ORBIS S.A. CAPITAL GROUP WARSAW, UL. BRACKA 16 CONSOLIDATED FINANCIAL STATEMENTS FOR THE 2010 FINANCIAL YEAR WITH AUDITOR S OPINION AND AUDIT REPORT

Transcription

1 ORBIS S.A. CAPITAL GROUP WARSAW, UL. BRACKA 16 CONSOLIDATED FINANCIAL STATEMENTS FOR THE 2010 FINANCIAL YEAR WITH AUDITOR S OPINION AND AUDIT REPORT

2 Orbis S.A. Capital Group TABLE OF CONTENTS AUDITOR S OPINION... 3 REPORT SUPPLEMENTING THE OPINION ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS OF ORBIS S.A. CAPITAL GROUP FOR THE 2010 FINANCIAL YEAR... 6 I. GENERAL INFORMATION Details of the audited Parent Information about the consolidated financial statements for the prior financial year Details of the authorized entity and the key certified auditor acting on its behalf Availability of data and management s representations II. ECONOMIC AND FINANCIAL POSITION OF THE CAPITAL GROUP DETAILED INFORMATION Information about the audited consolidated financial statements Consolidation documentation Justification of the opinion issued Completeness and correctness of drawing up notes and explanations and the report on the activities of the Capital Group III. FINAL INFORMATION CONSOLIDATED FINANCIAL STATEMENTS OF ORBIS S.A. CAPITAL GROUP FOR THE 2010 FINANCIAL YEAR 1. Consolidated Statement of Financial Position 2. Consolidated Income Statement and Consolidated Statement of Comprehensive Income 3. Consolidated Statement of Changes in Equity 4. Consolidated Statement of Cash Flows 5. Notes, comprising a summary of significant accounting policies and other explanatory information. REPORT ON THE ACTIVITIES OF ORBIS S.A. CAPITAL GROUP FOR THE 2010 FINANCIAL YEAR Deloitte Audyt Sp. z o.o. 2

3 AUDITOR S OPINION To the Shareholders and Supervisory Board of Orbis S.A. We have audited the attached consolidated financial statements of Orbis S.A. Capital Group with Orbis S.A. with its registered office in Warsaw at Bracka 16 as the parent, including the consolidated statement of financial position prepared as at 31 December 2010, the consolidated income statement and consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows for the financial year from 1 January 2010 to 31 December 2010 and notes, comprising a summary of significant accounting policies and other explanatory information. Preparation of consolidated financial statements and report on the activities in line with the law is the responsibility of the Management Board of the Parent. The Management Board of the Parent and members of its Supervisory Body are obliged to ensure that the consolidated financial statements and the report on the activities of the capital group meet the requirements of the Accounting Act of 29 September 1994 (Journal of Laws of 2009, No. 152, item 1223, as amended), hereinafter referred to as the Accounting Act. Our responsibility was to audit and express an opinion on compliance of the consolidated financial statements with the accounting principles (policy) adopted by the capital group, express an opinion whether the financial statements present fairly and clearly, in all material respects, the financial and economic position as well as the financial result of the Capital Group. Our audit of the financial statements has been planned and performed in accordance with: section 7 of the Accounting Act; national auditing standards, issued by the National Council of Statutory Auditors in Poland. We have planned and performed our audit of the consolidated financial statements in such a way as to obtain reasonable assurance to express an opinion on the financial statements. Our audit included, in particular, verification of the correctness of the accounting principles (policy) applied by the Parent and the subsidiaries, verification largely on a test basis - of the basis for the amounts and disclosures in the consolidated financial statements, as well as overall evaluation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. 3

