REINHOLD POLSKA AB (PUBL) (a public company with limited

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REINHOLD POLSKA AB (PUBL)
(a public company with limited liability incorporated in Sweden with register number 556706-3713)
COMBINED OFFERING UP TO
1,400,000 ORDINARY SHARES SERIES “B”
This Prospectus relates to the Combined Offering (the “Offering”) of ordinary shares series “B” (the “Shares”). The
Combined Offering consist of (i) 1,000,000 new shares (the “New Shares”), ordinary shares series “B” issued by
Reinhold Polska AB, and (ii) 400,000 existing shares (the “Selling Shares”), ordinary shares series “B” selling by
Reinhold Group BV.
Prior the Offering, 15.14 percent of shares and 60.66 percent of votes are held by Reinhold Group BV; 17.52
percent of shares and 8,12 percent of votes by Straumur-Burdaras Investment Bank; and 67.34 percent of shares
and 31.22 percent of votes by minority shareholders, holding less then 5 percent of equity each.
The Combined Offering consist of (i) a public offering to Institutional Investors in Poland and selected EU member
countries (see Selling Restrictions) and (ii) a public offering to Individual Investors in Poland.
The Offer Price will be determined, by 26 October 2007, by the Board of Directors with the agreement of the Lead
Manager, following the completion of the book-building process among Institutional Investors. The price will be
determined based on the following criteria and rules (i) the current and anticipated situation on the Polish and
international capital markets, (ii) the assessment of the growth prospects, risk factors and other information
relating to the Company’s activities as described in this Prospectus, (iii) the book-building process.
The maximum Offer Price was set up at 150 SEK.
The final Offer Price will be published on or about 26 October 2007, 10:00 am CET, by means of an ad-hoc
announcement on an electronic news information system and also, in Poland in the Gazeta Gieldy “Parkiet” and
will be published in the same way as the Prospectus and in the form of a current report.
The Company, in agreement with the Lead Manager, change the terms and conditions of the Offering, including
the total number of the Offer Shares that will ultimately be subject to the Offering.
The Lead Manager expects to deliver the Offer Shares through the facilities of the Polish NDS on or about 9
November 2007 following full prepayment for allotted Offer Shares.
This prospectus does not constitute an offer to sell, or the solicitation of an offer to buy. The Offer Shares to any
person in any jurisdiction in which it is unlawful to make any such offer to such person. The public offering of the
Offer Shares is being conducted only within the territory of Poland. Neither the prospectus nor the Offer Shares
have been registered or approved in or notified to any regulatory authority other than in Sweden and Poland. For
a description of certain restrictions on transfer please see "Selling Restrictions".
By participating in the Offering or investing or trading in the Shares you acknowledge that such activities involve
risks. While every care was taken to ensure that this Prospectus presents a fair and accurate overview of the risks
related to the Shares and the operations of the Company, the value of your investment may be adversely affected
by circumstances that are either not evident at the date hereof or not reflected in this prospectus. For a discussion
of certain consideration which should be taken into account in deciding whether to purchase the Offer Shares
please see "Risk Factors”.
Lead Manager:
This Prospectus is dated on .... October 2007.
The Prospectus of Reinhold Polska AB
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2
The Prospectus of Reinhold Polska AB
SUMMARY .............................................................................................................................11
Business of Reinhold Polska AB ....................................................................................................... 12
Business concept and vision ............................................................................................................. 13
Financial goal..................................................................................................................................... 13
Structure of Reinhold Polska AB ....................................................................................................... 13
Board of Directors and Management................................................................................................. 14
Articles of association ........................................................................................................................ 15
Capitalization and indebtedness........................................................................................................ 15
Summary of selected financial information ........................................................................................ 16
Profit forecast..................................................................................................................................... 19
Risk factors ........................................................................................................................................ 19
Major shareholders ............................................................................................................................ 19
Related party transactions ................................................................................................................. 19
Auditors and legal advisors................................................................................................................ 20
Offering .............................................................................................................................................. 20
RISK FACTORS.....................................................................................................................24
Risk inherent to the issuer’ and its activity......................................................................................... 25
Risk factors specific to the securities being offered and admitted to trading..................................... 30
USE OF PROCEEDS.............................................................................................................32
DIVIDENDS AND DIVIDEND POLICY...................................................................................33
CAPITALIZATION AND INDEBTEDNESS.............................................................................34
LIQUIDITY AND CAPITAL RESOURCES .............................................................................35
FORECAST............................................................................................................................37
Assumptions to forecast..................................................................................................................... 37
Profit forecast..................................................................................................................................... 46
Auditors’ report on forecast................................................................................................................ 47
SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA........48
Income statement data ...................................................................................................................... 49
Balance sheet data ............................................................................................................................ 50
Changes in shareholder’s equity data ............................................................................................... 51
Cash flow statement data .................................................................................................................. 52
OPERATING AND FINANCIAL REVIEW AND PROSPECTS ...............................................53
Overview ............................................................................................................................................ 53
Significant accounting policies........................................................................................................... 55
Income statement data ...................................................................................................................... 56
Description of selected income statement line items......................................................................... 57
Cash flow statement data .................................................................................................................. 58
Description of selected cash flow statement data ............................................................................. 59
BUSINESS .............................................................................................................................62
MANAGEMENT AND BOARD OF DIRECTORS ...................................................................74
Board of Directors and Management................................................................................................. 74
Remunerations and benefits.............................................................................................................. 76
Board practices .................................................................................................................................. 77
GENERAL INFORMATION ABOUT THE COMPANY ...........................................................78
Organizational structure..................................................................................................................... 78
Information on holdings...................................................................................................................... 80
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The Prospectus of Reinhold Polska AB
Employees ......................................................................................................................................... 81
Trend information............................................................................................................................... 82
Material contracts............................................................................................................................... 83
Patents, licenses and trademarks...................................................................................................... 85
Working capital statement ................................................................................................................. 86
SHAREHOLDERS..................................................................................................................87
RELATED PARTY TRANSACTIONS.....................................................................................88
Transactions inside the Group........................................................................................................... 88
Transactions outside the Group......................................................................................................... 89
TRANSFER RESTRICTIONS ................................................................................................90
INFORMATION ON THE SHARES........................................................................................91
TAXATION .............................................................................................................................98
Taxation in Poland ............................................................................................................................. 98
Taxation in Sweden ......................................................................................................................... 100
SECURITIES MARKET........................................................................................................101
TERMS AND CONDITIONS OF THE COMBINED OFFERING ..........................................105
General information ......................................................................................................................... 105
Terms and conditions of the Offering............................................................................................... 107
SELLING RESTRICTIONS ..................................................................................................111
DOCUMENTS ON DISPLAY................................................................................................113
ANNEX A: ARTICLES OF ASSOCIATION & RESOLUTIONS ............................................114
ANNEX B: FINANCIAL STATEMENT FOR 2006 ................................................................120
ANNEX C: INTERIM FINANCIAL STATEMENT FOR 2007 ................................................138
ANNEX D: ORDERS RECEPTION POINTS OF BESKIDZKI DOM MAKLERSKI SA .........154
ANNEX E: CERTIFICATE OF REGISTRATION ..................................................................155
ANNEX F: LIST OF ASSIGNMENTS ...................................................................................157
ANNEX G: MEMORANDUM OF ASSOCIATION.................................................................175
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The Prospectus of Reinhold Polska AB
THIS PROSPECTUS (“PROSPECTUS") HAS BEEN REGISTERED WITH THE SWEDISH
FINANCIAL SUPERVISORY AUTHORITY (FINANSINSPEKTIONEN) (THE "SFSA") IN
ACCORDANCE WITH THE PROVISIONS OF CHAPTER 2, SECTION 26 OF THE SWEDISH
FINANCIAL INSTRUMENTS TRADING ACT (1991:980). REGISTRATION BY THE SFSA DOES NOT
IMPLY THAT THE SFSA GUARANTEES THE FACTUAL INFORMATION PROVIDED HEREIN IS
CORRECT OR COMPLETE.
No person is or has been authorized to give any information or to make any representation in
connection with the offer or sale of the Offer Shares other than those contained in this Prospectus,
and, if given or made, such information or representations must not be relied upon as having been
authorized. No representation or warranty, express or implied, is made by Suprema Securities SA (the
"Lead Manager") or by Reinhold Polska AB as to the accuracy or completeness of information
contained in this Prospectus. This Prospectus does not constitute an offer to sell or the solicitation of
an offer to buy any securities other than the securities to which it relates, or an offer to sell or the
solicitation of an offer to buy such securities by any person under any circumstances in which such
offer or solicitation is unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no change in our affairs
since the date hereof or that the information contained herein is correct as of any time subsequent to
its date.
In making an investment decision, prospective investors must rely upon their own examination of us
and the information in this Prospectus, including the information relating to the risks involved with an
investment in Shares.
The Offer Shares is carried out in the Republic of Poland. This Prospectus is approved by the Swedish
Financial Supervisory Authority and notified only to the Polish Financial Supervision Commission on
the basis of the EU prospectus passport procedure.
No actions has been or will be taken in any jurisdictions other then Sweden and Poland then would
permit a public offering of the Offer Shares or the possession, circulation or distribution of this
Prospectus or any other material relating to the Company of the Offer Shares in any jurisdiction where
action for that purpose is required. Accordingly, the Offer Shares may not be sold, directly or indirectly,
and neither this Prospectus not any other offering material or advertisement in connection with the
Offer Shares may be distributed or published in any form or in any country or jurisdiction except under
circumstances that will result in compliance with any applicable laws, rules and regulations of any
such country or jurisdiction. The Company and the Lead Manager require that the persons to whom
this Prospectus is available familiarize themselves with all restrictions regarding the Combined
Offering of the Offer Shares and the distribution of this Prospectus and comply with them.
This Prospectus may not be used for, or in connection with, any offer to, or solicitation by, any person
in any jurisdiction or under any circumstances in which such offer or solicitation is not authorized or is
unlawful. This Prospectus does not constitute an offer of, or an invitation to purchase, any of the Offer
Shares in any jurisdiction in which such offer or invitation would be unlawful. For a further description
see “Selling Restrictions” and “Transfer Restrictions” .
Except as explicitly stated in the auditors’ report for the financial year 2006, the report on review of
interim financial information for the six month period ending June 30, 2007, and the report on the
forecast presented in the section “Forecast”, no information in this prospectus have been audited or
reviewed by the Company’s auditors.
IN CONNECTION WITH THIS OFFERING, SUPREMA SECURITIES SA OR ANY PERSON ACTING
FOR IT WILL NOT EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF REINHOLD POLSKA’S SHARES AT A LEVEL HIGHER THAN THAT WHICH MIGHT
OTHERWISE PREVAIL.
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The Prospectus of Reinhold Polska AB
Notice to investors in the United States
The Offer Shares have not been and will not be registered under the U.S. Securities Act of 1933 (the
“Securities Act”) as well as any other state’s securities law and may not be offered or sold within the
United States.
Notice to investors in the European Economic Area
In relation to each member state of the European Economic Area which has implemented the
Prospectus Directive (each, a “Relevant Member State”), an offer to the public of any Offer Shares
which are the subject of the Combined Offering contemplated by this Prospectus may not be made to
the public in that Relevant Member State, except that an offer of Offer Shares may be made to the
public in that Relevant Member State at any time under the following exemptions under the
Prospectus Directive, if they are implemented and in accordance with the implementing legislation in
that Relevant Member State:
to legal entities which are authorized or regulated to operate in the financial markets or, if not so
authorized or regulated, whose corporate purpose is solely to invest in securities;
to any legal entity which has two or more of (i) an average of at least 250 employees during the last
financial year; (ii) a total balance sheet of more than €43,000,000 and (iii) an annual net turnover of
more than €50,000,000, as shown in its last annual or consolidated accounts;
to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus
Directive) subject to obtaining the prior consent of the Managers for any such offer; or
in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such
offer of Offer Shares shall result in a requirement for the publication by the Company or Lead Manager
of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression “offer of any Offer Shares to the public” in relation to
any Offer Shares in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and any Offer Shares to be offered so as to
enable an investor to decide to purchase any Offer Shares, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member State, and the
expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
Cautionary note regarding forward-looking statements
This Prospectus contains various forward-looking statements that reflect managements current views
with respect to future events and financial and operational performance. The words believe," "expect,"
"anticipate," "intend," "may," ''plan," "estimate," "should," "could." "aim," "target," "might," or, in each
case, their negative, or similar expressions identify certain of these forward-looking statements. Others
can be identified from the context in which the statements are made. Forward-looking statements
appear in a number of places in this Prospectus including, without limitation, under "Risk Factors",
"Dividends and Dividend Policy." "Operating and Financial Review and Prospects", "Business" and
"Profit predictions" (particularly the sub-section "Profit projections - financials") and include, among
others, statements relating to:
- our strategy, outlook and growth prospects, including our operational and financial targets;
- our ability to identify and enter into contracts for new projects;
- the timing of new projects openings;
- the competitive environment in Poland;
- the political and economic outlook in general;
- the expected growth of the real estate market; and
- our dividend policy and ability to pay dividends.
Although we believe that the expectations reflected in these and other forward-looking statements are
reasonable, we can give no assurance that these forward-looking statements will materialize or prove
to be correct. Because these statements involve risks and uncertainties, the outcome could differ
materially from those set out in the forward-looking statements as a result of:
- our ability to improve our operational and financial systems and managerial controls and
procedures to keep pace with our growth;
- managements ability to successfully execute our growth strategy;
6
The Prospectus of Reinhold Polska AB
-
the impact of changes in pricing policies;
the actions or results of operations of our competitors in the markets in which we operate;
the impact of changes on supply in real estate market and demand for projects we evaluate;
the effects of changes in interest rates and foreign exchange rates, in particular the Polish Zloty
against the euro;
political and regulatory developments in Poland;
our ability to attract, motivate and retain our qualified personnel.
Additional factors that could cause our actual results of operations or performance to differ materially
include, but are not limited to, those discussed under "Risk Factors."
The forward-looking statements included herein speak only as of the date of this Prospectus. We
undertake no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Accordingly, prospective investors are cautioned
not to place undue reliance on these and other forward-looking statements.
Presentation of financial and certain other information
Consolidated Annual Report for 2006 was drawn up in accordance with the accounting principles set
forth by the Annual Reports Act, the International Financial Reporting Standards (IFRS). The group’s
consolidated statement was drawn up in accordance with the laws of Sweden and recommendations
of the Chartered Accountants’ Association (Sw. Redovisningsrådet) RR 30:05 ‘Supplementary
reporting principles for groups of companies’. The parent company applies the same reporting
principles as the group, unless at variance with the Annual Reports Act. The parent company’s
reporting principles different from those of the group are mentioned in the chapter ‘Parent Company’s
Reporting Principles’.
We have included in this Prospectus the following historical financial statements, each prepared in
accordance with international financial reporting standards as adopted by the European Union
("IFRS"):
• English translation of the audited Consolidated financial statements as of and for the year
ended December 31, 2006 of Reinhold Polska AB (publ)
• English translation of the audited interim Consolidated condensed financial statements as of
June 30, 2007.
Interim Consolidated condensed financial statements as of June 30, 2007 is included in our interim
release included elsewhere in this Prospectus.
This interim report has been compiled in accordance with IAS 34, Interim Financial Reporting. The
interim report is compiled in accordance with International Financial Reporting Standards (IFRS) and
with International Financial Reporting Interpretations Committee (IFRIC), the interpretations of
financial standards approved by EU, as well as the Swedish Accounting Standards Council’s RR 31
recommendation, Interim Reporting for Groups, and accompanying references to Chapter 9 of the
Annual Accounts Act.
We present our financial statements in Swedish krona. In this Prospectus, (i) references to "euro" or
"€" are to the single currency of the participating Members States in the Third Stage of the European
Economic and Monetary Union pursuant to the Treaty establishing the European Community, (ii)
references to "Swedish krona," "Swedish kronor" or "SEK" are to the lawful currency of Sweden. For
information regarding rates of exchange between krona and those currency, see "Exchange Rate
Information and Regulations”.
Certain amounts and percentages included in this Prospectus have been rounded and accordingly
may not add up to the total.
Certain defined terms
Unless otherwise indicated. "Reinhold Polska AB”, "we", "our", "us", “Company”, or similar terms refer
to the parent company of our group and its Consolidated subsidiaries at any given time.
Unless otherwise indicated, "Reinhold Polska" refers to Reinhold Polska AB either alone or together
with one or more of its affiliates, or one or more of its affiliates.
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The Prospectus of Reinhold Polska AB
Set forth below are definitions of certain other terms used herein:
“Articles of
Association”
“billion”
“Business Year”
“CEE”
“Combined
Offering” or
“Offering”
“Companies
Register”
“Board of Directors”
“Co-Managers”
“EEA”
“Existing Bearer
Shares”
“Existing
Registered Shares”
“Existing Shares”
“IFRS”
“kSEK” or “SEKk”
“Lead Manager”
“Managers”
“Maximum Offer
Price”
“NDS”
“New shares”
“Offer Period”
“Offer Price”
“Offer Shares”
“PFSA”
“SFSA”
“Prospectus”
“Real Estate
Portfolio”
“Reinhold Polska
Group”
8
means the articles of association (Bolagsordning) of Reinhold Polska AB.
means 1,000 million.
means a business year of Reinhold Polska AB, beginning on 1 January of a
calendar year and ending on 31 December of the same calendar year.
means Central and Eastern Europe, i.e., the Czech Republic, Slovakia,
Hungary, Poland and the Baltic States.
means the Offering of existing shares and the Offering of new issue shares.
means the Swedish Companies Registration Office (Bolagsverket), an
electronic register of companies.
means the executive board of Reinhold Polska AB.
means Beskidzki Dom Maklerski SA seated in Bielsko-Biala (Poland),
Stojalowskiego Street 27 and other investment firm invited by the Lead
Manager.
(European Economic Area) includes Austria, Belgium, Bulgaria, Cyprus, Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania,
Luxembourg, Malta, The Netherlands, Norway, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, Sweden, United Kingdom and also Switzerland.
means the ordinary non-par value voting bearer shares of Reinhold Polska AB
issued prior to the increase of Reinhold Polska AB’s share capital in
connection with the Combined Offering.
means the registered shares of Reinhold Polska AB class “A” and “B” held by
VPC AB.
means the Existing Bearer Shares and the Existing Registered Shares.
means International Financial Reporting Standards promulgated by the
International Accounting Standards Board.
means a thousand SEK
means Suprema Securities SA seated in Warsaw (Poland) Jasna Street
14/16A.
means the Lead Manager and Co-Managers.
means the maximum offer price for the Offer Shares, not to exceed SEK 150
per Offer Share, as be finally determined by the Board of Directors together
with the Lead Manager – Suprema Securities SA.
means the Polish National Depository of Securities (Krajowy Depozyt
Papierów Wartościowych SA).
means the issue of maximum 1,000,000 Shares, of class B with deviation from
existing preferential rights, to offer the issued shares in a public offering in
Poland.
or means the period of time during which Reinhold Polska AB offers the Offer
Shares in the Combined Offering.
means the price of one Offer Share in the Combined Offering.
means up to 1,400,000 Shares of Reinhold Polska AB consisting of newly
issued 1,000,000 shares and 400,000 existing shares.
means the Polish Financial Supervision Authority (Komisja Nadzoru
Finansowego).
means the Swedish Financial Supervisory Authority (Finansinspektionen).
means this document.
means the value of Reinhold Polska’s portfolio of real estate.
means Reinhold Polska AB together with its consolidated subsidiaries and
affiliates, which are stated at equity and where Reinhold Polska AB has a
significant influence.
The Prospectus of Reinhold Polska AB
“Reinhold Polska
AB” or “Company”
“Selling Shares”
“Selling
Shareholder”
“Shares”
“Subscription
Period”
“SPV”
“VPC AB” or “VPC”
means Reinhold Polska AB (publ) registered with the Companies Register of
the Swedish Companies Registration Office under registration number
556706-3713.
means selling shares owned by en existing shareholders of Reinhold Polska
AB.
means the existing shareholder of shares of Reinhold Polska AB.
means the shares of Reinhold Polska AB.
means the period of time during which investors can subscribe for Shares.
means a body corporate created to fulfill narrow, specific or temporary
objectives, primarily to isolate financial risk, usually bankruptcy but sometimes
a specific taxation or regulatory risk.
means computerized book-entry share registration system administrated by
VPC where all shares of Reinhold Polska AB are registered, and the register of
shareholders is kept.
Available information and reporting
After the Offering, we will furnish to the market annual reports, which will include our audited
Consolidated financial statements prepared in accordance with IFRS. The financial statements
included in the annual reports will be examined and reported upon, with an opinion expressed by, our
independent auditors. We will also furnish to the market quarterly reports, which will include audited
consolidated financial information prepared in accordance with IFRS.
We currently plan to issue financial reports over the course of the next 12 months according to the
following schedule:
- earnings release for the fiscal year ended December 31, 2007 on or about February 14, 2008;
- quarterly report as of and for the three months ended March 31, 2008 on or about May 4,
2008;
- quarterly report as of and for the six months ended June 30, 2008 on or about July 15, 2008;
and;
- quarterly report as of and for the nine months ended September 30, 2008 on or about
October 15, 2008.
The contents of our website www.reinholdpolska.com referred to in this Prospectus do not form a part
of this Prospectus.
The address of our registered office is Västmannagatan 52, 113 – 21 Stockholm, Sweden.
Market share and industry data
This Prospectus contains historical market data and industry forecasts, including information related to
the sizes of the markets in which we participate or parts thereof. This information has been extracted
from reports extracted from publicly available sources and industry reports. While the accuracy of such
information has not been independently verified, Issuer has confirmed that the information in the
reports has been properly extracted from such sources and compiled, based on its expert industry
knowledge, to show a balanced and objective view of the hospitality management industry. In addition,
Issuer has confirmed that it has independently prepared the information showing historical trends and
projections. Industry forecasts are, by their nature, subject to significant uncertainty, and there can be
no assurance that any of the forecasts will prove to be accurate. Market statistics are inherently
predictive and subject to uncertainty and are not necessarily reflective of actual market conditions.
Such statistics are based on market research which itself is based on sampling and subjective
judgments by both the researchers and the respondents.
Enforceability of liabilities and service of process
The issuer of the Shares is a public company with limited liability (publikt aktiebolag) incorporated
under the laws of Sweden with its registered office in Stockholm, Sweden. The issuer conducts all
operations outside of Sweden. In addition all of our directors and officers reside in jurisdictions outside
9
The Prospectus of Reinhold Polska AB
Sweden and substantially all of the assets of such officers and directors are located outside Sweden.
Furthermore, substantially all of the assets of the issuer of the Shares are located outside Sweden. As
a result, it may not be possible for investors in Sweden to effect service of process in Poland upon
such issuer or such directors and officers or to enforce against such issuer or such directors and
officers judgments obtained in Polish courts predicated upon civil liability provisions of the securities
laws or other laws of Poland.
We have been advised that the Poland and Sweden do not currently have a treaty providing for
reciprocal recognition and enforcement of judgments rendered in connection with civil and commercial
disputes. As a result, a final judgment for the payment of damages rendered by a court in Poland
based on civil liability, whether or not predicated solely upon the securities laws of Poland, may not be
enforceable in Sweden. If the party in whose favor the final judgment is rendered brings a new suit in a
competent court in Sweden, however, the party may submit to the Swedish court the final judgment
that has been rendered in Poland. A judgment by a court in Poland will be regarded by a Swedish
court only as evidence of the outcome of the dispute to which the judgment relates, and a Swedish
court may choose to rehear the dispute ab initio (from the start).
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The Prospectus of Reinhold Polska AB
SUMMARY
The following summary should be read as an introduction to this Prospectus, and any decision to
invest in the Offer Shares should be based on consideration of this Prospectus as a whole, including
the documents incorporated by reference and the risks related to the Combined Offering and the Offer
Shares as set out in “Risk Factors”. This summary is only intended to provide an overview and does
not purport to contain all the information that investors should consider in connection with any decision
relating to the Offer Shares. Investors are therefore advised to carefully read this Prospectus in its
entirety.
Where a claim relating to the information contained in this Prospectus is brought before a court in a
state of the European Economic Area, the plaintiff may, under the national legislation of the state
where the claim is brought, be required to bear the costs of translating this Prospectus before the legal
proceedings are initiated, and may be reimbursed for such costs, or parts thereof, by the other party or
parties to the proceedings only if the plaintiff investor is successful in such proceedings.
The Company takes responsibility for and accepts liability in respect of this Summary, including the
Summary Description of the Company, the Summary of the Combined Offering, the Summary of Risk
Factors and the Summary Financial Information included herein, but only accepts liability if it is
misleading, inaccurate or inconsistent when read together with other parts of this Prospectus.
