PROFI F IC REDIT I T C

Transcription

1 ANNUAL REPORT PROFI CREDIT Czech, a.s. 1

2 VYBRANÉ UKAZATELE PROFI CREDIT CZECH, A.S. /BASIC ECONOMIC FACTS OF PROFI CREDIT CZECH, A.S. Poskytnuté pjky (produkce) Loans Provided (Production) Poet poskytnutých pjek Number of loans provided Nominální hodnota poskytnutých pjek (v tis. K)* Nominal value of loans provided (in CZK thousand)* Vyplaceno celkem (v tis. K) Disbursed in total (in CZK thousand) Zamstnanecké úvry Podíl na celkové produkci Pjky pro podnikatele Podíl na celkové produkci 88,82 % 94,48 % 93,96 % 11,18 % 5,52 % 6,04 % Credit for employees share in total production Loans for businessman share in total production Lidské zdroje Human Resources Poet externích úvrových pracovník Number of external credit advisors Poet externích inkasních pracovník Number of external collectors Poet zamstnanc** Number of employees** Finanní ukazatele (v tis. K)*** Financial Indicators (in CZK thousand)*** Aktiva celkem Total assets Výnosy celkem Total revenues Náklady celkem Total costs HV ped zdanním Profit / Loss before taxation Da z píjmu**** Income tax**** HV po zdanní Profit / Loss after taxation * Nominální hodnota poskytnuté pjky v sob zahrnuje vyplacenou ástku a budoucí úrokové výnosy ** Poet zamstnanc ke konci roku *** Výsledky na základ eských úetních standard **** Splatná, odložená * Nominal value of provided loan consists of disturbed amount and future interest revenue ** Number of employees at the end of the year *** in a accordance with Czech Accounting Standards **** payable, deferred 2

3 PROFI CREDIT Czech, a.s. CONTENTS! "!! "! "# $ % & " # $ ' "# $ # $ "# $ % # $ 3

4 PROFI CREDIT Czech, a.s. 1. PROFIREAL GROUP FINANCIAL GROUP PROFIREAL Group is a multinational financial group that is active on the financial markets of Central and Eastern Europe. It is a significant provider of credit and loans in the Czech Republic, Slovakia, Poland and Bulgaria. There are two divisions at PROFIREAL Group: the companies of the PROFI CREDIT division operate in the world of financial credit and loans, while those in the PROFIDEBT division are involved in the purchase and exaction of debts. The parent company of the group is PROFIREAL Group SE, having its registered office in The Netherlands. The group has been involved in the provision of financial credit and loans since the year 2000, when it embarked on this project in the Czech Republic and Slovakia. It took up the purchase and exaction of debts in 2005, when the Czech Republic and Slovakia were again the first countries involved in the new division. Over the years, the PROFI CREDIT division has provided almost 700,000 loans, including revolving loans. The division occupies its strongest position in the Czech Republic, where it also achieves its highest profitability. Of the overall volume of loans and credit provided, the share provided in the Czech Republic is 50 %. The companies of the Profi Credit division recorded a year-on-year increase in credit and loans provided of 38.5 % in This result was helped mainly by an increase of output at Profi Credit Poland of more than 60 %, Profi Credit Czech of 30 % and the remaining companies in the division in Slovakia of 38 % and in Bulgaria of 26 %. At the same time, the nominal value of loans and credit provided in 2012 by the Profi Credit division topped the CZK 5.5 thousand million. The priority at the companies in the PROFIREAL group remains maintaining the quality of the client portfolio. The group continues to respond to the economic situation in the individual countries in which it is active on an operative basis and to adapt its business, in particular its risk management, to the current situation. 4

5 PROFI CREDIT Czech, a.s. PROFIREAL Group focuses on the countries of Central and Eastern Europe. The PROFIDEBT division took advantage of its opportunities on the market and has been able to buy debts in excess of CZK 1.3 thousand million in value. The banks and institutions that make up the target group of clients are using the services of external specialists more and more, entrusting them with the exaction of the money they are owed. Selling debts has also become one of the standard instruments they use. It is therefore likely that the growth of this sector in a year-on-year comparison will be in the tens of per cent for several years to come. 5

6 PROFI CREDIT Czech, a.s. The aim at PROFIREAL Group is to stabilise current activity and continually adapt it to the economicc situation in individual countries. Primary emphasis is placed on quality risk management, on optimising all processes within individual companies of the group, on making cost savings and on maintaining shares in market segments. Organizational structure of PROFIREAL Group 6