4 As presented in Note 2.2. to the financial statements, as at the date of first time adoption of International Financial Reporting Standards for preparation of the financial statements, the Management Board of the Parent considered various interpretations regarding IAS 17 and decided that perpetual usufruct of land acquired free of charge as a result of privatization of the Group companies should be recognized in the balance sheet in amounts determined in the course of independent valuation. As of 31 December 2010 and 31 December 2009, net value of perpetual usufruct of land as presented in fixed assets amounted to PLN 322,097 thousand and PLN 329,281 thousand, respectively, and presented under investment property, PLN 29,506 thousand and 30,099 thousand, respectively, and as assets held for sale of PLN 988 thousand. At the same time, as at 31 December 2010 and 31 December 2009, the Group created a provision for deferred income tax related to titles acquired free of charge, in the amount of PLN 66,992 thousand and PLN 68,282 thousand, respectively. In our opinion, due to the fact that the ownership title is not transferred to the Group upon contract termination, in line with IAS 17 such rights are regarded as operating lease and ought to be disclosed in off-balance sheet records. Had the perpetual usufruct of land acquired free of charge not been recognized in the balance sheet, the financial profit/loss for the 12 months ended 31 December 2010 including deferred tax would have been PLN 5,884 thousand higher, and the previous years' profit/loss as at 31 December 2010 would have been PLN 291,483 thousand lower. Similarly, the financial profit/loss for the financial year ended 31 December 2009 should have been PLN 3,985 thousand higher, while the previous year s profit/loss as at 31 December 2009 should have been lower by PLN 295,083 thousand. Additionally, the Group recognized perpetual usufruct of land acquired for a charge and amounting to PLN 45,817 thousand as at 31 December 2010 and PLN 46,802 thousand as at 31 December 2009 as property, plant and equipment. In our opinion, such rights should have been classified as operating lease, in accordance with IAS 17 and the value of payment, as long-term accruals and settled over time. In our opinion, except for the effects of adjustments described above with regard to classification of the perpetual usufruct of land, the audited financial statements in all material respects: present fairly and clearly the information material to evaluate the economic and financial position of the Capital Group as of 31 December 2010 as well as its profit or loss in the financial year from 1 January 2010 to 31 December 2010; have been prepared in accordance with the International Accounting Standards, International Financial Reporting Standards and related interpretations published as European Commission regulations, and in all matters not regulated in the standards in accordance with the provisions of the Accounting Act and secondary legislation to the Act; comply with the provisions of law applicable to the capital group which affect the contents of the consolidated financial statements. 4

5 The Report on the activities of the Capital Group for the 2010 financial year is complete within the meaning of Article 49.2 of the Accounting Act and the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and the rules of equal treatment of the information required by the laws of non-member states and consistent with underlying information disclosed in the audited consolidated financial statements.... Maciej Krasoń Key certified auditor conducting the audit No represented by entity authorized to audit financial statements entered under number 73 on the list kept by the National Council of Statutory Auditors Warsaw, 23 February 2011 The above audit opinion together with audit report is a translation from the original Polish version. In case of any discrepancies between the Polish and English version, the Polish version shall prevail. 5

6 REPORT SUPPLEMENTING THE OPINION ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS OF ORBIS S.A. CAPITAL GROUP FOR THE 2010 FINANCIAL YEAR I. GENERAL INFORMATION 1. Details of the audited Parent The Parent of the Capital Group operates under the business name Orbis S.A. The Company s registered office is located in Warsaw, ul. Bracka 16. The Company operates as a joint-stock company established by a notarized deed on 17 December 1990 before Paweł Błaszczak, Notary Public in Warsaw (Repertory A No. 1882/1990). The Company was recorded in the Commercial Register kept by the District Court for Warsaw, Business Court, XVI Business-Registry Division, section B, under number RHB25134, based on the decision of 9 January Currently, the Company is recorded in the Register of Entrepreneurs kept by the District Court for the capital city of Warsaw, XII Business Division of the National Court Register in Warsaw, under number KRS The Company s tax identification number NIP is: assigned by Second Tax Office Warszawa Śródmieście in Warsaw on 1 May The REGON number assigned by the Statistical Office in Warsaw is numerze: The Company operates based on the provisions of the Code of Commercial Companies. In accordance with the Company s by-laws, the scope of its activities includes: activity of tourism organizers, agents and intermediaries, other booking services and related activities; hotels and similar facilities; organization of fairs, exhibitions and congresses; catering services; maintenance and repair of motor vehicles excluding motorcycles; other passenger road transport n.e.c.; other booking service activity, n.e.c.; other financial services, n.e.c. excluding insurance and pension funds; advertisement agency activities; other publishing activity; non-specialized wholesale; retail trade in non-specialized stores selling mostly food, beverages and tobacco products; other non-school forms of education, n.e.c.; other financial brokerage; activities related to gambling, other personal, property and casualty insurance; other transport agency activities; rental and management of own or leased real property; management of real property on order. Deloitte Audyt Sp. z o.o. 6