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The Prospectus of Reinhold Polska AB
Business of Reinhold Polska AB
Reinhold Polska is engaged in real estate development in selected growth regions in Poland. The
Company’s main business concept is to identify real estate and land with ample value development
potential in the central and southern parts of Poland. The Company will primarily operate within the
segments of office, retail, logistic warehouses, and residential property. Reinhold has been active in
Poland since 2005 which means that valuable contacts have already been made. Reinhold’s extensive
experience coupled with the hiring of experienced Polish employees, the Company makes the
assessment that solid investment opportunities will be offered, and the usual middle channels can be
avoided. The Company intends to acquire and develop land and existing property in form of
residential, retail, warehouses and office properties. The common denominator for all investments is
that each of them should generate a return on equity of an average of more than 15 percent annually
with the present yield rate and after adjustments for forecasted development costs. The Company has
no revenues recorded so far.
Reinhold Polska development portfolio consists of residential, office and commercial projects. The
company intends to acquire and develop land and existing property in the form of residential, retail,
warehouse and office properties. As of 31 December 2006 and 30 June 2007 the company had no
revenues generated as all the projects are in progress.
The main activity of the companies in Poland is the construction and sale of residential real estate
(around 20 pct of the business), office development (app. 60 pct) and commercial development (app.
20%). All development projects are conducted by Project companies under the Reinhold Polska
Service’s management.
Currently, the Reinhold Polska portfolio is:
Project
No
P/1
Project Name
City
Type of the
Project
Residential Retail
Platinum
Wroclaw
P/2
Villa Nova
Wroclaw
Residential
P/3
Lipinski
Warsaw
Office - Retail
P/4
Silesia Atrium
Katowice
Office
P/5
Lipiński
Passage
Warsaw
Office - Retail
P/6
Bastylia II
Katowice
Residential
P/7
Villa Park
Krakow
Residential
P/8
Krakow
Commercial
P/9
Zakopianska
Plaza
Nowy Swiat
Gliwice
P / 10
Karpacka
Wroclaw
Commercial &
Residential
Residential
Market segment
Apartments of higher standard housing average 60 apartments (area app. 3,800 sq.
m.) and offices (area app. 3,200 sq. m.)
Apartments of higher standard - average 29
(area app. 1,854 sq m )
0;+1 level as retail; 2-5 level offices. (area
average 3,500 sq m)
Sale area app. 13,822 (12,346 sq. m. offices &
1,476 garages sq m)
0;+1 level as retail; 2-5 level offices. (area
average 2,400 sq.m.). We calculated the
budget on 1,300 sq m
Area average 10,500 sq. m.
Apartments of higher standard (area app. 1
650 sq m)
Commercial area (average 6,893sq m)
1 level commercial; 2-5 residential
3-levels boulding, (usable surface ofaround 4
000 sq m)
A Company’s motto is:
“It is better to become involved in a wide range of modest undertakings than few profitable ones.”
Reinhold Polska is a real estate company which conducts real estate development on selected growth
regions in Poland. The Company’s main business concept is to identify real estate and land with
ample value development potential in the central and southern parts of Poland. The Company is
primarily operating within the segments of office, retail, logistic warehouse, and residential
developments.
12
The Prospectus of Reinhold Polska AB
Business concept and vision
Reinhold Polska’s business concept is to acquire, develop, manage and sell real estate together with
development-land in Poland. The Company’s vision is to become one of the major real estate
developers in Poland. The vision will be achieved by acting through a global perspective with good
local knowledge, close cooperation with clients and partners along with a high degree of service and
quality.
Financial goal
Reinhold Polska’s financial goal is to create and realize value for Reinhold Polska’s shareholders
primarily through value growth. Reinhold Polska has a goal to over time provide its shareholders with
an annual return on equity of 15 per cent or more. To achieve the goals the Company has established
the strategies described below.
The generation of business opportunities
Reinhold has been active in Poland since 2005 which means that valuable contacts have already
been made. In combination with Reinhold’s extensive experience coupled with the hiring of
experienced Polish employees the Company makes the assessment that solid investment
opportunities will be offered and the usual middle channels can be avoided.
Acquisition
Reinhold Polska will focus on real estate along with development- land which possesses high potential
for growth in value.
Financing
Investments will be financed through the taking of bank loans and equity. The bank loans’ share of the
total investment shall correspond to approximately 70–85 per cent, and the remaining share, 30–15
per cent, shall be financed by equity. In order to seize market opportunities the Company may enter
into joint ventures with established players.
Sales strategy
Marketing and sales of residential properties will be managed by Reinhold Polska. Concerning
commercial properties, the Company will cooperate with international real estate brokers. Sales can
be conducted in all phases from the moment a project has been initiated through the acquisition of a
development property, when a permit for construction has been attained and until leasing has been
initiated or completed.
Structure of Reinhold Polska AB
Reinhold Polska A.B. owns 100% of shares and votes in Reinhold Polska B.V. with its registered office
in Netherlands (Wijnhaven 3B, 3011 WG Rotterdam, Holland). The Reinhold Polska B.V.’s scope of
activity is holding and financing activities.
Reinhold Polska Services Sp. z o.o. and Reinhold Polska Project – Special project vehicle companies
(SPV companies), created for each investment project, are owned by Reinhold Polska B.V. (100% of
shares and votes in Reinhold Polska Services Sp. z o.o. and SPV companies).
Reinhold Polska Services and SPV companies were established in January 2007 (with the exception
of Reinhold Polska Project 3 Sp. z o.o. which was established at 20th of the December 2006) by
Swedish investors. Participation of the international investors guaranteed implementation of western
experience and standards as regards home and mixed building on the Polish market.
13
The Prospectus of Reinhold Polska AB
The Reinhold Polska AB structure:
Board of Directors and Management
The Board of Directors comprises five ordinary members, including the Chairman. The management
consists only of the Managing Director (also being a Board Member).
Anders Lettström (born 1948)
Anders Lettström is the Chairman of the Reinhold Polska’s Board of Directors and has been a
member of the Board since 2006. He is currently Chairman of the Board in inter alia Oscarsteatern
AB, World Scout Foundation Sweden Chapter, OneConference Sweden AB and Board member in 2
Entertain AB and ULI Urban Land Institute Sweden.
Anders Lettström holds a degree in Master of Science in Economics (Real Estate) and a degree in
architecture from the Swedish Royal Institute of Technology, as well as a Master of Laws from
Stockholm University.
Anders Lettström holds no shares in Reinhold Polska.
Torgny Krook (born 1957)
Torgny Krook is a member of Reinhold Polska’s Board of Directors since 2006.
Torgny Krook holds a degree in Master of Science in Business Administration and Economics from the
University of Uppsala. Mr. Krook has earlier experience from real estate development; Mr. Krook was
Group Treasurer at SPP-LET International, a company operating within real estate investment and
development on the international market. Furthermore, Mr. Krook has previous experience as a board
member of directors of SPP International Property AB, Bleau lnvestment Pte Ltd in Singapore and
Aschcroft Retail Investment Pic. Mr. Krook currently holds the position as Global head of Institutions at
Nordea. Torgny Krook holds 7,000 shares in Reinhold Polska.
Jens Engwall (born 1956)
Jens Engwall is a member of Reinhold Polska’s Board of Directors since 2006. He is also Chairman of
the Board in inter alia China Real Estate Development AB and Board member in Fast Partner AB,
14
The Prospectus of Reinhold Polska AB
Catella Property AB, Vasallen AB, Russian Real Estate Investment Company and Chengde
Intressenter AB.
Jens Engwall holds a degree in Master of Engineering.
Jens Engwall holds no shares in Reinhold Polska.
Hans-Gunnar Håkansson (born 1945)
Hans-Gunnar Håkansson is a member of Reinhold Polska’s Board of Directors since 2006. He is also
Chairman of the Board in B&M Impex AB and Bofood AB. Board member in AMT Multimedia
Technology, AB Karlshamns Expressbyrå, Ranaverken AB and Styrelseakademien Skåne.
Hans-Gunnar Håkansson holds a degree in Business and Administration.
Hans-Gunnar Håkansson holds no shares in Reinhold Polska.
Gösta Gustafsson (born 1952)
Gösta Gustafsson is Managing Director of Reinhold Polska and has been a member of the Board of
Directors since 2006. He is also have a numeral assignments in the Boards of Directors of the
companies within Reinhold Group.
Gösta Gustafsson holds indirectly, through Reinhold Group B.V., 900,000 shares of class A and
160,000 shares of class B in Reinhold Polska, representing 60,66 % of the total amount of votes.
Management of the Company
Articles of association
Reinhold Polska A.B. is registered in Sweden (Västmannagatan 52, 113 – 21 Stockholm, Sweden)
under organization number 556706- 3713. According the register of the Swedish Companies
Registration Office (Sw. Bolagsverket) Reinhold Polska AB is a public limited liability company under
Swedish law ("publ" being the abbreviation for "publikt", which in turn translates into "public"). The
object of the company’s business it to, directly or indirectly, acquire, own and administer real
properties and to conduct any other business compatible therewith.
The shares of Reinhold Polska AB were created based on the provisions of the Swedish Companies
Act and in accordance with the company’s founding memorandum and articles of association They are
subject to the laws of Sweden.
All shares of Reinhold Polska AB are registered with, and the register of shareholders is kept by, the
computerized book-entry share registration system administrated by VPC AB and there are no
physical share certificates.
All issued call A and B shares are freely transferable.
Capitalization and indebtedness
Amounts in SEKk
Current liabilities
Secured by collateral
Not secured by collateral
Guaranteed
Non current liabilities
Secured by collateral
Not secured by collateral
As of 30 June 2007
76,655
0
76,655
0
135,638
0
88
Guaranteed
135,550
Equity
308,448
Share capital
Capital reserves
Other reserves
Other equity
3,500
0
-185
305,133
15
The Prospectus of Reinhold Polska AB
Total
520,741
Amounts in SEKk
As of 30 June 2007
Cash
Cash equivalent
Trading securities
Liquidity
Current bank debt
Current portion of non current debt
Other current financial debt
Current financial debt
Net current financial indebtness
Non current bank loans
Bonds issued
Other non current loans
Non current financial indebtness
Net financial indebtness
65,123
0
0
65,123
0
0
0
0
-65,123
135,550
0
0
135,550
70,377
Summary of selected financial information
This selected financial information has been derived from financial statements compiled in accordance
with International Financial Reporting Standards (IFRS) and with International Financial Reporting
Interpretations Committee (IFRIC), the interpretations of financial standards approved by EU, as well
as the Swedish Accounting Standards Council’s recommendations. The financial statement as of 30
June 2007 has been prepared in accordance with the same accounting principles and methods of
calculations as the 2006 Annual Report.
Consolidated income statement
Amounts in SEKk
Operationg income
Net sales
Other operating income
Operating expenses
Other external costs
Personnel costs
Depreciation and write-downs of tangible and intangible
assets
Other operating expenses
Operating profit / loss
Result from financial investments
Other interest income
Interest expense
Profit / loss after financial items
Tax on profit for the period
Net profit / loss for the period
Average number of shares
Earnings per Share
16
Jan-Jun 2007
Jun – Dec 2006
985
139
1,124
0
0
0
- 3,757
- 2,028
- 2,772
- 157
- 30
- 203
- 4,894
-4
0
- 2,933
5,082
-5
183
1,704
-2
- 1,231
- 69
114
0
- 1,231
7,000
0.02
7,000
- 0.18
The Prospectus of Reinhold Polska AB
Consolidated balance sheet
Amounts in SEKk
2007-06-30
Intangible assets
Tangible assets
Total fixed assets
2006-12-31
115
410
525
0
16
16
Properties reported as current assets
Short term receivables
Cash and bank balances
Total current assets
188,538
265,555
65,123
519,216
8,376
422
310,466
319,264
Total assets
519,741
319,280
Amounts in SEKk
2007-06-30
Equity
Share capital
Other additional capital
Other reserves
Retained earnings
Net profit/loss for the period
Total equity
Provisions
Long term liabilities
Current liabilities
Accrued expenses and deferred income
Total equity and liabilities
2006-12-31
3,500
306,250
-185
-1,231
114
308,448
3,500
306,250
-4
-1,231
308,515
88
0
135,550
8,496
74,609
1,046
75,655
2,054
215
2,269
519,741
319,280
Changes in Shareholders’ Equity Group
Amounts in SEKk
Opening balance
2006-06-27
Formation of the company
New share issue
Shareholder’s contribution
received
Translation differance
Net profit/loss for the period
Closing balance 2006-12-31
Share
capital
0
500
3,000
Other add
capital
0
Other
reserves
0
Retained
earnings
0
306,250
0
500
284,750
24,500
281,750
24,500
-4
3,500
Total
equity
-4
- 1,231
- 1,231
-4
- 1,231
308,515
17
The Prospectus of Reinhold Polska AB
Amounts in SEKk
Opening balance
2007-01-01
Formation of the company
New share issue
Shareholder’s contribution
received
Translation differance
Net profi/loss for the period
Closing balance 2006-12-31
Share
capital
3,500
Other add
capital
306,250
Other
reserves
-4
Retained
earnings
- 1,231
Total
equity
308,515
114
- 1,117
- 181
114
308,448
- 181
3,500
306,250
- 185
Consolidated cash flow statement
Amounts in SEKk
Operating profit/loss
Adjustments for non-cash items
Interest receivied
Interest paid
Income tax paid
Cash flow from operating activities before working capital
changes
Jan-Jun 2007
Jun – Dec 2006
- 4,834
118
243
- 64
- 69
- 2,933
4
1,704
-2
0
- 4,606
- 1,227
Changes in properties reported as current assets
Changes in receivables
Changes in liabilities
Cash flow after working capital changes
- 180,162
- 260,295
73,386
- 371,677
- 8,376
- 422
2,265
- 7,760
Purchase of equipment
Cash flow after investing activities
- 538
- 372,215
- 20
- 7,780
Formation of company
New share issue
Borrowings/repayment of debt
Shareholder's contribution received
Cash flow for the period
0
0
126,909
0
-245,306
500
284,750
8,496
24,500
310,466
310,467
- 38
65,123
0
0
310,466
Cash and cash equivalent at the beginning of the period
Exchange rate differences
Cash and cash equivalent at the end of the period
18
The Prospectus of Reinhold Polska AB
Profit forecast
Project
(in EUR)
Villa Nova
Silesia Atrium
Platinum
Lipinski Passagé
Villa Park
Gliwicie
Apartments
Karpacka
Profit 2008
Project
(in EUR)
Zakopianska
Bastylia II
Reinhold Lipinski
Profit 2009
Aqustion
Cost
Total costs
1,400,000
4,000,000
5,500,000 22,000,000
Gliwice
Wroclaw
Type of
Project
Residential
Office
Residential /
Commercial
Office/ Retail
Residential
Residential /
Retail
Residential
City
Krakow
Katowice
Warsaw
Type of
Project
Commercial
Residential
Office / Retail
Aqustion
Cost
Total costs
750,000
9,000,000
1,200,000 15,000,000
7,500,000 16,000,000
City
Wroclaw
Katowice
Wroclaw
Warsaw
Krakow
Profit
307,000
5,129,000
Finish
q2 ‘08
q4 ‘08
3,500,000
3,500,000
1,375,000
13,000,000
7,000,000
3,800,000
1,880,000
1,026,000
1,011,000
q2 ‘08
q3 ‘08
q4 ‘08
400,000
1,800,000
4,300,000
6,000,000
1,554,000
1,145,000
12,052,000
q4 ‘08
q4 ‘08
Profit
3,085,000
2,426,000
2,742,000
8,253,000
Finish
q2 ‘09
q1 ‘09
q2 ‘09
Risk factors
The business of Reinhold Polska AB involves risks which may be related to the industry in which the
Company operates, to certain specific features of its operations to the environment in which it
conducts its business. In addition, trading in Shares in the Company involves certain risks and
dangers. Please refer to the Section of the Prospectus titled “Risk factors” for an overview of such
risks that the Company is aware of and considers material.
Major shareholders
The principal shareholder of the Company, holding 15.14 percent of shares and 60.66 percent of votes
is Reinhold Group BV, an investment company registered in the Netherlands. Reinhold Group BV is
under ultimate control of Gösta Gustafsson, who is Managing Director of Reinhold Polska AB and has
been a member of the Board of Directors since 2006.
Remaining 17.52 percent of shares and 8.12 percent of votes shares belongs to Straumur-Burdaras
Investment Bank; and 67.34 percent of shares and 31.22 percent of votes by minority shareholders,
holding less then 5 percent of equity each.
Related party transactions
Reinhold Polska Services Sp zoo (100,0% subsidiary of Reinhold Polska AB) provides several types
of services in favor of Reinhold Polska Project 1-5 Sp zoo (SPVs companies; 100,0% subsidiaries of
Reinhold Polska AB). The services provided, as “Transactions inside the Group”, are as follows: (i)
advisory services on acquisition of the property; (ii) project and cost management services; (iii)
construction management services; (iv) accountancy services; (v) advisory services on project
financing; (vi) representation of the investor; (vii) marketing services; (viii) consultancy on obtaining
lessees; (ix) management of the property; (x) consultancy on sale of the property; (xi) sponsorship
agreement. Detailed information on transactions within the Group are described in “Related party
transactions”.
19
The Prospectus of Reinhold Polska AB
Related party transactions outside the Group are stated below:
Parties
Subject of the agreement
Price /
Remuneration
5,988.99 PLN
(per month)
Reinhold Polska
Services Sp zoo
Reinhold
investment Sp
zoo
Reinhold Polska
Project 1 Sp zoo
Reinhold Lifstyle
Sp zoo
Lease agreement of the office space in
Katowice, Francuska Street 35/37 regarding
office surface of 54,52 sq m, conference
rooms of 59.26 sq m and kitchen surface of
rd
13,16 sq m on the 3 floor.
Lease agreement of surface for marketing
purpose
Reinhold Polska
Project 2 Sp zoo
Reinhold Lifstyle
Sp zoo
Lease agreement of surface for marketing
purpose
500.00 PLN
(per month)
Reinhold Polska
Project 3 Sp zoo
Reinhold Lifstyle
Sp zoo
Lease agreement of surface for marketing
purpose
500.00 PLN
(per month)
500.00 PLN
(per month)
Date
28 th of May
2007 till
th
30 of
November
2007
st
1 of June
st
2007 till 31 of
December
2007
st
1 of June
st
2007 till 31 of
December
2007
st
1 of June
st
2007 till 31 of
December
2007
Auditors and legal advisors
The auditors of the Company for the financial year 2006 are Ernst & Young AB (Box 7850; S-103 99
Stockholm, Sweden). The auditor in charge is authorised accountant Mikael Ikonen. The principal
legal advisor to the Company is Magnusson Advokatbyra (Mäster Samuelsgatan 6; Box 7413, SE 103 91 Stockholm, Sweden).
Offering
Use of proceeds
The predicted initial share price of approximately 150 SEK per share is the price that is our maximum
goal. The new issue of up to 1,000,000.00 shares on the Warsaw Stock Exchange corresponds with
150 mln SEK that the Company will gain from the flotation. The Company plans to use the new capital
resources to finance projects in the pipeline. Moreover the Issuer will secure more sites in all Poland,
which is in line with our development policy and will widen our portfolio. The new acquired new
residential and commercial properties will be partially financed with resources form the flotation and
bank loans.
Eligible investors
The Combined Offering consist of (i) a public offering to Institutional Investors in Poland and selected
EU member countries (see Selling Restrictions) and (ii) a public offering to Individual Investors in
Poland.
Expected timetable
The Offering will be conducted pursuant to the following indicative timetable:
24 – 25 October
up to 3 p.m. CET
26 October
26 – 31 October
5 November
By 9 November
Book-building process among Institutional Investors
Determination of the Offer Price and the final number of Offer Shares
Subscription period
Allotment date
Settlement and Delivery date
Reinhld Polska AB, with the agreement of the Lead Manager, reserves the right to change the above
timetable of the Combined Offering, including the dates for accepting subscription orders. Information
on timetable changes, if any, shall be published in the same manner as this Prospectus.
20
The Prospectus of Reinhold Polska AB
Book-building
Prior to commencement of the Subscription Period, a book-building process will take place amongst
Institutional Investors invited by the Lead Manager during which such Institutional Investors, interested
in subscribing for the Offer Shares, will indicate the number of the Offer Shares they will be willing to
acquire and the offer price at which they will be willing to subscribe for.
In book-building process, investors may submit bids for any number of shares within the range from 1
to 1,400,000, expressing the number of Offer Shares and price. There are no restrictions in respect to
number of bids submitted for Offer Shares.
Prospective Institutional Investors seeking to take part in the book-building process and to subscribe
or purchase Offer Shares are advised to contact Suprema Securities S.A. for further details regarding
the subscription process.
While submitting book-building declarations, investors declare unrevokable obligation to subscribe for
the Reinhold Polska AB shares during subscribtion period, providing the Combined Offering will not be
revoked or suspended. Investors are not allowed to withdraw book-building declaration.
Determination of the Offer Price
The Offer Price will be determined by the Board of Directors with the agreement of the Lead Manager,
following the completion of the book-building process among Institutional Investors.
The price will be determined based on the following criteria and rules:
- the current and anticipated situation on the Polish and international capital markets;
- the assessment of the growth prospects, risk factors and other information relating to the
Company’s activities as described in this Prospectus;
- the book-building process.
The final Offer Price will be published on or about 26 October 2007, 10:00 am CET, by means of an
ad-hoc announcement on an electronic news information system and also, in Poland in the Gazeta
Gieldy “Parkiet” and will be published in the same way as the Prospectus and in the form of a current
report.
Moreover, such information will be provided to the Polish Financial Supervision Authority and the
Warsaw Stock Exchange in accordance with article 54 section 3 of the Polish Public Offering Act. No
expenses or taxes will be charged to the subscribers for or the purchasers of the Offer Shares, except
for customary banking charges.
Allotment
After closing book-building process Lead Manager will allot shares among Institutional Investors.
Purchase orders will be evaluated on the basis of the offer prices and investor demand. Other factors
that will be considered include the quality of the investor, whether the investor has a long-term
investment strategy, the goal of maximizing the proceeds from the Combined Offering and the goal of
supporting the development of an orderly and liquid secondary market for the Offer Shares.
All bids submitted below the final Offer Price will be cancelled.
After the shares are allocated, Lead Manager will issue invitation to investors to subscribe for Offer
Shares – by fax stated in book-building declaration. In the invitation Suprema Securities S.A. will
specify the number of shares granted to the investor, issue price as well as the value of the bid.
Reinhold Polska AB and the Lead Manager have not introduced any policy regarding preferential
treatment to certain classes on investors or certain affinity groups in the allotement or any discrepancy
by firm the subscribtion is made.
Offer Period
The period during which investors may purchase Offer Shares in the Combined Offering (the “Offer
Period”) will run from 26 October 2007 until 31 October 2007, 17.00 CET. The payment for shares
must be delivered during the Offer Period, no later then 31 October 2007 (date, payment is received).
Applications for allotted Offer Shares from Institutional Investors, who have been invited to place
orders following the completion of the book-building process, will be accepted at the registered office
of Suprema Securities S.A. at 14/16A Jasna Street, Warsaw, Poland.
21
The Prospectus of Reinhold Polska AB
Applications for allotted Offer Shares from Institutional Investors, who have been invited to place
orders following the completion of the book-building process, will be accepted at the registered office
of Suprema Securities S.A. at 14/16A Jasna Street, Warsaw, Poland.
Applications from Individual Investors will be accepted at the registered Orders Reception Points of
Beskidzki Dom Maklerski listed in Annex D.
Multiple subscriptions and offers to purchase will be accepted from Individual Investors, providing the
total amount of shares will not exceed 25,000 shares. In the case of any unsuccessful subscriptions,
to the extent that any payment in excess of that required for the Offer Shares allotted has been made,
The number of Offer Shares allocated to Individual Investor in the Public Offering will be determined in
the absolute discretion of the Board of Directors and the Lead Manager, however the Lead Manager
plans to distribute minimum 20% (280,000 shares) of Offered Shares to Individual Investors. Polish
Individual Investors are expected to be allocated Offer Shares on a pro rata basis with no minimum
allotment.
Prospective investors are advised to contact Beskidzki Dom Maklerski S.A. for details regarding the
refund of monies.
Purchase bids
Prospective international investors seeking to purchase Offer Shares in the Combined Offering are
advised to contact either the Lead Manager, or their bank, broker or other financial adviser for further
details regarding the manner in which purchase bids for Offer Shares are to be processed.
For specific information about the Global in Poland see “Additional Information relating to the Polish
Public Offering”.
Delivery and Settlement
The Lead Manager expect to deliver the Offer Shares through the facilities of the NDS on or about 9
November 2007 following full prepayment for allotted Offer Shares.