7 PROFI CREDIT Czech, a.s. 2. A WORD OF INTRODUCTION FROM THE CHIEF EXECUTIVE Ladies and gentlemen, Allow me to take this opportunity to briefly summarise our company s results for The economic situation throughout the Czech Republic was not overly different to the two previous years. We continue to have to face up to caution among the population stemming from fears of job losses, the ever-worsening payment ethic of our existing clients and increasing numbers of personal household insolvency. This situation is no different in the area of consumer loans. Official Czech Leasing and Financing Association statistics show stagnation or only a slight growth trend. In year-on-year terms, there has been growth of 1.1 %. From this perspective, I would describe 2012 as a successful year. What undoubtedly leads me to such a conclusion are the figures achieved and the quality of output. Overall output of CZK 1.7 thousand million for all products we supply marks a 30 % increase on the previous year. A special mention here must be made of the 43 per cent increase in new contracts. The end-ofyear results of the introduction of an updated range of loans for entrepreneurs proved this to be a step in the right direction. More specifically, we began offering entrepreneurs and sole traders two new products in April 2012, products that better satisfied their financial needs and repayment requirements. Stable results were also achieved in terms of the quality of output, this in spite of the increase in personal household insolvency already mentioned. The full implementation of client information from the register of client information, maintained under the abbreviation NRKI/BRKI, also played a positive part in this. Aside from actual results, there are two absolutely core matters whose implementation in 2012 is aimed at maintaining and developing our position on the market for providers of non-bank loans and credit next year. The beginning of the year saw us embark on the long journey of switching to a new information system. This innovation will help simplify work for our employees and will, of course, raise the standard of the services we provide our clients. The launch, in the middle of the year, of projects based on the Smart&Profi strategy for the entire 7

8 PROFI CREDIT Czech, a.s. division helped monitor client demands and introduced a strategy bringing the company division-wide unification, best practice, pro-client orientation, social responsibility and, last but not least, procedural improvement and cost effectiveness. Our time schedule means that we expect the first results at the very beginning of In conclusion, allow me to thank all our business partners for their cooperation over the past term. I would also like to use this opportunity to extend my thanks to all employees of PROFI CREDIT Czech, a.s. Ing. Rudolf Cejnar CEO, Member of the Board of Directors at PROFI CREDIT Czech, a.s. 8

9 PROFI CREDIT Czech, a.s. 3. CHARACTERISTICS OF PROFI CREDIT CZECH, A.S. 3.1 Company bodies The Board of Directors Ing. David Chour Chairman of the Board of Directors Completed secondary school in Chrudim, before studying at the Faculty of Economics and Administration at the University of Pardubice. Joined the company in the year 2000, when he began working as a financial analyst while still studying at university. Graduated in 2001 and became head of the Debt Administration Section and subsequently Economic Director at the company. Now CEO of the Administration Section. A Member of the Board of Directors since July 2001 and Chairman of the Board of Directors of the company since May Also a Member of the Board of Directors of parent company PROFIREAL Group SE since Ing. Petr Vrba Member of the Board of Directors Studied at the grammar school in Pardubice, specialising in mathematics and physics, and graduated from the University of Pardubice, where he attended the Faculty of Transport, concentrating on management, marketing and logistics. He joined PROFI CREDIT after completing his studies, taking up a junior management position, before becoming Head of the Debt Administration Section. Became a Member of the Board of Directors in Currently occupies the position of General Manager of the PROFI CREDIT division. In this role he is fully responsible for coordinating the activities of all companies within the PROFI CREDIT division. 9

10 PROFI CREDIT Czech, a.s. Completed grammar school in Medzilaborce in 1982, before attending the Faculty of Business at the University of Economics in Bratislava, graduating in Has many years of experience relating to banking and other financial institutions. Appointed Chief Executive of PROFI CREDIT Slovakia, s.r.o. in May 2003 and Managing Director of the company in December Has occupied the position of Chief Executive of the Short-term Loans Division since October Ing. Vladimír Michniewicz Member of the Board of Directors Worked for Tesla, a.s. after graduating from the University of Economics in Prague, Faculty of Business Administration. Joined PROFI CREDIT Czech, a.s. in 2007 as PROFI CREDIT division Operations Manager. Appointed a Member of the Board of Directors after working for the company for four years, he has occupied the position of Chief Executive since October 2012, a role in which he is responsible for coordinating the activities of all sections of PROFI CREDIT Czech. Ing. Rudolf Cejnar Member of the Board of Directors 10

11 PROFI CREDIT Czech, a.s. Ing. Karol Jurák Member of the Board of Directors Attended grammar school in Piešany and the Faculty of Business Informatics and Accounting at the Economic University in Bratislava. Joined PROFI CREDIT Slovakia, s.r.o. as a financial analyst in February Successively appointed Financial Manager at PROFI CREDIT Slovakia and Managing Director at PROFIDEBT Slovakia. Appointed to the post of General Manager of the PROFIDEBT division on and a Member of the Board of Directors of PROFI CREDIT Czech, a.s. since June In this role he is fully responsible for coordinating the activities of all companies within the PROFIDEBT division. The Board of Supervisors at PROFI CREDIT Czech, a.s. Roman Kouba Chairman of the Board of Supervisors Marian Ganaj Member of the Board of Supervisors Ing. Miroslava Oravcová - Member of the Board of Supervisors Management at PROFI CREDIT Czech, a.s. Advisory Unit Ing. Jaromír Všeteka Product Manager for Central Europe Pavel Strnádek, AA Commercial Manager for Central Europe Ota Hempl - IT Manager for Central Europe Ing. David íha Financial Manager for Central Europe Ing. Aleš Oborník Debt Administration Manager for Central Europe Ing. Barbora Biernacki Personnel Manager for Central Europe Ing. Zdenk Lhotský, MBA Strategic Development Manager Ing. František Tesa Special Project Manager 11