7 In the audited period, the Company conducted the following business activities: hotel and catering services. As of 31 December 2010, the Company s share capital amounted to PLN 92,154,016 and was divided into 46,077,008 ordinary shares with a face value of PLN 2 each. As of 31 December 2010, including the hyperinflatory adjustment, the Company s share capital amounted to PLN 517,754 thousand as reported in the financial statements. As at 24 November 2010 (the date of the last Shareholders Meeting) the Company s shareholders included: Accor S.A. (including Accor Polska Sp. z o.o.) 50.01% of shares Arka BZ WBK Akcji FIO 5.03% of shares Arka BZ WBK Zrównoważony FIO 5.04% of shares Aviva Otwarty Fundusz Emerytalna Aviva BZ WBK (formerly Commercial Union OFE BPH CU WBK) 9.90% of shares Other corporate and individual shareholders 30.02% of shares. During the financial year there were no changes in the share capital of the Company. As of 31 December 2010, the Company s equity amounted to PLN 1,809,848 thousand. The Capital Group s financial year is the calendar year. Composition of the Management Board as of the date of the opinion: Laurent Francois Picheral Chairman of the Board; Ireneusz Andrzej Węgłowski Vice-Chairman of the Board; Yannick Yvon Rouvrais Member of the Board; Marcin Szewczykowski Member of the Board. Changes in the composition of the Management Board during the audited period: On 30 June 2010 Jean-Philippe Savoye resigned from the position of the Chairman of the Board of the Parent with immediate effect. On the same date, Supervisory Board of Orbis S.A. appointed Laurent Picheral a member of the Board for the current office term and appointed him the Chairman of the Management Board of Orbis S.A. The above changes have been reported and registered at a relevant court register. Composition of the Orbis S.A. Capital Group as of 31 December 2010: the Parent - Orbis S.A. and subsidiaries: Hekon Hotele Ekonomiczne S.A % subsidiary; UAB Hekon - 100% subsidiary Wioska Turystyczna Wilkasy Sp. z o. o. 100% subsidiary; Orbis Incoming Sp. z o. o. in liquidation 100% subsidiary Orbis Development Sp. z o. o. in liquidation 100% subsidiary Orbis Corporate Sp. z o.o. 100% subsidiary; Orbis Transport Sp. z o.o % subsidiary; PKS Tarnobrzeg Sp. z o.o % subsidiary; PKS Gdańsk Sp. z o.o % subsidiary; Interbus Sp. z o. o. in liquidation 99.07% subsidiary Capital Parking Sp. z o.o % subsidiary; Deloitte Audyt Sp. z o.o. 7