Admission to trading
Reinhold Polska AB has applied for listing of the Existing Bearer Shares and the Offer Shares on the
Main Market of the Warsaw Stock Exchange and expects trading on the Warsaw Stock Exchange to
start on or about 12 November 2007.
Reinhold Polska’s shares will be traded on the WSE at PLN.
Underwriting
Reinhold Polska AB and the Lead Manager did not signed Underwriting Agreement.
Stabilization
Reinhold Polska AB and the Lead Manager did not signed Stabilization Agreement.
Over-allotement
Reinhold Polska AB did not granted or signed any over-allotement option to the Lead Manager or any
other brockerage firm.
Green-shoe
Reinhold Polska AB did not granted or signed any green-shoe option to the Lead Manager or any
other brockerage firm.
22
The Prospectus of Reinhold Polska AB
Pre-emptive purchase rights
Under the authorization of Extraordinary General Meeting of Shareholders, held on 30 August 2007,
The Board of Directors of Reinhold Polska AB resolved to increase a share capital by no more then
500,000 SEK by a new share issue of no more then 1,000,000 shares od class B with deviation from
the shareholder’s preferential rights.
Private placements
Under the authorization of Extraordinary General Meeting of Shareholders, held on 30 August 2007,
The Board of Directors of Reinhold Polska AB resolved to increase a share capital by no more than
500,000 SEK by a new share issue of no more then 1,000,000 shares of class B with deviation from
the shareholder’s preferential rights. New shares shall be subscribed by Institutional and Private
Investors in Poland. No securites of the same class or other classes were issued in order to become a
subject of private placements.
23
The Prospectus of Reinhold Polska AB
RISK FACTORS
Prospective investors should carefully review and consider the following risk factors and the other
information contained in this Prospectus prior to making any investment decision with respect to the
Offer Shares. The occurrence of one or more of these risks alone or in combination with other
circumstances may have a material adverse effect on the Group’s business, financial condition, results
of operations or prospects.
The risks set out below are not complete or exhaustive and therefore may not be the only risks the
Group is exposed to. The order in which the risks are presented below does not reflect the likelihood
of their occurrence or the magnitude or significance of the individual risks. Additional risks and
uncertainties of which the Group is not currently aware or which it does not consider significant at
present could likewise have a material adverse effect on the Group’s business, financial condition,
results of operations or prospects. The market price of the Shares could fall if any of these risks were
to materialize, in which case investors could lose all or part of their investment.
Investors should only purchase Offer Shares for inclusion in a broadly diversified portfolio. Those
investors who have any reservations regarding the content of this Prospectus should contact their
stockbroker, bank, lawyer, tax adviser or financial adviser. The information in this Prospectus is not
equivalent to the professional advice from the persons mentioned above.
24
The Prospectus of Reinhold Polska AB
Risk inherent to the issuer’ and its activity
The Group faces a number of general risks related to the real estate industry
The Group is exposed to all of the risks inherent in the business of acquiring, developing, owning,
managing and using real estate. These risks include, in particular, the following:
- cyclical fluctuations in the property market generally and in the national and local markets where
properties are located;
- sales risks;
- property abuse risks (including terrorism);
- construction delays and construction budget overruns;
- opposition from civic and environmental groups; and
- natural disasters.
The Group takes precautionary measures to protect its business activities from the negative impact of
the above risks and other risks related to the real estate industry in general, especially those to which
the Group’s developments are more susceptible, through contractual provisions and, as far as
possible, through insurance coverage. However, it is not possible to completely overcome all of these
risks. If, despite all of the precautions taken, any of these risks materialize, the result could have a
material adverse effect on the Company’s business, financial condition, results of operations and
prospects.
The Group will continue to depend on its ability to identify profitable development and
investment projects
The Group’s business model depends on its continuing ability to develop and/or acquire commercial
and residential properties in Poland with the potential for capital growth and/or investment returns on
equity of 15 per cent or more. Competition for such properties is intense at present, and the Group
expects competition to further intensify in the markets in which it operates. As a result, the Group may
not be able to find suitable properties, which could have a material adverse effect on the Group’s
business, financial condition, results of operations or prospects.
Even if the Group is able to develop projects and acquire property portfolios compatible with its
strategy, such developments and acquisitions could prove unsuccessful. The assumptions the Group
makes when developing and acquiring its property portfolio may prove partly or entirely inaccurate.
Inaccurate assumptions could adversely affect the Group’s business, financial condition, results of
operations or prospects.
The Group’s properties may be subject to increases in operating and other expenses
The Group’s business, results of operations, financial condition and prospects could be materially
adversely affected if operating and other expenses increase without a corresponding increase in
revenues. Factors which could increase operating and other costs include, among others:
- changes in statutory laws, regulations or government policies (including increases in property
taxes and other statutory charges), which increase the cost of compliance with such laws,
regulations or policies;
- increases in insurance premiums; and
- defects affecting the properties which need to be rectified, leading to unforeseen capital
expenditure.
Reinhold Group is exposed to the risk of increases in construction costs
The Group relies on subcontractors for the construction of its buildings. The Group recognizes that, for
several years, there has been a trend of increasing construction costs in Poland. This trend could be
heightened by stricter regulation relating to environmental protection. The Group is subject to the risk
of being unable to pass along the increase in construction costs in the form of higher sale prices.
25
The Prospectus of Reinhold Polska AB
Competition in the Polish market is high and may intensify in the future
The real estate market in Poland is highly competitive. The Group faces competition from both
international and local real estate investors including developers, investment funds, various types of
financial institutions and wealthy individuals. As property market in Poland, the Group expects
competition to intensify. In particular, the Group has experienced, as a result of the accession of
Poland to the European Union, increased competitive pressures from international property
developers and other investors. Some competitors and potential competitors may have significant
advantages over the Group, including greater name recognition, longer operating histories, preexisting relationships with current or potential purchasers or tenants, significantly greater financial,
marketing and other resources and more ready access to capital which would allow them to respond
more quickly to new investment opportunities.
No assurance can be given that the Group will be able to compete successfully in the future. If the
Group fails to compete effectively or, if increased competition leads to lower revenues and lower profit
margins for the Group, the Group’s business, financial condition, results of operations or prospects
may be adversely affected.
The Group may be exposed to oversupply
The real estate market in Poland has experienced significant growth in recent years. Although the
Company believes that its focus on prime sites and developments means that there is and will
continue to be demand for its developments, no assurance can be given that the supply of new office
and residential projects will not exceed demand in the relevant jurisdiction. Any such excess may have
an effect on the value of the Company’s portfolio and its ability to sell or lease its completed projects at
forecasted levels or at all and, therefore, may adversely affect the Company’s business, financial
condition, results of operations or prospects.
The Group may not be able to attract and retain sufficiently qualified employees in
Poland
Increasing competition for employees across the European Union countries from other local or
international real estate companies may make it more difficult for the Group or its subsidiaries to
attract and retain qualified employees and may lead to rising employee costs in the future. If the Group
is unable to attract and retain employees with the required training, experience and motivation in key
strategic markets or if competition for qualified employees increases its employee costs, it may
materially adversely affect the Group’s business, financial condition, results of operations or
prospects.
The Group’s activities are subject to many regulations, some of which are highly
restrictive. In addition, current regulations may become more onerous in the future
The Group is required to comply with numerous regulations governing matters such as the
construction, refurbishment and maintenance of buildings, safety and leases. The Group, along with
its suppliers and subcontractors, must comply with numerous regulations concerning urban planning,
construction and development and building safety, which can result in significant expenses and
investments for the Group.
Changes to these regulations or to their interpretation or application could force changes in the way
the Group manages its assets. Regulations may require the Group to conduct major renovations of its
buildings and limit its ability to sell assets, implement its investment or renovation programs. Such
changes could increase operating, maintenance and refurbishment costs of the Group’s properties, or
limit the amount of rent that the Group may collect from its tenants, and could therefore have a
significant negative impact on the Group’s business, financial condition, results or outlook.
Given the complexity of some regulations applicable to the Group, particularly rules that determine
when building permits must be obtained for renovations, it is possible that the Group’s interpretation of
these regulations could be challenged by tenants or result in injunctions or compliance orders from the
relevant authorities.
26
The Prospectus of Reinhold Polska AB
The Group’s property valuations may not reflect the real value of its portfolio, and the
valuation of its assets may fluctuate from one period to the next
The values determined by independent appraisers are based on numerous assumptions that may not
prove correct, and also depend on trends in the relevant property markets. As a result, the valuation of
the Group’s property assets may not reflect potential selling prices. In addition, the figures may vary
substantially between valuations. A decline in valuation may have a significant adverse impact on the
Group’s financial condition and results, particularly because changes in property values to a certain
extent are reflected in the Group’s consolidated net profit.
The Group’s properties are exposed to the risk of destruction and deterioration
The Group’s buildings may be exposed to risks such as flooding, fire and gas explosions which could
lead to the destruction or deterioration of its buildings. These risks may not be adequately covered by
the Group’s insurance policies, and the Group may not be fully indemnified for losses related to these
risks, in particular for losses suffered from total destruction of property or from operating losses due to
such destruction. If full indemnity is not possible, the total or partial destruction of the Group’s
properties could lead to major renovation costs and significant financial losses.
Some of the Group’s properties may not be readily convertible to an alternative use if such properties
were to become unprofitable due to competition, age, decreased demand, regulatory changes or other
factors. The conversion of commercial properties to alternate uses or of non-commercial properties to
commercial use generally requires substantial capital expenditure. Thus, if the current use of any
property becomes unprofitable the market value of that property may decline.
The conversion of a commercial property to an alternate use or the conversion of a non-commercial
property to commercial use may also be subject to planning control and zoning restrictions. Current
and future applications for the proposed use or change of use and redevelopment of a property may
be refused or delayed by the relevant authorities or by objections and appeals to the courts by third
parties, thereby restricting the Group’s ability to develop or re-let, as the case may be, the property for
the new use within its proposed timescale.
Reinhold Group is exposed to risks of environmental claims
The Group’s activities are subject to laws and regulations relating to the environment and public
health. These laws and regulations require a property owner to ensure that its premises are free from
risks that may threaten the physical safety or health of its occupants. They cover the presence of toxic
products in buildings (e.g., asbestos and lead), the installation of approved environmental protection
measures, and efforts to combat risks such as those caused by electromagnetic waves, floods, fires
and gas explosions. Failure to comply with these laws and regulations could lead to major costs or
penalties for the Group.
The Group generally does not undertake any environmental searches or investigations prior to
purchasing any land or properties, and therefore the Group may own land which contains
environmental pollutants (e.g. waste, oil or toxic chemicals) or buildings whose structures incorporate
hazardous materials (e.g. asbestos and formaldehyde) which are harmful to the environment or to the
health of workmen on development sites or residents and occupants of residential or office sites.
Environmental laws often impose liability regardless of whether the owner or operator of the property
knew of, or was responsible for, the presence or release of the hazardous substances. The removal
and disposal of such hazardous substances, along with the associated maintenance and repair work,
could entail significant costs. Furthermore, it may be impossible for the Group to obtain recourse
against the party responsible for the pollution or against prior owners.
The incurrence of environmental claims or unforeseen costs to remove or dispose of these substances
and hazardous materials or to repair resultant damage caused by them could adversely affect the
Group’s business, financial condition, results of operations and prospects.
If laws and regulations relating to the environment and public health were to impose increased
obligations or to be extended to apply to all Group assets regardless of age, or if new laws regulating
risks not currently identified were to come into force, the Group could be required to significantly
increase its expenses or capital expenditures to comply with them.
27
The Prospectus of Reinhold Polska AB
The Group is exposed to interest rate risks
The Group utilizes variable and fixed rate debt financing to finance the purchase, development,
construction and maintenance of its properties. When variable rate financing is used, the Group’s
costs increase if prevailing interest rate levels rise. Rising interest rates could also affect the Group’s
ability to make new investments and could reduce the value of the properties.
The Group may be exposed to changes in VAT law
In Poland, value added tax is generally charged at 22 per cent, but a preferential rate of 7 per cent
applies to the sale, by developers, of residential apartments. A change in tax law is due to come into
force on 1 January 2008 which will remove the preferential rate of 7 per cent. and, accordingly, the
sale of residential apartments by the Group will be subject to value added tax at 22 per cent, unless
the property being sold falls into the category of “social development”. The category of “social
development” is not defined with certainty under Polish law.
On 3 April 2007, the Polish government approved the proposal of such definition to be included in the
Polish VAT regulations. The definition in its version approved by the government, relates to, among
others, residential apartments with an area not exceeding 120 square meters. However, the definition
may be subject to change as it must be introduced to the Polish VAT regulations through the act
adopted by the Polish Parliament and may be amended during the parliamentary proceedings. As of
the date of this Prospectus, the Polish government has not filed the relevant bill with the Polish
Parliament. The levying of value added tax on residential apartments may have an adverse effect on
the Group’s ability to sell its residential apartments and/or the sale price which can be achieved for
such properties and, therefore, have an adverse effect on its business, financial condition, results of
operations and prospects.
Reinhold Group may not obtain at all or in a timely manner all required permits and
consents for the completion of its property development projects
As a result of bureaucratic difficulties, environmental and heritage protection laws, and time
constraints with the administrative authorities in the relevant jurisdictions, the Group may encounter
difficulties in obtaining relevant permits for the development of its projects or, more likely, may acquire
those permits later than expected. Any such inability to obtain, or delay in obtaining, permits or
consents could have a material adverse effect on the Group’s business, financial condition, results of
operations or prospects.
Changing residential trends may adversely affect sales of developments
Reinhold Polska’s business concept is to acquire, develop, manage and sell real estate together with
development–land in Poland. Changing residential trends are likely to emerge within the Polish market
as it matures and relaxed planning policies may give rise to over-development, thereby affecting the
sales potential of the Group’s residential developments. These factors will be considered within the
investment strategy implemented by the Group but may not always be able to be anticipated and may
have a material adverse effect on the Group’s business, financial condition, results of operations and
prospects.
The Group is exposed to maintenance risks
The desirability of a rental property depends not only on its location but also on its condition. To
remain desirable and to generate a revenue stream over the long term, a property’s condition must be
maintained or, in some cases, improved to meet the changing needs of the market. Most of the
Group’s properties have been recently redeveloped, and are expected to require only standard
maintenance in the near term. As these properties age, or as market requirements change,
maintaining or upgrading these properties in accordance with market standards may entail significant
costs, which are typically borne primarily by the property owner, not the tenants. If the actual costs of
maintaining or upgrading a property exceed the Group’s estimates, or if hidden defects are discovered
during maintenance or upgrading, which are not covered by insurance or contractual warranties, or if
the Group is not permitted to raise its rents due to legal constraints under applicable local landlordtenant laws, the Group will have to bear the additional costs. Furthermore, any failure by the Group to
28
The Prospectus of Reinhold Polska AB
undertake relevant repair work in response to the factors described above could adversely affect the
sales and rental income earned from affected properties. All of these factors could have a material
adverse effect on the Group’s business, financial condition, results of operations and prospects.
The Group is subject to risks relating to its office and retail rental business
As Reinhold Polska is managing real estates, the Group faces risks specific to office and retail rental
business, which may have a negative impact on the value of its assets, its results, business and
financial condition. These risks result from the following factors:
- The office and retail rental portfolio is more sensitive than residential property to the economic
environment in the relevant markets.
- Renovation work required on vacant units before they are relent is often more extensive in the
office and retail segment than in the residential segment.
- The risk of tenants becoming insolvent and the resulting impact on Group results is greater in the
office and retail segment because of the greater relative importance of each tenant.
29
The Prospectus of Reinhold Polska AB
Risk factors specific to the securities being offered and admitted to trading
The market price of the Shares could prove to be volatile
The market price of the Shares depends to a large extent on the value of the Group’s real estate
portfolio. After the Combined Offering, the price of the Shares may be subject to volatility due in
particular to variations in the Group’s actual or forecasted operating results, changes in profit forecasts
or a failure to meet the profit expectations of securities analysts, a decrease in the market value of the
Group’s portfolio, general economic conditions and other factors. The general volatility of share prices,
in particular within the real estate sector, may also lead to price pressure on the Shares without there
necessarily being a reason for this in the business or the earnings outlook of the Group.
Future sales of Shares may affect their market price
Sales, or the possibility of sales, of substantial numbers of Shares in the public markets, including
sales by the Company’s principal shareholders, following the Combined Offering could have a material
adverse effect on the market price of the Shares or could affect the Company’s ability to obtain further
capital through an offering of equity securities. Subsequent equity offerings may reduce the
percentage ownership of the Company’s existing shareholders.
The Polish Financial Supervision Commission may undertake actions that may lead to
the withholding of the Combined Offering or the listing and trading of the Shares and
the Offer Shares on the Warsaw Stock Exchange
If the issuer or any entity participating in a public offering on behalf of, or on instruction from, the issuer
violates the law in connection with the public offering in Poland, or there is a reasonable suspicion that
such violation has occurred or may occur, the Polish Financial Supervision Commission may:
order that the commencement of such public offering be withheld or that such public offering already
underway be discontinued, in each case for not more than 10 business days, or
proscribe the commencement or continuation of the public offering, or
publish, at the expense of the issuer, information concerning the illegal activities with respect to the
public offering.
Similarly, if the issuer or any entity acting on behalf of, or on instruction from the issuer violates the law
in connection with applying for the admission of securities to listing and trading on a regulated market
operated by the Warsaw Stock Exchange, or there is a reasonable suspicion that such violation has
occurred or may occur, the Polish Financial Supervision Commission may
order that the admission of the securities to trading on a regulated market operated by the Warsaw
Stock Exchange be withheld for not more than 10 business days, or
proscribe admission of the securities to listing and trading on a regulated market operated by the
Warsaw Stock Exchange, or
publish at the expense of the issuer information concerning the illegal activities with respect to
applying for admission of securities to listing and trading on a regulated market operated by the
Warsaw Stock Exchange.
The Polish Financial Supervision Commission may apply the measures described in the first or
second paragraph above if the contents of this Prospectus filed with the Polish Financial Supervision
Commission or made available indicate that
the offer or the admission of securities to listing and trading on a regulated market operated by the
Warsaw Stock Exchange would materially compromise investors’ interests,
establishment or incorporation of the issuer was effected in gross violation of applicable laws and the
consequences of such violation subsist,
activities of the issuer were, or are, conducted in gross violation of applicable laws and the legal
consequences of such violation subsist, or
the legal status of the securities does not comply with applicable laws.
30
The Prospectus of Reinhold Polska AB
If the issuer to whom the Republic of Poland is a host state violates or is reasonably suspected to
have violated the law, the Polish Financial Supervision Commission shall notify the competent
authority in such issuer’s home state. If, despite the notification mentioned in the preceding sentence,
the competent authority of the issuer’s home state does not undertake measures to prevent further
violation of the statutory provisions or if such measures prove ineffective, the Polish Financial
Supervision Commission may, with a view to protecting the interests of investors and having first
notified such authority, apply with respect to the issuer the measures provided in the first or second
paragraph above.
If justified by the security of listing and trading on a regulated market operated by the Warsaw Stock
Exchange or a threat to investors’ interests, at the demand of the Polish Financial Supervision
Commission, the Management Board of the Warsaw Stock Exchange shall withhold the admission to
trading on the regulated market or the listing of the securities indicated by the Polish Financial
Supervision Commission for up to 10 days.
There can be no assurance that the situations described above will not occur in relation to the
Company, the Shares and/or the Offer Shares, the Offering and the applying for the admission of the
Shares and the Offer Shares to listing and trading on a regulated market operated by the Warsaw
Stock Exchange.
The scope of ongoing information disclosed by the Company to Polish investors may
differ from the scope of such information disclosed by Polish public companies
As of the date of this Prospectus relevant Polish regulations require foreign companies having their
securities listed on one or more regulated markets in EU member states and on the Warsaw Stock
Exchange to disclose to Polish investors solely, current and periodic reports published by that
company on such regulated markets. Due to the fact that the Company’s shares are intended to be
listed on Stockholm Stock Exchange, the Company will not be subject to the information obligations
specified by relevant Polish regulations and will be obliged to provide Polish investors solely with
current and periodic reports published in accordance with Swedish regulations.
It cannot be excluded that the scope of ongoing information disclosed by the issuers of the securities
listed on Stockholm Stock Exchange differs and/or will differ materially from the scope of such
information disclosed by Polish public companies listed on the Warsaw Stock Exchange. As a result,
Polish investors may not be provided with ongoing information that they could reasonably expect from
an issuer of securities listed on the Warsaw Stock Exchange.
31
The Prospectus of Reinhold Polska AB
USE OF PROCEEDS
A steady growth and development of the Company were always our priorities. To follow our course we
decided to enter Warsaw Stock Exchange and gain financial resources to finance further expansion on
the Polish market. Due to a great shortage of residential and commercial properties on the Polish
market we decided to invest more in that segment and fulfill our customers’ needs. New capital
resources from the flotation will enable the Company to be more active on the market and extend
Company’s portfolio.
The predicted initial share price of approximately 150 SEK per share is the price that is our maximum
goal. The new issue of up to 1,000,000.00 shares on the Warsaw Stock Exchange corresponds with
150 mln SEK that the Company will gain from the flotation. The Company plans to use the new capital
resources to finance projects in the pipeline. Moreover the Issuer will secure more sites in all Poland,
which is in line with our development policy and will widen our portfolio. The new acquired residential
and commercial properties will be partially financed with resources form the flotation and bank loans.
32
The Prospectus of Reinhold Polska AB
DIVIDENDS AND DIVIDEND POLICY
Dividend Policy
The Offer shares will be eligible for dividends, if any, declared in respect of the financial year
commencing from 1 January 2007, and for subsequent periods. Once the share capital increase
relating to the issue of new shares of Reinhold Polska AB has been registered with VPC, the newly
issued shares will rank equally with the outstanding shares for dividends.
Reinhold Polska AB did not pay dividends for the year 2006. In 2007, there is no plan to pay out any
dividends. Commencing from 2009, for the financial year ending 31 December 2008, the Company
expects to pay dividends, providing closing projects which are now in progress. However, Reinhold
Polska AB can not assure that dividends will be paid in the future or if dividends are paid, how much
they will amount to. The declaration and payment by the Company of any future dividends and the
amount thereof will depend on the Company’s results of operations, financial condition, cash
requirements, future prospects, profits available for distribution under applicable laws and other factors
deemed relevant by the Board of Directors.
Dividends under Swedish Law
Under the Swedish Companies Act, those shareholders and nominees whose names are recorded in
the register of shareholders as of the relevant record date have a right to a dividend. The relevant
record date shall, according to the Swedish Companies Act, be specified in the resolution declaring
the dividend, unless a mandate is given to the board of directors to determine the record date. The
record date may not occur later then the day before the next annual general meeting of shareholders.
Dividend payments are normally made as an amount of cash per share but can also be made in kind.
The payment process is administrated by VPC. If a shareholder cannot be reached by VPC, the
shareholder’s claim to the dividend will remain valid, subject to that the shareholder claims the
dividend within the limitation period, which is ten years from the record date of such dividend. In the
event of the shareholder not claiming its dividend within the limitation period, the dividend will accrue
to the Company.
Dividends under WSE Rules
Pursuant to the WSE’s Detailed Rules of Stock Exchange Trading and the Detailed Rules of KDPW,
the Company must immediately notify WSE and KDPW on the adoption of a resolution on the
allocation of profit do dividend payment, the total amount of dividend to be paid, the Record Date and
the dividend payment date. As stipulated in Paragraph 91.2 of the Detailed Rules of the KDPW, a
period of no less then ten days must elapse between the dividend record date and the dividend
payment date. However, this rule usually does not apply to foreign issuers where agreements entered
into by KDPW with foreign depositaries provide that payments of dividends can be made on the third
business day after the Record Day.
Additional requirements on transfer of dividends to Polish shareholders
For those shareholders of the Company who hold Shares in securities accounts opened in Poland,
any dividends declared by the Company will be paid through KDPW and the Polish securities houses
which are members of the KDPW. The Company will distribute dividends through the VPC which will
in turn transfer to the KDPW such share of dividends which is attributable to the total number of
Shares held by the KDPW on behalf of the Polish Shareholders. The KDPW will in turn distribute such
dividends to the securities houses which are members of KDPW fur further transfer to the ultimate
shareholders on the basis of the lists of shareholders submitted by the securities houses to the KDPW
for such purpose.
At to the tax considerations applicable to the dividends, see “Taxation”.
