Income Tax on People
Act on Income Tax on Legal Entities
Act on Tax from Civil-legal actions
Act on Accounting
Act on Freedom of Business Activity
Act on creation and functioning of
large-area commercial objects
Act on Construction Law
Act on Industrial Ownership Law
o
st
Page 266
th
Złoty, zł, PLN
Legal monetary unit of the Republic of Poland, in general circulation since
st
th
January 1 , 1995 according to the Act dated July 7 , 1994 on denomination of
o
zloty (Dz.U. N 84, pos. 383, with later changes)
FORMS AND APPENDICES
Appendix No 1 – Subscription form for offered shares of Rank Progress S.A.
SUBSCRIPTION FORM FOR OFFERED SHARES OF RANK PROGRESS S.A
Number of subscription certificate....................................
Brokerage house accepting subscription: ..............................................................................................................
Brokerage house address: ..............................................................................................................................
This document forms a subscription for Offered Shares of Rank Progress S.A. located in Legnica. The Offered Shares are
normal shares to bearer, with a nominal value of 0,10 zł each, designed for obtaining in a Public Offer, under conditions
specified in the Prospectus and in this subscription form.
Subscriptions will be accepted for number of Offered Shares not less than 50 shares, A subscription for the number of
Offered Shares less than 50 shares will be treated as invalid. Subscriptions for a number of Offered Shares greater than the
total number of shares available in the given Tranche will be treated as subscriptions for the maximum number of Offered
Shares available in the given Tranche and they will be subjected to reductions.
1. Name and surname (name of company of a legal entity):.......................................................................................
2. Place of residence (legal entity office):
Postal Code:........-............... City/Town.....................................................
o
Street: ................................................................................. House/flat N : .........................
o
3. Domestic citizens: PERSONAL ID N , PESEL or REGON (or other identification
o
N ):......................................................................................................................................
4. Correspondence address (best phone #).......................................................................................
5. e-mail addreess.......................................................................................
6. Foreign citizens: passport number, number of proper legal entities register:.....................................
7. Personal data of a legal entity representative:
..................................................................................................................................................................
8. Number of subscribed Offered Shares: .................(in words.................................................................................)
9. Amount paid for Offered Shares: ............................zł (in words...............................................................................)
10. Form of payment for Offered Shares: .............................................................................................................................
*
11. Form of payment return if no allocation or no issue takes place
 In cash, collected at the brokerage house accepting subscriptions
 Bank transfer to the account: account owner.................................................................................
o
Account in ................................ Account N ........................................................................................
 other: ................................................................................................................................................
*
12. Do you place a disposal of deposition of the Offered Shares :
 yes
 no
13. Brokerage house, where the Offered Shares are to be deposited: .........................................................................
*
mark the proper field with an “x”
Page 267
14.
15.
16.
17.
18.
19.
20.
KDPW Code of the brokerage house, where the Offered Shares are to be deposited: ................................................
Number of securities account...........................................................................................
*
Did you participate in the book-building process
 yes
 no
Number of Purchase Declaration, used by the Investor: ..........................................................................
Number of Offered Shares indicated in the Purchase Declaration: .................................................................
Price declared in Purchase Declaration: ....................................................................................................
I place the subscription in the Tranche:
 Open  Institutional Investors
Note! Missing or improper definitions of evidence data of the Investor or the method or return of the paid amount (or a
part thereof) can result in a delayed payment of paid fees. The return of the payment is made without any interests and
reparations. The Investor is fully responsible for consequences resulting from an improperly filled form.
DECLARATION OF THE SUBSCRIBER
I, hereby signed, declare that I have acknowledged the contents of the Issue Prospectus of Rank Progress S.A., accept
conditions of the Public Offer, I know the contents of the Status of Rank Progress S.A. and I agree to its contents as well as I
agree to join the Partnership. I agree to allocation of Offered Shares in the number resulting from the subscription or lower
than subscribed for, or not to have allocated Shares at all, according to the conditions specified in the Issue Prospectus.
Allocation of no Offered Shares at all or of a lower number thereof can take place only as a result of application of rules of
allocation of Offered Shares, described in the Prospectus. I hereby agree for my personal data to be processed in the scope
necessary for execution of Public Offer of shares of Rank Progress S.A.
……………………………………………………………..
……………………………………………………………
Date and signature of the subscriber
Date of subscription submission
Signature and stamp of the subscription collector
Page 268
Appendix No 2 – Disposal of deposition of Offered Shares of Rank Progress S.A.
