ANNUAL REPORT. You can be confident and head to places where others do not feel. firm ground.

Transcription

1 ANNUAL REPORT 2010 You can be confident and head to places where others do not feel firm ground

2 Table Financial of Contents planning with a difference Introductory Word from the Chairperson of the Board 2. Company Profile 2.1 Basic data 2.2 Mission 2.3 Product portfolio 2.4 Business partners 2.5 Marketing in Success in Objectives for Organizational Structure 4. Partners Group 5. Compliance of the Company s activities with regulations governing operations on the financial market 6. Company economic results in Structure of mediated contracts 6.2 Balance sheet 6.3 Income statement 6.4 Appendix to final accounts 6.5 Auditor s reports 7. Contacts

3 Introductory Word from the chairperson of the board of directors 1. The economic results in 2010 again confirmed our dominant position among financial and advisory companies. Even last year, which was critical for many entities and when a record number of companies went bankrupt, we managed to increase our income by almost thirty percent, despite the fact that we operate in a highly competitive environment where every mistake is punished severely. If we maintain our inventiveness, commitment and enthusiasm, I am convinced that the growth potential of Partners is far from being exhausted. The commission turnover of Partners exceeded one billion crowns in 2010: it reached the amount of 1,064 billion crowns. The Partners consultants and managers concluded 170 thousand contracts for their clients in 2010 and they gained over 70 thousand new clients. Thanks to the setting of a career plan and great results, 2010 was also a year of promotion to higher positions. In total, Partners attracted over six hundred consultants and over one hundred consultants were promoted. At the end of 2010, 2,400 consultants and managers were cooperating with Partners. There are also several obligations arising from our position. We need to stay committed to the journey we set out on three years ago, thanks to which we can celebrate success now. A journey that leads to professional financial advising and a strong bond between the Partners consultants and clients. Therefore, we are fostering cooperation with the European Financial Planning Association (EFPA), we keep improving our system of training, we disseminate financial literacy and we promote the idea of low-budget products. The fact that the Partners consultants offer comprehensive and diversified portfolios to their clients is also apparent from the production composition in Partners is not a one-product company: we are able to help clients with savings, investing, financing own housing and insurance of all kinds. One-quarter of the company production in 2010 was made up of investment life insurance policies and about the same part of the portfolio is represented by individual investments into unit-linked trusts. The number of contracts providing for regular investments into investment trusts is growing continuously. We were very successful in 2010 in the area of mortgages: the total volume of mortgage loans exceeded eight billion crowns. This means that we mediate mortgages in the total amount of 32 million crowns a day and our share in the Czech mortgage market is approaching ten percent. The success enjoyed by Partners is based on a solid business policy and in particular skilled people. We want successful consultants and managers at Partners to have the opportunity to benefit from the Company s economic results. Therefore, we launched the unique Partners shares program in However, our efforts are focused not only on commission turnovers, volumes of mediated financial flows or concluded contracts. Services have also come to the fore of everyday operations in Partners. In 2010 we launched several projects, the objective of which is ensuring quality services, the awareness and loyalty of our clients and also ongoing business. Service orientation will be focused on in 2011 as well. However, even now the active call centre deals with contracts that are about to be terminated, it checks client satisfaction after the first contact with Partners consultants and it offers innovations in the Company product portfolio. Clients are informed about possibilities and advantages of Partners services through various channels. In 2010 we were also active in supporting the creation and opening of new client contact centres of Partners throughout the Czech Republic. In 2010 alone, seven new client contact centres came into existence and in the next year there will be even greater growth. The services of an independent and top-quality financial planning with a difference will be visible and available in all parts of the country. The end of the calendar year saw the preparation of the Partners Investment Company, acquisition of the peníze.cz website and launch of the quality control system Watchdog 2.0. These activities show the direction for 2011, in which we will keep developing client services, focus on the quality of our advisory services, and we will be developing Partners affiliated companies and their activities, i.e. the Partners Investment Company, Partners Media and Partners Academy In 2011, the set strategy should ensure further growth of yields and profit. As for yields, we again plan 30% growth and at least 100% growth in profit. This is also related to reinforcing our dominant position on the market and increasing the Company market share. We are at the end of a period of establishing Partners on the Czech financial advisory market, and a period of growing the built business, focusing on the quality of advisory services and product portfolio has started. Prague, 8 May 2011 Kateřina Palková Chairperson of the Board

4 2. 2. Company Profile 2.1 Basic data as of Partners For Life Planning, a.s. provides financial advisory services and the mediation of financial products in the Czech Republic. It started operations in June 2007 with the objective of becoming one of the leading companies with a long-standing reputation on the market. It was entered in the Commercial Register on 23 August 2006 under the trade name of Nostimo, a.s. Since 18 July 2007 it has been registered under the trade name of Partners For Life Planning, a.s. in the Commercial Register kept by the Municipal Court in Prague, Section B, insert The Company does not have an organizational unit abroad. Company Profile Company name... Partners For Life Planning, a.s. Company seat... Prague 4, Stýblova 253/13, zip code Identification number Tax identification number... CZ Legal form... joint-stock company Registered capital... CZK 30,000,000 Statutory body Board of Directors: Kateřina Palková Chairperson of the Board Petr Borkovec Vice-Chairman of the Board Pavel Kohout Member of the Board Tomáš Prouza Member of the Board Martin Vícha Member of the Board It is important to rely on a good partner... Supervisory Board Chairman of the Supervisory Board... Radim Lukeš Vice-Chairman of the Supervisory Board... Pavel Novotný Member of the Supervisory Board... Vladimíra Janečková