33
The Prospectus of Reinhold Polska AB
CAPITALIZATION AND INDEBTEDNESS
Amounts in SEKk
Current liabilities
Secured by collateral
Not secured by collateral
Guaranteed
Non current liabilities
Secured by collateral
Not secured by collateral
Guaranteed
Equity
Share capital
Capital reserves
Other reserves
Other equity
Total
Amounts in SEKk
Cash
Cash equivalent
Trading securities
Liquidity
Current bank debt
Current portion of non current debt
Other current financial debt
Current financial debt
Net current financial indebtness
Non current bank loans
Bonds issued
Other non current loans
Non current financial indebtness
Net financial indebtness
34
As of 30 June 2007
76,655
0
76,655
0
135,638
0
88
135,55
308,448
3,5
0
-185
305,133
520,741
As of 31 August 2007
14,741
0
14,741
0
230,963
0
5,052
230,963
236,015
3,5
0
-219
293,675
481,719
As of 30 June 2007
As of 31 August 2007
51,07
0
0
51,07
0
0
0
0
-51,07
230,963
0
0
230,963
179,892
65,123
0
0
65,123
0
0
0
0
-65,123
135,55
0
0
135,55
70,377
The Prospectus of Reinhold Polska AB
LIQUIDITY AND CAPITAL RESOURCES
Reinhold primary sources of liquidity have been the issuance of shares, shareholder’s contribution and
bank borrowings. Reinhold’s need for liquidity in the future will arise primarily from direct investments
in developing projects.
Reinhold expects that the majority of its liquidity and financing needs in the next years will be founded
through a combination of the proceeds from this Combined Offering, bank loans and cash flow from
operations.
Amounts in SEKk
Total Equity
Share capital
Other additional capital
Other reserves
Retained earnings
Net profit/loss for the period
Provisions
Long term liabilities
Current liabilities
Accrued expenses and deferred income
Total current liabilities
TOTAL EQUITY AND LIABILITIES
2007-06-30
308,448
3,500
306,250
-185
-1,231
114
88
135,550
74,609
1,046
75,655
519,741
2006-12-31
308,515
3,500
306,250
-4
-1,231
8,496
2,054
215
2,269
319,280
Reinhold total liabilities amounted to SEKk 211,293 as of 30 June 2007 and SEKk 10,765 as of 31
December 2006. The difference results from Reinhold’s activity. The company started its activity in
2006 and by the end of that year started to carry out one project. As of 30 June 2007 there were 7
projects in progress and 7 in preparation phase. Reinhold’s cash and cash equivalents amounted to
SEKk 65,123 as of 30 June 2007 and SEKk 310,466 as of 31 December 2006. Total equity and
liabilities amounted to SEKk 519,741 as of 30 June 2007 and SEKk 319,280 as of 31 December 2006
what stands for 63% growth in equity and liabilities in 6 months. The growth in financial resources
resulted from the growth in liabilities as the equity remains at a similar level.
Reinhold equity ratio (i.e., the ratio of equity to total assets as of 30 June 2007 is 59,3%, its debt ratio
(i.e., the ratio of total liabilities to total assets) as of 30 June 2007 is 55,0%.
Reinhold equity ratio (i.e., the ratio of equity to total assets as of 31 December 2006 is 96,6%, its debt
ratio (i.e., the ratio of total liabilities to total assets) as of 31 December 2006 is 4,0%.
Project
Platinum
Villa Nova
Lipiński
Silesia Atrium
Lipinski Passage
Villa Park
Zakopiańska Plaza
Total
Town
Wroclaw
Wroclaw
Warsaw
Katowice
Warsaw
Krakow
Krakow
Due date
q2 -2008
q2 -2008
q2 -2009
q4 -2008
q3 -2008
q4 -2008
q2 -2009
2007-06-30
46,097
15,653
18,450
16,359
27,183
3,198
8,610
135,550
2006-12-31
8,496
8,496
As of 30 June 2007 the company has been carrying out 7 projects and next 7 were in preparation
stadium. External loans related to the projects accounted for SEKk 135,550 as of 30 June 2007 and
SEKk 8,496 as of 31 December 2006. The company’s financing policy assumes the projects will be
financed in 75% from banking loans and in 25% from its equity.
Reinhold Polska AB believes its cash flows, together with borrowings and the funds invested in
Reinhold Polska AB in connection with the offering will be sufficient to fund its working capital needs,
35
The Prospectus of Reinhold Polska AB
anticipated capital expenditures and debt service requirements as they become due, although
Reinhold Polska AB cannot assure investors that this will be the case. See “Risk Factors”.
Amounts in SEKk
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Cash flow for the period
Cash and cash equivalent at the end of the period
2007-06-30
-371,677
-538
126,909
-245,306
65,123
2006-12-31
-7,760
-20
318,246
310,466
310,466
Cash flow from operating activities as of 31 December 2006 accounted for SEKk -7,760. Cash flow
from operating activities as of 30 June 2007 accounted for SEKk -371,677. The most important
influence on cash flow from operating activities in 2006 had the operating loss accounted for SEKk 2,933 and changes in properties reported as current assets accounted for SEKk -8,376. The most
important impact on cash flow from operating activities in 2007 had operating loss accounted for SEKk
-4,834, changes in properties reported as current assets accounted for SEKk -180,162 and changes in
receivables accounted for SEKk -260,295. Changes in properties reported as current assets resulted
from new projects development as the investments in progress are booked as inventory.
Cash flow from investing activities in 2006 accounted for SEKk -20 and resulted from the purchase of
equipment. Cash flow from investing activities in 2007 accounted for SEKk -538 and also resulted
from the purchase of equipment.
Cash flow from financing activities at the end of 2006 accounted for SEKk 318,246 and consisted from
new share issue accounted for SEKk 284,750, shareholders contribution accounted for SEKk 24,500,
borrowings of debt in the amount of SEKk 8,496 and the capital on the formation of the company in
the amount of SEKk 500. Cash flow from financing activities for the first six months of 2007 amounted
for SEKk 126,909 and resulted from borrowings of debt.
The following table shows the changes in the consolidated shareholders’ equity of Reinhold as of the
dates stated below and should be read in conjunction with the Audited Consolidated
Financial Statements as of 30 June 2007.
Changes in Shareholder’s Equity Group
Amounts in SEKk
Opening balance
2006-06-27
Formation of the company
New share issue
Shareholder’s contribution
received
Translation differance
Net profit/loss for the period
Closing balance 2006-12-31
Amounts in SEKk
Opening balance
2007-01-01
Formation of the company
New share issue
Shareholder’s contribution
received
Translation differance
Net profi/loss for the period
Closing balance 2006-12-31
Share
capital
0
500
3,000
Other add
capital
0
Other
reserves
0
Retained
earnings
0
Total
equity
0
500
284,750
24,500
281,750
24,500
-4
-4
- 1,231
308,515
3,500
306,250
-4
- 1,231
- 1,231
Share
capital
3,500
Other add
capital
306,250
Other
reserves
-4
Retained
earnings
- 1,231
Total
equity
308,515
114
- 1,117
- 181
114
308,448
- 181
3,500
306,250
- 185
There are no restrictions on the use of equity capital resources that have materially affected, or could
materially affect, directly or indirectly, Reinhold’s operations.
36
The Prospectus of Reinhold Polska AB
FORECAST
Assumptions to forecast
Reinhold Polska Project 1
Residential & Retail Development Project Reinhold Platinum Plaza
Wroclaw, Przyjazni Street
To valuate the income on the commercial projects Reinhold Polska is consulting the level of expected
rents and yield with major real estate agents. Also an in-house market research is prepared, analyzing
competitiveness with other projects. With the most recent analysis of rents, yield, prices and
preferences in different sectors of property market Reinhold Polska has ability to perfectly tailor offer
for tenants and deliver premium profits to investors.
Residential segment of property business was growing rapidly in the last 2 years, customers
preferences were changing almost as fast as the prices. Reinhold Polska is building its knowledge
with help of the best residential market consultants and brokers, therefore the company is updating
market reports from them every quarter. Also to verify the information from consultants, projects are
being matched with comparable products available on local market.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The project is located in the district of Krzyki in Wroclaw, in its south part - Partynice. The surrounding
area is the most preferred place to live in Wroclaw as it has very good communication with the city
centre and with Kobierzyce commune, where the large FDI investments are placed. In the closest
surrounding of the property there are mainly new residential buildings. The plot is directly by Przyjazni
street which will be renovated and extended in 2007. There is a tram stop and taxi post directly by the
plot. The property is located ca. 100m from the Karkonoska Street which is a main street in Krzyki
district.
In the south part of Wroclaw there are many residential developments as this location is the most
preferred one. Prices in this area have gone up by over 100% in last 12 months. Most of offered
apartments are in low or medium standard. The quality of the product has not gone up along with the
prices. Our strategy is to offer quality apartments in buildings with attractive architecture for
reasonable price. We are expecting to sell apartments for 10,000 PLN/ sq m and parking lots for
22,000 PLN/sq m.
The closest project of high quality is “Zielona Etiuda” prepared by ATAL S.A. on Turniejowa Str. The
average price of 1 sq m of apartment exceeds 15,000 PLN net. This is over 50% more than our
planned selling price.
At Wisniowa Street is Rezydencja Lipowa, with average price of 1 sq m at 12,500 PLN net and 30,000
PLN net for underground parking. The project is prepared by AQUADUKT Klaudiusz Skrzydelski
Przedsiębiorstwo Instalacyjno-Budowlane and MG INVEST Marcin Gabryjelski. In January 2007 the
average price of 1 sqm of new built flats in Wroclaw amounted to 7,100 PLN. There is no competition
in near vicinity in case retail area that we are going to deliver to the market. The sale of retail area is
7,406 PLN/sq m net as combination of rent per sq m 48 PLN, 7% cap rate, and 90% of leased area.
The calculated rent 48 PLN/sq m includes also rent of 20 parking lots in retail building.
According to the real estate agents the average rent of modern office space in Wroclaw is 16 EUR per
sq m and 25 EUR for modern retail space. Our calculations for the projection were 12.5 EUR on
average for office and retail space.
37
The Prospectus of Reinhold Polska AB
Our assumption regarding yield rates are based on the market report prepared by experienced real
estate consultants. We assumed yield rate for this project at the level of 7.0%, according to
international agents there were transaction at level of 6.0-6.75% yield, depending on location.
Our property is located in a booming residential area and we are expecting demand for services like:
retail bank, chemists, grocers, newspaper agent, bakery on the ground level and hairdresser, stylist,
fitness, medical care on the upper levels.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
Reinhold Polska Project 2
Residential Development Project Villa Nova
Wroclaw, Terenowa street
Residential segment of property business was growing rapidly in the last 2 years, customers
preferences were changing almost as fast as the prices. Reinhold Polska is building its knowledge
with help of the best residential market consultants and brokers, therefore the company is updating
market reports from them every quarter. Also to verify the information from consultants, projects are
being matched with comparable products available on local market.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The project is located in the district of Krzyki in Wroclaw. The surrounding area is the most preferred
place to live in Wroclaw as it has very good communication with the city centre and with Kobierzyce
commune, where the large FDI investments are placed.
In the closest surrounding of the property there are mainly new residential buildings. The plot is
located 10-15 min drive from the city centre and 10 min drive from the shopping malls and leisure
centers.
The property is located ca. 500m from the Borowska Street which is a main street in Krzyki district.
The renovation and extension of the Borowska Street has started and is planned to be finished in
2007.
We aim in two groups of customers.
People with good social status especially middle management, directors and engineers working for
foreign companies in Kobierzyce commune. Those customers value the location and are looking for a
quality accommodation. We plan to sell 50-75% of apartments to this group of clients.
International and local investors, which are looking for opportunities to place their money. We are
looking to sell 25-50% of apartments to this group of clients.
In the south part of Wroclaw there are many residential developments as this location is the most
preferred one. Prices in this area have gone up by over 100% in last 12 months. Most of offered
apartments are in low or medium standard. The quality of the product has not gone up along with the
prices. Our strategy is to offer quality apartments in buildings with attractive architecture for
reasonable price.
There is no direct competition to this project.
38
The Prospectus of Reinhold Polska AB
The closest project of high quality is “Zielona Etiuda” prepared by ATAL S.A. on Turniejowa Str. The
average price of 1 sqm of apartment exceeds 15,000 PLN net. This is over 50% more than our
planned selling price.
At Wisniowa Street is Rezydencja Lipowa with average price of 1 sqm at 12,500 PLN net and 30,000
PLN net for underground parking. The project is prepared by AQUADUKT Klaudiusz Skrzydelski
Przedsiębiorstwo Instalacyjno-Budowlane and MG INVEST Marcin Gabryjelski.
In February 2007 the average price of 1 sqm of new built flats in Wroclaw amounted to 7,500 PLN.
It is planned that the whole area will be earmarked for sales on completion of development.
All the project profitability calculations have been based on the safe sales option.
The sale price of apartments is 8,500 PLN/sqm net + 25,000 PLN net for underground parking.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
Reinhold Polska Project 3
Office & Retail Development Project Reinhold-Lipinski Building
Warszawa, Jerozolimskie 63 Avenue
To valuate the income on the commercial projects Reinhold Polska is consulting the level of expected
rents and yield with major real estate agents. Also an in-house market research is prepared, analyzing
competitiveness with other projects. With the most recent analysis of rents, yield, prices and
preferences in different sectors of property market Reinhold Polska has ability to perfectly tailor offer
for tenants and deliver premium profits to investors.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The property is located in CBD. In the neighborhood there are many new office buildings, Marriott
Hotel and new shopping centre – Złote Tarasy. There is a tram and bus stop by the plot. Within 5 min
walk from the plot there is metro station and main railway station is across the street. To attract more
customers we plan to join adjacent properties (Lipiński and Lipinski Passage) and build a backyard
with catering services. Both properties will deliver high quality office and retail spaces just in the CBD.
Our assumption of th yield rates are based on the market reports prepared by international real
estates agents. We assumed yield rate for this project at the level of 6.0%. In the CBD we have
recently seen transactions at the level of 5.5% yield rate.
To be on the safety site we assume that the rent will be at the level of 22 EUR for offices, 65 EUR for
retail on the ground floor, 35 EUR for retail on the 1st floor. The recently open Shopping Center “Zlote
Tarasy” is offering office spaces for 24 EUR per sq m and 40-130 EUR per sq m for retail space. By
using safe figures we can easily fulfill expectation of our investors.
We predict to lease office space to companies with the good track record and retail area to high-class
boutiques, banks as well as up market restaurant and coffee shop in backyard space.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
39
The Prospectus of Reinhold Polska AB
Reinhold Polska Project 4
Silesia Atrium
Katowice, Korfantego street
To valuate the income on the commercial projects Reinhold Polska is consulting the level of expected
rents and yield with major real estate agents. Also an in-house market research is prepared, analyzing
competitiveness with other projects. With the most recent analysis of rents, yield, prices and
preferences in different sectors of property market Reinhold Polska has ability to perfectly tailor offer
for tenants and deliver premium profits to investors.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The plot is located in the district of Welnowiec in Katowice. The property is a former printing plant
„Cartotecnica„ and it will be a A-class office building. There are residential buildings and industrial
buildings in the neighborhood, which is 5 minutes by car and 10 minutes by public transport to the city
centre.
Katowice is the capital of the 2.7-million Silesian Agglomeration and its retail and service centre.
Companies which locate their seats in Katowice acquire employees also from other big cities of the
agglomeration: within a distance of less than 30 minutes by car there are Gliwice and Sosnowiec, with
over 200 thousand inhabitants each.
Rent asked on today’s market amount to ca. 19 EUR per sq m of A class office space. The prices may
be negotiated, even to a level lower 15%, depending on the surface area of leased space, duration of
the agreement (agreements for a definite period of time – at least for 3 years – are preferred), as well
as on the prestige and market position of the lessee. The Landlors offer a number of additional
services, e.g. the option of adapting the space to the Lessee’s needs, but they are usually subject to
additional payments. According to international real-estate agents, sales transactions in the Silesia
region are being based on yields between 6-7%, whereas Reinhold Polska based a calculation on
yield 7%.
B+ office spaces are being offered on the market for 13-14 EUR/sq m, B class 10 – 12 EUR/sq m. The
rent is, in most cases, not negotiable. The agreements are concluded for a definite or indefinite period
of time.
We predict to lease office area to the number of big companies which are interested to move to
Katowice. It will be companies from different business like: IT, Accountants services, Customer
services (call centers). We expect cooperation with City Hall to offer this project to potential investors.
We predict to pre-lease around 30% of surface before start construction process. The average
effective rent for sq m of useable area will be 14 EUR. Period of rent agreement will be not shorter
than 3 year time with banking guarantee for at least 3 months rent value. To the end of construction
period 90% of area will be rented.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
40
The Prospectus of Reinhold Polska AB
Reinhold Polska Project 5
Office, Retail & Residential Development Project Reinhold-LipinskiPassage
Warszawa, Jerozolimskie 61 Avenue
To valuate the income on the commercial projects Reinhold Polska is consulting the level of expected
rents and yield with major real estate agents. Also an in-house market research is prepared, analyzing
competitiveness with other projects. With the most recent analysis of rents, yield, prices and
preferences in different sectors of property market Reinhold Polska has ability to perfectly tailor offer
for tenants and deliver premium profits to investors.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The property is located in CBD. In the neighborhood there are many new office buildings, Marriott
Hotel and new shopping centre – Zlote Tarasy. There is a tram and bus stop by the plot. Within 5 min
walk from the plot there is metro station and main railway station is across the street. To attract more
customers we plan to join adjacent properties (Lipiński and Lipiński Passege) and build a backyard
with catering services. Both properties will deliver high quality office and retail spaces just in the CBD.
Our assumption regarding yield rates are based on the report researches prepared by the international
market consultants. We assumed yield rate for this project at the level of 6.75%, but recent market
transactions in the CBD were carried out at the level of 5.5%
To be on the safety site we assume that the rent will be at the level of 12 EUR for offices and 52 EUR
for retail spaces. The recently open Shopping Center “Zlote Tarasy” is offering office spaces for 24
EUR per sq m and 40-130 EUR per sq m for retail space. Market conditions will allow us to meet our
assumptions easily or even better ones.
We predict to lease office area to the number of small companies that need to be in very center of
Warsaw. We predict to lease retail area to lease the retail space to small boutique operators,
restaurants or coffee shops and banks.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
Reinhold Polska Project 6
Residential Development, Bastylia II
Katowice, Pulaskiego street
Residential segment of property business was growing rapidly in the last 2 years, customers
preferences were changing almost as fast as the prices. Reinhold Polska is building it’s knowledge
with help of the best residential market consultants and brokers, therefore the company is updating
market reports from them every quarter. Also to verify the information from consultants, projects are
being matched with comparable products available on local market.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design a building based on the budget, which is compared weekly against
the initial assumptions.
41
The Prospectus of Reinhold Polska AB
The project is located in most popular residential location, 2 km from the centre of Katowice. We are
looking to deliver minimum 11,000 sq m of quality apartments, with ca. 110 parking lots. Sales price
we based our calculation on amounted to 5,800 PLN/sq m net. Parking lots will be sold at the level
25,000 PLN per lot. Comparable project are being sold for 5,800-6,200 PLN/ sq m. Our sales strategy
was consulted by major real estate advisors and brokers.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
Reinhold Polska Project 7
Residential, Commercial Development Project Villa Park
Kraków, Grzegorzecka Street
Notice: Preliminary Purchase Agreement was signed. Final Agreement will be sign upon fulfillment of
all agreed precedent conditions.
Residential segment of property business was growing rapidly in the last 2 years, customers
preferences were changing almost as fast as the prices. Reinhold Polska is building its knowledge
with help of the best residential market consultants and brokers, therefore the company is updating
market reports from them every quarter. Also to verify the information from consultants, projects are
being matched with comparable products available on local market.
To valuate the income on the commercial projects Reinhold Polska is consulting the level of expected
rents and yield with major real estate agents. Also an in-house market research is prepared, analyzing
competitiveness with other projects. With the most recent analysis of rents, yield, prices and
preferences in different sectors of property market Reinhold Polska has ability to perfectly tailor offer
for tenants and deliver premium profits to investors.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The subject real estate is located at Grzegorzecka Street - Sródmiescie district of Krakow. This is the
oldest district in Krakow, famous for its historical architecture. The plot is located within 7 min. walking
distance from the Market Square – the heart of Krakow.
In the closest surrounding of the property there are mainly old residential buildings. There is very few
new residential investments because of low supply of suitable plots.
It presents an opportunity for higher-class customers for whom it is attractive to have a city-centre
located apartment with a high standard quality. Additionally it could be an excellent option for foreign
investors to place their money for a middle term profit due to the fantastic location of the real estate.
There are no new commercial premises available in the closest surroundings of the investment. We
plan to create a rental space for health-related services as there is University Hospital located near the
plot. All other options are also possible due to low supply of subject premises.
There is a lack of competitive projects as the plot is located in the heart of the city in a densely
populated area. The closest project of high quality is “Parkside” developed by Mayline on Kopernika 8
Str. The average price of 1 sq m of varies from 18,000 to 21,000 PLN/sq m net. The price for
underground parking place is 48,000 PLN net.
The second comparable project in the closest neighborhood is Krakowski Kazimierz Apartments on
Starowislna Str. The prices start from 16,000 PLN/sq m net. The top penthouse is valued 20,000
PLN/sq m net.
It is planned that the whole area will be earmarked for sales on completion of development. The
presales and prelease will begin at an initial stage after obtaining building permit of the project.
42
The Prospectus of Reinhold Polska AB
All the project profitability calculations have been based on the safe sales option.
It is estimated that the sales offer will be marketed after obtaining a valid construction permit. 100% of
the total space should be sold and lease before obtaining building occupation.
The sale price of apartments is 11,500 - 12,000 PLN/sq m net + 40,000 PLN net for underground
parking.
The sale of retail area is 11,400 PLN/sq m net as combination of rent per sq m 70 PLN, 7% cap rate,
and 95% of leased area. When preparing this calculation we had a number of meetings with local and
international real estate agents. On Krakow market sales transactions of retail space are based on
yields below 7%.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
Reinhold Polska Project 8
Zakopiańska Plaza
Kraków, Zakopiańska street
To valuate the income on the commercial projects Reinhold Polska is consulting the level of expected
rents and yield with major real estate agents. Also an in-house market research is prepared, analyzing
competitiveness with other projects. With the most recent analysis of rents, yield, prices and
preferences in different sectors of property market Reinhold Polska has ability to perfectly tailor offer
for tenants and deliver premium profits to investors.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The plot is located in the district of Lagiewniki in Kraków. The plot is located directly by the
Zakopiańska Street which is the main city road. There is a tram and bus stop in the vicinity. The
project is located 20 – 25 min from the city centre.
According to the major real estate agents prime rents for A class building reach level of 19 EUR/ sq m,
with a low vacancy rate. The B class buildings are being offered for ca. 14 EUR/ sq m. Service
charges not included. According to international real-estate agents, sales transactions in the Silesia
region are being based on yields between 6-7%, whereas Reinhold Polska based its calculation on
yield 7%.
We predict to lease office area to the number of international and major local companies which are
interested to move to Kraków. Most likely tenants are operating in businesses like: IT, Accountants
services and so one. On the ground floor we would like to locate banks, kiosks and coffee shop.
We predict to pre lease around 20 % of surface before start construction process. The average
effective rent for sq m of useable area will be 40 PLN/sq m for Office, 60 PLN/sq m for retail and 150
PLN/lot for parking. Period of rent agreement will be not shorter than 3 year time with banking
guarantee for at least 3 months rent value. We are looking to have 90% of office area and 95% of
retail leased out before end of construction period. It is assumed that one of the leading real estate
agencies will be chosen to lease office space and then find the best buyer after development, to which
the project will be sold.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
43
The Prospectus of Reinhold Polska AB
Reinhold Polska Project 9
Residential & Retail Development Project Nowy Swiat
Gliwice, Nowy Swiat street
Notice: Preliminary Purchase Agreement was signed. Final Agreement will be sign upon fulfillment of
all agreed precedent conditions.
Residential segment of property business was growing rapidly in the last 2 years, customers
preferences were changing almost as fast as the prices. Reinhold Polska is building it’s knowledge
with help of the best residential market consultants and brokers, therefore the company is updating
market reports from them every quarter. Also to verify the information from consultants, projects are
being matched with comparable products available on local market.
To valuate the income on the commercial projects Reinhold Polska is consulting the level of expected
rents and yield with major real estate agents. Also an in-house market research is prepared, analyzing
competitiveness with other projects. With the most recent analysis of rents, yield, prices and
preferences in different sectors of property market Reinhold Polska has ability to perfectly tailor offer
for tenants and deliver premium profits to investors.
There are mainly residential buildings in the neighborhood. The project is located in a very popular for
residential area. There is 5 minutes to the city centre by car and 8 minutes by public transport. To
maximize the profits Reinhold Polska is planning to deliver apartments and retail units on the plot.
Sales price we based our calculation on amounted to 5,500 PLN/sq m, net. Comparable project in
Slask are being sold for 5,800-6,200 PLN/ sq m. Our sales strategy was consulted by major real
estate advisors and brokers.