DISPOSAL OF DEPOSITION OF OFFERED SHARES OF RANK PROGRESS S.A.
Next number....................................
Data of the account owner:
1.
2.
3.
4.
Name and surname (name of a company of a legal entity):
........................................................................................................................................................................
Place of residence (office of the legal entity):
Postal code:........-...............
City/Town.....................................................
Street: ................................................................. House / flat number: ...............................................
PESEL, REGON (or other identification number): ...................................................................................
Correspondence address (best contact phone #):
.............................................................................................................................................................
Data of person executing the disposal or a person acting in the name of a legal entity:
1.
2.
3.
4.
5.
Name and surname (name of a company of a legal entity):
.................................................................................................................................................................
Place of residence (office of the legal entity):
Postal code:........-...............
City/Town.....................................................
Street: ................................................................. House / flat number: ...............................................
PESEL, REGON (or other identification number):................................................................................................
o
Personal ID N :…………………………………………………………………………………………….
Correspondence address (best contact phone #)
........................................................................................................................................................................
Shares, for which the subscription is made:
1.
2.
3.
4.
5.
Number of Offered Shares, on which the subscription is made: .................. (in worde:
.................................................................................)
Brokerage house, where the Offered Shares are to be deposited
.........................................................................................
KDPW Code of the brokerage house, where the Offered Shares are to be deposited
.........................................................................................
Number of securities account
.........................................................................................
Subscription certificate number
.........................................................................................
Note:
The Investor holds the sole responsibility for the consequences being a result of an improperly filled form.
Page 269
DECLARATION OF THE PERSON MAKING THE DISPOSAL
I hereby make an irrevocable disposal of deposition all Offered Shares of Rank Progress S.A. allocated to me on a securities
account specified above.
I oblige to inform the POK, where I have made the subscription, in a written form, about all changres related to my
securities account.
I agree for this form to be filled with a subscription certificate number by an employee of the CSP in a case, when monetary
assets will not arrive on the account of CSO until the moment of subscription.
……………………………………………………..
………………………………………………………………
Date and signature of the person who makes the disposal
Date of subscription submission
Signature and stamp of the subscription collector
The Investor holds the sole responsibility for the consequences being a result of an improperly filled form.
Appendix No 3 – Declaration of interest in a purchase of Offered Shares of Rank Progress S.A.
DECLARATION OF INTEREST IN A PURCHASE OF OFFERED SHARES OF RANK PROGRESS S.A.
Next number....................................
The goal of the declaration of interest in a purchase of Offered Shares is to define the size of demand for Offered Shares of
Rank Progress S.A. and it can be used to define the issue price of shares.
The price of Offered Shares should be defined in this Purchase Declaration as an approximation 0,01 zł.
The declared number of Offered Shares should be a multiple of 10 pieces. The declared number of Offered Shares should
not be less than 100 pieces and no more than the number available in the Tranche, in which the subscription will be made.
We expect, that in a case of definition of the issue price equal to or lower than the price defined by you in the Purchase
Declaration for Offered Shares, it will be changed into the subscription entry related to the Offered Shares.
We also empahise, that this Purchase Declaration does not constitute a subscription as understood according to the
Prospectus of Rank Progress S.A. Additionally, it is not binding for any of the parties – with the execption of preferences of
priority of allocation of Offered Shares for the participants of the book building process, described in the Prospectus.
1.
2.
3.
4.
5.
6.
Date ..........................
Name and surname (company).............................................................................................................................
Address (office) .........................................................................................................................................
Correspondence address (tel/fax) ..............................................................................................................
Identity document, PESEL, REGON or other identification number.....................................................
Currency status ..........................................
I hereby declare interest in the purchase of Offeres Shares of Rank Progress S.A. according to the rules specified in the Issue
Prospectus.
Number of Offered Shares: .........................
Price of Offered Shares: .........................
I will make a subscription in the Tranche .......................................................
o
Fax N and e-mail address for invitations sent in the Institutional Investors Tranche ...........................
Page 270
…………………………………………………………
…………………………………………………………..
Date and signature of the person submitting Purchase
Declaration
Date of Declaration submission and signature and stamp of
the person accepting the Purchase Declaration
CONFIRMATION OF PURCHASE DECLARATION USE
I hereby confirm the use of Purchase Declaration according to the rules specified in the Issue Prospectus
…………………………………………………………
…………………………………………………………..