5 2.2 Mission The work strategy of Partners can be summarized by the slogan Financial Planning WITH A DIFFERENCE. The cornerstones of the Company mission is a focus on decency and fairness in providing advisory services, thoughtful selection of all associates and emphasis placed on the quality of information that consultants have available. We are convinced that a top-quality financial advising based on professional knowledge, and the independence and impartiality of financial consultants is a great advantage for every client. We believe in lifelong partnerships between clients and Partners financial consultants and open relationships based on trust. Partners VISION We are a symbol of modern financial planning We are changing the history of financial advising We are proud of being Partners Partners was established in June The company founders decided to return the dignity to financial advising in the Czech Republic that it deserves, and to offer reputable and comprehensive help to clients regarding their family finances. Several years after its foundation, Partners is the biggest financial advisory company on the Czech market, with yearly sales of over one billion crowns and with two hundred thousand clients. We strive to be one step ahead and to come up with innovations that have an added value for clients. Therefore, our portfolio includes low-budget insurance and investment products that have been prepared by our analysts in cooperation with partner financial institutions so that they are advantageous for Partners clients and bring profit to them. As the only financial advisory company on the market, we also offer quality banking products and services, prepared specially and exclusively for Partners clients. We strive to increase the financial literacy of our clients and of the general public. Our financial consultants take part in the Czech TV program Krotitelé dluhů or Debt Busters, experts from Partners publish articles in prominent Czech media and on the financial news portals of the Partners and We are capable of maximizing your potential... Partners MISSION We see every client as a unique personality with their own objectives. Our mission is to improve their living standard by dealing with real needs. We create an environment for the business success of our consultants. We help to develop their potential through professional and practical training. We give direction to financial advising and we give it the dignity that it deserves.

6 Transaprent background Hard-color background Low-color variant Inverted low-color variant 2.3 Product portfolio A great benefit for Partners consultants and clients and a guarantee of our impartiality and independence is the extent of our portfolio. We are able to create a financial plan for clients, comprising products from the entire financial market: insurance, banking, investment and credit ones. We place special emphasis on the development of exclusive low-budget products that clients can find only in Partners offer. Banking products Current accounts Mortgage loans Investment credits for companies and entrepreneurs Investment credits for associations of housing unit owners and housing cooperatives Payment and credit cards Business loans Bridge mortgage loans Saving accounts Term deposits Investments Investment gold Model portfolios Investment trusts Regular investing (lifecycle products) Direct investments on stock exchanges Leasing Leasing credits Non-life insurance Travel insurance Accident insurance Car and property insurance Property insurance and liability insurance for citizens Work disability insurance Property insurance and liability insurance for entrepreneurs Costs of veterinary care insurance Motor vehicle third party liability insurance Business risks insurance Legal protection insurance Travel agency bankruptcy insurance Accident insurance Medical supplementary insurance Contributory pension scheme Contributory pension scheme with government contribution Building savings Bridge loans from building savings Building savings Credits from building savings Life insurance Pension life insurance scheme Flexible insurance Unit-linked life insurance Capital life insurance Risk insurance Credit life insurance Life insurance Thanks to our wide portfolio, our services were used by leading Czech employers within employee benefits. We ensure the following services for our company clients: training of professional sponsors from the advisory network in the area of strategy and individual programs within the Partners Corporate Business, legislative changes and innovations of our business partners in the area of employee benefits, cooperation with business partners in creating new products specially for corporate clients, creating tailor-made offers to our clients-employers according to their ideas, including administration for possible public tenders, presenting offers to management or competent persons in companies, follow-up care for employees and control of services in companies. We cooperate with over 250 employers throughout the Czech Republic. 2.4 Business partners We cooperate with over fifty business partners. These include the biggest banks, insurance companies and investment companies and other financial institutions on the Czech market. In individual types of financial products, the commissions for their mediating are unified or reasonably similar so as not to disturb the impartiality of financial advising. At present, our business partners include: Grant Help, s.r.o.