8 PMKS Tarnobrzeg Sp. z o.o % subsidiary; Orbis Kontrakty Sp. z o.o. 100% subsidiary. Orbis Casino Sp. z o.o % associate. The consolidated financial statements as of 31 December 2010 included the following entities: a) Parent Orbis S.A. We have audited the financial statements of Orbis S.A., the Parent, for the period from 1 January to 31 December As a result of our audit, on 23 February 2011 we issued a qualified opinion with the qualification regarding perpetual usufruct of land. b) Companies subject to full consolidation: Name and address of the Company Hekon Hotele Ekonomiczne S.A. Interest in the capital (%) 100% UAB Hekon 100% Orbis Transport Capital Group Orbis Kontrakty Sp. z o.o. 90,07% 100% Name of entity that audited the financial statements and type of opinion issued Deloitte Audyt Sp. z o.o. (with qualification regarding classification of perpetual usufruct of land acquired for charge) UAB Deloitte Lietuva (unqualified) Deloitte Audyt Sp. z o.o. (with qualification regarding classification of perpetual usufruct of land acquired for charge) Revision Rzeszów Józef Król Sp. z o.o. Balance sheet date of the consolidated entity 31 December December December December 2010 Opinion date 23 February February February February 2011 c) Companies subject to equity method of consolidation: Name and address of the Company Orbis Casino Sp. z o.o. Interest in the capital (%) Name of entity that audited the financial statements and type of opinion issued 33,33% Finans Servis Sp. z o.o. Balance sheet date of the consolidated entity 31 December 2010 Opinion date Not issued In the consolidated financial statements prepared by the Parent no significant simplifications or discrepancies from the adopted consolidation principles regarding controlled entities occur. In the financial year, ORBIS S.A. concluded an agreement on the sale of all shares held in PBP Orbis Travel Sp. z o.o.; the agreement was completed on 29 March Information about the consolidated financial statements for the prior financial year The activities of the Capital Group in 2009 resulted in a net loss of PLN 6,061 thousand. The consolidated financial statements of the Capital Group for the 2009 were audited by a certified auditor. The audit was performed by authorized entity Deloitte Audyt Sp. z o.o. On 19 April 2010, the certified auditor issued a opinion on those financial statements with the following qualification: Deloitte Audyt Sp. z o.o. 8

9 During the audited period, PBP Orbis Sp. z o.o., a 95.08% subsidiary of Orbis S.A., was implementing a new finance and accounting system. Since the implementation was in progress, the subsidiary was unable to verify recognition, presentation, ageing and measurement of its receivables and liabilities as of the balance sheet date. In the consolidated financial statements of the Group, the value of these items was as follows: assets classified as held for sale of PLN 17,548 thousand, liabilities related to assets classified as held for sale of PLN 17,412 thousand. Therefore, we have been unable to obtain sufficient certainty as to correctness and we do not assess the amount and measurement of the above items as of 31 December 2009 included in the consolidated financial statements of the Capital Group with regard to PBP Orbis Sp. z o.o. As presented in Note 2.2. to the financial statements, as at the date of first time adoption of International Financial Reporting Standards for preparation of the financial statements, the Management Board of the Parent considered various interpretations regarding IAS 17 and decided that perpetual usufruct of land acquired free of charge as a result of privatization of the Group companies should be recognized in the balance sheet in amounts determined in the course of independent valuation. As of 31 December 2009 and 31 December 2008, net value of perpetual usufruct of land as presented in fixed assets amounted to PLN 329,281 thousand and PLN 338,202 thousand, respectively, and presented under investment property, PLN 30,099 thousand and 30,296 thousand, respectively. At the same time, as at 31 December 2009 and 31 December 2008, the Group created a provision for deferred income tax related to titles acquired free of charge, in the amount of PLN 68,282 thousand and PLN 70,014 thousand, respectively. In our opinion, due to the fact that the ownership title is not transferred to the Group upon contract termination, in line with IAS 17 such rights are regarded as operating lease and ought to be disclosed in off-balance sheet records. Had the perpetual usufruct of land acquired free of charge not been recognized in the balance sheet, the financial profit/loss for the 12 months ended 31 December 2009 including deferred tax would have been PLN 3,985 thousand higher, and the previous years' profit/loss as at 31 December 2009 would have been PLN 295,083 thousand lower. Similarly, the financial profit/loss for the financial year ended 31 December 2008 should have been PLN 3,852 thousand higher, while the previous year s profit/loss as at 31 December 2008 should have been lower by PLN 302,336 thousand. Additionally, the Group recognized perpetual usufruct of land acquired for a charge and amounting to PLN 46,802 thousand as at 31 December 2009 and PLN 47,587 thousand as at 31 December 2008 as property, plant and equipment. In our opinion, such rights should have been classified as operating lease, in accordance with IAS 17 and the value of payment, as long-term accruals and settled over time. The General Shareholders Meeting, which approved the consolidated financial statements for the 2009 financial year, was held on 15 June In accordance with applicable laws, the financial statements for the 2009 financial year were submitted to the National Court Register (KRS) on 21 June 2010 and filed for publication in Monitor Polski B on 23 June They were published in Monitor Polski B No on 24 August Details of the authorized entity and the key certified auditor acting on its behalf The audit of the financial statements was conducted based on the agreement of 3 July 2008 concluded between Orbis S.A. and Deloitte Audyt Sp. z o.o. with registered office in Warsaw, al. Jana Pawła II 19, recorded under number 73 on the list of entities authorized to provide audit services kept by the National Council of Statutory Auditors. On behalf of the authorized entity, Deloitte Audyt Sp. z o.o. 9