Date and signature of the person submitting Purchase
Declaration
Date of confirmation and signature and stamp of the
person accepting the Purchase Declaration
Appendix No 4 - List of subscription points accepting subscriptions for shares
List of CSPs
o
N
Brokerage house
Address
City
Phone
1
DM IDMSA
Mały Rynek 7
31-041 Kraków
(012) 397-06-20
2
DM IDMSA
ul. Króla Kazimierza Wielkiego 29
32-300 Olkusz
(032) 625-73-75
3
DM IDMSA
ul. Wałowa 16
33-100 Tarnów
(014) 632-60-15
4
DM IDMSA
ul. Nowogrodzka 62 b
02-002 Warszawa
(022) 489-94-50
5
DM IDMSA
ul. Batorego 5
47-400 Racibórz
(032) 459-44-65
6
DM IDMSA
Rynek 36B II piętro
48-300 Nysa
(077) 409-11-25
7
DM IDMSA
ul. Zwycięstwa 14
44-100 Gliwice
(032) 333-15-85
8
DM IDMSA
ul. Kościuszki 30
40-048 Katowice
(032) 609-04-85
9
DM IDMSA
ul. 3 maja 18/2
20-078 Lublin
(081) 528-61-85
10
DM IDMSA
ul. Bukowska 12
60-810 Poznań
(061) 622-18-10
11
DM IDMSA
90-318 Łódź
(042) 663-12-30
12
DM IDMSA
ul. Jagiellońska 85 / 3
70-437 Szczecin
(091) 432-31-12
13
DM IDMSA
ul. Świdnicka 18/20, 3 floor
50- 068 Wrocław
(071) 390-16-62
ul. Sienkiewicza 82/84
nd
2 floor of Zenit Office Centre
rd
Page 271
Appendix 5 – The Status
STATUS OF THE STOCK PARTNERSHIP
(uniform text dated 30.01.2010)
§ 1.
GENERAL STATEMENTS
1.1
The name of the partnership is: Rank Progress Spółka Akcyjna. The Partnership can also use an abbreviated name:
Rank Progress S.A.
1.2
In the international trade, the partnership can use the name: „Rank Progress” with a proper suffix, indicating the
legal form of the partnership.
1.3
The Partnership is located in Legnica.
1.4
The Partnership acts on the territory of the Republic of Poland and abroad.
1.5
The Partnership can create branches, factories, representative offices and other organisational units on the territory
of its activity.
1.6
The Partnership can be a shareholder/partner in other partnerships in Poland and abroad, it can also participate in
all legally accepted organisational-legal ventures.
1.7
The Partnership is meant to exist permanently.
1.8
The Partnership was created as a result of transformation of a partnership named: Bartnicki, Mroczka E.F.RANK
PROGRESS Spółka Jawna (general partnership) located in Legnica, registered in the Business Entities Register with
the KRS number: 0000003563 in the District Court for Wrocław - Fabryczna in Wrocław, IX Economic Department of
the National Court Register, according to a resolution of the partners of this Partnership, included in the protocol
st
prepared by a notary, Elżbieta Rączkowska – Martyn in a Notarial Office in Legnica on October 1 , 2007, included in
Repertorium A with the number 11956/07, the assets of which, as a company, are brought to the partnership
created by the transformation, while retaining the same proportions of current capital levels of the partners,
according to the opinion and a report of an expert auditor from a study of transformation plan and evlauation of
st
assets and credits as of May 31 , 2007, as well as from a financial report for the period from 01.01.2007 to
31.05.2007.
1.9
The Founders of the Partnership created as a result of the transformation, are partners of the Partnership of the
company name: Bartnicki, Mroczka E.F.RANK PROGRESS Spółka Jawna (general partnership) located in Legnica,
namely, the following people:
1)
Andrzej Wojciech Bartnicki,
2)
Jan Roman Mroczka.
§ 2.
SUBJECT OF ACTIVITY OF THE PARTNERSHIP
2.1
1.
2.
The subject of activity of the Partnership includes:
45.11.Z – deconstruction and demolition of buildings; ground works,
43.13.Z – execution of geological-engineering digs and drillings,
Page 272
3.
4.
5.
6.
7.
8.
41.20.Z – Execution of general construction works related to buliding construction,
42.13.Z – Execution of general construction works related to bridges and tunnels,
42.12.Z – Execution of general construction works related to

Issue Prospectus for shares of

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