7 2.5 Marketing in 2010 Media and Partners In 2010, Partners experts and managers were quoted in the media more frequently than all other financial advisory companies on the Czech market. The king of Partners media activities in 2010 was Pavel Kohout who again became a member of the National Economic Council of the Czech Government (NERV). However, Partners as such was written and spoken about in the media. The biggest media topics included the spring launch of Partners Bank Services in cooperation with UniCredit Bank after a press conference on 20 April In autumn, starting education was written about in connection with the founding of EFPA Czech Republic and the highlight of the end of the year was the establishment of the Partners Investment Company. Websites and internal communication We presented ourselves to the general public particularly through our websites and At the end of the year we managed to gain the popular financial server after tough competition with several interested entities. Peníze.cz and Finmag.cz express Partners opinions, advise readers and attempt to reinforce financial literacy, and they are a frequent source and inspiration for other media as well. At the end of the year, our websites underwent an extensive update. The main source of internal information in 2010 was again the online application Prometeus, which provides organized updates, overviews, statistics, complaints chat, a corporate materials ordering system and many other functions to consultants and employees. Other support resources included the Partners News weekly and in particular the website which brings information about the Company activities to Partners consultants and employees, and at the same time they could be seen by consultants from competitive companies who are interested in the conditions of work for Partners. Advertising campaign We consolidated the advertising activities from previous years in 2010, too. Education, identification and wit, this can summarize the message of the advertising campaign in 2010, which attempted to explain the essence of financial advising in a better way, including its individualisation. And that is why the campaign focused particularly on education and connecting the positive values of advising with the Partners brand. We communicated particularly through a TV spot campaign and also through printed advertisements in big dailies and news weeklies, an internet campaign and last but not least in the outdoor form, where a personified billboard campaign of Partners consultants and managers took place. We know how and where to work hard...

8 Guiding you safely to the finishing line... Krotitelé dluhů (Debt Busters) We tried to reinforce awareness about Partners through another project Krotitelé dluhů (Debt Busters). The first part appeared on TV screens in January 2009 and Partners consultants were already there. Led by Tomáš Prouza, selected managers and consultants have been helping people in difficult financial situations till today. In 2010, the public service TV station broadcast the third series of the program. Charity Partners realizes its responsibility towards the public and supports many charity activities and donations. In 2010, a concept was presented for the first time, in which Partners consultants and managers could propose charity projects that they are related to. In total, the company selected 19 charity projects on the motion of their managers and consultants and donated over CZK 800 thousand for these projects. These financial resources help where it is really needed. Sponzoring Partners has been a titular partner of renowned golf tournaments for a long time. This concerns particularly the tournament entitled Celebrity Golf Cup and Bank of the Green. The tournament entitled Celebrity Golf Cup is a traditional tournament for top managers and owners of medium-sized and large companies. Bank of the Green is a tournament of fourmember teams of bankers. Meetings of bankers at the golf tournament have been visited three times by President Václav Klaus and the (former) Governor of the Central Bank, Zdeněk Tůma. Cooperation with University A successful and innovative activity of Partners is support for and development of cooperation with universities, particularly those specializing in finances and economy. The main partner in past years was the Faculty of Business and Economy of Mendel University in Brno. After two years of successful cooperation, Partners together with the Faculty of Business and Economy of Mendel University in Brno introduced a brand new study field of Finances and Investment Management, tailor-made for students who intend to follow a career in finance. By realizing this new study field for the future generation of financial specialists, Partners have taken another step on the way to fulfilling their vision of being a symbol of modern financial planning.

9 Focusing our energies in the right direction Success in 2010 FIP II client and financial planning system EFPA European system of training and certification of financial consultants Further development of the project of Partners Bank Services Starting operation of the Partners Investment Company Creating an active call centre National advertising campaign aimed at educating the general public Another series of the TV project Krotitelé dluhů (Debt Busters). New company websites in the common editorial system Preparing the clients portal Preparing the shares program for managers Extending the network of Client Centres to other towns Watchdog 2.0 new comprehensive quality control system Development of corporate insurance services Opening the master s program at the Faculty of Economics and Management of Mendel University under the auspices of Partners 2.7 Objectives for 2011 Launching the clients portal Service agent project of follow-up service and client care Service campaigns in cooperation with KPMG Starting provision of the investment advisory service Development of operation of the Partners Investment Company Launching a portal warning against unfair practices of financial institutions Initiation of the new master s program of Finances and Investment Management at Mendel University in Brno Launching the shares program for Partners managers Launching the lead management project Preparing expansion abroad and launching cross-border cooperation with Poland Money Busters - website about financial planning Second year of the EFPA project European system of training and certification of financial consultants Expanding the product portfolio and offer of business partners New internal training system for consultants and new training materials New advertisement campaign, the mission of which is explaining the essence of financial advising IT package for consultants New unified design of client centres, regional branches and training centres Opening new client centres throughout the country New products and services within Partners Bank Services Development of charity activities Offer of workshops and trainers thanks to the Partners Academy Expanding the active call centre Publishing a regular client newsletter

