Report of the Management Board of Towarzystwo Finansowe SKOK S.A. from the Issuer activity for 2012

Transcription

1 Report of the Management Board of Towarzystwo Finansowe SKOK S.A. from the Issuer activity for 2012 Gdańsk, 13 March 2013 CU Financial Society, Joint-Stock Company (Towarzystwo Finansowe SKOK Spółka Akcyjna), with its seat in Gdańsk, at: Gdańsk, at ul. Arkońska 11, entered into register of entrepreneurs kept by the District Court Gdańsk - Północ in Gdańsk 7th commercial division under National Court 0

2 Register number NCR Tax Identification Number NIP , share capital: PLN ,00 - fully paid in. I. CHARACTERISTICS OF THE COMPANY Name (business name): Towarzystwo Finansowe Spółdzielczych Kas Oszczędnościowo-Kredytowych Spółka Akcyjna Registered office: Gdańsk Address: ul. Arkońska 11, Gdańsk Phone no.: (+48 58) Fax: (+48 58) tfskok@tfskok.pl Web page: Financial statement for the period from 1 January to 31 December 2012 have been prepared in accordance with International Accounting Standards / International Financial Reporting Standards (IFRS) and related interpretations published in the form of European Commission regulations. Financial statements have been prepared assuming that Towarzystwo Finansowe SKOK S.A. (hereinafter referred to as: the "Company", "Issuer", "CU Financial Society"") shall continue to operate in the foreseeable future. At the date of this report there are no circumstances indicating a threat to continuation of Company's business. The functional currency and currency of presentation in the financial statements is the Polish Zloty (PLN). All figures in the financial statements are presented in thousands of PLN, unless indicated otherwise. 1. Business overview of the Company The main areas of activity of the Company are: issuing and servicing payment cards; management of cash dispenser networks: SKOK 24, ecard and Global Cash; authorization and settlement of cash transactions, including e-commerce and mobile transaction; software development services for financial institutions, serving banking and insurance products, electronic banking; call centre, including conducting active marketing campaigns, telephone hotline, and recovery services; outsourcing services in provision of information technology infrastructure, maintenance and operation of software, regional service of users; support for operations and development of entities in the system of Cooperative Savings and Credit Unions (hereinafter the "CU") by providing them with comprehensive solutions and services in information technology; provides money transfer services in international trade, as a representative of Western Union. 2. Information about organizational or capital relations of the Issuer with other entities and identification of its main domestic and foreign investments (securities, financial instruments, intangible assets and real property) including 1

3 capital investments made outside its group of related entities and description of methods for their financing. MAING SHAREHOLDERS SKOK Holding S.a.r.l. At 31st December 2012 SKOK Holding S.a.r.l. had shares in the Company, representing 32,06% of the share capital of the Issuer, which constituted 62,81% of the overall amount of votes at the ordinary meeting Chairman of the Management Board of SKOK Holding S.à.r.l. also serves as Member of the Supervisory Board of the Company. Vice-Chairman of SKOK Holding S.a.r.l. also serves as Vice-Chairman of the Supervisory Boards of the Issuer. Spółdzielcza Kasa Oszczędnościowo-Kredytowa im. Franciszka Stefczyka (hereinafter: SKOK Stefczyka) At 31st December 2012 SKOK Stefczyka had shares in the Company, representing 65,40% of the share capital of the Issuer, which constituted 32,21% of the overall amount of votes at the ordinary meeting Chairman of the Management Board of SKOK Stefczyka is Secretary of the Supervisory Board of the Company. Chairman of the Supervisory Board of SKOK Stefczyka is a Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. Treasurer of the Supervisory Board of SKOK Stefczyka is Vice-Chairman of the Supervisory Board of the Issuer and Vice-President of SKOK Holding S.a.r.l. OTHER UNRELATED ENTITIES CU Management Society Sp. z o.o. SKA (Ltd) Limited Partnership (hereinafter: TZ SKOK SKA ) At 31st December 2012 The Issuer had named shares of TZ SKOK SKA, representing 42,27% of the share capital of the TZ SKOK SKA. Chairman of the Supervisory Board of TZ SKOK SKA is Chairman of the Supervisory Board the Issuer and President of SKOK Holding S.a.r.l. A ecard S.A. ecard joint stock company is an entity in which the President, Vice-President and Member of the Management Board are the President and two members of the Management Board of the Issuer. Person acting as Chairman of the Supervisory Board of ecard also serves as Chairman of the Supervisory Boards of the Issuer and President of SKOK Holding S.a.r.l. 2