10 the audit of the consolidated financial statements was conducted under the supervision of Maciej Krasoń, key certified auditor (No ), in the registered office of the Parent from 6 to 17 December 2010, from 17 to 28 January 2011 and outside the registered office from 31 January to 23 February The entity authorized to audit the financial statements was appointed by the resolution of the Supervisory Board of 22 April 2008 based on authorization included in Article 20 clause 2 point 8 of the by-laws of Orbis S.A. and on Article 9 clause 1 point 10 of the Parent s Supervisory Board Regulations. Deloitte Audyt Sp. z o.o. and Maciej Krasoń, key certified auditor, confirm that they are authorized to carry out audits and meet the requirements of Article 56 of the of the Act of statutory auditors and their self-regulation, entities authorized to audit financial statements and public supervision (Journal of Laws of 2009, No. 77, item 649), to express an unbiased and independent opinion on the financial statements of the Orbis S.A. Capital Group. 4. Availability of data and management s representations The scope of our audit was not limited. During the audit, all necessary documents and data as well as detailed information and explanations were provided to the authorized entity and the key certified auditor, as confirmed e.g. in a written representation of the Management Board of 23 February Deloitte Audyt Sp. z o.o. 10

11 II. ECONOMIC AND FINANCIAL POSITION OF THE CAPITAL GROUP Presented below are the main items from the consolidated income statement as well as financial ratios describing the financial result of the Capital Group and its economic and financial position compared to the prior years. Main items from the income statement (PLN 000) (*) Sales revenue 818, , ,704 Operating expenses (767,404) (792,674) (868,900) Other operating revenue 18,158 23,988 8,635 Other operating expenses (20,273) (17,182) (18,957) Revaluation of non-financial non-current assets 558 (2,855) 10,035 Financial revenue Financial expenses (19,750) (21,714) (25,482) Interest in net profit of associates (3,951) (53) 904 Income tax (9,871) (16,711) (10,933) Net profit (loss) 10,758 (6,061) 26,112 Total comprehensive income 9,069 (5,979) 26,883 Profit/loss on continued operations 16,096 26,721 33,006 Profit/loss on discontinued operations (5,338) (32,782) (6,894) Profitability ratios gross profit margin 6% 8% 7% net profit margin 2% 3% 4% net return on equity 1% 2% 2% Effectiveness ratios assets turnover ratio receivables turnover in days liabilities turnover in days inventory turnover in days Liquidity/Net working capital debt ratio 18% 22% 28% equity to fixed assets ratio 82% 76% 72% net working capital (PLN 000) (93,477) (285,090) (76,119) current ratio quick ratio (*) Data for 2008 have been modified following separation of profit/loss on discontinued operation s in the income statement. An analysis of the above figures and ratios indicated the following trends in 2010: a decrease in the gross and net profit margins and the net return in equity; a slight increase in assets turnover ratio, accompanied with a decrease in the receivables and liabilities turnover in days; a decrease in the debt ratio and a significant decrease in the negative value of net working capital; an increase in equity to fixed assets ratio and liquidity ratios. Deloitte Audyt Sp. z o.o. 11