10 3. Organizational Structure The company s organizational structure is made up of individual functional sections as they follow from the approved company organizational scheme as of 1 June SUPERVISORY BOARD BOARD OF DIRECTORS GENERAL MANAGER Chairperson of the Board of Directors Kateřina Palková FINANCIAL DEPARTMENT Zuzana Střílková Member of the Board of Directors Pavel Kohout CEO Member of the Board of Directors Martin Vícha CEO Vice-Chairman of the Board of Directors Petr Borkovec CEO Member of the Board of Directors Tomáš Prouza PRODUCT MANAGEMENT COMMITTEE (PMC) EXECUTIVE COMMITTEE ExCo MANAGERS COUNCIL Director, Senior Director SECRETARIAT Markéta Rychetská SECRETARIAT Evelina Židlíková RECEPTION OFFICE PRAGUE STRATEGY SECTION Pavel Kohout SALES SECTION Vladislava Cisarzová OPERATIONS SECTION Petr Bartoš MARKETING SECTION Vlastimil Divoký CLIENT CARE SECTION Tomáš Prouza CLIENT CENTRES MANAGEMENT SECTION ALTERNATIVE DISTRIBUTION, SERVICE AND X-SELLING SECTION FINANCIAL EDUCATION ACADEMY SECTION Svatava Petrovičová MANAGER ANALYSIS DEPARTMENT SALES DEPARTMENT BACK-OFFICE DEPARTMENT Petra Meišnerová RECEPTION PRAGUE LOGISTICS DEPARTMENT Šárka Klukanová senate MARKETING DEPARTMENT David Pokorný RECEPTION BRNO PR AND COMMUNICATION DEPARTMENT Lada Kičmerová ETHICS COMMITTEE LEGAL COMPLIANCE DEPARTMENT Vít Mikolášek HR DEPARTMENT Svetlana Solařová CLIENT CENTRE PRAGUE Josef Vejvoda CLIENT CENTRES CZECH REPUBLIC CLIENT CENTRES ABROAD branch advisors (ba) private bankers (pb) relationship managers (RSM) PARTNERS BANKING SERVICE DEPARTMENT IT/IS DEPARTMENT Stanislav Bartoš PARTNERS HEADQUARTERS DIVISION CALL CENTRE PARTNERS DISTRIBUTION DIVISION PARTNERS BANKING SERVICES DIVISION

11 4. Partners Group In 2010, the Partners Group was actually created by founding companies, in which Partners is the sole shareholder. The companies include: Partners akademie, s.r.o., with its seat in Brno, Holandská 878/2, zip code , Company ID No , entered in the Commercial Register kept at the Regional Court in Brno, Section C, insert (hereinafter only referred to as the Partners Academy); Partners investiční společnost, a.s., with its seat in Prague 4, Stýblova 253/13, zip code , Company ID No , entered in the Commercial Register kept at the Municipal Court in Prague, Section B, insert (hereinafter only referred to as the Partners Investment Company ); Partners media, s.r.o., with its seat in Prague 1, Václavské náměstí 807/64, zip code , Company ID No , entered in the Commercial Register kept at the Municipal Court in Prague, Section C, insert (hereinafter only referred to as the Partners Media ). 5. Compliance of the Company s activities with regulations governing operations on the financial market In order to ensure a high level of compliance of the activities of the Company and its financial consultants with the generally binding law regulating operations on the financial market, direct controls were carried out in 2010 within the internal control system and other control mechanisms were used, comprising Watchdog 2.0 and the activities of the Ethics Committee. Beside remote controls, on-site controls were also carried out, aimed particularly at knowledge of the generally binding law, internal regulations, the compliance of set processes, the method of dealing with complaints and other activities. The outcomes of the controls were evaluated on a continuous basis and were used to improve ensuring compliance of the Company s activities and the activities of its mandataries with the law. Based on the regular evaluation of the activities of Partners and its financial consultants, analyses of selected legal issues and related recommendations have been prepared. Partners, in cooperation with its business partners, have prepared measures to implement legal obligations related to the adoption of Act No. 145/2010 Coll., the Consumer Credit Act. Partners For Life Planning a. s. RC = CZK 30 mil. During the year, the Company also carried out the continuous implementation of legislative changes into its internal processes and internal regulations, e.g. in relation to the issuing of decrees of the Czech National Bank No. 303/2010 Coll. and No. 380/2010 Coll. Partners akademie, s. r. o. RC = CZK 200 thousand 100 % Partners investiční spol., a.s. RC = CZK 10 mil. 100 % Partners media, s. r. o. RC = CZK 20 mil. 100 % The Company also organized training of employees and mandataries in the area of the regulations set by Act No. 253/2008 Coll., providing for some measures against the legalization of yields from crime and financing terrorism. The training also included the checking of knowledge in the form of a written test. In 2010, the Czech National Bank did not initiate or conduct any proceedings against the company due to breach of directives regulating the Company s operations on the financial market. No sanctions were imposed on the Company by the authorities supervising the financial market. The affiliated companies were founded in order to develop business potential and to make specialized processes in collective investment, education and media activities more effective.

12 Company s economic results in Economic results in 2010 Since its foundation in 2007, Partners has always seen growth. Whether it concerns the commission turnover, the number of concluded contracts, the number of clients or business partners and products in the portfolio, Partners has managed to grow in all these parameters for three years, despite the unfavourable macroeconomic situation and the past financial crisis. commission turnover 2010 CZK 1,064,031,000 concluded contracts ,774 clients ,179 active consultants 2,476 products in offer business partners 53 employees in headquarters Data registered as of Ensuring your way up...