In retail units we are looking to lease them out for banks, boutique shops, kiosk, and services for 50
PLN/sq m which is a conservative approach.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
Reinhold Polska Project 10
Residential Development Project Karpacka
Wroclaw, Karpacka street
Notice: Purchase Contract is currently negotiated.
Residential segment of property business was growing rapidly in the last 2 years, customers
preferences were changing almost as fast as the prices. Reinhold Polska is building its knowledge
with help of the best residential market consultants and brokers, therefore the company is updating
market reports from them every quarter. Also to verify the information from consultants, projects are
being matched with comparable products available on local market.
Reinhold Polska is always on the safe side, having conservative look on costs. Therefore Reinhold
Polska is always using international companies with experienced cost consultants. The qualified
consultants are involved in investment process from first check up stage till last day of investment
looking out for the changes in cost. With this watch Reinhold Polska is able to avoid overbalance in
the future. For safety reasons we always set 10% contingency of the total development cost for
unexpected costs. Together with the consultants we set the budget during the acquisition of the
44
The Prospectus of Reinhold Polska AB
project. The architect will design the project based on the budget, which is compared weekly against
the initial assumptions.
The project is located in district of Muchobor in Wroclaw, which is a good residential location. There is
a number of new residential projects and the city authorities are strongly developing infrastructure in
the area.
Estimated sales price is 6,800 PLN/ sq m. Comparable projects are being sold in the area for 7,0007,300 net.
The interest rate we use for our calculation is based on central bank’s rates enlarged by margin. We
are in close cooperation with the main banks Poland and our calculation are based on recent initial
term sheet. Every project is being initially consulted with bank sector. We base our calculation on
WIBOR 1M rate (4.75% at present) plus 1.75% margin for the bank.
45
The Prospectus of Reinhold Polska AB
Profit forecast
Project
(in EUR)
Villa Nova
Silesia Atrium
Platinum
Lipinski Passagé
Villa Park
Gliwicie
Apartments
Karpacka
Profit 2008
Project
(in EUR)
Zakopianska
Bastylia II
Reinhold Lipinski
Profit 2009
46
Aqustion
Cost
Total costs
1,400,000
4,000,000
5,500,000 22,000,000
Gliwice
Wroclaw
Type of
Project
Residential
Office
Residential /
Commercial
Office/ Retail
Residential
Residential /
Retail
Residential
City
Krakow
Katowice
Warsaw
Type of
Project
Commercial
Residential
Office / Retail
Aqustion
Cost
Total costs
750,000
9,000,000
1,200,000 15,000,000
7,500,000 16,000,000
City
Wroclaw
Katowice
Wroclaw
Warsaw
Krakow
Profit
307,000
5,129,000
Finish
q2 ‘08
q4 ‘08
3,500,000
3,500,000
1,375,000
13,000,000
7,000,000
3,800,000
1,880,000
1,026,000
1,011,000
q2 ‘08
q3 ‘08
q4 ‘08
400,000
1,800,000
4,300,000
6,000,000
1,554,000
1,145,000
12,052,000
q4 ‘08
q4 ‘08
Profit
3,085,000
2,426,000
2,742,000
8,253,000
Finish
q2 ‘09
q1 ‘09
q2 ‘09
The Prospectus of Reinhold Polska AB
Auditors’ report on forecast
To the Board of Directors in Reinhold Polska AB (publ)
Corporate identity no 556706-3717
We have examined how the forecast set out on page 46 in Reinhold Polska AB’s prospectus dated
October (…) 2007 has been prepared.
The Board of Directors’ and the Managing Director’s responsibility
It is the Board of Directors’ and the Managing Director’s responsibility to prepare the forecast, together
with the material assumptions upon which is based, in accordance with the requirements of the
European Commission’s Regulation on Prospectuses 809/2004.
The auditors’ responsibility
It is our responsibility to provide an opinion required by Annex 1 item 13.2 of the European
Commission’s Regulation on Prospectuses 809/2004. We are not required to, nor do we, express an
opinion on the possibility of achievement of result or on the assumptions on which the preparation of
the forecast is based. We do not accept any responsibility for any financial information previously
reported on and used in the compilation of the forecast beyond that owed to those to whom any
reports on that financial information were addressed to us at the dates of their issue.
Work performed
We performed our work in accordance with FAR SRS Proposed Recommendation RevR 5
Examination of Prospectuses. Our work included an evaluation of the procedures undertaken by the
Board of Directors and the Managing Director in compiling the forecast and the accounting policies
used when compiling the forecast compared to those policies adopted by the company.
We planned and performed our work so as to obtain the information and explanations we considered
necessary in order to obtain reasonable assurance that the forecast has been compiled based on the
basis stated on pages 37 - 45.
Since the forecast and assumptions on which it is based relate to the future and may therefore be
affected by unforeseen events, we can express no opinion as to whether the actual results reported
will correspond to those shown in the forecast. Differences may prove to be material.
Opinion
It is our opinion that the forecast has been compiled on the basis stated on pages 37 - 45 and in
accordance with the accounting principles applied by the company.
Stockholm, October (…) 2007
Ernst & Young
Mikael Ikonen
Authorised auditor
47
The Prospectus of Reinhold Polska AB
SELECTED CONSOLIDATED FINANCIAL
INFORMATION AND OPERATING DATA
This selected financial information has been derived from financial statements compiled in accordance
with International Financial Reporting Standards (IFRS) and with International Financial Reporting
Interpretations Committee (IFRIC), the interpretations of financial standards approved by EU, as well
as the Swedish Accounting Standards Council’s recommendations. The financial statement as of 30
June 2007 has been prepared in accordance with the same accounting principles and methods of
calculations as the 2006 Annual Report.
This Prospectus contains audited consolidated financial statements of the Company and its
subsidiaries taken as a whole (the “Group”) as of and for the period 27 June - 31 December 2006 and
1 January - 30 June 2007 prepared in accordance with International Financial Reporting Standards
(“IFRS”), and incorporates by reference the audited consolidated financial statements of the Group as
of and for the year ended 31 December 2006.
Except data, recognized by Reinhold Polska AB and its Auditor, stated in Annex C: “Interim Financial
Statement for 2007” page 147 of this Prospectus, more detailed figures could not be readable for
potential investors. Providing limited time of operational activity of Reinhold Polska AB, as well as the
fact profits on projects shall occur starting form 2007, the Company is unable to include more detailed
figures and ratios (including profitability ratios) which will provide comparability of data.
Reinhold Polska AB has since the presentation of its last annual report established new offices in
Warsaw, Poznan and Krakow. Financing for this has been obtained from local banks such as PKO
and DNB. During the period the Company has started ten (10) projects in Poland with a total
investment cost of 226,810,013SEK. This has mainly been financed by internal funds and by obtaining
external loans amounting to 230,962,803SEK.
No government, legal or arbitration proceedings during a period covering previous 12 months have
had effects on the issuer’s group financial position or profitability.
48
The Prospectus of Reinhold Polska AB
Income statement data
The following table sets out the Company’s historical operating results in absolute amounts.
Consolidated income statement
Amounts in SEKk
Operationg income
Net sales
Other operating income
Operating expenses
Other external costs
Personnel costs
Depreciation and write-downs of tangible and intangible
assets
Other operating expenses
Operating profit / loss
Result from financial investments
Other interest income
Interest expense
Profit / loss after financial items
Tax on profit for the period
Net profit / loss for the period
Average number of shares
Earnings per Share
Jan-Jun 2007
Jun – Dec 2006
985
139
1,124
0
0
0
- 3,757
- 2,028
- 2,772
- 157
- 30
- 203
- 4,894
-4
0
- 2,933
5,082
-5
183
1,704
-2
- 1,231
- 69
114
0
- 1,231
7,000
0.02
7,000
- 0.18
49
The Prospectus of Reinhold Polska AB
Balance sheet data
The following table sets out the Company’s historical operating results in absolute amounts.
Consolidated balance sheet
Amounts in SEKk
Intangible assets
Tangible assets
Total fixed assets
2007-06-30
2006-12-31
115
410
525
0
16
16
Properties reported as current assets
Short term receivables
Cash and bank balances
Total current assets
188,538
265,555
65,123
519,216
8,376
422
310,466
319,264
Total assets
519,741
319,280
Amounts in SEKk
Equity
Share capital
Other additional capital
Other reserves
Retained earnings
Net profit/loss for the period
Total equity
Provisions
Long term liabilities
Current liabilities
Accrued expenses and deferred income
Total equity and liabilities
50
2007-06-30
2006-12-31
3,500
306,250
-185
-1,231
114
308,448
3,500
306,250
-4
-1,231
308,515
88
0
135,550
8,496
74,609
1,046
75,655
2,054
215
2,269
519,741
319,280
The Prospectus of Reinhold Polska AB
Changes in shareholder’s equity data
The following table sets out the Company’s historical operating results in absolute amounts.
Changes in Shareholders’ Equity Group
Amounts in SEKk
Opening balance
2006-06-27
Formation of the company
New share issue
Shareholder’s contribution
received
Translation differance
Net profit/loss for the period
Closing balance 2006-12-31
Amounts in SEKk
Opening balance
2007-01-01
Formation of the company
New share issue
Shareholder’s contribution
received
Translation differance
Net profi/loss for the period
Closing balance 2006-12-31
Share
capital
0
500
3,000
Other add
capital
0
Other
reserves
0
Retained
earnings
0
Total
equity
0
500
284,750
24,500
281,750
24,500
-4
-4
- 1,231
308,515
3,500
306,250
-4
- 1,231
- 1,231
Share
capital
3,500
Other add
capital
306,250
Other
reserves
-4
Retained
earnings
- 1,231
Total
equity
308,515
114
- 1,117
- 181
114
308,448
- 181
3,500
306,250
- 185
51
The Prospectus of Reinhold Polska AB
Cash flow statement data
The following table sets out the Company’s historical operating results in absolute amounts.
Consolidated cash flow statement
Amounts in SEKk
Operating profit/loss
Adjustments for non-cash items
Interest receivied
Interest paid
Income tax paid
Cash flow from operating activities before working capital
changes
Jan-Jun 2007
Jun – Dec 2006
- 4,834
118
243
- 64
- 69
- 2,933
4
1,704
-2
0
- 4,606
- 1,227
Changes in properties reported as current assets
Changes in receivables
Changes in liabilities
Cash flow after working capital changes
- 180,162
- 260,295
73,386
- 371,677
- 8,376
- 422
2,265
- 7,760
Purchase of equipment
Cash flow after investing activities
- 538
- 372,215
- 20
- 7,780
Formation of company
New share issue
Borrowings/repayment of debt
Shareholder's contribution received
Cash flow for the period
0
0
126,909
0
-245,306
500
284,750
8,496
24,500
310,466
310,467
- 38
65,123
0
0
310,466
Cash and cash equivalent at the beginning of the period
Exchange rate differences
Cash and cash equivalent at the end of the period
52
The Prospectus of Reinhold Polska AB
OPERATING AND FINANCIAL REVIEW AND
PROSPECTS
Overview
Reinhold Polska is engaged in real estate development in selected growth regions in Poland. The
Company’s main business concept is to identify real estate and land with ample value development
potential in the central and southern parts of Poland. The Company will primarily operate within the
segments of office, retail, logistic warehouses, and residential property. Reinhold has been active in
Poland since 2005 which means that valuable contacts have already been made. Reinhold’s extensive
experience coupled with the hiring of experienced Polish employees, the Company makes the
assessment that solid investment opportunities will be offered, and the usual middle channels can be
avoided. The Company intends to acquire and develop land and existing property in form of
residential, retail, warehouses and office properties. The common denominator for all investments is
that each of them should generate a return on equity of an average of more than 15 percent annually
with the present yield rate and after adjustments for forecasted development costs. The Company has
no revenues recorded so far.
Reinhold Polska development portfolio consists of residential, office and commercial projects. The
company intends to acquire and develop land and existing property in the form of residential, retail,
warehouse and office properties. As of 31 December 2006 and 30 June 2007 the company had no
revenues generated as all the projects are in progress.
The main activity of the companies in Poland is the construction and sale of residential real estate
(around 20 pct of the business), office development (app. 60 pct). All development projects are
conducted by Project companies under the Reinhold Polska Service’s management.
Material factors affecting the Company’s results of operations
General economic conditions in the real estate markets in which the company operates influence the
company’s business. See “Business” and “Risk Factors.” Political and regulatory decisions and
developments also affect supply and demand in the real property markets. In addition, the following
factors have affected and are expected to continue to affect the results of the company’s operations:
Ability to acquire land and/or buildings for development at reasonable prices
The Group’s business model depends on its continuing ability to develop and/or acquire commercial
and residential properties in Poland with the potential for capital growth and/or investment returns on
equity of 15 per cent or more. Competition for such properties is intense at present, and the Group
expects competition to further intensify in the markets in which it operates. As a result, the Group may
not be able to find suitable properties, which could have a material adverse effect on the Group’s
business, financial condition, results of operations or prospects.
Even if the Group is able to develop projects and acquire property portfolios compatible with its
strategy, such developments and acquisitions could prove unsuccessful. The assumptions the Group
makes when developing and acquiring its property portfolio may prove partly or entirely inaccurate.
Inaccurate assumptions could adversely affect the Group’s business, financial condition, results of
operations or prospects.
Ability to develop properties for sale and investment at reasonable costs
The Group’s business, results of operations, financial condition and prospects could be materially
adversely affected if operating and other expenses increase without a corresponding increase in
revenues. Factors which could increase operating and other costs include, among others:
• changes in statutory laws, regulations or government policies (including increases in property taxes
and other statutory charges), which increase the cost of compliance with such laws, regulations or
policies;
- increases in insurance premiums; and
53
The Prospectus of Reinhold Polska AB
-
defects affecting the properties which need to be rectified, leading to unforeseen capital
expenditure.
Increases in construction costs
The Group relies on subcontractors for the construction of its buildings. The Group recognizes that, for
several years, there has been a trend of increasing construction costs in Poland. This trend could be
heightened by stricter regulation relating to environmental protection. The Group is subject to the risk
of being unable to pass along the increase in construction costs in the form of higher sale prices.
Interest rates
In general, demand for real estate tends to increase when interest rates are low, which can lead to
higher valuations of the Company’s existing portfolio and higher prices charged by the Group.
Conversely, increasing interest rates generally affect the valuation of the Company’s properties
adversely, which can result in the Group being required to recognize a valuation adjustment that
negatively affects its income. Increases in interest rates also increase the Company’s refinancing
costs.
54
The Prospectus of Reinhold Polska AB
Significant accounting policies
The financial statement was drawn up in accordance with the accounting principles set forth by the
Annual Reports Act, the International Financial Reporting Standards (IFRS). The group’s consolidated
statement was drawn up in accordance with the laws of Sweden and recommendations of the
Chartered Accountants’ Association (Sw. Redovisningsrådet) RR 30:05 “Supplementary reporting
principles for groups of companies”.
The statement utilizes a purchase-value approach. This means that the group’s equity includes the
equity of the parent company and such equity components of the subsidiaries which appeared in the
period of their relation to the group. The group’s consolidated statement incorporates balance sheets
of all subsidiaries. A subsidiary is a company in which direct or indirect interest of the parent company
exceeds 50% of votes at the shareholders’ meeting.
Revenue recognition
Revenue is reported when substantial risks and rewards in connection with the company’s goods are
transferred to the buyer and the company is likely to generate economic rewards.
Taxation
Taxation of the period’s result comprises current and deferred taxation. Current taxation refers to the
tax amount to be paid or received as a refund for a given financial year. It also includes adjustments of
current taxation resulting from changes concerning previous periods. Deferred taxation refers to
reduction of future taxes due to deduction of losses, as well as periodical differences. In the current
year, the company did not activate the deferred tax with regard to deduction of loss.
Tangible fixed assets
Equipment (movable property) is assessed by the purchase value less accrued depreciation and
revaluation, if any. Depreciation of equipment (movable property) is disclosed as cost in such a way
that the asset’s value is depreciated linearly over its estimated useful life.
Operating Premises
The value of operating premises is estimated in accordance with the principles applicable to
inventories. This means that the value of the premises is reported at the lower of its purchase value or
net sale value
Receivables
Receivables are reported at the estimated amount to be received.
Loan Costs
Neither the group nor the parent company activates interest in the purchase value of assets. It is, in
turn, reported as the cost of the period in which it appeared.
Selected financial information
This selected financial information has been derived from financial statements compiled in accordance
with International Financial Reporting Standards (IFRS) and with International Financial Reporting
Interpretations Committee (IFRIC), the interpretations of financial standards approved by EU, as well
as the Swedish Accounting Standards Council’s recommendations. The financial statement as of 30
June 2007 has been prepared in accordance with the same accounting principles and methods of
calculations as the 2006 Annual Report.
55
The Prospectus of Reinhold Polska AB
Income statement data
The following table sets out the Company’s historical operating results in absolute amounts.
Amounts in SEKk
Operationg income
Net sales
Other operating income
Operating expenses
Other external costs
Personnel costs
Depreciation and write-downs of tangible and intangible
assets
Other operating expenses
Operating profit / loss
Result from financial investments
Other interest income
Interest expense
Profit / loss after financial items
Tax on profit for the period
Net profit / loss for the period
56
Jan-Jun 2007
Jun – Dec 2006
985
139
1,124
0
0
0
- 3,757
- 2,028
- 2,772
- 157
- 30
- 203
- 4,894
-4
0
- 2,933
5,082
-5
183
1,704
-2
- 1,231
- 69
114
0
- 1,231
The Prospectus of Reinhold Polska AB
Description of selected income statement line items
The parties are hereby reminded that financial data cannot be directly comparable as the company
hasn’t fully operated in 2006 and as the data report to different time period of the year.
Revenues
The company started its activity in 2006 and by the end of 2006 no sales have been reported. For the
first six months of 2007 the company has generated SEKk 985 net sales which resulted from under
lease of office floor space and sale of advertising. The company didn’t generate any revenue from its
core business as all the projects are in progress and none of them was finished as of 30 June 2007.
Costs
Other external costs grew by 36% by the end of 1H2007. Other external costs consists of all
maintenance costs and other overhead expenses.
In 2006 the company had one employee, the total personnel costs of SEKk 157 concern one person,
whereof wages salaries and other benefits accounted for SEKk 123 and social security costs
accounted SEKk 34. Growth of personnel costs in 2007 resulted from growing employment in the
company connected with company development in Poland and openings of Polish companies. The
employment as of 30 June 2007 grew by 900% in comparison to 31 December 2006.
Result on financial activities
Interest income in 2006 and in first six months of 2007 represented interests received from banks.
Interest expense in 2006 and in first six months of 2007 resulted from interests from bank loans.
Tax on profit for the period
Reinhold Polska Services and all special purpose vehicles (SPV) use 19% tax rate. Only one SPV
generated profit as of 30 June 2007. Tax liabilities and tax receivables are valued in estimated
amounts due.
57
The Prospectus of Reinhold Polska AB
Cash flow statement data
The following table sets out the Company’s historical operating results in absolute amounts.
Amounts in SEKk
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Cash flow for the period
Cash and cash equivalent at the end of the period
58
Jan-Jun 2007
Jun – Dec 2006
- 371,677
- 7,760
- 538
- 20
126,909
318,246
- 245,306
310,466
65,123
310,466
The Prospectus of Reinhold Polska AB
Description of selected cash flow statement data
The parties are hereby reminded that financial data cannot be directly comparable as the company
hasn’t fully operated in 2006 and as the data report to different time period of the year.
Cash flow from operating activities
Cash flow from operating activities as of 31 December 2006 accounted for SEKk -7,760. Cash flow
from operating activities as of 30 June 2007 accounted for SEKk -371,677. The most important
influence on cash flow from operating activities in 2006 had the operating loss accounted for SEKk 2,933 and changes in properties reported as current assets accounted for SEKk -8,376. The most
important impact on cash flow from operating activities in 2007 had operating loss accounted for SEKk
-4,834, changes in properties reported as current assets accounted for SEKk-180,162 and changes in
receivables accounted for SEKk -260,295. Changes in properties reported as current assets resulted
from new projects development as the investments in progress are booked as inventory.
Cash flow from investing activities
Cash flow from investing activities in 2006 accounted for SEKk -20 and resulted from the purchase of
equipment. Cash flow from investing activities in 2007 accounted for SEKk -538 and also resulted
from the purchase of equipment.
Cash flow from financing activities
Cash flow from financing activities at the end of 2006 accounted for SEKk 318,246 and consisted from
new share issue accounted for SEKk 284,750, shareholders contribution accounted for SEKk 24,500,
borrowings of debt in the amount of SEKk 8,496 and the capital on the formation of the company in
the amount of SEKk 500. Cash flow from financing activities for the first six months of 2007 amounted
for SEKk 126,909 and resulted from borrowings of debt.
Key financial ratios and data
Amounts in SEKk
Jan-Jun 2007
Jun – Dec 2006
- 4,860
- 2,929
- 4,894
- 2,933
- 538
- 20
Amounts in SEKk
Average number of shares
Earnings per Share
Dividends per Share
Jan-Jun 2007
Jun – Dec 2006
7,000
7,000
0.02
- 0.18
0.00
0.00
EBITDA
EBIT
Total investments
Share related data
Market risk
The Company’s financial risk management focuses on four major types of risks: price risk, credit risk,
and interest rate risk.
Foreign exchange risk
The currency risk is the risk that changes in exchange rates will affect the consolidated income
statement, balance sheet and cash flow statement. To reduce currency risks Reinhold raise
investment credits in the Polish companies in local currency. As a guarantee for these credits the
59
The Prospectus of Reinhold Polska AB
Parent company are depositing the equity invested in Sweden. Hereby Reinhold are not exposed to
any currency risk, since the investment and the credit is in same currency
Price risk
The Group is exposed to property price and property rentals risk. Even though the Group’s activities
are focused on one geographical area — Poland — such activities are spread over several business
lines (residences, offices, retail, and logistics warehouses) and one country that undergo one specific
business cycle.
Credit risk
Reinhold Polska finances its projects through two sources: 25% from equity and 75% from bank
financing. The equity part is transfer directly from Reinhold Polska AB to Polish SPVs. The investment
credits are taken by Polish SPVs from Polish Banks only PLN so there is no exchange rate risk here.
To avoid exchange rate risk as Reinhold Polska AB has all the equity in SEK, the equity is put to the
all SPVs in way of credits form Danske Bank taken by each Polish SPV and granted in SEK deposit of
110 % credit value in PLN by Reinhold Polska AB. This structure covers the exchange rate risk
concerning equity participation in polish SPVs. However the company has significant financial risk
concerning interest rates of the credit facilities. This risk is generally covered by assuming increase of
future interest rate and contingency.
Interest rate risk
The interest-rate risk is the risk that changes in interest rates will affect net interest items and cash
flow. The projects in Poland are partly financed by interest bearing borrowings, whereby Reinhold is
exposed to an interest-rate risk.
Recent developments
During the first six months of 2007 Reinhold has started 6 projects in Poland and next 4 are in
preparation stadium. All projects of Reinhold Polska have been described in details in “Profit
Predictions”.
The short summary of each project is presented below.
No
Name of the
project
Localization
P/1
Platinum
Wroclaw
P/2
Villa Nova
Wroclaw
60
Description
The project will offer 7,000 square meters of usable residential
area and around 3,000 square meters of commercial area in
two separate buildings. A parking space will be provided in an
underground garage. The land is located in a booming
residential area. In this area many new residential buildings are
developed and a couple of projects are under construction. In
the vicinity there will be an office business park.
The project will offer 1,850 square meters of usable floor area
and 43 parking places in an underground garage. The project
will be made up of two high standard buildings. The plot of land
is located in a booming residential area. In the neighborhood
we will find many new residential buildings and construction
projects. A campus of Medical Academy (attended by
numerous foreign students) is located in the vicinity. One of the
largest Aqua Parks of Poland is at a driving distance of 10
minutes from the project location. A new main road and tram
connection will be built in 2007-2008.
The Prospectus of Reinhold Polska AB
No
Name of the
project
Localization
P/3
Lipiński
Warsaw
P/4
Silesia
Atrium
Katowice
P/5
Lipiński
Passage
Warsaw
P/8
Zakopianska
Plaza
Krakow
Description
The building has in total 3,500 square meters of usable space.
Ground floor and first floor is designed for retail and the rest
four levels for exclusive office space. The property is located in
CBD. In the neighborhood there are many new office buildings,
Marriott Hotel and new shopping centre – Zlote Tarasy. There is
a tram and bus stop by the plot. Within 5 min walk from the plot
there is metro station and main railway station is across the
street.
The 18,000 square meters of the former printing company,
Cartotecnica will be an A-class office building. The after
renovation there will be approximately 13,800 square meters in
two and four level buildings and 315 parking places on a two
level car park. There will be possibility to build new building
replaced one existing building.