12 As of 31 December 2010, the value of current liabilities (PLN 214,715 thousand) exceeded the amount of current assets (PLN 121,238 thousand). According to the Management Board, though, there is no threat for the Group s operation as a going concern as presented in details in Note 30.6 to the consolidated financial statements of the Orbis S.A. Capital Group. DETAILED INFORMATION 1. Information about the audited consolidated financial statements The audited consolidated financial statements were prepared as of 31 December 2010 and include: consolidated statement of financial position as of 31 December 2010 with total assets and liabilities plus equity of PLN 2,217,014 thousand; consolidated income statement for the period from 1 January 2010 to 31 December 2010, disclosing a net profit of PLN 10,758 thousand; consolidated statement of comprehensive income for the period from 1 January 2010 to 31 December 2010, disclosing a total comprehensive income of PLN 9,069 thousand; consolidated statement of changes in equity for the period from 1 January 2010 to 31 December 2010, disclosing an increase in equity of PLN 9,069 thousand; consolidated statement of cash flows for the period from 1 January 2010 to 31 December 2010, disclosing a cash inflow of PLN 3,739 thousand; notes, comprising a summary of significant accounting policies and other explanatory information. The structure of assets and liabilities plus equity as well as items affecting the profit/loss has been presented in the consolidated financial statements. The audit covered the period from 1 January 2010 to 31 December 2010 and focused mainly on: verification of the correctness and fairness of the consolidated financial statements prepared by the Management Board of the Parent, verification of the consolidation documentation, evaluation of the correctness of the consolidation methods and procedures applied during consolidation, review of opinions and reports on audits of financial statements of subsidiaries and associated companies included in consolidation, prepared by other certified auditors. 2. Consolidation documentation The Parent presented the consolidation documentation including: 1) financial statements of entities included in the consolidated financial statements; 2) financial statements of controlled entities, adjusted to the accounting principles (policy) applied during consolidation; 3) financial statements of controlled entities translated into the Polish currency; 4) all consolidation adjustments and eliminations necessary for preparation of the consolidated financial statements; 5) calculation of the fair value of the net assets of controlled entities; 6) calculation of goodwill and negative goodwill as well as their write-downs, also due to impairment; Deloitte Audyt Sp. z o.o. 12

13 7) calculation of minority interest; 8) calculation of exchange differences arising from translation of the financial statements of controlled entities denominated in foreign currencies. Basis for the preparation of the consolidated financial statements The consolidated financial statements of the Capital Group for the 2010 financial year have been prepared in accordance with the International Financial Reporting Standards. Entities in the Capital Group The scope and method of consolidation as well as the relationship between entities in the capital group have been determined based on the criteria specified in the International Financial Reporting Standards. Financial period The consolidated financial statements have been prepared as of the same balance sheet date and for the same financial year as the financial statements of the Parent Orbis S.A. Subsidiaries and the associate included in consolidation prepared their financial statements as of the same balance sheet date as the Parent. The financial year of all subsidiaries and the associated company included in consolidation ended on 31 December Consolidation method The financial statements of the subsidiaries were consolidated using the full method, i.e. full amounts of all relevant items of the financial statements of the Parent and the subsidiaries included in consolidation were summed up. Once the values had been summed up, consolidation adjustments and eliminations were applied to: the cost of shares held by the Parent in subsidiaries and the part of net assets of the subsidiaries corresponding to the interest of the Parent in these companies, mutual receivables and liabilities of entities included in consolidation; material revenue and expenses related to transactions between entities included in consolidation. The equity method was applied with respect to associated entities. The value of the Parent s interest in the associated company was adjusted by increases or decreases in the equity of the associated company attributable to the Parent, which occurred in the period covered by consolidation, and decreased by dividends due from such companies. 3. Justification of the opinion issued As presented in Note 2.2. to the financial statements, as at the date of first time adoption of International Financial Reporting Standards for preparation of the financial statements, the Management Board of the Parent considered various interpretations regarding IAS 17 and decided that perpetual usufruct of land acquired free of charge as a result of privatization of the Group companies should be recognized in the balance sheet in amounts determined in the course of independent valuation. As at 31 December 2010 and 31 December 2009, net value of perpetual usufruct of land as presented in fixed assets amounted to PLN 322,097 thousand and PLN 329,281 thousand, respectively, and presented under investment property, PLN 29,506 thousand and 30,099 thousand, respectively, while in assets held for sale was PLN 988 thousand. Deloitte Audyt Sp. z o.o. 13