13 6.1 Structure of mediated contracts in 2010 A great benefit for Partners consultants and clients and a guarantee of our objectiveness and impartiality is the scope of our portfolio. We are able to create a financial plan for clients, comprising products from the entire financial market: insurance, banking, investment and credit. We place special emphasis on the development of exclusive low-budget products that clients can find only in Partners offer. We dance where others fall... Contributory pension scheme 7 % Bank products, mortgage loans 5% Building savings 3 % Risk and accident insurance 10 % Unit-linked and flexible insurance 28 % Car and property insurance 12 % Investment trusts regular paid investments 11 % Investment trusts single investments 24 %

14 6.2 Balance sheet

15

16 6.3 Income statement

17 6.4 Appendix to final accounts 2010 The information provided in the Appendix has been compiled according to individual paragraphs of Section 39, Decree No. 500/2002 Coll. (1) The Company was founded on 23 August 2006 under the name of NOSTIMO, a.s. with its seat in Brno, Lidická 710/57. After a change of owners, its name was changed to Partners For Life Planning, a.s. on 14 June 2007, and on 26 June 2007 the Company seat was changed to Prague 4, Stýblova 253/13. After changes during that year, the Board of Directors and the Supervisory Board were made up of the following people as of the balance sheet day. APPENDIX TO FINAL ACCOUNTS 2010 Partners For Life Planning, a.s. Chairperson of the Board of Directors Vice-Chairman of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Chairman of the Supervisory Board Vice-Chairman of the Supervisory Board Member of the Supervisory Board Ing. Kateřina Palková Ing. Petr Borkovec Ing. Tomáš Prouza Pavel Kohout Ing. Martin Vícha Radim Lukeš Ing. Pavel Novotný Ing. Vladimíra Janečková Changes in the Company bodies during 2010: Ing. Petr Borkovec was named Vice-Chairman of the Board of Directors date of commencing membership: , date of commencing the position: On , a change was made in the entry of Ing. Tomáš Prouza in the Commercial Register. The position of Ing. Tomáš Prouza as Vice-Chairman of the Board of Directors was deleted from the records and he was registered as a Member of the Board of Directors. Changes in the Supervisory Board: On , the position of Jan Majer as Member of the Supervisory Board was deleted. On , the position of Radim Lukeš as Chairman of the Supervisory Board was deleted from the records date of commencing membership in the Supervisory Board: At the same time, the position of Ing. Pavel Novotný as Chairman of the Supervisory Board was deleted from the records and the position of Ing. Pavel Novotný as Vice-Chairman of the Supervisory Board was entered was entered on As of the balance sheet date, the Company had registered the following subjects of enterprise: investment agent insurance agent production, trade and services not specified in Appendices 1 to 3 of the Trade Licensing Act The registered capital amounts to CZK 30,000, % has been paid up. In 2010, a change in shares was registered in the Commercial Register. On , the entry of 300 documentary bearer equity shares with a nominal value of CZK 100,000 was deleted and 600 documentary bearer shares with a nominal value of CZK 50,000 were registered. Page 1 of 11 Page 2 of 11

18 The Company s organizational structure is made up of individual functional sections as follows from the approved Company organizational scheme valid for 2010: General Manager s Section Financial Department Product Management Committee CEO s section Partners Headquarters Division CEO Secretariat / Reception Office Prague Strategy section Analyses Department Client Care Section Legal and Compliance Department HR Department Operations Section Back-Office Department Reception Prague Logistics Department IT/IS Department Marketing Section Marketing Department Reception Brno PR and Communication Department Sales Section Sales Department CEO s section Partners Distribution Division Secretariat Financial Education Academy Section Client Centres Management Section Client centre Prague Client centres Czech Republic Client centres abroad Alternative distribution, service and X-selling section Branch advisors Private Bankers Relationships Managers Call centre CEO s section Partners Banking Services Division Manager Partners Banking Service Department (2) In 2010, Partners For Life Planning, a.s. founded the following affiliated companies: Partners investiční společnost, a.s. The original name of the trading company Partners nemovitostní, a.s. was deleted on Date of entry: Company seat: Stýblova 253/13, Prague 4 Registered capital: CZK 10,000,000, paid up 100 % Ownership interest of Partners For Life Planning, a.s.: 100 % Partners akademie, s.r.o. Date of entry: Company seat: Holandská 878/2, Brno Štýřice Registered capital: CZK 200,000, paid up 100 % Ownership interest of Partners For Life Planning, a.s.: 100 % Partners media, s.r.o. Date of entry: Company seat: Václavské náměstí 807/64, Prague 1 Nové Město Registered capital: CZK 20,000,000, paid up 100% Ownership interest of Partners For Life Planning, a.s.: 100 % No agreements providing for transfers of profit or controlling agreements were concluded with the companies. (3) The average composite number of employees for the entire period was 45, of which the composite number of managers: 5. The total volume of payroll costs per employee was CZK 48,428 thousand, of which CZK 12,512 thousand was for managers. Compensation paid to Members of the Board of Directors and the Supervisory Board amounted to CZK 1,351 thousand. (4) No credits or loans were provided to Members of the Board of Director or the Supervisory Board, and no non-monetary compensation is provided to them for membership in these bodies. The managers, i.e. the General Manager and her subordinate managers, were not provided any loans or credits either and if passenger cars were provided to them for personal use, taxation was then applied according to the Income Tax Act. Selected managers were paid CZK 155 thousand in 2010 for their contributory pension schemes and life insurance. (5) The Company accounting complies with the respective provisions of Act No. 563/1991 Coll., Accounting Act, as amended, and Decree No. 500/2002 Coll., as amended by Decree No. 472/2003 Coll., and Decree No. 397/2005 Coll., implementing some provisions of Act No. 563/1991 Coll., Accounting Act, as amended, for accounting units that are entrepreneurs accounting in the system of double-entry bookkeeping, also the Czech Accounting Standards and Act No. 586/1992 Coll., Income Tax Act, as amended. For due bookkeeping, respective internal directives have been compiled that deal with all economic operations arising from the business activity. List of directives: Page 3 of 11 Page 4 of 11