The building has in total 2,400 square meters of usable area on
six levels. The plot is located in CBD next to our other project Lipiński. In the neighborhood there are many new office
buildings and new shopping centre – Zlote Tarasy. There is a
tram and bus stop by the plot. Within five minutes of walking
there is metro station and main railway station is across the
street.
Total surface of 7,181 square meters is a great location for
retail and office buildings. The project assume a six level
building with a underground parking. The project is located in
the south part of Kraków by the Zakopiańska Street, the main
road leading to Zakopane. The plot is located close to the well
established retail area. You can find companies like Carrefour
and Castorama there. On the other side of the street there will
be another office and retail building.
Projects in preparation phase:
No
Name of the
project
Localization
P/6
Bastylia II
Katowice
P/7
Villa Park
Kraków
P/9
Nowy Swiat
Gliwice
P/10
Karpacka
Wroclaw
Description
The plot is located in Katowice. This is a residential building
with a total usable surface of around 10,500 square meters.
There are residential buildings, schools, medical center and a
post office in the neighborhood.
This residential building has 1,650 square meters of usable
area. The building will have five levels and one underground
parking with 13 parking lots. The plot is located in a vanity of
square and Galleria Kazimierz.
This is a residential building with total usable surface of around
5,000 square meters. The building will have ten levels and 50
parking lots. A big shopping center, Silesia City Center, will be
in nearby vicinity.
The plot is located in the district of Muchobor Wielki in
Wroclaw, a good residential location with convenient
communication with city centre. A travel to the old square takes
only 15 minutes by car and ca 20 minutes by public
transportation. We plan to deliver 4,000 sq meters of modern
residential space with 40 parking lots.
61
The Prospectus of Reinhold Polska AB
BUSINESS
General overview
Reinhold Polska is a real estate company which conducts real estate development in selected growth
regions in Poland. The Company’s main business concept is to identify real estate and land with
ample value development potential in the central and southern parts of Poland. The Company will
primarily operate within the segments of office, retail, logistic warehouses, and residential property.
Reinhold has been active in Poland since 2005 which means that valuable contacts have already
been made. Reinhold’s extensive experience coupled with the hiring of experienced Polish
employees, the Company makes the assessment that solid investment opportunities will be offered,
and the usual middle channels can be avoided. The Company intends to acquire and develop land
and existing property in form of residential, retail, warehouses and office properties. The common
denominator for all investments is that each of them should generate a return on equity of an average
of more than 15 percent annually with the present yield rate and after adjustments for forecasted
development costs. The Company has no revenues recorded so far.
Market overview
The real estate market is controlled to a significant extent by macroeconomic factors such as GDP
growth, consumer behavior, employment, disposable income of purchasers, interest rates and
availability of credit. Interest rates are the key factor because they drive the real property company’s
refinancing costs. Key factors influencing market segments such as office, logistics or residential differ
substantially. The real estate market for office or logistics premises is much more dependent on
economic trends then the market for residential real property. The factors driving attractiveness of a
property are legal requirements, tenant diversity, the condition of the property and, last but not least,
the property’s location.
The return on real property investment – the yield – can be described as the ratio between a
property’s net income divided by its market value and has three main components: the risk-free rate, a
risk premium and an individual property-related premium. The first two components are driven by
macroeconomic factors while the third differs significantly depending on the type and location of the
property.
Economic situation in Poland
Real GDP growth maintains a fast pace in 1H 2007 after a 5.8 percent rise in 2006 and a sluggish rise
of 3.2 percent in 2005. The GDP of Poland is expected to increase by 6.7 percent in 2007 and 5.6
percent in 2008. A significant improvement on the labor market in 2006 and 1H 2007 is represented by
two figures. The unemployment rate fell from 17.6 percent in December 2005 to 14.9 percent in
December 2006 and 12.2 percent in July 2007. This was mainly influenced by the rapid economic
growth, but nonetheless immigration of a more mobile part of the work force to several EU-15
countries (Germany, Great Britain, Ireland) must be taken into consideration. Real wages were rising
in 2006 and continue to rise in 1H 2007. Consumer price inflation in 2006 was only 1 percent but it is
expected to rise in 2007 due to rising wages and tightening in the labor market.
62
The Prospectus of Reinhold Polska AB
Key macroeconomic indicators
20,0%
18,0%
16,0%
17,6%
14,0%
14,9%
12,0%
10,0%
11,3%
8,0%
6,7%
6,0%
4,0%
3,5%
2,0%
2,1%
1,0%
unemployment rate
9,9%
5,6%
5,8%
2,3%
2,3%
2007*
2008*
real GPD growth
consumer price inflation
0,0%
2005
2006
2005
3.5%
1.4%
6,385
17.6%
2.1%
real GDP growth in Poland
real GDP growth in EURO-zone
GDP per capita in Poland (in €)
unemployment rate in Poland
consumer price inflation in Poland
* estimates
2006
5.8%
2.6%
7,048
14.9%
1.0%
2007*
6.7%
2.1%
7,531
11.3%
2.3%
2008*
5.6%
2.2%
7,929
9.9%
2.3%
Key figures characterizing the situation in major cities in Poland
population (in thousands, 3Q 2006)
entities of the national economy
out of which with foreign capital
Warszawa
1,697
301,370
16,528
Poznan
568
89,019
2,416
Krakow
758
104,814
2,018
Wroclaw
636
92,454
2,491
Katowice
317
42,720
919
Real estate market in Poland in general
With an increasing demand from tenants and stabilizing rental levels in all segments, the Polish real
estate market is maturing. The market is becoming increasingly diverse and liquid, with investors of
more nationalities represented, a lower concentration of activity recorded in the capital city, and an
increasing amount of transactions across all segments.
From 1998 until the end of 1Q2007 over 220 investment transactions have been concluded in Poland
in non-residential real estate sector. 2006 was a record year with investment volume reaching €4.79
billion, exceeding the 2005 volume by over 50 percent. 1Q 2007 registered a slower activity with
transactions amounting to €380 million, 55.7 percent less than in 1Q 2006, while more transactions
were concluded outside Warsaw (38 percent in 1Q 2007 in comparison to 60 percent in 1Q 2006).
Cumulative transactions in non-residential real estate sectors have been growing systematically since
1997. Until 2004 the majority of transactions were concluded in the office sector, since then the fast
growing retail sector is on the first place. Average yields have fallen from 6.00 percent in 2005 to 5.50
percent in 2006. Although yields have kept falling in the recent years and they may still shrink, the
scale of this downwards movement should not be large.
63
The Prospectus of Reinhold Polska AB
Chart 1. Cumulative investment transactions by sector in non-residential real estate, 2006
4% 1%
offices
retail
42%
warehouses
53%
other
Chart 2. Theoretical prime net investment yields
12,00%
11,00%
11,00%
10,00%
10,00%
9,00%
9,50%
8,75%
8,50%
7,63%
8,00%
7,00%
8,00%
7,00%
6,00%
6,25%
6,00%
5,88%
5,50%
5,00%
May 2003
retail
Retail
Office
Industrial
February 2005
February 2006
office
May 2003
10.00%
9.50%
11.00%
Feb 2005
8.25-8.75%
7.75-8.25%
8.50-9.00%
February 2007
industrial
Feb 2006
6.25%
5.75-6.00%
7.50-7.75%
Feb 2007
6.00%
5.50%
7.00%
Office market
The Polish office market is mainly concentrated on Warsaw. At the end of 2006, modern office area in
Warsaw reached 2,56 million square meters, with the majority of space located in non-central
locations. 21 new office buildings were added to the Warsaw office market in 2006, four of which were
added to the city center, six to the upper south (Mokotow) and the remainder to the other non central
locations. This constitutes an enormous upsurge of 55 % from 120,000 sq m of new office space in
2005 to 187,000 sq m in 2006. Letting activity was also high in Warsaw. Take-up increased by 10.5%
to 412,000 sq m in 2006 from 373,000 sq m in 2005. This growth was mainly caused by new
transactions involving foreign investors and tenants renegotiating their leases. Total vacancy rate for
modern office space in Warsaw continued to decrease from 8.2% at the end of 2005 to 5.4% by
December 2006. City center prime (headline) rents reached levels from EUR 20 to EUR 24 per square
meter per month. In non-central locations, prime headline rents reached approximately EUR 14 to
EUR 16 per square meter per month. Rents are expected to increase in short time period due to a
scheduled office supply in 2008. A significant discrepancy is observed on the office market all over
Poland. The third largest city in Poland, Krakow, offers round 660,000 sq m of office spaces. The next
places occupy Silesia with an offer of 350,000 sq m and Wroclaw with 250,000 sq m office spaces.
64
The Prospectus of Reinhold Polska AB
Lodz is the least developed city in that sector, offering only 90,000 sq m and rents levels only of EUR
11 – 14 pre sq m per month.
Prime yield in the past year (2Q 2006 – 1Q 2007) in office properties market amounted to 5.50 percent
and the average price per sq m to €2,379.
Retail market
At the end of 1Q 2007 over 1 million sq m of modern retail space was located in 30 shopping centers.
Investment volume in the retail sector amounted in 2006 for €3,5 billion, 50 percent more than a year
before. Strong demand from the tenants has driven the vacancy rate to shrink in all the shopping
centers except for some shopping centers undergoing rapid tenant turnover. Although rents have
remained stable for the last two years, an upward pressure on rents remains, especially in the best
performing shopping centers in Warsaw.
Total modern retail space in Warsaw amounts approximately 1,33 million square meters at present, of
which approximately 1,1 million square meters falls on shopping centers space. In 2007 Warsaw
remains the most developed and one of the most expensive retail locations in Poland comprising
“Arkadia” 103,000 sq m, “Galeria Mokotow” 62,000 sq m and recently opened “Zlote Tarasy” 63,400
sq m. Rental levels in Warsaw remains still the most expensive in Poland and are between €45 and
€50 per square meter per month. Spaces located on prime retail locations in Warsaw amounted to
approximately €55 per square meter per month. Retail market in other major cities in Poland is not as
developed as in Warsaw. Krakow with total retail space of 328,000 sq m, has seen substantial growth
in demand in recent years. Rental levels remain stable at the level of €32-35 per sq m per month.
Krakow’s old market district has rental levels of €60-100 per sq m per month due to very limited supply
of rental space. Retail markets in Lodz and Wroclaw can be compared to Krakow’s retail market and
indicate the same tendencies. Within the Silesia conurbation customers have a retail area of
approximately 672,000 sq m. In comparison to other cities except Warsaw rental levels stand at the
same level.
Prime yield in the past year (2Q 2006 – 1Q 2007) in retail properties market amounted to 6.00 percent
and the average price per sq m to €2,241. However the retail market in Warsaw and other major cities
has reached saturation, development of other retail formats like factory outlets or retail parks is now
the mail interest of developers and investors.
Industrial and warehouse properties market
Key factors driving the warehouse real estate market in the recent years were upgrading of the road
infrastructure, central locations in Europe and fast growing, absorptive consumer market in Poland.
The total stock of modern warehouse space in Poland amounted to nearly 2,72 million sq m at the end
of Q1 2007. 174,000 sq m were added in Q1 2007 and 753,000 sq m were in construction. In
response to high demand in regional markets, the majority of new projects were being developed in
the regions outside Warsaw, were 46 percent of all modern warehouse space is currently located. At
the end of 1Q 2007 the total vacancy rate amounted for 5.69 percent, 2.25 percentage points lower
compared to the previous quarter. Prime yield in the past year (2Q 2006 – 1Q 2007) in industrial and
warehouse properties market amounted to 6.50 percent and the average price per sq m to €758.
Investment volume in 2006 amounted to €197 million.
sector
warehouse parks in Warsaw
(within a radius of 20 km)
logistics parks around Warsaw
(between 20 km and 100 km from Warsaw)
logistics parks in Poland
(outside a radius of 100 km from Warsaw)
total / average
* at the end of 1Q 2007
total space
(sq m)*
vacancy rate
(percent)*
675,000
space in
construction
(sq m)*
117,000
777,000
63,000
9.32
1,265,000
573,000
5.29
2,717,000
753,000
5.69
2.51
65
The Prospectus of Reinhold Polska AB
Residential market
The housing sector has become very attractive compared with other real estate sectors in Poland in
the last years. With a housing shortage estimated at approximately 1,5 million units at the end of 2006,
Poland is and shall remain in the coming years among the most interesting residential markets in
Europe. The deep imbalance between supply and demand for housing resulted in rising levels both of
residential property production and residential property pricing. It is nonetheless to be noted that the
markets vary significantly among major cities. Housing construction activity is concentrated in largest
Polish cities. In 2005 approximately 32 percent of new housing units were located in Warsaw and the
next 29% in Krakow, Poznan, Wroclaw, the Tri-City and Lodz. The residential real estate development
business is highly fragmented in Poland, but trends towards consolidation are noticeable. The few
developers taking on projects in more then one city are mainly multi-national corporations or Polish
companies listed on the Warsaw Stock Exchange.
The total supply of housing units in major cities has been maintained at a steady level in 2006 in
comparison with 2005, while a significant increase in demand has been recorded. Consequently a
sharp increase in prices has been noticed. Other factors driving raising prices are increase in
construction costs and land prices designated for residential developments.
Average net prices in major cities in 4Q 2006
Price and Change
average net price (PLN/sq m)
price increase comparing to 4Q 2005
Warsaw
8,200
77%
Poznan
4,700
45%
Wroclaw
6,000
93%
Gdansk
5,800
66%
Krakow
7,300
79%
Warsaw
Poland’s capital city Warsaw with more than 2,7 million inhabitants in the metropolitan area enjoys the
lowest unemployment rate and the highest average salary. Warsaw demographics, with almost 50
percent of people under 40 years of age, is the main support for rising demand. People born in the
second baby boom are entering the work market and a new baby boom is expected to have its peak in
the years 2010-2012 witch should cause an even higher demand for larger flats and single-family
houses. The scale of migration by young people to Warsaw which was high in the past ten years is not
going to decline also in the coming years. In 2006 the most dynamic increase in demand has been
reported among buyers who either purchase housing units speculatively for reselling or renting them.
This group of buyers is dominated by foreign investment funds and private buyers of pools of units
from the UK, Ireland, Spain and Israel.
In 1H 2006 construction of approximately 6,200 units was begun in Warsaw, slightly less than in 1H
2005, but significantly more than in the crisis year 2003 when 5,200 units were started. The large
supply-demand gap in Warsaw resulted in a steep price increase. The average nominal asking price
rose by 25 percent between January and October 2006 and exceeded 6,000 PLN/sq m. Presently the
two largest developers in Warsaw have a combined market share of about 16 percent and new small
development companies are still entering the local market. The total market value of new units offered
for sale in 2006-2007 in the Warsaw metropolitan area is estimated at 14,0 billion PLN.
The supply-demand gap mentioned above results in remaining high profitability of development
activity in Warsaw despite the rise in land prices and increase of construction costs. In the coming
year a substantial increase in supply of residential property is expected, which may result in decrease
in profitability that should nonetheless remain at fairly attractive levels. In typical projects estimated
gross margins are at the level of 25-35 percent while return on equity is in the range of 150-250
percent.
Krakow
Krakow’s position as an international tourist destination and an academic center has had a significant
positive impact on the city’s economic condition for years. A gap of approximately 50,000 housing
units exists in the city between the number of households (307,000) and housing units (260,000). In
addition to this discrepancy, a qualitative similar to other Polish major cities deficit exists due to years
of deferred maintenance, lack of modernization and poor construction quality. Only 48 percent of
potential buyers in Krakow are looking to buy for their own use, while 27 percent are interested in
buying housing units for investment or rental income. The prices of new housing units in Krakow
started to rise in 2005 and continued to rise steeply in 2006. Just as it is in the case of Warsaw, prices
are expected to keep rising, however at a slower pace.
66
The Prospectus of Reinhold Polska AB
Lodz
The second largest city in Poland by population, situated in the center of the country, has a relatively
large housing stock relative to its declining population. For a few years, negative net migration and
negative birthrate were registered, partly due to close proximity of Warsaw, poorer economic
prospects of inhabitants and higher unemployment rate. These factors resulted in a considerable and
steadily growing gap between Lodz and other major Polish cities in terms of housing development.
Four major development companies control over 50 percent of the market and the top ten account for
87.5 percent of total housing production. Given the current low level of production, around 1,000 units
in 2006, demand clearly outpaces supply. In 2006 prices have been therefore increasingly faster than
in Warsaw. Most probably residential development market in Lodz has recovered from stagnation
which lasted longer than in other major Polish cities. Proactive policy of the local government in
attracting new investors, upgraded transportation infrastructure and improving economic situation of
the inhabitants should result in the coming years in growing demand and push the housing production
to a level of approximately 2,000 units per year.
Poznan
Poznan’s favorable location halfway between Warsaw and Berlin is mirrored in its second place
among Polish cities in terms of foreign investments per capita. The city is also the second largest
banking center in the country with headquarters of ten banks and many branches. Despite Poznan’s
strong economic condition, the residential real estate market remained relatively underdeveloped with
prices changing very little. The value of new multi-family construction market is estimated to reach the
level of 0,8 billion PLN in 2007. During the last years 2,900 units have been built yearly in average.
Even if this number rises, it will take up to ten years to cover the city’s housing shortage estimated at
approximately 30,000 units. Although Poznan remains a poorly-developed market with limited
dynamics, it offers a relatively high return on investment in rental units in comparison to other major
Polish cities. Prices rising slowly but steadily since 2004 and very good economic position of the city
and its residents should result in a significant revival of the market in the coming years.
Wroclaw
Wroclaw’s location at one of the most important transport corridors in Europe connecting Dresden with
Krakow and the Ukraine and the its local governments proactive policy towards investors resulted in a
significant improvement of economic situation of the city’s inhabitants in the past two years. The
housing shortage of approximately 44,000 units is not to be covered shortly as 3,300 new units are
built annually. With demand clearly outpacing supply, new residents immigrating to the city from
outlying towns to take attractive jobs and sharply rising prices, the residential real estate market in
Wroclaw is in present and will be in the coming years very much to the advantage of developers.
On the residential market the situation has stabilized and the prices stopped rising. The most
expensive cities are still Warsaw and Krakow with an average price of approximately 8,000 PLN per
sq m. People, who want to buy an apartment in Wroclaw will have to pay over 7,200 PLN per sq m.
Katowice among big cities in Poland are rather a not expensive location with only 4,800 PLN per sq m.
The residential market is still affected by huge demand and comparable small supply but prices
reached their top levels and will stay steady for another few months.
Information sources
The information and data about the real estate market in Poland are gathered from numerous reports
available to the public, from statistical data published by Central Statistical Office of Poland, Eurostat,
National Bank of Poland and from mass media. Some of the forecasts have been prepared by the
issuer partly on the basis of data available to the public. The issuer doesn’t assure that any of the data
or forecasts are exact or accurate.
List of reports and publications serving as data and information sources:
- Poland Commercial Property Market, Spring 2007, King Sturge
- Poland Commercial market review 2007, Knight Frank
- Poland Residential market review 2007, Knight Frank
- Accumulator – investment market in Poland, Spring 2007, CB Richard Ellis
- Prime Pitch – shopping centre market in Poland, 1st Half 2006, CB Richard Ellis
- Big Box Poland – industrial market in Poland, First Quarter 2007, CB Richard Ellis
- Living Residential Warsaw, Beginning 2007, CB Richard Ellis
67
The Prospectus of Reinhold Polska AB
-
68
Rynek Nieruchomosci Raport 2006, Polskie miasta Warszawa, Krakow, Katowice, Gdansk,
Poznan, Ober Haus
Residential Markets in Poland – Warsaw, Krakow, Lodz, Poznan, The Tri-City, Wroclaw,
2006/2007, REAS
The Prospectus of Reinhold Polska AB
Principal activities of Reinhold Polska AB
The main activity of the companies in Poland is the construction and sale of residential real estate
(around 20 pct of the business), office development (app. 60 pct). All development projects are
conducted by Project companies under the Reinhold Polska Service’s management.
Currently, the Reinhold Polska portfolio is:
Project
No
P/1
Project Name
City
Type of the
Project
Residential Retail
Platinum
Wroclaw
P/2
Villa Nova
Wroclaw
Residential
P/3
Lipinski
Warsaw
Office - Retail
P/4
Silesia Atrium
Katowice
Office
P/5
Lipiński
Passage
Warsaw
Office - Retail
P/6
Bastylia II
Katowice
Residential
P/7
Villa Park
Krakow
Residential
P/8
Krakow
Commercial
P/9
Zakopianska
Plaza
Nowy Swiat
Gliwice
P / 10
Karpacka
Wroclaw
Commercial &
Residential
Residential
Market segment
Apartments of higher standard housing average 60 apartments (area app. 3,800 sq.
m.) and offices (area app. 3,200 sq. m.)
Apartments of higher standard - average 29
(area app. 1,854 sq. m.)
0;+1 level as retail; 2-5 level offices. (area
average 3,500 sq. m.)
Sale area app. 13,822 (12,346 sq. m. offices &
1,476 garages sq. m.)
0;+1 level as retail; 2-5 level offices. (area
average 2,400 sq.m.). We calculated the
budget on 1,300 sq m
Area average 10,500 sq. m.
Apartments of higher standard (area app. 1
650 sq. m.)
Commercial area (average 7,181 sq. m.)
1 level commercial; 2-5 residential
3-levels boulding, (usable surface ofaround
4,000 sq. m.)
A Company’s motto is:
“It is better to become involved in a wide range of modest undertakings than few profitable ones.”
Reinhold Polska is a real estate company which conducts real estate development on selected growth
regions in Poland. The Company’s main business concept is to identify real estate and land with
ample value development potential in the central and southern parts of Poland. The Company is
primarily operating within the segments of office, retail, logistic warehouse, and residential
developments.
Business concept and vision
Reinhold Polska’s business concept is to acquire, develop, manage and sell real estate together with
development-land in Poland. The Company’s vision is to become one of the major real estate
developers in Poland. The vision will be achieved by acting through a global perspective with good
local knowledge, close cooperation with clients and partners along with a high degree of service and
quality.
Financial goal
Reinhold Polska’s financial goal is to create and realize value for Reinhold Polska’s shareholders
primarily through value growth. Reinhold Polska has a goal to over time provide its shareholders with
an annual return on equity of 15 per cent or more.
To achieve the goals the Company has established the strategies described below.
69
The Prospectus of Reinhold Polska AB
The generation of business opportunities
Reinhold has been active in Poland since 2005 which means that valuable contacts have already
been made. In combination with Reinhold’s extensive experience coupled with the hiring of
experienced Polish employees the Company makes the assessment that solid investment
opportunities will be offered and the usual middle channels can be avoided.
Acquisition
Reinhold Polska will focus on real estate along with development- land which possesses high potential
for growth in value.
Financing
Investments will be financed through the taking of bank loans and equity. The bank loans’ share of the
total investment shall correspond to approximately 70–85 per cent, and the remaining share, 30–15
per cent, shall be financed by equity. In order to seize market opportunities the Company may enter
into joint ventures with established players.
Sales strategy
Marketing and sales of residential properties will be managed by Reinhold Polska. Concerning
commercial properties, the Company will cooperate with international real estate brokers. Sales can
be conducted in all phases from the moment a project has been initiated through the acquisition of a
development property, when a permit for construction has been attained and until leasing has been
initiated or completed.
Principal markets in which the issuer competes
Reinhold Polska is a real estate company which conducts real estate development on selected growth
regions in Poland. The Company’s main business concept is to identify real estate and land with
ample value development potential in the central and southern parts of Poland. The Company will
primarily operate within the segments of office, retail, logistic warehouses, and residential property.
Reinhold has been active in Poland since 2005 which means that valuable contacts have already
been made. In combination with Reinhold’s extensive experience coupled with the hiring of
experienced Polish employees, the Company makes the assessment that solid investment
opportunities will be offered, and the usual middle channels can be avoided. The Company intends to
acquire and develop land and existing property in the form of residential, retail, warehouses and office
properties. The common denominator for all investments is that each of them should generate a return
on equity of an average of more than 15 per cent annually with the present yield rate and after
adjustments for forecasted development costs. The Company has no revenues recorded so far.
Competitors
Wide range of property developers on the polish market is resulting in a dilution among companies.
Good profit prospective induced many new entrants to invest and develop on this market. Competition
on that market seems to be regional because many companies have their activity field only in some
parts of Poland. Nevertheless competition on that market becomes more and more tight, what requires
from the Company immediate response to the changing market conditions. Constant monitoring and
following the market is one of our prime mean of competing and seizing more market share.
Among our competitors on the Warsaw real estate market, we should name:
- Dom Development S.A.
- Echo Investment S.A.
- Pirelli Pekao Real Estate
- GTC S.A.
Past few years were very successful for property developers. Some of them debuted on the Warsaw
Stock Exchange and their shares were rising by two digit number percentage on the debut. A great
demand for property developer’s shares proves that investors are awaiting new profitable
undertakings and another source of profit.