4 Person acting as Vice-Chairman of the Supervisory Board of ecard also serves as Vice- Chairman of the Supervisory Boards of the Issuer and Vice-President of SKOK Holding S.a.r.l. Member of the Supervisory Board of ecard joint stock company, also acts as Secretary of the Supervisory Board of the Issuer and President of the Management Board of Stefczyk Cooperative Savings and Credit Union. Cooperative Research Institute Labour Cooperative (hereinafter: KSKOK ) Spółka jest powiązana ze względu na podleganie kontroli przez tę samą jednostkę co Emitent przez SKOK Stefczyka, który na dzień r. posiadał 54,63% udziałów w KSKOK. Przewodniczący Rady Nadzorczej KSKOK pełni równocześnie funkcje: Przewodniczącego Rady Nadzorczej Spółki oraz Prezesa Zarządu SKOK Holding S.a.r.l. Cooperative Research Institute Labour Cooperative (hereinafter referred to as: SIN ) Chairman of the Management Board of SIN SP is a Member of the Supervisory Board of the Company and the Chairman of SKOK Holding S.à.r.l. Przewodniczącego Rady Nadzorczej Spółki oraz Prezesa Zarządu SKOK Holding S.a.r.l. Cooperative and Mutual Insurance Society (hereinafter: TUW SKOK ) This entity is related due to the control by SKOK Holding S.a.r.l., which as at 31st December 2012 had 80.37% shares in TUW SKOK. Therefore, TUW SKOK was under control of the same entity as the Issuer. Member of the Management Board of TUW SKOK is Vice-Chairman of the Management Board of SKOK Holding S.a.r.l. and Vice-Chairman of the Supervisory Boards of the Issuer. Chairman of the Management Board of TUW SKOK is President of the Management Board of SKOK Holding S.a.r.l. and Chairman of the Supervisory Boards of the Issuer. Cooperative Life Insurance Society Joint Stock Company (hereinafter referred to as: TU SKOK Życie S.A. ) This entity is related due to the control by SKOK Holding S.a.r.l., which as at 31st December 2012 had 73.93% shares in TU SKOK Życie. Therefore, TU SKOK was under control of the same entity as the Issuer. Member of the Management Board of TU SKOK Życie is Vice-Chairman of the Supervisory Board of Issuer and Vice-President of the Management Board of SKOK Holding S.à.r.l. Chairman of the Supervisory Board of TU SKOK Życie S.A is Chairman of the Supervisory Board the Issuer and President of SKOK Holding S.a.r.l. A Asekuracja Sp. z o.o. 3

5 This entity is related due to the control by SKOK Holding S.a.r.l., which as at 31st December 2012 had 100% shares in Asekuracja Sp. z o.o Therefore, Asekuracja Sp. z o.o was under control of the same entity as the Issuer. Member of the Management Board of Asekuracja Sp. z o.o. is Vice-Chairman of the Supervisory Board of Issuer and Vice-President of SKOK Holding S.à.r.l. Chairman of the Management Board of Asekuracja Sp. z o.o. Supervisory Board of Issuer and President of SKOK Holding S.à.r.l. is Chairman of the ARS Sp. z o.o. This entity is related due to the control by SKOK Holding S.a.r.l., which as at 31st December 2012 had 100% shares in ARS Sp. z o.o Therefore, ARS Sp. z o.o was under control of the same entity as the Issuer. AWEK Sp. z o.o. This entity is related due to the control by SKOK Holding S.a.r.l., which as at 31st December 2012 had 51% shares in Awek Sp. z o.o Therefore, Awek Sp. z o.o was under control of the same entity as the Issuer. CU Investment Funds Society, Joint-Stock Co. (hereinafter referred to as: TFI SKOK S.A. ) Chairman of the Supervisory Board of TFI SKOK S.A. is Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. Vice-Chairman of the Supervisory Board of TFI SKOK S.A. is Vice-Chairman of the Supervisory Board of the Issuer and Vice-President of SKOK Holding S.a.r.l. Stefczyk Leasing CU Investment Funds Society, Joint-Stock Co. (hereinafter: Stefczyk Leasing ) The entity is related to due to the control by the same entity as the Issuer - SKOK Stefczyka which as at 31st December 2012 had 100% shares in Stefczyk Leasing. This entity is related due to the control by SKOK Stefczyka., which as at 31st December 2012 had 100% shares in Stefczyk Leasing. Apella S.A. The entity is related to due to the control by the same entity as the Issuer - SKOK Holding S.a.r.l., which as at 31st December 2012 had 99.58% shares in Apella S.A. Chairman of the Supervisory Board of Apella S.A. is Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. Vice-Chairman of the Supervisory Board of Apella S.A. is Vice-Chairman of the Supervisory Board of the Issuer and Vice-President of SKOK Holding S.a.r.l. 4

6 Member of the Supervisory Board of Apella S.A. is the Secretary of the Supervisory Board of the Issuer. The Society for Promotion of Financial Education (hereinafter: SKEF ) Chairman of the Audit Committee of SKEF is Vice-Chairman of the Supervisory Board of the Issuer and Vice-President of SKOK Holding S.a.r.l. Ecco Holiday Sp. z o.o. (Ltd.) Chairman of the Supervisory Board of Ecco Holiday Sp. z o.o. is Vice-Chairman of the Supervisory Board of Issuer and Vice-President of SKOK Holding S.à.r.l. CU Management Society Sp. z o.o. (Ltd.) (hereinafter referred to as: TZ SKOK ) Chairman of the Supervisory Board of TZ SKOK SKA is Vice-Chairman of the Supervisory Board the Issuer and Vice-President of SKOK Holding S.a.r.l. A Vice-President of the Supervisory Board of TZ SKOK. is the Secretary of the Supervisory Board of the Issuer. XTRADE S.A. Chairman of the Supervisory Board of XTRADE S.A is Vice-Chairman of the Supervisory Board the Issuer and Vice-President of SKOK Holding S.a.r.l. A Foundation for the Support of Mutual Insurance (hereinafter: FWUW ) Chairman of the Supervisory Board of FWUW is Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. Foundation of Franciszek Stefczyk (hereinafter: Foundation ) Chairman of the Board of Trustees of the Foundation is Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. Member of Board of Trustees of the Foundation is the Secretary of the Supervisory Board of the Company. ASK INVEST S.a.r.l. Member of the Management Board of the Issuer is Member of the Board of ASK INVEST S.a.r.l. CU Management Society Sp. z o.o. (Ltd) SKA Limited Partnership (hereinafter: Stefczyk Finanse ) The entity is related to due to the control by the same entity as the Issuer - SKOK Holding S.a.r.l., which as at 31st December 2012 had 100% shares in Stefczyk Finanse. Chairman of the Supervisory Board of Stefczyk Finanse is Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. 5