12 PROFI CREDIT Czech, a.s. Management at PROFI CREDIT Czech, a.s. Business Unit Ing. Jana Matiková Financial Manager Ing. Martina Pechánková Product Manager Ing. Tomáš Jakoubek Deputy Commercial Manager Eduard Tihoun Marketing Manager Radek Matyáš - IT Manager Vladimíra Strouhalová Deputy Internal Audit Manager Bc. Jakub Dvoák Debt Administration Manager Ing. Jaroslava Zikmundová Operations Manager Mgr. Žaneta Nedomová - HR Manager As at

13 PROFI CREDIT Czech, a.s. 3.2 Company profile PROFI CREDIT Czech, a.s. was founded in 1994 under the name of Profireal, a. s. The company then changed its trade name and product brands in February Initially, the company specialised in real estate and the purchase and administration of debts. PROFI CREDIT Czech, a.s. has been involved in the non-banking financial sector since 2000, when it began providing loans to individuals (natural persons) not conducting a business (employees, pensioners). The company now has a broad portfolio of products intended for natural persons and legal persons alike and is a prominent provider of financial loan services. PROFI CREDIT Czech, a.s. is part of the multinational PROFIREAL Group SE financial group, with its headquarters in The Netherlands. The company began expanding into other European markets at the end of the year 2000 by moving into Slovakia. The subsidiary here, PROFI CREDIT Slovakia, s.r.o., made use of the know-how of the parent company and very quickly made a mark on the new market. Further expansion followed in 2004, when a subsidiary was set up in Poland. The company then moved into the Bulgarian market in November The company s ever-expanding range of products led to the foundation of another subsidiary, Cash Gate, s.r.o., in the Czech Republic in February The basic philosophy at PROFI CREDIT is to provide a personal approach. Products are offered by way of direct sales through a network of loan advisors that help clients choose the right product according to their individual needs and possibilities. 13

14 PROFI CREDIT Czech, a.s. 3.3 The product range PROFI CREDIT offers its clients a wide range of products, including Employee (personal) Loan, Sole-trader Loans, Enterprise Loans, Loans against Security and, from April 2012 in certain districts of the Czech Republic, new loans (on a pilot basis) for legal persons and natural persons engaging in business. All loans and credit mentioned above were not tied to a specific purpose in 2012, with the exception of the Loan against Security, were without charges for loan approval and set-up and mostly came with the option of automatic revolving. Money from an approved loan is paid into the client's account by credit transfer. Loan repayments are also made into the company's account by credit transfer (withdrawal from the client s account, standing order from the client s account, cash deposit in the company s account etc.). The advantage of our loans lies in their accessibility and speed of provision. AN EMPLOYEE (PERSONAL) LOAN is intended for clients that have a regular income, either from employment or from a pension or annuity. The repayment period is between 12 and 48 months and the loan is not tied to any specific purpose. Clients can therefore use this loan for whatever they want a holiday, home furnishings, to buy a car, electronics etc. A LOAN AGAINST SECURITY is intended for natural persons (individuals) not conducting a business, self-employed persons and legal persons. The basic criterion for loan approval is security in the form of real estate. This is a short- to medium-term loan with a repayment period of 1 to 48 months. There is no limit to the size of the loan; it mainly depends on the quality of the real estate pledged. The client must specify the purpose of the loan provided 1. Our company offers clients conducting a business two types of loans: a Sole-trader Loan and an Enterprise Loan. A SOLE-TRADER LOAN is intended mainly for small-scale entrepreneurs and sole traders that have regular income from business activity. The basic criteria for providing a loan to applicants are their economic situation (income, revenue, monies they owe, obligations etc.) 1 A natural person not conducting a business must state the purpose of the loan so as to satisfy the condition laid down by the Consumer Loans Act 14