70
The Prospectus of Reinhold Polska AB
Exceptional factors that influenced the issuer’s activity
In the opinion of the board there were no such factors recorded, which may influence on issuer’s
activity.
A summary information regarding the extent to which the issuer is dependent, on
patents or licenses, industrial, commercial or financial contracts or new
manufacturing processes
Reinhold Polska AB does not pursue any particular research and development activities and does not
depend on any patents or licenses.
The basis for any statements made by the issuer regarding its competitive position
Our competitive position on the Polish market is going to improve in the near future. We are looking
forward to complete our projects in next few years and invest more in new undertakings. We assume
that we can seize approximately 5% market share.
Above assumptions regarding market position and market overview are based on the following
sources:
- Central Statistic Office
- www.cbre.com.pl
- www.colliers.pl
- www.domdevelopment.pl
- www.jwconstruction.com.pl
- www.echo.com.pl
- www.pirellipekaore.com
- www.gtc.com.pl
Available market publications do not contain any details specifying the Company’s market share. The
Company’s board estimates its market share mostly basing on above mentioned reports and
researches.
Investments
Reinhold Polska AB was founded 2006 with the main goal to acquire, develop, manage and sell
properties. The 2006 was a year of employing people, negotiating with potential investors and
implementing manuals.
In 2006 the Company made only a conditional purchase of a property located in Warsaw. The
transaction was completed at the beginning of 2007, when there was a rapid upsurge in Company’s
development.
The Company Reinhold Polska has head office in Warsaw and local offices in Wroclaw, Katowice,
Poznan and Krakow. Investments will be financed through bank loans and equity. The bank loans’
share of the total investment shall correspond to approximately 70–85 per cent, and the remaining
share, 30–15 per cent, shall be financed by equity. In order to seize market opportunities the
Company may enter into joint ventures.
Reinhold Polska AB invested in 6 projects in Poland since the beginning of 2007.
Please see the table below:
71
The Prospectus of Reinhold Polska AB
Project
No
P/1
Project Name
City
Acquisition
date
15.03.2007
Wroclaw
Type of the
Project
Residential Retail
Residential
Platinum
Wroclaw
P/2
Villa Nova
Acquisition cost
25.05.2007
6,710,000.00 PLN*
12,643,260..00 PLN
P/3
Lipinski
Warsaw
Office - Retail
21.02.2007
29,966,890.32 PLN*
P/4
Silesia Atrium
Katowice
Office
08.08.2007
19,282,000.00 PLN*
Lipinski
Passage
P/8
Zakopianska
Plaza
*/ including VAT
Warsaw
Office - Retail
15.06.2007
13,380,500.00 PLN
Krakow
Commercial
10.07.2007
3,660,000.00 PLN*
P/5
Project 1 – Platinum - Wroclaw
The project will offer 7,000 sq m of usable residential area and around 3,000 sq m of commercial area
in two separately buildings. A parking space will be provided in an underground garage. The land is
located in a booming residential area. In this area many new residential buildings are developed and a
couple of projects are under construction. In the vicinity there will be a office business park.
Project 2 – Villa Nova - Wroclaw
The project will offer 1,850 sq m of usable floor area and 43 parking places in an underground garage.
The project will be made up of two high standard buildings. The plot of land is located in a booming
residential area. In the neighborhood we will find many new residential buildings and construction
projects. A campus of Medical Academy (attended by numerous foreign students) is located in the
vicinity. One of the largest Aqua Parks of Poland is at a driving distance of 10 minutes from the project
location. A new main road and tram connection will be built in 2007-2008.
Project 3 – Lipinski - Warsaw
The building has in total 3,500 sq m of usable space. Ground floor and first floor is designed for retail
and the rest four levels for exclusive office space. The property is located in CBD. In the neighborhood
there are many new office buildings, Marriott Hotel and new shopping centre – Zlote Tarasy. There is
a tram and bus stop by the plot. Within 5 min walk from the plot there is metro station and main railway
station is across the street.
Project 4 – Silesia Atrium - Katowice
The 18,000 sq m of the former printing company „Cartotecnica” will be a A-class office building. The
After renovation there will be ca 13,800 sq m in 2 and 4 levels buildings and 100 parking places on 2levels car park. There will be possibility to build new building replaced one existing building.
Project 5 – Lipinski Passage - Warsaw
The building has in total 2,400 sq m of usable area on 6 levels. The Plot is located in CBD next to the
our other project - Lipinski. In the neighborhood there are many new office buildings and new
shopping centre – Zlote Tarasy. There is a tram and bus stop by the plot. Within 5 min walk from the
plot there is metro station and main railway station is across the street.
Project 8 – Zakopianska Plaza - Krakow
Total surface of 7,181 sq m is a great location for retail and office buildings. The project assume a 6
level building with a underground parking.. The project is located in the south part of Krakow by the
Zakopianska Street, the main road leading to Zakopane. The plot is located close to the well
established retail area. You can find there companies like Carrefour and Castorama. On the other side
of the street there will be another office and retail building.
The issuer's principal future investments on which its management bodies have already made firm
commitments.
The Company is permanently looking for new investment opportunities like existing buildings and well
located plots.
72
The Prospectus of Reinhold Polska AB
Recently the Company has signed preliminary purchase agreements to the following properties:
Project
No
P/6
P/7
P/9
Project Name
City
Bastylia II
Villa Park
Nowy Świat
Katowice
Krakow
Gliwice
P / 10
Karpacka
Wroclaw
Type of the
Project
Residential
Residential
Commerical /
Residencial
Residential
Acquisition
date
-
Acquisition cost
4,250,000.00 PLN
5,500,000.00 PLN**
1,430,100.00 PLN*
-
6,900,000.00 PLN**
*/ including VAT
**/ net price
After signing final purchase agreements to the above properties the Company is again going to carry
out the developments.
The business model of Reinhold Polska AB focuses on acquiring and developing different premises:
land as well as existing properties in the residential, retail, warehouses and office segment. The range
of investment / projects varies from green field projects to developed projects. All projects require
additional investments before commercialisation stage. Reinhold Polska AB will not have as its
objective to operate properties but only purchase, develop, and then sell them off.
Any estimations of the portfolio as well as separate projects can be misleading, taking into account the
following aspects:
1) the final value of the additional investment may vary from the budget, and, as a result of this,
we can not adopt the capex based method of the valuation
2) market value of the investment base on numerous assumptions which are volatile in such fast
changing economy as Poland
3) finally, the purchase value assumption does not include estimated, investors demand on the
real estate market
We assume, any valuation prepared by us, may be misleading for investors, and may not disclose the
appropriate value of projects
73
The Prospectus of Reinhold Polska AB
MANAGEMENT AND BOARD OF DIRECTORS
Board of Directors and Management
The Board of Directors comprises five ordinary members, including the Chairman. The management
consists only of the Managing Director (also being a Board Member).
Reinhold Polska AB, represented by Anders Lettström and Gösta Gustafsson, members of the Board
of Directors, hereby declares that, having taken all reasonable care to ensure that this is the case, the
information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts
and contains no omission likely to affect its import.
Anders Lettström (born 1948)
Anders Lettström is the Chairman of the Reinhold Polska’s Board of Directors and has been a
member of the Board since 2006. He is currently Chairman of the Board in inter alia Oscarsteatern
AB, World Scout Foundation Sweden Chapter, OneConference Sweden AB and Board member in 2
Entertain AB and ULI Urban Land Institute Sweden.
Anders Lettström holds a degree in Master of Science in Economics (Real Estate) and a degree in
architecture from the Swedish Royal Institute of Technology, as well as a Master of Laws from
Stockholm University.
Anders Lettström holds no shares in Reinhold Polska.
Torgny Krook (born 1957)
Torgny Krook is a member of Reinhold Polska’s Board of Directors since 2006.
Torgny Krook holds a degree in Master of Science in Business Administration and Economics from the
University of Uppsala. Mr. Krook has earlier experience from real estate development; Mr. Krook was
Group Treasurer at SPP-LET International, a company operating within real estate investment and
development on the international market. Furthermore, Mr. Krook has previous experience as a board
member of directors of SPP International Property AB, Bleau lnvestment Pte Ltd in Singapore and
Aschcroft Retail Investment Pic. Mr. Krook currently holds the position as Global head of Institutions at
Nordea. Torgny Krook holds 7,000 shares in Reinhold Polska.
Jens Engwall (born 1956)
Jens Engwall is a member of Reinhold Polska’s Board of Directors since 2006. He is also Chairman of
the Board in inter alia China Real Estate Development AB and Board member in Fast Partner AB,
Catella Property AB, Vasallen AB, Russian Real Estate Investment Company and Chengde
Intressenter AB.
Jens Engwall holds a degree in Master of Engineering.
Jens Engwall holds no shares in Reinhold Polska.
Hans-Gunnar Håkansson (born 1945)
Hans-Gunnar Håkansson is a member of Reinhold Polska’s Board of Directors since 2006. He is also
Chairman of the Board in B&M Impex AB and Bofood AB. Board member in AMT Multimedia
Technology, AB Karlshamns Expressbyrå, Ranaverken AB and Styrelseakademien Skåne.
Hans-Gunnar Håkansson holds a degree in Business and Administration.
Hans-Gunnar Håkansson holds no shares in Reinhold Polska.
Gösta Gustafsson (born 1952)
Gösta Gustafsson is Managing Director of Reinhold Polska and has been a member of the Board of
Directors since 2006. He also has a numeral assignments in the Boards of Directors of the companies
within Reinhold Group.
Gösta Gustafsson holds indirectly, through Reinhold Group B.V., 900,000 shares of class A and
160,000 shares of class B in Reinhold Polska, representing 60,66 % of the total amount of votes.
The Board of Directors’ all current and previous assignments are listed in ANNEX F.
74
The Prospectus of Reinhold Polska AB
Founders
Reinhold Polska, initially being a dormant shelf company, was founded on May 30, 2006 by the
Swedish limited liability company Lagrummet AB (corp. reg. no. 556499-3979), and registered on
June 27, 2006 (see: ANNEX G).
Miscellaneous
The office address of the Board members is c/o Reinhold Polska, Västmannag. 52, 11325 Stockholm,
Sweden.
None of the Board members has any family relationship with any other Board member.
None of the Board members has been involved in any bankruptcies, receiverships or liquidations
during the past five years.
During the past five years, none of the Board members has been convicted of any fraudulent offenses
or subject to official public incrimination and/or sanctions by statutory and regulatory authorities
(including designated professional bodies) and none of them has been has been prohibited by a court
from acting as a member of a Board of Directors, management or administrative body or otherwise
engaging in business activities.
Administrative, Management and Supervisory bodies and Senior Management
conflicts of interest
Besides being a Board member, Gösta Gustafsson is also the Managing Director in Reinhold Polska.
Other than described above, there is no conflict of interest between the obligations of the Board
members to Reinhold Polska and their private interests and/or other obligations.
There are no arrangements or understanding with major shareholders, customers, suppliers or others,
pursuant to which any person listed above was selected as a member of the Board or management.
Neither Torgny Krook nor Gösta Gustafsson has agreed to any restrictions on the disposal of their
shares of Reinhold Polska within a certain period of time.
75
The Prospectus of Reinhold Polska AB
Remunerations and benefits
Anders Lettström received no remuneration during 2006 from Reinhold Polska AB. For 2007, Reinhold
Polska will pay him a total amount of SEK 90,000.
Hans-Gunnar Håkansson received no remuneration during 2006. For 2007, Reinhold Polska will pay
him a total amount of SEK 70,000.
Torgny Krook received no remuneration during 2006. For 2007, Reinhold Polska will pay him a total
amount of SEK 70,000.
Jens Engvall received no remuneration during 2006. For 2007, Reinhold Polska will pay him a total
amount of SEK 70,000.
Gösta Gustafsson received a total amount of SEK 123,000 during 2006. For 2007, Reinhold Polska
will pay him a total amount of SEK 500,000.
No Board member has received any remuneration during 2006 and will not receive any remuneration
during 2007 from any of Reinhold Polska’s subsidiaries. No benefits in kind have been granted.
No amount has been set aside or accrued by Reinhold Polska or its subsidiaries to provide pension,
retirement or similar benefits.
76
The Prospectus of Reinhold Polska AB
Board practices
According to the Swedish Company Act and Reinhold Polska’s articles of association, the Board
members must be re-elected every Annual Shareholders’ Meeting. The current Board, registered at
the Swedish Companies Office on October 13, 2006, was re-elected on August 30, 2007, and will thus
be in office until the next Annual Shareholders’ Meeting, due to be held not later than June 30, 2008.
None of the Board Members (including the Managing Director) have entered into any service contracts
with Reinhold Polska or any of its subsidiaries providing for benefits upon retirement and/or
termination of employment.
In accordance with the Swedish Company Act and Reinhold Polska’s Articles of Association there
must be an independent auditor. Reinhold Polska’s auditor is Ernst & Young AB and the responsible
accountant is Peter Mikael Ikonen.
Reinhold Polska has no remuneration or auditing committee.
According to Chapter 8 Section 6 of the Swedish Companies Act (2005:551), the Board of Director
shall each year adopt written rules of procedures governing its work. The Board of Directors in
Reinhold Polska adopted such rules of procedures on 13 November 2006, attached hereto as Exhibit.
Furthermore, according to Chapter 8 Section 7 of the Swedish Companies Act (2005:551), the Board
of Directors shall, in written instructions, state the allocation of work between the Board of Directors
and the Managing Director. The Board of Directors in Reinhold Polska adopted such written instruction
on 13 November 2006, attached hereto as Exhibit 16.4.
Reinhold Polska has not adopted the Swedish Code of Corporate Governance as only companies
listed on the Stockholm Stock Exchange with a market capitalization exceeding SEK 3 billion are
required to adopt the code.
77
The Prospectus of Reinhold Polska AB
GENERAL INFORMATION ABOUT THE COMPANY
Organizational structure
A brief description of the group and the issuer’s position within the group
Reinhold Polska A.B. is registered in Sweden (Västmannagatan 52, 113 – 21 Stockholm, Sweden)
under organization number 556706- 3713. According the register of the Swedish Companies
Registration Office (Sw. Bolagsverket) Reinhold Polska A.B. is a public limited liability company under
Swedish law ("publ" being the abbreviation for "publikt", which in turn translates into "public"). The
object of the company’s business it to, directly or indirectly, acquire, own and administer real
properties and to conduct any other business compatible therewith.
Reinhold Polska A.B. owns 100% of shares and votes in Reinhold Polska B.V. with its registered
office in Netherlands (Wijnhaven 3B, 3011 WG Rotterdam, Holland). The Reinhold Polska B.V.’s
scope of activity is holding and financing activities.
Reinhold Polska Services Sp. z o.o. and Reinhold Polska Project – Special project vehicle companies
(SPV companies), created for each investment project, are owned by Reinhold Polska B.V. (100% of
shares and votes in Reinhold Polska Services Sp. z o.o. and SPV companies).
Reinhold Polska Services and SPV companies were established in January 2007 (with the exception
of Reinhold Polska Project 3 Sp. z o.o. which was established at 20th of the December 2006) by
Swedish investors. Participation of the international investors guaranteed implementation of western
experience and standards as regards home and mixed building on the Polish market.
The Reinhold Polska AB structure:
78
The Prospectus of Reinhold Polska AB
A list of issuer’s subsidiaries
The following table presents the Reinhold Polska structure and the Company’s shares in the entities
as at 30 June 2007.
Entity name
Country of
% of equity
registration
Reinhold Polska BV
Holland
100.0
Reinhold Polska Services Sp zoo
Poland
100.0
Reinhold Polska Project 1 Sp zoo
Poland
100.0
Reinhold Polska Project 2 Sp zoo
Poland
100.0
Reinhold Polska Project 3 Sp zoo
Poland
100.0
Reinhold Polska Project 4 Sp zoo
Poland
100.0
Reinhold Polska Project 5 Sp zoo
Poland
100.0
Reinhold Polska Project 6 Sp zoo
Poland
100.0
Reinhold Polska Project 7 Sp zoo
Poland
100.0
Reinhold Polska Project 8 Sp zoo
Poland
82.5*
Reinhold Polska Project 9 Sp zoo
Poland
100.0
Reinhold Polska Project 10 Sp zoo
Poland
100.0
*/ remaining 17.5% of equity and votes are owned by Seima Sp zoo
% of votes
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
82.5*
100.0
100.0
Consolid.
method
full
full
full
full
full
full
full
full
full
full
full
full
All entities of the Company conducted business activities in the territory of Poland compliance with the
Commercial Companies Code and have been formed for an unspecified time.
79
The Prospectus of Reinhold Polska AB
Information on holdings
Except holdings mentioned above, Reinhold Polska AB do not hold any portion of the capital of the
companies which may have a significant on the assessment of its own assets and liabilities, financial
position of profits and losses.
The following SPV: Reinhold Polska Project 11 Sp. z o.o., Reinhold Polska Project 12 Sp. z o.o.,
Reinhold Polska Project 13 Sp. z o.o., Reinhold Polska Project 14 Sp. z o.o. are now under
registration process.
80
The Prospectus of Reinhold Polska AB
Employees
Reinhold Polska AB has only one employee – Sven Gösta Gustafsson – Managing Director, because
its activity is carried out by daughter Polish companies:
- Reinhold Polska Services Sp. z o. o. management company which hires all employees and serve
all the project companies
- Reinhold Polska Project from 1 to 14 (Reinhold Polska 11-14 Sp. z o.o. are now under registration
process),
through Reinhold Polska BV.
Reinhold Polska Services Sp. z o. o. delivers best quality employees for complex managing and
administrating project shelf companies. Based on management agreements with project companies
Reinhold Polska Services Sp. z o.o. takes care of all activities regarding project managing like:
accounting, financing, cost control, construction and development process etc. Reinhold Polska
Services Sp. z o.o. which relies on experienced polish employees can easily control the whole activity
of each project company.
Reinhold Polska is indirectly controlled by Sven Gösta Gustafsson as he owns a controlling interest in
Reinhold Group B.V.
There are no options relating to the shares in Reinhold Polska.
81
The Prospectus of Reinhold Polska AB
Trend information
The most significant recent trends in production, sales and inventory, and costs and
selling prices since the end of the last financial year to the date of the registration
document.
Company’s policy is to reduce all possible cost by cooperating only with experienced contractors,
which on the one hand is a warranty for good quality services and on the other hand reduces
expenses by minimizing unexpected costs in the future. Therefore the Company’s revenue
perspectives are strictly combined with current cost reducing policy, which will enable to profit from the
investments.
Information on any known trends, uncertainties, demands, commitments or events
that are reasonably likely to have a material effect on the issuer's prospects for at
least the current financial year.
The board is not aware of any factor that will significantly affect the Company’s perspectives.
82
The Prospectus of Reinhold Polska AB
Material contracts
No
Parties
1
Reinhold
Polska
Project 1
Sp zoo
Domar SA
and Pawel
Cisielski
and Renata
Cisielska
2
Reinhold
Polska
Project 2
Sp zoo
Inkom SA
3
Reinhold
Polska
Project 3
Sp zoo
Yours Sp
zoo
4
Reinhold
Polska
Project 4
Sp zoo
Cartotecnic
a Polska Sp
zoo
Subject of the agreement
Acquisition of a real property consisting of undeveloped
plots of land numbers:
- 34 with area of with area of 1,180 square meters,
situated in Wroclaw, Przyjazni Street, for which the
District Court for Wroclaw-Krzyki, IV Land and Mortgage
Register Department, maintains the land and mortgage
register no. WR1K/00076421/0;
- 35/3 with area of 250 square meters, situated in
Wroclaw, Przyjazni Street, for which the District Court for
Wroclaw-Krzyki, IV Land and Mortgage Register
Department, maintains the land and mortgage register no.
WR1K/00107997/5;
- 35/4 with area of 1,194 square meters, situated in
Wroclaw, Przyjazni Street, for which the District Court for
Wroclaw-Krzyki, IV Land and Mortgage Register
Department, maintains the land and mortgage register no.
WR1K/00102897/9;
- 35/5 with area of 942 square meters, situated in
Wroclaw, Przyjazni Street, for which the District Court for
Wroclaw-Krzyki, IV Land and Mortgage Register
Department, maintains the land and mortgage register no.
WR1K/00102896/2;
- 35/6 with area of 1,134 square meters, situated in
Wroclaw, Przyjazni Street, for which the District Court for
Wroclaw-Krzyki, IV Land and Mortgage Register
Department, maintains the land and mortgage register no.
WR1K/00102898/6;
- 35/7 with area of 1,135 square meters, situated in
Wroclaw, Przyjazni Street, for which the District Court for
Wroclaw-Krzyki, IV Land and Mortgage Register
Department, maintains the land and mortgage register no.
WR1K/00102899/3;
- 35/8 with area of 1,145 square meters, situated in
Wroclaw, Przyjazni Street, for which the District Court for
Wroclaw-Krzyki, IV Land and Mortgage Register
Department, maintains the land and mortgage register no.
WR1K/00102900/4.
Acquisition of a developed plot of land number 16 with
area of 2,405 square meters, situated in Wroclaw,
Terenowa Street 4, for which the District Court for
Wroclaw-Krzyki, IV Land and Mortgage Register
Department, maintains the land and mortgage register no.
WR1K/00028501/4.
Acquisition of a developed plot of land number 5 with
area of 846 square meters, situated in Warsaw,
Jerozolimskie 63 Avenue, for which the District Court for
Warszawa-Mokotów, X Land and Mortgage Register
Department, maintains the land and mortgage register no.
WA4M/00164464/2 together with a residential and office
building with a usable area of 2,720 square meters.
Acquisition of real property consisting of plots numbers:
1/1, 4/1, 4/2, 4/3, 8/1 with a joint area of 18,134 square
meters, situated in Katowice, Al. Wojciecha Korfantego
Street 138, for which the District Court in Katowice, XI
Land and Mortgage Register Department, maintains the
land and mortgage register no. KA1K/00032363/7
together with building of the administration with a usable
area of 2,300 square meters, production building with a
usable area of 10,200 square meters, production and
storage building with a usable area of 2,090 square
meters, reception building with a usable area of 28
square meters, bunker for flammable substances with a
usable area of 80 square meters, building with gas
terminals with a usable area of 8,50 square meters,
building for storage and baling with a usable area of 280
square meters.
Price /
Remun.
16,743,577.20
PLN
Date
15th of
March
2007
th
6,710,000.00
PLN
25 of
May
2007
29,966,890.32
PLN
21st of
February
2007
19,282,000.00
PLN
8 th of
August
2007
83
The Prospectus of Reinhold Polska AB
No
Parties
5
Reinhold
Polska
Project 5
Sp zoo
Varsovia I
C.B.
6
Reinhold
Polska
Project 6
Sp zoo
7
Reinhold
Polska
Project 8
Sp zoo
Przedsiębio
rstwo
Budownictw
a Ogólnego
i Uslug
Techniczny
ch „Sląsk”
Sp. z o.o.
Seima Sp
zoo
8
Reinhold
Polska
Project 2
Sp zoo
84
Zbigniew
Smolka
Subject of the agreement
Acquisition of a share of 855/1000 in a real property
consisting of a plot of land number 6, with area of 672
square meters, situated in Warsaw, Jerozolimskie 61
Avenue, for which the District Court for WarszawaMokotów, X Land and Mortgage Register Department,
maintains the land and mortgage register no.
WA4M/00039872/0 together with residential and
commercial building with a usable area of 1,639.78
square meters.
Acquisition of a real property consisting of undeveloped
plots of land numbers: 29/5, 29/6, 29/7, 10/12, situated in
Katowice, Pulaskiego Street, with a joint area of
4,592 square meters, for which the District Court in
Katowice, XI Land and Mortgage Register Department,
maintains the land and mortgage register no.
KA1K/00051975/9.
Acquisition of a real property consisting of undeveloped
plots of land numbers: 1/17, 1/20, 1/169, 1/171, 1/173,
with a joint area of 3,340 square meters, situated in
Kraków-Podgórze, for which the District Court for KrakówPodgórze, IV Land and Mortgage Register Department,
maintains the land and mortgage register no.
KR1P/00300214/1.
Construction of a multifamily residential complex with
underground garages and infrastructure on a real
property situated in Wroclaw, Terenowa Street 4.
Price /
Remun.
13,380,500.00
PLN
Date
15 th of
June
2007
5,185,000.00
PLN
3rd of
Septemb
er 2007
3,000,000.00
PLN
10th of
July
2007
6,810,000.00
PLN
30th of
August
2007
The Prospectus of Reinhold Polska AB
Patents, licenses and trademarks
Reinhold Polska is not the registered owner of any material patents, licenses or trademarks. Reinhold
Group BV has applied for registration in the Polish Patent Office of “Reinhold” as a verbal trademark
and a verbal – graphic trademark. The registration process is still pending.