7 Vice-Chairman of the Supervisory Board of Stefczyk Finanse is Vice-Chairman of the Supervisory Board of the Issuer and Vice-President of SKOK Holding S.a.r.l. Spółdzielnia Stefczyka Chairman of the Supervisory Board of Spółdzielnia Stefczyka is Vice-Chairman of the Supervisory Board the Issuer and Vice-President of SKOK Holding S.a.r.l. A Stefczyk Real Estate CU Management Society Sp. z o.o. SKA (Ltd) Limited Partnership (hereinafter: Stefczyk Nieruchomości ) The entity is related to due to the control by the same entity as the Issuer - SKOK Holding S.a.r.l., which as at 31st December 2012 had 100% shares in Stefczyk Nieruchomości. Chairman of the Supervisory Board of Stefczyk Nieruchomości is Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. Chairman of the Supervisory Board of Stefczyk Nieruchomości is Vice-Chairman of the Supervisory Board of the Issuer and Vice-President of SKOK Holding S.a.r.l. Finance Community CU Management Society Sp. z o.o. SKA (Ltd) Limited Partnership (hereinafter: Wspólnota Finanse ) Chairman of the Supervisory Board of Wspólnota Finanse is Chairman of the Supervisory Board of the Issuer and President of SKOK Holding S.a.r.l. Vice-Chairman of the Supervisory Board of Wspólnota Finanse is Vice-Chairman of the Supervisory Board of the Issuer and Vice-President of SKOK Holding S.a.r.l. 3. Changes in the basic principles of management of the Issuer's business. There were no changes in basic management principles of the Issuer's business in Value of remuneration, bonuses or benefits, including those resulting from incentive or bonus programs based on the capital of the Issuer, including programs based on bonds with the right of priority, exchangeable, subscription warrants (in cash, in kind or any other form), paid, due or potentially due to each of the persons managing and supervising the Issuer in the Issuer' business, irrespective of whether they were properly counted in costs, or the resulted from profit sharing. Board remuneration in 2012 in the Company Ewa Bereśniewicz-Kozłowska 526 Tomasz Krasiński 392 Alicja Kuran-Kawka 385 Marcin Golas 349 Cezary Godziuk* 175 Total 1,827 *Member of the Management Board from 1 June

8 Supervisory Board remuneration in 2012 in the Company Szumański Andrzej 70 Matusiak Rafał* 53 Andrzej Sosnowski 57 Grzegorz Buczkowski 58 Monika Bentkowska** 5 Grzegorz Bierecki 71 Total 314 *to 25 October 2012 *from 29 November All agreements concluded between the Issuer and managing persons which envisage compensation in case of their resignation or dismissal from the position held, without material reason, or if their dismissal or resignation is caused by merger of the Issuer through takeover. There are no agreements concluded which envisage compensation for managing persons in case of their resignation or dismissal from the position held, without material reason, or if their dismissal or resignation is caused by merger of the Issuer through takeover. 6. Determination of the total number and nominal value of all shares of the Issuer and shares in affiliated entities of the Issuer held by managers and supervisors (for each person separately.) Shareholder Alicja Kuran-Kawka Member of the Board Marcin Golas Member of the Board Grzegorz Buczkowski - Vice-Chairman of the Supervisory Board Andrzej Sosnowski -Member of the Supervisory Board Grzegorz Bierecki Number of shares / Number of votes at a general meeting Share in the share capital as of 13/03/2013 Par value of shares in PLN Share in the total number of votes at the General Meeting on 31st December 2012 Share in the total number of votes at the General Meeting on 26th April , % 4, % 0.005% 4, % 4, % 0.005% 184, % 184, % 0.189% 75, % 75, % 0.077% 206, % 206, % 0.211% -Member of the Supervisory Board Other persons managing and supervising the Issuer did not own shares in the Company as at the balance sheet date or the date of submission of the report. 7

9 7. Information about agreements known to the Issuer (including those entered into after the balance sheet day), which could in the future result in change in proportions of shares held by existing shareholders and bondholders. The Issuer is not aware of any agreements, which could result in changes in the proportion of shares held by existing shareholders. 8. Information about the system for verification of employee share schemes. The Company does not keep employee share scheme. 9. Information on purchase of own shares, in particular on purpose of their acquisition, the number and nominal value, indicating what part of capital they represent, the purchase price and sale price of such shares in the event of their sale. In 2012 the Company did not purchase its own shares. 8