15 PROFI CREDIT Czech, a.s. and information from the available public registers (public and paid). This is a short- to medium-term loan with a repayment period of 1 to 48 months. A loan may be provided to an entrepreneur with lower economic credibility or a startup business as long as a credible jointdebtor supports the application. The approval of such an application is subject to individual consideration. AN ENTREPRENEUR LOAN is intended for business entities (natural persons conducting a business and legal persons). The basic criteria for the approval of a loan are income from business activity and quality security by pledging real estate. As with a Sole Trader Loan, this is a short- to medium-term loan with a repayment period of 1 to 48 months. There is no limit on the size of the loan, which is dependent on the quality of security. Clients have been able to use an Employee Loan, a Sole Trader Loan and an Enterprise Loan to refinance or consolidate their existing loans from banks and non-banking institutions since We also allow Sole Trader Loans and Enterprise Loans to be used to consolidate obligations towards public administration (Czech Social Security Administration, tax authority). By consolidating the client s obligations under a single loan, we are able to reduce his monthly repayment expenses and therefore his overall monthly expenses, meaning that the client has more available cash to use for his needs. Arranging the payment of an obligation to another company is absolutely free. The company was able to enter the Non-banking Register of Client Information in 2011, having previously used the SOLUS register and publicly-accessible registers administered by the Czech public sector. The year 2012 saw us undertake the recalibration of the SCORE CARD provided by a prominent foreign company, meaning that we can approach the financing and loan burden of the people in the Czech Republic even more responsibly. The company plans to cancel Loans against Security, Sole Trader Loans and Enterprise Loans in 2013 and to broaden the pilot operation of a new, comprehensive range of products for entrepreneurs and small-scale traders throughout the Czech Republic and in doing so cover the products in question. We would also like to expand our range of retail loan products and so be able to provide A loan for all. 15

16 PROFI CREDIT Czech, a.s. 3.4 Commercial results PROFI CREDIT Czech, a.s., which has provided non-banking loans and credit on the Czech market since 2000, provided loans and credit of a total value of over CZK 1.7 thousand million in As in previous years, the Employee Loan was our best-selling product. Prague (R 02) was the best region in 2012, providing loans in the City of Prague and the Central Bohemia Region of a value of around CZK 330 million. Second best was the eské Budjovice region (R 06), which provides loans in the Budjovice region, Plze region, Karlovy Vary region and partly in the Central Bohemia region. The loans provided here totalled CZK 297 million. In third position with approximately CZK 286 million was the Pardubice region (R 01), providing loans in the Pardubice region, Hradec Králové region and partly in the Liberec region and Vysoina region. In fourth to sixth positions were the Ostrava region (R 04), the Mladá Boleslav region (R 05) and the Brno region (R 03), the remaining loans being provided by the commercial department at head office, by alternative distribution channels and by a specialised network for enterprise loans. The record month was November 2012, when the company provided loans valued at a total of CZK 176 million. From a regional perspective, the strongest month was August 2012, when the Prague region arranged loans of a nominal value of almost CZK 34 million. During its time on the Czech market, PROFI CREDIT Czech, a.s. has surpassed a nominal value of newly-provided loans of CZK thousand million and total output, including revolving loans, of CZK thousand million. Total output for individual regions TOTAL CZK 1.7 thousand million " " " " " " )*+,- "(!!( ""( ( "!(!!(!( " """""""" """""""" """""""" """""""" 16

17 PROFI CREDIT Czech, a.s. 3.5 Commercial outlook Whereas 2011 was partly influenced by the financial crisis, results for 2012 testify to economic stability in the Czech Republic and the prosperity of PROFI CREDIT. Indeed we saw an increase in new production of around 43 % on We expect an increase in new production of 30 % on 2012 and would like to achieve this target mainly through updated products for entrepreneurs and sole traders. Our aim is to offer products to suit clients and loan advisors that are quicker and easier to get. This, of course, applies to all countries in which PROFI CREDIT is active. The markets of the Czech Republic, Slovakia, Poland and Bulgaria all have specific characteristics, whether it be the currency, the population structure or the local legislation. In all these countries, however, PROFI CREDIT provides its clients with attractive and attainable products. 17

18 PROFI CREDIT Czech, a.s. 3.6 Commercial network PROFI CREDIT Czech, a.s. offers its clients a personal approach. That is why it sells its products directly through a network of external colleagues so-called loan advisors and partner companies. A quality commercial network is the foundation on which the company s success is built and for this reason PROFI CREDIT places great importance on the development of the commercial network. The network of loan advisors ensures contact with the client and care for the client the whole time, meaning from the presentation of a full offer of services to the client, through signing a loan contract, to the repayment of the loan. The commercial network in the Czech Republic is divided into six regions: the Pardubice (R 01), Prague (R 02), Brno (R 03), Ostrava (R 04), Mladá Boleslav (R 05) and eské Budjovice (R 06) regions. Each region has its own headquarters, providing the administrative background for commercial group managers and loan advisors. The relevant regional managers are responsible for the quality and volume of output and the recruitment of new loan advisors in the region. Each region is further divided into several districts, responsibility for these lying with the competent commercial group managers, known as district managers or team managers. We had 36 district managers and 4 team leaders on Loan advisors work with PROFI CREDIT based on cooperation contracts, the most important motivational element being the commission paid for loans arranged. PROFI CREDIT provides an above-standard level of commission, a system that is further supported by motivational competitions. Loan advisors are also offered marketing support and the chance to attend business conferences and events focusing on sport or relaxation. 18