14 At the same time, as at 31 December 2010 and 31 December 2009, the Group created a provision for deferred income tax related to titles acquired free of charge, in the amount of PLN 66,992 thousand and PLN 68,282 thousand, respectively. In our opinion, due to the fact that the ownership title is not transferred to the Group upon contract termination, in line with IAS 17 such rights are regarded as operating lease and ought to be disclosed in off-balance sheet records. Had the perpetual usufruct of land acquired free of charge not been recognized in the balance sheet, the financial profit/loss for the 12 months ended 31 December 2010 including deferred tax would have been PLN 5,884 thousand higher, and the previous years' profit/loss as at 31 December 2010 would have been PLN 291,483 thousand lower. Similarly, the financial profit/loss for the financial year ended 31 December 2009 should have been PLN 3,985 thousand higher, while the previous year s profit/loss as at 31 December 2009 should have been lower by PLN 295,083 thousand. Additionally, the Group recognized perpetual usufruct of land acquired for a charge and amounting to PLN 45,817 thousand as at 31 December 2010 and PLN 46,802 thousand as at 31 December 2009 as property, plant and equipment. In our opinion, such rights should have been classified as operating lease, in accordance with IAS 17 and the value of payment, as long-term accruals and settled over time. 4. Completeness and correctness of drawing up notes and explanations and the report on the activities of the Capital Group The Parent confirmed the validity of the going concern basis in preparation of the consolidated financial statements. The notes to the consolidated financial statements give a correct and complete description of measurement principles regarding assets, liabilities, profit or loss and principles of preparation of the consolidated financial statements. The Parent prepared notes in the form of tables to individual items of the consolidated statement of financial position and statement of comprehensive income as well as narrative descriptions, in line with the requirement of IFRS. Notes describing property, plant and equipment, intangible assets, investments, liabilities and provisions correctly present increases and decreases as well as their basis during the financial year. Limitations imposed on individual assets disclosed in the consolidated statement of financial position arising from security granted to creditors have been described. Individual assets and liabilities as well as revenue and expenses have been correctly presented by the Parent in the consolidated financial statements. The consolidated statement of financial position, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows as well as notes which constitute an integral part of the financial statements include all items required for disclosure in the consolidated financial statements under IFRS. The consolidated financial statements have been supplemented with the Management Board s report on the activities of the Company in the 2010 financial year. The report contains all information required under Article 49.2 of the Accounting Act and the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and the rules of equal treatment of the information required by the laws of nonmember states. We have audited the report with respect to the disclosed information derived directly from the audited consolidated financial statements. Deloitte Audyt Sp. z o.o. 14

15 III. FINAL INFORMATION Management Board s Representation Deloitte Audyt Sp. z o.o. and the key certified auditor received a representation letter from the Parent s Management Board, in which the Board stated that the Capital Group complied with the laws in force.... Maciej Krasoń Key certified auditor conducting the audit No represented by entity authorized to audit financial statements entered under number 73 on the list kept by the National Council of Statutory Auditors Warsaw, 23 February 2011 Deloitte Audyt Sp. z o.o. 15