10 II. CHARACTERISTICS OF THE COMPANY BUSINESS 1. Information on the basic products, goods or services along with determination of their value and quantity and share of individual products, goods and services (if they are relevant) or their groups in the Issuer's total sales, as well as changes in this area in a given accounting year. The main sources of revenues in 2012 were income from card and ATM activities and IT services. IT services The Issuer is a provider of comprehensive IT solutions. It specialises in the It provides also IT modern technologies for the Entities of SKOK System. In 2011 card and ATM activities brought the Company income in the amount of PLN 52,819, increase by 18% in relation to 2011 (2011: PLN 44,637), which accounted to 48% of the toatl value of the income on sales. Card and ATM activities COKiT ) The company provides services of issuing and service of payment cards, management of ATM networks: SKOK 24, ecard and Global Cash and authorization and settlement of non-cashtransactions. In 2012 card and ATM activities brought the Company income in the amount of PLN 47,264 thousand, i.e. about PLN 7, 071 thousand more (increase by 18%) in relation to The share of the above mentioned activities in income from sales reached the level of 43%. 9

11 Money transfer services (hereinafter: Western Union ) With regard to money transfer services, the Company is a representative of Western Union Limited. This activity is carried out in cooperation with Cooperative Savings and Credit Unions. Income in 2012 increased by PLN 479 thousand (increase by 10%) in relation to 2011 and amounted to PLN thousand. Income from Western Union transfers in 2012 accounted for 5% of the total value of income from sales. Income in 2012 in the various business sectors were as follows (in PLN thousands): Business segments COKiT Western Union IT services Other services Total* Total revenue 47,264 5,202 52,819 3, ,277 including: external sales 47,264 5,202 52,819 2, ,277 Total expenses 40,207 2,603 42,533 3,785 89,128 including: external costs 40,207 2,603 42,533 3,785 89,128 Segment result 7,057 2,599 10, ,149 *gross result from the sale 2. Information on sales markets, including breakdown between domestic and foreign markets, and information about the sources of supply of materials for production, in goods and services, identifying the dependence on one or more customers and suppliers, and in case if the share of one customer or supplier reaches at least 10% of total sales revenue - name (business name) of the supplier or customer, its share in sale and supply and its formal ties with the CU Financial Society Joint Stock Company. In 2012, all sales were made on the domestic market. The only recipients of services in 2012, which share constitutes at least 10% of sales income was SKOK Stefczyka which share of sales was 39,5%. SKOK Stefczyka relations with the Issuer are described in section I.2. The basis for the provision of services is mainly Agreement on participation in the ATM network of 24th September 2007 and Agreement on outsourcing IT services and equipment lease of February 1st None of the suppliers reached at least 10% share in sales income. 3. Information about concluded agreement, which are significant for the Issuer' business, including known to the Issuer agreements between the shareholders (partners), insurance, cooperation or collaboration agreements. On 18th October 2012 the Issuer signed the Annexe to the PLN Current Account Credit Agreement (of which the Company informed in the Current Report RB 36/2010 of 10th December 2010) (hereinafter referred to as the "Annexe"). Based on the Annexe the Company was granted a loan in the amount not exceeding PLN 120,000 thou. in the period 10

12 from 13th October 2012 to 10th October 2013 which shall be assigned and utilised to finance a cash injection to the ATM network operated by the Company (Current Report RB 19/2012 of 18th October 2012). Funds release took place after submitting by the Company the documents confirming the collateral set out in the Agreement. The collateral is: 1. blank promissory note of the Company dated on , provided with the Annex 1 of 7 October 2011 to the promissory note declaration of surety of the National Cooperative of Savings and Credit Unions, based in Sopot, ul. Władysława IV 22, Sopot (hereinafter referred as to: KSKOK ), granted in the amount of PLN120,000 with the interests and other costs accrued from the capital. 3. Transfer of ownership of Treasury bonds owned by the KSKOK under the Agreement of 23 December 2010 as amended (Current Report 39/2011 of 10 October 2011). Moreover, in 2012, the Company did not enter into insurance, cooperation and collaboration agreements that are of significant importance to the Company. Also, the Company is not aware of any information on any agreements significant for the Company concluded in 2012 between the shareholders. 4. Information on important transactions entered into by the Issuer or its subsidiary with related entities on terms other than market terms, with their amounts and information specifying character of those transactions. In 2012, there have been no transactions entered into by the Company with related parties on terms other than market terms. 5. Information on concluded and terminated in a given year agreements for loans, with stating at least their amount, type and interest rate, currency and maturity. Apart from the mentioned in point II.3 annexe in 2012, the Company has not taken and did not terminate any credits and loans. 6. Information on loans granted in the financial year, with particular emphasis on loans granted to affiliates of the issuer, indicating at least the amount, type and interest rate, currency and maturity, as well as issued and received, during the fiscal year, warranties and guarantees, with particular regard to guarantees granted to related entities of the issuer. In 2012 the Company did not receive or grant loans and guarantees, apart from those mentioned in the point II Assessment, together with the reasons, on the management of financial resources, with particular emphasis on the ability to meet undertaken obligations, and to identify potential threats and actions that the issuer has taken or intends to take to counteract these threats. Financial situation of the Issuer, in the opinion of the Management Board does not constitute a threat to its continuing operation, and for implementation of investment plans. The company has a secure capital structure and financial resources enable the Company to fully implement its undertaken commitments: assets are fully covered by the fixed capital of the Company, 11