19 PROFI CREDIT Czech, a.s. Total number of loan advisors by region Total of 932 advisors " " " " "! " " " " "" " "" " We had a total of 932 loan advisors plus outside partners on The highest number of loan advisors, 193, work in the Prague region (R 02). We have the following number of loan advisors in the remaining regions: Ostrava 178 (R 04), eské Budjovice 162 (R 06), Pardubice 155 (R 01), Brno 130 (R 03) and Mladá Boleslav 114 (R 05). Since we are aware that a properly-motivated commercial network is the basis of success, we will continue providing maximum support to the commercial network in 2013 so that it is able to fully concentrate on commercial activity and so achieve the planned quantitative and qualitative results. 19

20 PROFI CREDIT Czech, a.s. 3.7 Employees All monitored personnel indicators were fulfilled in 2012 HR costs (overall and for individual chapters), parameters of expected stability, turnover, mobility and quality of adaptation and development activities. The priority at the HR section was to launch the first year of the Development Management Programme. This is a two-year programme aimed at preparing our own staff with management potential for key positions at the company. The programme is conceived as a set of activities that follow on from each other, including an assessment of current potential, training, individual development meetings and internal group seminars. The following topics were part of the modules carried out in 2012: a typology of personality, self-management, time planning, procedural and project management of tasks. We also introduced a number of innovations in terms of supporting processes in HR. Several new selection methods, standardised in line with key positions, were created for the recruitment process, with emphasis on the application of principles of the Assessment Centre. An outplacement programme was introduced as part of the programme of terminating employment. This is essentially an offer of active help from the company for outgoing employees. We also provided a cycle of in-house training sessions aimed at improving computer literacy. What is more, e-learning was put in place as our own internal instrument of creating training. The Junior Training Programme, a two-year training programme for university students, continued in 2012 in support of young people on the labour market. Five students completed the programme last year. The Development Management Programme remains a priority in 2013 and key to this is an assessment of the quality of the programme so far and the degree of improvement in the management abilities of those participating in the programme and the provision of other training modules. A key project aimed at supporting employee performance known as REVA will be carried out in HR as part of the Smart & Profi strategy. The aim of this is to update the remuneration system and the system of evaluating employees. HR partnership will be strengthened considerably, with capacity strengthening and more effective concentration on the core areas of the commercial and collection network of our business. We would like to introduce new 20

21 PROFI CREDIT Czech, a.s. methods of adapting and training employees, the aim being to increase productivity availability of the training activities provided to a broader target group. and the The number of employees at PROFI CREDIT saw a slight increase in The number of employees in 2012 reflected long-term capacity requirements that mirror the growth of the professional agenda at certain sections. We also carried out a project nvolving the introduction of new products within the commercial network that was covered by new employment positions. "" "" "" "" "" "" "" ""! "" "" " "!!!! "! "!! " " " "" " "" " ".(+)/ ) ,.8+1 9:.;++-.(+) /01 2-) <(+) ,.8+1 9:.;++- -=34:6>=3?1 0) )+,3=);:+0<+ 21

22 PROFI CREDIT Czech, a.s. 3.8 Sponsorship Sponsorship is a significant part of the social responsibility activities at PROFI CREDIT Czech, a.s. and is one of the traditional values that the company promotes. Support for the Markéta children s home in Radhoš, which is run by Mr. and Mrs. Och, is not solely financial in nature. In addition to providing such financial support, we also invite all the children from Markéta to an in-house company event. Employees at PROFI CREDIT Czech, a.s. now traditionally help prepare a children s day that is held at the children s home in Radhoš itself. The children at Markéta have been ordered into institutional care and cannot be adopted. In spite of the fact that caring for them requires a special, individual approach, just like other children they need a loving environment to be able to successfully move forward in life. PROFI CREDIT Czech, a.s. tries to support the people that run the organisation and the children themselves in these efforts as much as possible. Another notable charity project in which PROFI CREDIT Czech, a.s. is involved is the Taána Kuchaová Foundation known as Beauty of help. This project focuses on making senior citizens more active, supporting volunteer work at facilities for senior citizens and care services for the old. The foundation supports tried-and-trusted activities that provide senior citizens with modern social services. These respect their needs, prevent them being excluded from society and allow them to live a full life in a natural environment. Cooperation between PROFI CREDIT Czech, a.s. and the Beauty of Help Foundation has helped improve the living conditions of other needy people that should not be forgotten, because we too will be old one day. Last year we were also able to build on our cooperation with the Czech Cystic Fibrosis Association, which brings together patients and their families and helps deal with the problems that accompany this illness. This association provides sufferers with a wide range of social services, as well as psychological and material support. Actor Ivan Trojan is patron of the association and the face of the project. Our company too contributes towards the running of the organisation, donating the sum of CZK 500,000 in