19 1/2007 System of the Company s internal management 2/2007 System of internal rules in the Company HR and economic management area A 3/2007 Employment and non-employment agreements. Concluding, changes and termination 5/2007 Providing travel reimbursement for business trips of pursuant to Act No. 262/2006 Coll 6/2007 Providing travel reimbursement for business trips of Members of the Board of Directors and the Supervisory Board 9/2007 Cash and cash operations 10/2007 Setting principles for accruals of costs and yields, for applying liability reserves, for the creation and application of adjusting entries and for the creation and use of reserves 11/2007 Foreign currencies and exchange rate differences 16/2007 Intangible and tangible assets 17/2007 Keeping records of mutual receivables and liabilities with partners and consultants 18/2007 Inventories 20/2007 Contributory pension scheme 21/2007 Unit-linked life insurance 1/2008 Commissions to partners and consultants 2/2008 Creation of and using the cancellation fund 3/2008 Sale of goods and providing services for consultants 4/2008 Payment and accounting fees for registration of consultants at the Czech National Bank 5/2008 List of accounts 6/2008 Accounting documents and their circulation 8/2008 Working hours, breaks at work and overtime work. Personal data and records of attendance. Salary and its setting, bonuses and wage supplements 9/2008 Company catering 7/2008 Work outside regular workplace 10/2008 Acquisition and discarding of property Other necessary activities (e.g. stock-taking) are carried out upon the instructions of the General Manager. The accounting unit considers fixed intangible assets to be those assets, the value of which exceeds CZK 60,000 in individual cases and the usable life is longer than one year. The assets can be acquired for consideration, by investment, gift or by own activity. The accounting unit considers fixed tangible assets to be those elements of assets, the value of which exceeds CZK 40,000 in individual cases and the usable life is longer than one year. The assets can be acquired for consideration, by investment, gift or by own activity. Accessories to fixed assets are objects that make up one property unit with the main object and that are a part of its value and record. Accessories make up a part of supply or they are attached to it subsequently, i.e. by technical valuation. If the respective objects do not make up one property unit with the main object, these are separate movables. Technical valuation of fixed assets are considered to be expenses for completed superstructures, extensions and building conversions, reconstructions and property modernization if their sum exceeded CZK 40,000 in individual assets during the respective accounting period. At the end of the accounting period, technical valuation is activated in assets, where it increases the input price of the assets. The accounting unit acquires fixed assets particularly by purchase. In the acquisition of fixed assets by purchase, the assets are accounted to the debit of the respective analytic account 041xxx in the case of the acquisition of fixed intangible assets and to analytic accounts 042xxx in the case of the acquisition of fixed tangible assets. After the accounting unit decides to put fixed assets into service, fixed assets are transferred from accounts of assets acquisition to the respective assets accounts. Putting into service is seen as ensuring all technical and operational conditions and meeting all obligations provided for in law, e.g. building, environmental, fire, safety and sanitary regulations. The accounting unit valuates assets in agreement with Act No. 563/1991 Coll., Accounting Act, Decree No. 500/2002 Coll., implementing some provisions of the Accounting Act, and Czech Accounting Standard for Entrepreneurs No Assets are valued by the acquisition prices or replacement acquisition prices and using costs in the case of acquisition of assets by own activity. Fixed non-tangible and tangible assets are valued according to Section 25 and Section 47, Section 61 and Section 61a of the Decree. Fixed tangible and intangible assets are depreciated according to the depreciation plan indirectly to costs using book depreciation. The residual value is found out using depreciation reserves to fixed tangible and intangible assets created in agreement with book depreciation. For fixed tangible assets, the depreciation plan applies the same period of depreciation of individual parts of assets for book depreciation as the period of depreciation according to their classification in depreciation groups pursuant to the Income Tax Act, while depreciation starts in the month of putting the assets into service. The accounting unit decided that low-value fixed tangible assets are assets, the acquisition price of which is lower than CZK 40,000 but higher than CZK 30,000, and the usable life is longer than 1 year. Acquisition of low-value fixed tangible assets is accounted in account 042 Fixed tangible assets under CZK 40 thousand in progress, and after their inclusion the assets are transferred to the respective assets account 022 Fixed tangible assets under CZK 40 thousand. Upon a decision of an employee responsible for acquisition of the assets, all the assets of this group will be included in a group with a depreciation period of 36 or 60 months for depreciation purposes. The accounting unit decided that low-value fixed intangible assets are assets, the acquisition price of which is lower than CZK 60,000 but higher than CZK 30,000, and the usable life is longer than 1 year. Acquisition of low-value fixed intangible assets is accounted in account 041 Fixed intangible assets under CZK 60 thousand in progress, and after their inclusion the assets are transferred to the respective assets account 013 Fixed intangible assets under CZK 60 thousand. Upon a decision of an employee responsible for acquisition of the assets, all the assets of this group will be included in a group with a depreciation period of 36 months for depreciation purposes. Tangible assets, the acquisition price of which ranges from CZK 1,000 to CZK 30,000 and at the same time whose usable life is longer than one year, are entered in operative records. The assets are accounted on account 501 Consumption of low-value tangible assets and are subject to accruals in the case of one-off equipment. Tangible assets, the acquisition price of which is lower than CZK 1,000 and also assets, the usable life of which is shorter than one year, are accounted in account 501 Consumption of low-value tangible assets, and they are not entered in the operative records. Intangible assets, the acquisition price of which ranges from CZK 1,000 to CZK 30,000 and at the same time whose usable life is longer than one year, are entered in operative records. The assets are accounted on account 518 Low-value intangible assets and are subject to accruals in the case of one-off equipment. Intangible assets, the acquisition price of which is lower than CZK 1,000 and also assets, the usable life of which is shorter than one year, are accounted in account 518 Low-value intangible assets, and they are not entered in the operative records. In the case of the acquisition of more assets in connection with initial equipment of the Company in relation to starting or extending a certain activity, depreciation of the value of these assets will be subject to accruals according to the instructions of an employee responsible for their acquisition, but for no more than 24 months. Page 5 of 11 Page 6 of 11