13 share of equity in fixed capital (equity, long-term liabilities and provisions for liabilities) is 92%, liquidity ratios indicate that the Company does not have problems with the current payment of liabilities: the most liquid assets - cash - constitute 78% of the value of short-term liabilities. In 2012, in relation to 2011, significant improvement of capital structure of the Company occurred, demonstrated by the indicators of general debt and indebtedness of equity, presented in item III.10. No threats occur related to maintaining the cash flow and solvency in the long-term perspective. 8. Assessment of the feasibility of investment plans, including equity investments, compared to the resources available, including possible changes in the structure of financing this activity. Company's Management Board believes that the Issuer is able to finance investment plans from measures generated from operating activities and obtaining funding from the issue of shares and debt instruments. 9. In case of issuing securities during the period covered by the report - a description of how proceeds from the issue were used by the Issuer until preparation of the report on activities. On 11 January 2012 the Company's liabilities due to the issuance of the Commercial Investment - Term Bills of Exchange (hereinafter: "KWIT") towards the National Cooperative Savings and Credit Union (Krajowa Spółdzielcza Kasa Oszczędnościowo-Kredytowa) (hereinafter: KSKOK ) amounted to PLN 32,200. On 28 May 2012 the company repaid, in accordance with the schedule, its liabilities due to KWIT in the amount of PLN 500 thousand.. On 3 July 2012 the Company issued KWIT at the amount of PLN 10,000 (Current Report 14/2012 of 3 July 2012) of the redemption date on 3 October The offer was addressed to KSKOK. The aim of the issue was to acquire funds to supply the ATM network administered by the Issuer. On 03 October 2012 KWIT at the amount of PLN 10,000 were repaid. On 31 December 2012, the Issuer redeemed KWIT at the amount of PLN 4,200. As of the day of publication of the report, the aggregate indebtedness due to KWIT is PLN 27,500, of the following redemption dates: 28 May 2013 (PLN 1,000 ) 28 May 2014 (PLN 1,000 ) 10 October 2014 (PLN 12,000 ) 31 October 2014 ( PLN 12,000) 28 May 2015 ( PLN 1,500) On 19 December 2012 the District Court Gdańsk-Północ in Gdańsk, 7th Commercial Department of the National Court Register registered the increased share capital to the amount of PLN 191,610, (in words: one hundred ninety one million six hundred ten thousand three hundred eighty six Polish Złoty). The increasing the share capital was executed by means of issue of 1,712,086 ordinary shares registered shares of L series, at the par value of PLN 1,00 (in words: one Polish Złoty) each (Current register 25/2012 of 10 December 2012 and Current register 27/2012 of 20 December 2012), depriving the hitherto shareholders of the subscription right. 12

14 The L series shares were taken over under private subscription at the issue price of PLN 2,75 each: Community CU took over 1,300,026 shares of L series in exchange for in-kind contribution, under the form of 1,787,536 registered shares of the CU Management Society limited joint-stock partnership (Towarzystwo Zarządzające SKOK Sp. z o.o), at the par value of PLN 1.00 each share, including: 883,082 shares of C series holding the numbers from , shares of G series holding the numbers from (the initial value of in-kind contribution was estimated at the amount of PLN 3,575,072.00). The shares taken over by the CU Community constitute 0,68% of the share capital of the Company after its increase and authorise to 1,33% of the general voting rights at the General Meeting of the Company. CU Wybrzeże took over 102,072 shares of L series in exchange for in-kind contribution, under the form of 140,350 registered shares of C series holding the numbers from to of CU Management Society limited jointstock partnership, of the par value PLN 1,00 each (initial value of the in-kind contribution was estimated at the amount of PLN 280,700,00). The shares taken over by CU Wybrzeże constitute 0,05% of the share capital of the company after its increase and authorise to 0,10% the general voting rights at the general meetings of the Company. CU Jowisz took over 128,170 shares of L series in exchange for in-kind contribution, under the form of 176,234 registered shares of F series holding the numbers from to of CU Management Society limited joint-stock partnership, of the par value PLN 1,00 each (initial value of the in-kind contribution was estimated at the amount of PLN 352,468.00). The shares taken over by CU Jowisz constitute 0,07% of the share capital of the company after its increase and authorise to 0,13% the general voting rights at the general meetings of the Company. CU of Unia Lubelska took over 181,818 shares of L series in exchange for in-kind contribution, under the form of 250,000 registered shares of F series holding the numbers from to of CU Management Society limited joint-stock partnership, of the par value PLN 1,00 each (initial value of the in-kind contribution was estimated at the amount of PLN 500,000.00). The shares taken over by the CU of Unia Lubelska constitute 0,09% of the share capital of the company after its increase and authorise to 0,19% the general voting rights at the general meetings of the Company. After the registration of the increased share capital, the general number of votes arising from all shares issued is Explanation of differences between financial results disclosed in the annual report and previously published estimates of the results for the year. The Issuer does not publish forecasts for Presentation of the basic economic and financial values, as disclosed in annual financial statements, in particular description of factors and events, including those of unusual character, having a significant impact on the issuer's activities and achieved profits or incurred losses in the financial year and also presentation of prospects for issuer's business development, at least in the next accounting year. 13