23 PROFI CREDIT Czech, a.s. 4. BOARD OF DIRECTORS REPORT Report of the Board of Directors on the assets balance for 2012, annual report for 2012 and proposal for profit distribution of PROFI CREDIT Czech, a.s. for Date: April 3, 2013 Elaborated by: Ing. Rudolf Cejnar CEO BS, PROFI CREDIT Czech, a.s. This Report shall be submitted to the sole shareholder acting in the office of the General Meeting by the Board of Directors of PROFI CREDIT Czech, a.s. established on December 5, 1994, with its registered office in Jindišská 24/941, Prague 1. The main subject of business of the company in 2012 was provision of credits and loans. The total assets of the company for the accounting period of 2012 achieved the amount of CZK 4,480,078 thousand. The share of current assets was 97.00% and their total volume reached CZK 4,366,219 thousand in 2012, while trade receivables amounted to CZK 4,278,790 thousand. The proportion of fixed assets to the total assets of the company reached 1.52% and their total amount in 2012 was CZK 67,993 thousand. External funding of the company reached CZK 2,053,382 thousand of which long-term loans amounted to CZK 1,378,032 thousand. The main components of the total revenues of the company reaching CZK 1,607,966 thousand in 2012 were represented by financial revenues from the granted loans and credits in the amount of CZK 810,260 thousand, contractual penalties and charges of CZK 648,438 thousand, and other operating revenues (court fees, fees for legal representation, etc.) of CZK 134,255 thousand. Costs in 2012 reached the total amount of CZK 1,480,666 thousand and the main costs were represented by value adjustments and creation of reserves in the area of operation reaching CZK 546,025 thousand, receivables written off for the reason of unsuccessful execution of CZK 184,067 thousand, interests on credits amounting to CZK 264,342 thousand, costs related to the commissions paid to external workers and debt collectors of CZK 124,659 thousand and wage expenditures of CZK 89,596 thousand. 23

24 PROFI CREDIT Czech, a.s. As at the accounting unit showed accounting operating results before tax in the amount of CZK 176,599, After setting off of the deferred tax (CZK 148,369.92) and tax liabilities the company gained a profit for 2012 amounting to CZK 127,300, When taking into account adjustments related to additional and deductible items the income tax base for the relevant accounting period reached CZK 258,046,068. Tax liabilities for 2012 including the withholding tax amounted to CZK 49,150, In accordance with the business plan PROFI CREDIT Czech, a.s. gained an accounting profit in The net accounting profit of the company for 2012 amounted to CZK 127,300, In accordance with the company Statutes and with view to the fact that the statutory amount of reserve funds was fulfilled it is proposed to distribute the profit as follows: For dividend distribution: CZK 100,000,000; The amount of CZK 27,300, shall be transferred to the retained earnings account. Operating results with a detail break-down are contained in the statements attached herein bellow: Full balance sheet; Full profit and loss statement; Cash flow statement; Annexes to the complete set of annual statements; and Report on relations between related parties. Ing. David Chour Chairman of the Board of Directors Ing. Rudolf Cejnar Member of the Board of Directors 24

25 5. FINAL REPORT OF THE SUPERVISORY BOARD PROFI CREDIT Czech, a.s. Final Report of the Supervisory Board of PROFI CREDIT CZECH, a.s. designed for the company General Meeting session. The Supervisory Board of PROFI CREDIT Czech, a.s. at its session held on discussed the documents describing the operating profit for the accounting and tax period of 2012 as submitted by the Board of Directors of the company, namely the following: 1. Annual report of the company for 2012; 2. Report of the Board of Directors on business activities of the company in 2012; 3. Report of the Board of Directors on the company assets and annual report, and proposal for profit distribution for 2012; 4. Report by the external auditor on verification of the annual report as at , 5. Report on relations between related parties for 2012 In accordance with the provisions of Section 198 of the Commercial Code the Supervisory Board reviews among others the regular annual report and the proposal of the Board of Directors for profit distribution or loss settlement and submits its opinion to the General Meeting. The regular annual report of PROFI CREDIT Czech, a.s. for 2012 was verified by the auditing company Deloitte Audit s.r.o. with its registered office in Karolinská 654/2, Prague 8. The auditing company also verified the correctness of data specified in the Report on relations between related parties. Operating results of the company for 2012 showed a profit of CZK 127,300, In accordance with the Statutes of the company and with view to the fact that the statutory amount of the reserve fund was fulfilled the proposal for the profit distribution is as follows: For dividend distribution: CZK 100,000,000; The amount of CZK 27,300, shall be transferred to the retained earnings account. The Supervisory Board discussed the operating results for 2012, became acquainted with the content of the Report by the external auditor on verification of the regular annual report, 25

26 PROFI CREDIT Czech, a.s. discussed and reviewed the regular annual report for 2012, discussed and reviewed the proposal of the Board of Directors for distribution of the company profit and reviewed and granted its approval as regards the Report on relations between related parties according to Section 66 (10a) of the Commercial Code. The Supervisory Board claims that the annual report was elaborated on grounds of a duly conducted bookkeeping and that the proposal of the Board of Directors on profit distribution complies with legal regulations. The Supervisory Board recommends to the General Meeting to approve the regular annual report of the company for 2012, the aforementioned proposal of the Board of Directors on distribution of the company profit for 2012 and the Report on relations between related parties for Roman Kouba Chairman of the Supervisory Board of PROFI CREDIT Czech, a.s. 26