20 Deviations from the methods pursuant to Section 7, par. 5 of the Act do not occur. In Partners For Life Planning, a.s., the following is used for currency conversion in accounting: a) as of the time of realization of the respective accounting case daily exchange rate of the Czech National Bank an exchange rate of a bank or an exchange office in the purchase and sale of a foreign currency b) as of the end of the balance sheet date (or as of another date of the final accounts) daily exchange rate of the Czech National Bank In Partners For Life Planning, a.s., a statement was applied that was published by the Czech National Bank together with the Ministry of Finance in Financial Bulletin No. 1/1/2002, in which it is stated that the published exchange rates apply retroactively also for the previous part of the respective day, i.e. that the exchange rates published by the Czech National Bank at 14:15 are valid from 00:00 till 24:00. In the conversion of a currency that does not feature in the foreign exchange rates published by the Czech National Bank, official average rates of the central bank of the respective country are used, or the current exchange rate of the inter-bank market in relation to the American dollar or Euro. In 2010, the Company did not create any adjusting entries subject to taxation. (6) Supplementary information to the Balance Sheet and the Profit and Loss Statement Fixed intangible assets over CZK 60,000 in CZK thousand Type Difference Software 4,507 5, Software below CZK 60, Valuable rights 1,021 1,021 0 Audiovisual works Total 6,034 6, Fixed tangible assets over CZK 40,000 in CZK thousand Type Difference Technical valuation 5,332 6, Vehicles 2,827 1, Inventory 4,619 5, IT 4,983 4,985 2 Assets from CZK 30 to 40 thousand 1,456 1, Total 19,217 19, Adjusting entries YEAR 2009 Adjusting entries to receivables in CZK thousand Type Initial balance Creation Accounting Final balance Accounting adjusting entries YEAR 2010 Adjusting entries to receivables in CZK thousand Type Initial balance Creation Accounting Final balance Accounting adjusting entries 445 1, ,678 Adjusting entries are created for unpaid credits of consultants including interest that is delayed for more than 1 year from the time of the credit maturity. YEAR 2010 Adjusting entries to material in stock in CZK thousand Type Initial balance Creation Accounting Final balance Accounting adjusting entries Adjusting entries were created for corporate materials in stock that are sold to consultants, where the value falls due to a change in the Company logo. List of reserves YEAR 2009 Other reserves in CZK thousand Type Initial balance Creation Decrease Final balance For financial costs 18,000 30,000 18,000 30,000 YEAR 2010 Other reserves in CZK thousand Type Initial balance Creation Decrease Final balance For financial costs 30,000 40,000 30,000 40,000 The final amount of reserves as of the balance sheet day was set at CZK 40 million. Its amount is based on professional estimates of cancellations in the following year. Back tax In 2010, Partners For Life Planning was imposed back tax of CZK 129 thousand by the tax authority for the supplementary tax return in Deferred tax Year 2009 Year The accounting unit calculates deferred tax from differences in the net book values of fixed assets. As of the balance sheet day, the balance on the account of deferred liability amounts to CZK 534 thousand. (7) The Company does not account formation expenses and its assets are not encumbered with lien or an easement. Page 7 of 11 Page 8 of 11