15 The value of revenue generated due to sales amounted to PLN 109,277 and it increased by 21,7% as compared to the previous year. The operating activity costs incurred amounted to PLN 100,599 and they were higher by 21,4% as compared to 2011, including: costs of products, services, goods and materials sold: PLN 89,128 (increase by 19,3%). overhead costs: PLN 10,732 (increase by 41,9%). costs of sales: PLN 738,000 (increase by 23,9%). The profit generated on sales for the current year amounted to PLN 8,678 and was higher against the profit on sales in 2011 by 25,1%. After considering the remaining burdens of the gross financial result, the Company closed the year 2012 with the positive financial result at the level of PLN 4,847, which is an increase by 345,2% as compared to The main perspectives of development of the Issuer s activity are associated with: development of non-cash transactions service, both for SKOK system entities and for external consumers; acquiring new consumers of the services provided in the scope of authorisation, transaction settlement and tele-information services; implementation of new services provided in ATMs; development of services associated with provision of complex solutions in the scope of IT infrastructure; The market strategy developed assumes high quality of the services while maintaining competitive prices. Within the perspective of the forthcoming year, the Management Board of the Company will continue the activities targeted towards the increase of use of the potential of the Company through implementation of new products and aquisition of new consumers for the offered services. 12. The evaluation factors and unusual events affecting the outcome of the activities for the accounting year, specifying the degree of influence of these factors or unusual events on the achieved result. In the opinion of the Issuer there were no unusual factors and events that had an impact on its performance and were not described in the text of this report. 14

16 III. OTHER INFORMATION 1. Description of significant risks and threats, identifying the extent to which the issuer is exposed. SIGNIFICANT RISK AND THREAT FACTORS Risk factors and threats associated with the Company's operations can be divided into two groups: a. Risks associated with current and future operations of the Company: risks associated with suppliers - cooperation of the Company with suppliers of i.e. software, telecommunications lines and companies that support ATMs, bears risks, i.e. the potential failure of hardware infrastructure and software. The existence of some of them may lead to difficulties in using services offered by the Company. For this purpose the Company selected and selects reputable suppliers of hardware and software used for conducted business. Restrictive agreements for provision of maintenance services, concluded with them ensure security and continuity of the system functioning; risk to security of information systems - the Company's business is subject to random events without human intervention, such as hardware damage, power failures, fires, flooding, and to events involving people, such as burglary, unauthorized access to data, which may disrupt security of the system and its smooth functioning. The company undertakes every effort to ensure that all transactions made were held subject to the rules of safety and confidentiality of clients and users data; risk of losing key employees - the competence of employed specialists have a significant impact on the Company's operations. The Issuer minimizes this risk level through an active personnel policy in the remuneration system, systematic training and promotion. b. Risks associated with the environment in which the Company operates: risks associated with macroeconomic situation in the country - there is a risk that in case of deterioration of the economic situation in Poland and a decrease in consumer demand, the dynamics of the Company's development may slow down; risks associated with currency exchange rates - the Company accounts for certain transactions in foreign currencies (USD and EUR). Fluctuations in exchange rates affect mainly the amount of income realized from the provision of money transfer services and the value of these investments, settling of which is based on foreign currencies; risks associated with regulatory changes - changes in tax law and regulations relating to banking and payment and financial services and securities market, may increase the Company's operating costs, reducing operating margins and lowering profitability. Equal effect may have risk factors associated with regulations of international organizations of payment (Visa and MasterCard); 15

17 risk of competition - there is a risk of increased operating costs as a result of the need to maintain market position against financial institutions that continuously modify offers of their products; risk of reducing charges for financial services - there is risk associated with the overall pressure on lowering commission fees for financial services; risks of changing interest rates - in connection with the use of foreign capital, the Issuer is exposed to the risk of interest rate changes. 2. Characteristics of internal and external factors relevant to the development of the issuer' business and a description of the Issuer's business development prospects, at least until the end of the accounting year following the financial year for which financial statements was prepared, included in the annual report, including elements of marketing strategy developed by it. EXTERNAL FACTORS Market of Cooperative savings and credit unions Cooperative Savings and Credit Unions in Poland have a high potential for growth, both quantitative and organizational. CU's associate more than 2.5 million members and have approximately 2 thousand establishments. As of the status at the end of the 2nd quarter, the value of deposits exceeds PLN 15,3 billion and the value of the loans granted amounts to 10,9 billion. Cooperative savings and credit unions in YEAR NUMBER OF ESTABLISHMENTS NUMBER OF MEMBERS (IN PLN THOUS. ) DEPOSITS (IN PLN million) LOANS (IN PLN million) ,558 1, ,254 1, , ,112 2, ,461 1,169 3,938 2, ,553 1,395 4,990 3, ,589 1,551 5,553 4, ,663 1,669 6,705 5, ,757 1,856 8,604 6, ,801 2,026 10,842 8, ,851 2,177 13,028 9, ,934 2,315 15,598 10, IIQ 1,974 2,527 15,319 10,904 Source: The market of payment cards (based on NBP data) 16