27 PROFI CREDIT Czech, a.s. 6. REPORT BY THE EXTERNAL AUDITOR Report on the Financial Statements Based upon our audit, we issued the following audit report dated 29 March 2013 on the financial statements which are included in this annual report on pages 29 to 70: We have audited the accompanying financial statements of PROFI CREDIT Czech, a.s., which comprise the balance sheet as of 31 December 2012, and the profit and loss account, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. Statutory Body s Responsibility for the Financial Statements The Statutory Body is responsible for the preparation and fair presentation of these financial statements in accordance with accounting regulations applicable in the Czech Republic, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Act on Auditors and International Standards on Auditing and the related application guidelines issued by the Chamber of Auditors of the Czech Republic. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 27

28 PROFI CREDIT Czech, a.s. Opinion In our opinion, the financial statements give a true and fair view of the financial position of PROFI CREDIT Czech, a.s. as of 31 December 2012, and of its financial performance and its cash flows for the year then ended in accordance with accounting regulations applicable in the Czech Republic. Report on the Related Party Transactions Report We have also reviewed the factual accuracy of the information included in the related party transactionss report of PROFI CREDIT Czech, a.s.for the year ended 31 December 2012 which is included in this annual report on pages 71 to 76. This related party transactions report is the responsibility of the Company s Statutory Body. Our responsibility is to express our view on the related party transactions report based on our review. We conducted our review in accordance with Auditing Standard 56 issued by the Chamber of Auditors of the Czech Republic. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the related party transactions report is free of material factual misstatements. A review is limited primarily to inquiries of Company personnel and analytical procedures and examination, on a test basis, of the factual accuracy of information, and thus provides less assurance than an audit. We have not performed an audit of the related party transactions report and, accordingly, we do not express an audit opinion. Nothing has come to our attention based on our review that indicates that the information contained in the related party transactions report of PROFI CREDIT Czech, a.s. for the year ended 31 December 2012 contains material factual misstatements. Report on the Annual Report We have also audited the annual report of the Company as of 31 December 2012 for consistency with the financial statementss referred to above. This annual report is the responsibility of the Company s Statutory Body. Our responsibility is to express an opinionn on the consistency of the annual report and the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and the related application guidelines issued by the Chamber of Auditors of the Czech Republic. Those standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the information included in the annual report describing matters that are also presented in the financial statements is, in all material respects, consistent with the relevant financial statements. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the information included in the annual report of the Company is consistent, in all material respects, with the financial statements referred to above. In Prague on 14 June 2013 Audit firm: Statutory auditor: Deloitte Audit s.r.o. certificate no. 79 Diana Rádl Rogerová certificate no

29 7. FINANCIAL STATEMENTS 7.1 Full balance sheet as at (in CZK thousand) PROFI CREDIT Czech, a.s Gross Adjustment Net Net TOTAL ASSETS B. Fixed assets B.I. Intangible fixed assets B.I.2. Intangible results of research and development B.I.3. Software B.I.7. Intangible fixed assets under construction B.II. Tangible fixed assets B.II.1. Plots of land B.II.2. Buildings B.II.3. Independent movable assets and sets of movable assets B.II.7. Unfinished tangible fixed assets B.III. Financial fixed assets B.III.1. Shares in controlled and managed entities B.III.3. Other long-term securities and shares B.III.5. Other financial fixed assets C. Current assets C.I. Inventories C.I.5. Goods C.II. Long-term receivables C.II.1. Trade receivables C.III. Short-term receivables C.III.1. Trade receivables C.III.2. Receivables - controlling and managing entity C.III.6. State - tax receivables C.III.7. Short-term advance payments C.III.8. Estimated accounts receivable C.III.9. Other receivables C.IV. Short-term financial assets C.IV.1. Cash C.IV.2. Accounts in banks D. I. Accruals D.I.1. Deferred charges D.I.3. Accrued income

30 PROFI CREDIT Czech, a.s TOTAL LIABILITIES A. Equity A.I. Capital stock A.I.1. Capital stock A.II. Capital funds A.II.3. Revaluation of assets and liabilities A.III. Reserve funds, indivisible fund and other revenue reserves A.III.1. Mandatory reserve fund/indivisible fund A.IV. Operating results from previous years A.IV.1. Retained earnings from previous years A.V. Operating results from the current accounting period (+ - ) B. External funding B.I. Reserves B.I.3. Income tax reserve B.I.4. Other reserves B.II. Long-term liabilities B.II.1. Trade liabilities B.II.9. Other liabilities B.II.10. Deferred tax liabilities B.III. Short-term liabilities B.III.1. Trade liabilities B.III.2. Liabilities - controlling and managing entity B.III.5. Liabilities towards employees B.III.6. Payables to social security and health insurance B.III.7. State - tax liabilities and subsidies B.III.8. Short-term received advance payments B.III.10. Estimated accounts payable B.III.11. Other liabilities B.IV. Bank loans and overdrafts B.IV.2. Short-term bank loans B.IV.3. Short-term overdrafts C. I. Deferrals C.I.1. Accrued charges C.I.2. Deferred income