21 Financial leasing Purpose Company Agreement No. Acquisition price Monthly instalment Termination Passenger car ŠkoFin s.r.o ,151 11,702 02/2015 In 2010, the Company purchased a Škoda Superb car through financial leasing. Operative leasing Purpose Company Agreement No. Acquisition price Monthly instalment Termination Passenger car Autoleasing, a.s ,035 20, /2011 Passenger car Autoleasing, a.s ,072 21, /2011 Passenger car Autoleasing, a.s ,389,132 38, /2012 Passenger car Autoleasing, a.s ,968 19, /2012 Trade receivables Receivables total 24,205 34,092 Of which overdue for more than 180 days Trade liabilities Liabilities total 51,632 54,001 Of which overdue for more than 180 days 1 23 (8) The Profit and Loss Statement is classified by elements. (9) The total amount of liabilities not specified in the Balance Sheet the liabilities from financial and operative leasing amount to CZK 2,140 thousand as of the balance sheet day. The Company registers low-value intangible and tangible assets in the total amount of CZK 8,352 thousand in its operative records. The accounting unit is not aware of any operation, the risks or benefits of which would be significant for evaluation of the financial situation. (10) During the accounting period, the Company did not conclude a business transaction with an affined party that was not be concluded under common market conditions. Business transactions with affiliated companies are concluded under common market conditions. (11) Total costs of compensations to the auditing company: Statutory audit CZK 422 thousand Advisory services CZK 26 thousand (12) From the Company incorporation, the registered capital of CZK 2 million was represented by 20 documentary bearer equity shares with a nominal value of CZK 100,000. In 2009, the registered capital was increased from own resources to CZK 30 million and was made up of 300 documentary bearer equity shares with a nominal value of CZK 100,000. As of the balance sheet day, the registered capital of CZK 30 million was represented by 600 documentary bearer equity shares with a nominal value of CZK 50,000. In 2010, the Company purchased 27 equity shares from a shareholder with a nominal value of CZK 1,350 thousand for the price of CZK 13,950 thousand. (13) Sales according to types of activities in CZK thousand Yields of own products Yields from sale of services 5,139 8,077 Yields from commissions 833,072 1,048,213 Yields from sale of assets Other yields 5,356 7,523 Yields total 844,339 1,064,031 (14) Changes in equity capital in CZK thousand change Registered capital 30,000 16,050-13,950 Capital funds Reserve fund 400 1, Retained profit from past years 8,908 21,558 12,650 Retained loss from past years Profit/loss in current accounting 13,350 58,938 45,588 period Balance of equity capital 52,658 97,646 44,988 Page 9 of 11 Page 10 of 11

22 Reduction of the registered capital by CZK 13,950 thousand is due to the purchase of 27 own shares with a total nominal value of CZK 1,350 thousand for the price of CZK 13,950. (15) As of the day of preparing the final accounts, there were no changes and events in the accounting unit that would have a significant effect on the final accounts of In Prague on Ing. Kateřina Palková General Manager Round seal FINAUDIT TŘINEC, s.r.o. Chamber of Auditors of the Czech Republic Licence No. 100 Illegible signature Page 11 of 11

23 Giving your wishes space to fly...

24 6.5 Auditor s report

25 7. Contacts Headquarters Client centres Prague: Stýblova 253/ Prague 4 Information line: Phone No.: Fax No.: info@partners.cz Brno: Nové Sady Brno Česká Lípa: Mariánská 216/ Česká Lípa Ostrava: Velká Ostrava Pelhřimov: Karlovo náměstí Pelhřimov Brno: Spielberk Office Centre Holandská Brno Information line: Phone No.: Fax No.: info@partners.cz České Budějovice: Nádražní České Budějovice Hradec Králové: Československé armády 1245/ Hradec Králové Lanškroun: Komenského Lanškroun Praha 1: Václavské náměstí Praha 1 Praha 9: Prosecká 851/ Praha 9 Trutnov: Pražská Trutnov Nové Město nad Metují: T. G. Masaryka Nové Město nad Metují Vysoké Mýto: Fügnerova Vysoké Mýto Nymburk: Tyršova Nymburk Zlín: Zarámí Zlín Olomouc: 1. máje 869/ Olomouc Znojmo: Pražská Znojmo Olomouc: třída Svobody 639/ Olomouc

26 A reliable partner is one part of being successful...

27 Partners For Life Planning, a.s. Stýblova 253/13, , Prague 4 Chodov info@partners.cz Company ID No.: , tax ID No.: CZ Bank details: UniCredit Bank Czech Republic a.s. Bank account: /2700