18 Payment card market can be characterized on the basis of analysis of several key elements, among others: number and structure of issued payment cards, the volume of transactions done by payment cards, or the availability of ATMs available to cardholders. At the end of September 2012 the number of payment cards amounted to 33.2 million. This means that the decrease observed from the beginning of 2012 has been halted. In terms of manner in which card payments transaction were carried out at the end of 2012 the structure of cards was as follows: debit cards accounted for 79.3%, charge cards for 0.9% and credit cards 19,8% of all payment cards issued. By the end of the third quarter of 2012 there were 1,464,3 million transactions were performed by payments cards (an increase by 12%), which a value of PLN 305,1 billion (an increase by 7,1%). A characteristic feature of the Polish market is the dominance of debit cards. Cards of this type not only dominated the market in terms of numbers, but also the volume of transactions In terms of points accepting POS terminals, an increase was reported as compared to At the end of the third quarter of 2012 there were nearly 126 thousand of such points as compared to 112 thousand at the end of The number of merchants supporting payments via POS terminals reached almost 233 thousand (the end of September 2012) In the first three quarters of 2012 there were 867 million transaction performed, which accounted to 87,7% of all transactions concluded in Total value of transactions performed in 2012 amounts to PLN 82 billion (which accounts to 82,8 % of the value of transactions performed in 2012). Average value of transactions at the POS terminal was PLN 94,9. At the end of the third quarter of 2012, the number of ATMs in Poland amounted to nearly 18 thousand. At those ATMs there were 558 million transactions carried out, worth a total of PLN 202,5 billion. Compared to the end of the third quarter of 2011, these figures indicate that the number of ATMs increased by 5,4%, the number of ATM transactions by nearly 5,5% and value of transactions made at ATMs by nearly 0,8%. The average value of transactions made at ATMs in 2011 amounted to PLN 381. INTERNAL FACTORS The most important internal factors affecting the development of the Company include a high technology level in Centre for Servicing Cards and Terminals, meeting international standards and providing the possibility of expanding the market for the Issuer to other entities outside the system, Cooperative savings and credit unions, and high potential of staff. PERSPECTIVES OF DEVELOPMENT Perspective of development are described in p. II Information about major achievements in research and development. In 2012, the Company did not have major achievements in research and development Information on natural environmental issues. 17

19 Due to the nature of activity, no decision on the protection of the environment has been issued in relation to the Company in The company is also not required to obtain any consents or authorizations relating to environmental protection. The Company's activity has no impact on the natural environment Information on employment. In 2012, agreements were signed with 93 people and terminated contracts with 43 people. Employment figure rose to 448 people at the end of At the date of publication of the report in the Company employs 448 people, including in the Company's branch - Towarzystwo Finansowe SKOK S.A - Division of HSO in Sopot people. 6. Information on: a) the date of conclusion an agreement by the issuer and entity authorized to audit financial statements for an audit or review financial statements and consolidated financial statements and the period for which this agreement was concluded, b) remuneration of the entity authorized to audit financial statements, paid or due for the accounting year separately for: - examination of annual financial statements, - other attestation services, including a review of financial statements, - tax advisory services, - other services. On 25 June 2012 the Issuer has entered into an agreement with the Team of Financial Experts, "Auditor" Sp. z o.o. (Ltd.) on review of individual financial statements of the Issuer for the first half of , and conducting examination of individual financial statements of the Company for the period The information contained in the table relate to 2011 and 2012 (w in PLN wit VAT). Auditor 2011 r. Auditor 2012 r. examination of annual financial statements ,600 other attestation services, including a review of financial statements 6, ,600 tax advisory services 20,295 27,060 other services Information on offices (establishments) held by the Company Under resolution of the Management Board of the Company of 9th February 2011, on the base of assets and the organizational structure of the acquired company Hardware Software Outsourcing Sp. z o. o. (Ltd.) in Sopot a Branch of the Company was established in Sopot, which operates under the business name: Cooperative Savings and Credit Union Financial Society Joint Stock Company - Branch HSO in Sopot. 8. Description of events significantly affecting issuer's activities that occurred during the financial year and after its end, until the date of approval of financial statements. 8.1 Payment of dividend 18

20 On 20 June 2012 the General Meeting of the Company passed a resolution on payment of dividend, resulting from the profit sharing for The dividend was paid in the amount of PLN 1,291,490,30 (in words: one million two hundred ninety one thousand four hundred ninety Polish Zloty and thirty groszy), i.e. at PLN 0,02 (in words: 2 groszy) each. 64,574,515 shares of the company (of A-I series) participated in the dividend. The day of the dividend was on 2 July 2012 and the dividend payment day was on 17 July Obtaining PCI DSS certification On 31 July 2012 the Issuer obtained a certificate of compliance with the standards of Payment Card Industry Data Security Standard (hereinafter referred as to: PCI DSS ). This is a security standard granted by Payment Card Industry Security Standards Council(established by: the credit cards companies - American Express, Discover Financial Services, JCB International, MasterCard Worldwide and Visa International, to facilitate the implementation of a unified approach to data security card around the world). The standard is designed to ensure a high and consistent level of safety in all environments where card holder's data are processed. PCI DSS provides a set of requirements to enhance payment card data security. The requirements include: maintaining secure network architecture, security of card holder's data, monitoring, detection and elimination of all vulnerable systems and applications, designing secure software, maintaining strong internal control systems both logical and physical, constant monitoring of all network and systems, with particular emphasis on access to card holder's data, regular testing of security systems and processes, maintaining appropriate security policies and procedures. 8.3 Increase in share capital The increase in the share capital was described in point II Appointment of members of the Supervisory Board On 20 June 2012, the General Meeting of the Company, due to the end of the current term of members of the Supervisory Board on 3 October 2012, appointed the following people to the Supervisory Board of the Issuer: 1. Grzegorz Michał Bierecki, 2. Grzegorz Paweł Buczkowski, 3. Rafał Sławomir Matusiak, 4. Andrzej Sosnowski, 5. Andrzej Paweł Szumański. According to 16 of the Articles of Association, the Supervisory Board members were appointed for a five-year joint term, which began on 4 October 2012 (RB 12/2012 of 20 June 2012). On 22 October 2012 the Board of the Towarzystwo Finansowe SKOK received the resigrantion of Mrs. Rafał Matusiak from the memebership of the Supervisory Board, effective as of 25 October The reason for the resignation was incompatibility of offices of the President of the Board of the National Cooperative Savings and Credit Union and other functions performed in other entities under control of the Financial Supervision Commission, which came into effect on 27 October 2012 resulting from the Act on cooperative savings and 19