31 PROFI CREDIT Czech, a.s. 7.2 Profit and loss statement according to the type of income and expenditures, period ending on (in CZK thousand) I. Proceeds from sale of goods 5 + Sales margin 5 Period until Period until II. Sales II.1. Proceeds from sale of own products and services B. Cost of sales B.1. Material and energy consumption B.2. Services Added value C. Personal costs C.1. Wage expenditures C.2. Remuneration to members of the company and cooperative authorities C.3. Costs of social security and health insurance C.4. Social costs D. Taxes and duties E. Depreciation of intangible and tangible fixed assets III. Proceeds from sale of long-tern assets and materials III.1. Proceeds from sale of fixed assets F. Remaining value of sold fixed assets and materials F.1. Remaining value of sold fixed assets G. Change in reserves and provisions in the operating and complex deferred charges area IV. Other operating revenues H. Other operating costs * Operating results VI. Proceeds from sale of securities and shares J. Sold securities and shares M. Change in reserves and provisions in the financial area X. Interest on income N. Interest on costs XI. Other financial revenues O. Other financial costs * Financial operating results Q. Income tax for regular activities Q.1. - payable Q.2. - deferred ** Operating results for regular activities

32 PROFI CREDIT Czech, a.s. *** Operating results for the accounting period (+/-) **** Operating results before tax Statement of changes in equity as at (in CZK thousand) Status as at Operating profit distribution Revaluation of holdings Operating results for current period Status as at Operating profit distribution Revaluation of holdings Operating results for current period Status as at Capital stock Capital funds Reserve funds, indivisible fund and other revenue reserves Retained earnings from previous years Unsettle d loss from previou s years Operating results from the current accounting period TOTAL EQUITY

33 PROFI CREDIT Czech, a.s. 7.4 Cash flow statement (Cash Flow) as at (in CZK thousand) Period until Period until P. Initial cash flow balance Cash flows from the main profitable activities (operating activities) Z. Operating results for regular activities before tax A.1. Adjustments related to non-monetary operations A.1.1. Depreciation of fixed assets A.1.2. Change in provisions and reserves balance A.1.3. Profit (loss) from the sale of fixed assets A.1.5. Interest on costs and income A.1.6. Adjustments related to other non-monetary operations A.* Net operating cash flow before changes in the working capital A.2. Change in working capital balance A.2.1. Change in receivables and accrued assets balance A.2.2. Change in liabilities and accrued liabilities balance A.2.3. Change in inventories A.** Net operating cash flow before tax a extraordinary items A.3. Interest paid A.4. Interest received A.5. Paid income tax for regular activities A.*** Net cash flow from operating activities B.1. Expenditures related to acquisition of fixed assets B.2. Income on sales of fixed assets B.3. Loans and credits to related parties B.*** Net cash flow from investment activities Cash flows from financial activities C.1. Change in commitments on financing balance C.*** Net cash flow from financial activities F. Net change in cash flow balance R. Final cash flow balance

34 Annex to annual report PROFI CREDIT Czech, a.s Annex to annual report 1. GENERAL FACTS... "!! 2. ACCOUNTING METHODS AND GENERAL ACCOUNTING PRINCIPLES OVERVIEW OF SIGNIFICANT ACCOUNTING RULES AND PROCEDURES % " @ % 4. ADDITIONAL DATA REGARDING THE BALANCE SHEET AND PROFIT AND LOSS STATEMENT % 34

35 Annex to annual report PROFI CREDIT Czech, a.s. A "! A @ 5. EMPLOYEES, COMPANY MANAGEMENT AND STATUTORY BODIES LIABILITIES NOT INCLUDED IN THE BOOKS EVENTS OCCURRING AFTER THE DATE OF THE ANNUAL REPORT

36 Annex to annual report PROFI CREDIT Czech, a.s. 1. GENERAL FACTS 1.1. Establishment and characterictics of the company PROFI CREDIT Czech, a.s. (formerly Profireal, a.s.) (hereinafter the company ) was established by the Memorandum of Association as a joint-stock company on November 21, 1994 and originated by means of its registration in the Commercial Register kept by the court in Hradec Králové on December 5, The company is currently maintained by the Municipal Court in Prague, Section B, Insert No The scope of business of the company is as follows: Services in the area of administrative management and organizational and operating services for natural and legal persons; Granting of credits and loans from equity resources; Property management; Property leasing related to other services; Real Estate activities; Pawnshop; Trading with receivables and debts - factoring and forfeiting; Organizational activities in the field of social events; Intermediary activities in trading; Lease and renting of movables; Wholesale trading; Specialized retail trading. The registered office of the company is situated in Prague 1, Jindišská 24/941, postal code In 2012 the amount of the capital stock remained unchanged and amounted to CZK 232,650 thousand (63 shares with the total nominal amount of CZK 232,650 thousand). The annual report of the company was elaborated as at The accounting period corresponds to the calendar year - from to