21 credit unions of 5 November 2009 (Journal of Laws of 2012., ite. 855)(Current Report 20/2012 of 22 October 2012). On 29 November 2012, at the General Meeting of the supervisory Board, Mrs. Joanna Bentkowska was appointed as the Member of the Supervisory Board of the Towarzystwo Finansowe SKOK S.A. 8.5 Changes in the Management Board composition: At the meeting of the Supervisory Board held on 15 May 2012, Mr. Cezary Godziuk, who oversees the development of the market (Current Report 5/2012 of 15 May 2012). was appointed as the member of the Board. As of the day of submitting the report, the composition of the Management Board of the Issuer was as follows: Ewa Bereśniewicz-Kozłowska President of the Board Cezary Godziuk -Member of the Board Marcin Golas -Member of the Board Alicja Kuran-Kawka -Member of the Board Tomasz Krasiński -Member of the Board 9. Information about financial instruments in the field of: a) risk of: price changes, credit, substantial cash-flow disruptions and loss of financial liquidity, to which the Company is exposed. Risks are described in note 46 to Financial Statements of the Towarzystwo Finansowe SKOK S.A. for b) adopted by the Company objectives and methods of financial risk management, including methods of securing relevant types of planned transactions for which hedge accounting is applied. The Company does not apply hedge accounting. 10. Financial ratios and the current and projected financial situation of the issuer. Key financial indicators are presented in the table below: Description Operating return on sales 8.72% 9.52% Profitability of net sales 1.21% 4.43% Return on assets 0.22% 0.98% Return on Equity (ROE) 0.33% 1.42% Current liquidity ratio (times)

22 Quick ratio (times) Immediate ratio (times) Coverage of fixed capital with equity (times) Overall debt ratio 33% 31% Debt-equity ratio (times) Share of equity in fixed capital 91% 92% Ration presented in the above table were calculated according to the following formulas: operational sales profitability - operating result to sales revenue profitability of net sales - the net financial result to income from sales, return on assets - net financial result to total assets, return on equity - net financial result to equity, current liquidity ratio - current assets minus trade liabilities over 12 months to the value of short-term liabilities under 12 months, quick ratio - current assets minus trade liabilities over 12 months and inventories to the value of short-term liabilities under 12 months, immediate ration - value of short-term investments to short-term liabilities under 12 months, coverage of fixed assets with fixed capital - equity plus reserves and long-term liabilities to fixed assets, the overall debt ratio - total liabilities to total assets debt equity ratio - total liabilities to equity; share of equity in fixed capital- share equity to fixed capital. In the opinion of the Management Board, the future financial situation will be influenced by factors described in the Company's growth prospects (points II.11 and III.2.) Proposed distribution of profit for 2012 The Management Board proposes to allocate the net profit of the Company for the year 2012 in the amount of PLN 4,846,942,73 as follows: - to allocate the profit in the amount of PLN ,64 (in words: four million seven hundred thirty five thousand - eight hundred seventy-six Polish Zloty and sixty-four groszy) for the payment of a dividend to the Company Shareholders (which is PLN 0,02 per common share, excluding own shares held by the Company in the amount of 10,907), - to allocate the profit in the amount of PLN 111,066,09 (in words: one hundred and eleven thousand sixty-six Polish zloty and nine grosz) for the reserve capital established for the payment of funds in dividend in the future years. 11. Indication of the proceedings pending before the court, authority competent for arbitration or a public authority, including information on: a) proceedings relating to liabilities or debts of the issuer or its subsidiary, value of which constitutes at least 10% of the issuer's equity, stating: object of the proceedings, the amount in dispute, the date of opening the proceedings, the parties to initiated proceedings and the position of the issuer, b) two or more proceedings regarding the obligations and debts, total value of which is at least 10% of the issuer's equity, stating the total amount of proceedings separately in the group liabilities and claims, together with the position of the issuer in this case and, for the most important proceedings in 21

23 the group of obligations and the group of claims - an indication of their object, the amount in dispute, the date of initiating proceedings and the parties to the initiated the proceedings. In 2012, there were no any proceedings involving the Issuer, pending before government bodies, legal or arbitration proceedings, where a single or aggregate value exceeded 10% of the Issuer equity. Ewa Bereśniewicz-Kozłowska President of the Board Cezary Godziuk -Member of the Board Marcin Golas -Member of the Board Alicja Kuran-Kawka -Member of the Board Tomasz Krasiński -Member of the Board 22