85
The Prospectus of Reinhold Polska AB
Working capital statement
Taking into account the proceeds of the Offering, the Company is of the opinion that the working
capital available for the Company is sufficient for its present requirements, for at least a period of 24
months from the date of the publication of this Prospectus.
86
The Prospectus of Reinhold Polska AB
SHAREHOLDERS
Reinhold Polska AB has a total amount of 7,000,000 shares, divided into 900,000 class A and
6,100,000 class B shares. As of June 29, 2007, Reinhold Polska had 272 shareholders. The control of
Reinhold Polska is allocated to ten major shareholders, holding jointly more than 62 per cent of the
share capital and more than 82 per cent of the total amount of votes.
However, as regards public companies, please note that according to the Swedish Companies Act
information on shareholders with less than 500 shares is not publicly available, unless such
shareholder owns all the shares in a company.
The following table sets out information regarding the ownership of the Company’s shares as of the
date of this Prospectus:
Entity name
Reinhold Group BV
Straumur-Burdaras Investment Bank
Others (owing less then 5% of capital)
Total
No of shares
1,060,000
1,226,100
4,713,900
7,000,000
% of equity
15.14%
17.52%
67.34%
100.00%
No of votes
9,160,000
1,226,100
4,713,900
15,100,000
% of votes
60.66%
8.12%
31.22%
100.00%
and as adjusted to reflect the Offering:
Entity name
Reinhold Group BV
Straumur-Burdaras Investment Bank
Others (owing less then 5% of capital)
Existing shareholders
Selling shares
New shares
New shareholders
Total
No of shares
660,000
1,226,100
4,713,900
6,600,000
400,000
1,000,000
1,400,000
8,000,000
% of equity
8.25%
15.33%
58.92%
82.50%
5.00%
12.50%
17.50%
100.00%
No of votes
6,600,000
1,226,100
4,713,900
12,540,000
400,000
1,000,000
1,400,000
13,940,000
% of votes
47.35%
8.80%
33.82%
89.96%
2.87%
7.17%
10.04%
100.00%
Shares of class A carries ten votes each while shares of class B carries one vote each.
Reinhold Polska is directly controlled by its major shareholder Reinhold Group BV with more than 60
per cent of the votes. Reinhold Polska is indirectly controlled by Gösta Gustafsson as he owns a
controlling interest in Reinhold Group B.V.
Under Swedish law the objective of a company shall unless otherwise stipulated in the articles of
association be the generation of profits for distribution to the shareholders. A decision to the contrary
by the general meeting would be in contradiction to the law. The general meeting may not adopt any
resolution which is likely to provide an undue advantage to a shareholder or another person to the
disadvantage of the company or another shareholder. In addition the Companies Act stipulates
several qualified majority requirements in connection with shareholder voting in order to protect the
minority rights (see Section “Voting rights” below).
Reinhold Polska is not aware of any arrangements which may result in a change of control of the
company.
New capital resources from the flotation of up to 1,000,000.00 shares on the Warsaw Stock Exchange
will enable Reinhold Polska AB to be more active on the market and extend the Company’s portfolio.
The existing projects are already financed and the Company thus plans to use the new capital
resources to finance new projects, during the next 12 months period. Moreover the Issuer will secure
more sites in all of Poland, which is in line with the Issuer’s development policy and will widen the
Issuer’s portfolio. The new acquired residential and commercial properties will be partially financed
with resources form the flotation and bank loans.
Payments made from selling 400,000 shares form existing shareholders will go to Reinhold Group BV.
87
The Prospectus of Reinhold Polska AB
RELATED PARTY TRANSACTIONS
Transactions inside the Group
Parties
Reinhold Polska
Services Sp zoo
Reinhold Polska
Project 1 Sp zoo
Reinhold Polska
Services Sp zoo
Reinhold Polska
Project 2 Sp zoo
Reinhold Polska
Services Sp zoo
Reinhold Polska
Project 3 Sp zoo
Reinhold Polska
Services Sp zoo
Reinhold Polska
Project 4 Sp zoo
Reinhold Polska
Services Sp zoo
Reinhold Polska
Project 1 Sp zoo
Project 3 Sp zoo
Reinhold Polska
Project 3 Sp zoo
Project 4 Sp zoo
Reinhold Polska
Project 3 Sp zoo
Project 5 Sp zoo
Reinhold Polska
Services Sp zoo
Reinhold Polska
Services Sp zoo
88
Subject of the agreement
Price /
Remuneration
775,500.00 PLN
(2,5% of
construction cost)
Date
the
150,150.00 PLN
(2,5% of
construction cost)
2 of May
2007
the
384,060.00 PLN
(2,5% of
construction cost)
1 of January
2007
the
1,167,789.00 PLN
(2,5% of
construction cost)
1 of June
2007
25,000.00 net PLN
30,500.00 gross PLN
1st of July
2007
Sponsorship agreement
25,000.00 net PLN
30,500.00 gross PLN
1st of July
2007
Sponsorship agreement
25,000.00 net PLN
30,500.00 gross
PLN
1st of July
2007
Advisory Services on Acquisition of
Property;
Project and Cost Management Services;
Construction Management Services;
Accountancy Services;
Advisory Services on Project Financing
Representation of the Investor;
Marketing Services;
Consultancy on Obtaining Lessees;
Management of the Property;
Consultancy on Sale of the Property.
Advisory Services on Acquisition of
Property;
Project and Cost Management Services;
Construction Management Services;
Accountancy Services;
Advisory Services on Project Financing
Representation of the Investor;
Marketing Services;
Consultancy on Obtaining Lessees;
Management of the Property;
Consultancy on Sale of the Property.
Advisory Services on Acquisition of
Property;
Project and Cost Management Services;
Construction Management Services;
Accountancy Services;
Advisory Services on Project Financing
Representation of the Investor;
Marketing Services;
Consultancy on Obtaining Lessees;
Management of the Property;
Consultancy on Sale of the Property.
Advisory Services on Acquisition of
Property;
Project and Cost Management Services;
Construction Management Services;
Accountancy Services;
Advisory Services on Project Financing
Representation of the Investor;
Marketing Services;
Consultancy on Obtaining Lessees;
Management of the Property;
Consultancy on Sale of the Property.
Sponsorship agreement
the
nd
st
st
The Prospectus of Reinhold Polska AB
Transactions outside the Group
Parties
Subject of the agreement
Price /
Remuneration
5,988.99 PLN
(per month)
Reinhold Polska
Services Sp zoo
Reinhold
investment Sp
zoo
Reinhold Polska
Project 1 Sp zoo
Reinhold Lifstyle
Sp zoo
Lease agreement of the office space in
Katowice, Francuska Street 35/37 regarding
office surface of 54,52 sq m, conference
rooms of 59.26 sq m and kitchen surface of
rd
13,16 sq m on the 3 floor.
Lease agreement of surface for marketing
purpose
Reinhold Polska
Project 2 Sp zoo
Reinhold Lifstyle
Sp zoo
Lease agreement of surface for marketing
purpose
500.00 PLN
(per month)
Reinhold Polska
Project 3 Sp zoo
Reinhold Lifstyle
Sp zoo
Lease agreement of surface for marketing
purpose
500.00 PLN
(per month)
500.00 PLN
(per month)
Date
28 th of May
2007 till
th
30 of
November
2007
st
1 of June
st
2007 till 31 of
December
2007
st
1 of June
st
2007 till 31 of
December
2007
st
1 of June
st
2007 till 31 of
December
2007
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The Prospectus of Reinhold Polska AB
TRANSFER RESTRICTIONS
As a result of the following restrictions, we advise you to contact legal counsel prior to making any
resale, pledge or transfer of the Offer Shares.
Notice to investors in the United States
The Offer Shares have not been and will not be registered under the U.S. Securities Act of 1933 (the
“Securities Act”) as well as any other state’s securities law and may not be offered or sold within the
United States.
Notice to investors in the European Economic Area
Each purchaser in a Member State of the European Economic Area which has implemented the
Prospectus Directive (each, a "Relevant Member State") other than, in the case of paragraph (a)
below, persons receiving offers contemplated in this Prospectus in Sweden or Poland, who receives
any communication in respect of, or who acquires any Shares under, the offering contemplated in this
Prospectus will be deemed to have represented and agreed that:
- the purchaser is a qualified investor within the meaning of the law in that Relevant Member State
implementing Article 2(1 )(e) of the Prospectus Directive; and
- in the case of any Shares acquired by the purchaser as a financial intermediary, as that term is
used in Article 3(2) of the Prospectus Directive, (i) the Shares acquired by it in the offering have
not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to,
persons in any Relevant Member State other than qualified investors, as that term is defined in the
Prospectus Directive, or in circumstances in which the prior consent of the Lead Manager has
been given to the offer or resale; or (ii) where Shares have been acquired by it on behalf of
persons in any Relevant Member State other than qualified investors, the offer of those Shares to
it is not treated under the Prospectus Directive as having been made to such persons.
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The Prospectus of Reinhold Polska AB
INFORMATION ON THE SHARES
Share capitał
Reinhold Polska has a share capital of SEK 3,500,000 divided into 7,000,000 shares of which 900,000
shares are of class A and 6,100,000 shares are of class B.
All shares of Reinhold Polska have been authorized, issued and fully paid. Shares of the Company
have no nominal value; under Swedish law, there is no nominal value of shares.
The quote value of Reinhold Polska shares is SEK 0.50 per share.
The share capital of Reinhold Polska does not consist of shares not representing capital. Under
Swedish law it is not possible to have shares not representing capital. Reinhold Polska does not own
any of its own shares.
There exist no convertible securities, exchangeable securities or securities with warrants in relation to
Reinhold Polska.
There are no acquisition rights and or obligations over authorized but unissued capital in the
Company. There are no options relating to the shares in Reinhold Polska.
On August 30, 2008 the Extraordinary General Shareholders’ meeting of Reinhold Polska authorized
the company’s Board of Directors to increase the share capital of the company by a new share issue
of shares of class B, with or without deviation from the shareholders’ preferential rights, and to decide
upon the other conditions relating to the share issue.
A history of share capital
Reinhold Polska AB was founded on May 30, 2006 and registered on June 27, 2006 as Lagrummet
December nr 1280 AB (a dormant shelf company). The initial share capital amounted to SEK 100,000
divided into 1,000 shares (only one type of shares existed at the time).
On September 14, 2006 Reinhold Nordic Holding B.V., a company within the Reinhold group,
purchased Reinhold Polska. On the same date two extra shareholder meeting were held for
registration technical reasons. On these meetings two classes of shares were enacted, the limits for
the registered share capital was changed as well as the share quote value (split 1:200,000) and a
CSD-clause was added to the articles of association. The share capital was increased with SEK
400,000 by way of issuing 800,000 new shares, giving a total share capital of SEK 500,000 divided
into 1,000,000 shares, 900,000 class A and 100,000 class B.
On October 18, 2006, Reinhold Polska increased its share capital with SEK 3,000,000 by way of
issuing 6,000,000 new shares of class B, giving it a total share capital of SEK 3,500,000 divided into
7,000,000 shares, out of which 900,000 are shares of class A and 6,100,000 shares of class B.
On August 30, 2007 an Extra General Shareholders’ Meeting authorized the Board of Directors to
issue new shares class B in conjunction with the proposed listing on the Warsaw stock exchange (see
Section “Certain Information concerning the Offer Shares”).
Memorandum and articles of association
According to Section 3 of the articles of association, the object of Reinhold Polska’s business is to,
directly or indirectly, acquire, own and administer real properties and to conduct any other business
compatible therewith.
All shares carry the same right to dividends, commencing from the first record date for dividends
occurring after the new issue has been registered at the Swedish Companies Registration Office.
According to Section 4 of the articles of association Shares of class A carries ten votes each while
shares of class B carries one vote each.
According to Section 7 of the articles of association in the event of new issues of shares class A and B
where payment is not to be made in kind, owners of shares of the same class enjoy primary
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The Prospectus of Reinhold Polska AB
preferential rights to subscribe for new shares. Owners of the other class of shares enjoy secondary
preferential rights. In the event of (i) new issues of shares of class A or B where payment is not to be
made in kind or (ii) issues of warrants or convertible debentures where payment is not to be made in
kind, all shareholders, irrespective of whether their shares are of class A or class B, have preferential
rights to subscribe for new shares pro rata to the number of shares previously held by them.
The shares may be redeemed by Reinhold Polska in accordance with the Swedish Companies Act
(2005:551).
The Articles of Association of Reinhold Polska include a conversion right for holders of shares of class
A to convert the shares of class A to shares of class B.
According to Section 10 of the articles of association Reinhold Polska shall have a Board of Directors
consisting of no less than three (3) members and no more than seven (7) members with a maximum
of five (5) deputies.
There are no conditions more stringent in the articles of association than required by Swedish law.
According to the Swedish Companies Act:
(i)
a resolution to amend the articles of association, which reduces any shareholder’s rights to
profit or assets, restricts the transferability of shares or alters the legal relationship between shares,
normally requires the unanimous approval of the shareholders present at the meeting with nine-tenths
of all outstanding shares represented at the meeting;
(ii)
a resolution to amend the articles of association for the purpose of limiting the number of
shares which a shareholder may vote at a general meeting of shareholders or requiring the retention
of a larger amount of the net profit than required by the Swedish Companies Act or amending
shareholder’s rights in a liquidation or dissolution, normally requires the approval of shareholders
representing a two-thirds majority of the votes cast at the meeting and a nine-tenths majority of the
shares represented at the meeting; and
(iii)
a resolution of the kind referred to under (ii) or (iii) above may, however, be taken with a lower
supermajority requirement if the amendments referred to therein will only adversely affect specific
shares or classes of shares. In such cases, the requirement under (i) above will apply together with
the following separate supermajority: (a) where the class of shares is adversely affected, approval of
the owners of half of all shares of such class and of the owners of nine-tenths of the shares of such
class present or represented at the meeting, or (b) where the shares adversely affected do not
constitute a class of shares, the unanimous approval of all such affected outstanding shares present
at the meeting representing nine-tenths of all adversely affected outstanding shares.
According to section 12 of the articles of association, notice of annual shareholders’ meetings as well
as of extraordinary shareholders’ meetings at which matters regarding amendments to the articles of
association are to be addressed, shall be issued not earlier than six weeks and not later than four
weeks prior to the shareholders’ meeting. Notice of other extraordinary shareholders’ meetings shall
be issued not earlier than six weeks and no later than two weeks prior to the shareholders’ meeting.
Such notice of shareholders’ meetings shall be published in Post – och Inrikes Tidningar (the Swedish
Official Gazzette) and Svenska Dagbladet.
Section 13 of the articles of association prescribes the conditions of admission. Shareholders who
want to participate in shareholders’ meetings, shall be listed in such print-outs or other representation
of the entire shareholders’ register as stated in the Swedish Companies Act (2005:551), Chapter 7
Section 28 Paragraph 3, concerning the circumstances five weekdays prior to the meeting, as well as
notify the company not later than 4.00 pm (CET) the day which is specified in the notice to the
meeting. The last-mentioned day may not be a Saturday, Sunday, New Years Eve, Midsummer Eve,
Christmas Eve or other public holiday and not fall earlier than the fifth weekday prior to the meeting.
Shareholders may bring up to two counsels at shareholders’ meetings only if the shareholder is giving
notice of the number of counsels to the company in accordance with the previous paragraph.
There are no provision in the articles of association that would have an effect of delaying, deferring or
preventing a change of control of Reinhold Polska.
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The Prospectus of Reinhold Polska AB
As Reinhold Polska is a public company, under Swedish law, public companies are obligated, as a
general rule, to disclose their share registers. However, please note that according to the Swedish
Companies Act information on shareholders with less than 500 shares is not publicly available, unless
such shareholder owns all the shares in a company.
There are no conditions imposed by the founding memorandum or the articles of association,
governing changes in capital that are more stringent than required by law.
Information on the shares to be offered and admitted to trading
On August 30, 2007 the Extraordinary General Shareholders’ meeting of Reinhold Polska AB
authorized the company’s Board of Directors to increase the share capital of the company by a new
issue of shares of class B, with or without deviation from the shareholders’ preferential rights. At the
meeting it was furthermore resolved to authorize the Board of Directors to list all shares of class B on
the Warsaw Stock Exchange.
The Board of Directors and the larger shareholders are endeavoring to effect a new issue of shares
based on the above-mentioned authorization as well as to sell shares, which will increase the number
of shareholders in the company.
The Board of Directors intends to resolve to up to 1,000,000 shares of class B and thereby increase
the share capital with maximum 500,000 SEK to 4,000,000 SEK. The right to subscribe for the new
shares shall, with deviation from the shareholders’ preferential rights, be given to institutional and
individual investors in Poland. The reason for deviating from the preferential rights is to obtain a
sufficiently broad shareholder basis before the contemplated listing on the Warsaw Stock Exchange.
Furthermore, the Sellers have decided to offer to institutional investors in Poland up to 400,000 shares
of class B.
The maximum share price was set up at 150 SEK, and will be finally determined by the Board of
Directors together with the Lead Manager – Suprema Securities S.A. The price will be determined on
26 October 2007 The basis for the price determination will be the final outcome of book-building
process, which is planned for the period starting from 24 to 25 October 2007. For detailed information,
see “Terms and conditions of the Combined Offering.
The Board of Directors is contemplating to apply for registration of all shares of class B at the Warsaw
Stock Exchange.
Application to acquire shares shall be made in the period 24 October 2007 until 26 October 2007 no
later then 3 p.m. CET. The Board of Directors may decide to extend the period. The application shall
be made by way of fax to Suprema Securities S.A. at +48 22 345 84 11. The application is binding.
The allotment of the shares will be decided upon by the Board of Directors. The primary objective is to
obtain a broad ownership base in order to facilitate a sufficient and liquid trading of the shares.
Allotment will not be dependent upon when the application has been filed. In the event of oversubscription, a lower number of, or no, shares may be allocated. The result of the offer will be made
public through a public announcement, available on www.reinholdpolska.com on 5 November 2007.
When the allotment of shares has been determined, a settlement note will be sent out indicating the
number of shares allocated. No trading will occur prior to such notice. Interested parties who have not
been allocated any shares will not be notified.
Payment of the shares shall be made in cash in accordance with the instructions on the settlement
note. In the event the shares are not fully paid on the due date, the shares may be allocated and sold
to someone else. Should the sales price be lower than the sales price in this offer, then the party who
first applied may be required to pay the difference.
All shares of Reinhold Polska AB are registered with, and the register of shareholders is kept by, the
computerized book-entry share registration system administrated by VPC AB and there are no
physical share certificates. Following payment and registration of the shares, a note will be sent out
evidencing that the paid shares are registered on the purchaser’s relevant account. This is expected to
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The Prospectus of Reinhold Polska AB
occur by 9 November 2007. Shares referable to purchaser’s who in the application have provided
information that the shares should be held by a certain bank or similar institute will be registered at
such account and the purchaser will be notified in accordance with any such bank’s and institute’s
routines.
The shares issued in accordance with this prospectus will grant right in any profits of company for the
financial year 2007.
The Selling shareholders have agreed not to divest any shares in the company for a period of 180
days from the first trading date.
The offer in this prospectus is subject to that there are no events or circumstances arising which would
cause the timing of the offer in this prospectus to be inappropriate. Such events may for instance be of
business, financial or political nature, and may also involve an assessment that the interest of the offer
is insufficient. Accordingly, the offer may be party or wholly withdrawn, which will be published as soon
as possible in a press release. The offer may not be withdrawn once the shares are registered and
traded at the stock exchange.
A description of rights attached to the securities
All rights and obligations referring Shares are described in Swedish Companies Act, article of
association, as well as other respective acts. Prospective investors should consult their own legal
advisors for more detailed information.
Corporate rights and obligations
Dividends
There are no preference shares in Reinhold Polska. Thus, shares of class A and shares of class B
have the same right to dividends.
Under the Swedish Companies Act, only the general meeting of shareholders may authorize the
payment of dividends. The amount of dividends paid may not exceed that recommended by a
company’s board of directors (except in certain limited circumstances) and may only be paid from
funds legally available for that purpose. Under Swedish law, no interim dividends may be paid in
respect of a financial period for which audited financial statements have not been yet adopted by the
annual general meeting of shareholders. The market practice in Sweden is for dividends to be paid
annually.
Under the Swedish Companies Act, dividends may be paid to shareholders if, after payment of such
dividend, the company have full coverage for its restricted equity. The calculation for possible
dividends shall be based on the last adopted balance sheet taking into consideration any changes to
the restricted equity since the balance sheet date. Even if a dividend payment would be permitted
under such calculation, a dividend may only be paid if such payment can be justified in relation to (i)
requirements as to the amount of the shareholders’ equity in relation to the company’s and the group’s
business type, scope and risks, and (ii) the company’s and the group’s need to strengthen its balance
sheet and the company’s and the group’s liquidity. The company’s and the group’s position in general
shall also be taken into consideration.
See also “Dividends and Dividend Policy”.
Property rights and obligations
Voting rights
Under the Swedish Companies Act, resolutions are passed by a simple majority of votes cast at the
meeting with the chairman of the meeting having the decisive vote (except in respect of elections),
unless otherwise required by law or a company’s articles of association.
Under the Swedish Companies Act, certain resolutions require special quorums and majorities,
including but not limited to, the following:
- a resolution to amend the articles of association generally requires a two-thirds majority of the
votes cast at the meeting and a two-thirds majority of the shares represented at the meeting;
- a resolution to amend the articles of association, which reduces any shareholder’s rights to profit
or assets, restricts the transferability of shares or alters the legal relationship between shares,
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The Prospectus of Reinhold Polska AB
-
-
-
-
-
-
normally requires the unanimous approval of the shareholders present at the meeting with ninetenths of all outstanding shares represented at the meeting;
a resolution to amend the articles of association for the purpose of limiting the number of shares
which a shareholder may vote at a general meeting of shareholders or requiring the retention of a
larger amount of the net profit than required by the Swedish Companies Act or amending
shareholder’s rights in a liquidation or dissolution, normally requires the approval of shareholders
representing a two-thirds majority of the votes cast at the meeting and a nine-tenths majority of the
shares represented at the meeting;
a resolution of the kind referred to under (ii) or (iii) above may, however, be taken with a lower
supermajority requirement if the amendments referred to therein will only adversely affect specific
shares or classes of shares. In such cases, the requirement under (i) above will apply together
with the following separate supermajority: (a) where the class of shares is adversely affected,
approval of the owners of half of all shares of such class and of the owners of nine-tenths of the
shares of such class present or represented at the meeting, or (b) where the shares adversely
affected do not constitute a class of shares, the unanimous approval of all such affected
outstanding shares present at the meeting representing nine-tenths of all adversely affected
outstanding shares;
a resolution to issue, approve or authorize the issuance of new shares or convertible debentures
or warrants with deviation from the preferential right for existing shareholders, except when
payment therefore shall be made in kind, normally requires a two-thirds majority of votes cast at
the meeting and two-thirds of the shares represented at the meeting;
a resolution to redeem any of the outstanding share capital requires a two-thirds majority of votes
cast at the meeting and two-thirds of the shares represented at the meeting; if a company has
more than one class of shares, said majority requirements apply within each class that is
represented at the meeting and which rights are adversely affected by the resolution;
a resolution to approve a merger requires a two-thirds majority of the votes cast and two-thirds of
the shares represented at the meeting; if a company has more than one class of shares, said
majority requirements apply within each class of shares represented at the meeting; in certain
circumstances pertaining to public companies, however, such resolution requires unanimous
approval of the shareholders present at the meeting, at which meeting at least nine-tenths of all
outstanding shares in the company must be represented; and
a resolution to approve the division of a company requires a majority of two-thirds of the votes cast
and two-thirds of the shares represented at the meeting; in certain circumstances pertaining to
public companies, however, such resolution requires unanimous approval of the shareholders
present at the meeting, at which meeting at least nine-tenths of all outstanding shares in the
company must be represented.
General meeting of shareholders
Under the Swedish Companies Act, a company may prescribe in its articles of association that more
than one general meeting of shareholders shall be held during one year. However, the annual general
meeting of shareholders, where, among other things, the financial statements are presented and
adopted, must be held within six months of the end of each fiscal year.
Notices of annual general meetings of shareholders shall be given not more than six, and not less
than four, weeks prior to such meeting, and notices of extraordinary general meetings of shareholders
shall be given not more than six and not less than two weeks prior to such meetings, unless a
resolution amending the articles of association is proposed, in which case notice of the meeting must
be given not later than four weeks before the meeting. A shareholder may attend and vote at the
meeting either in person or by proxy. Proxies are not valid for longer terms than one year from the
date of issuance. Each shareholder is entitled to cast the full number of votes represented by such
holder’s; shares, unless otherwise prescribed in the articles of association. A voting list of those
present or represented at the general meeting of shareholders shall be prepared by the company.
According to Reinhold Polska AB’s articles of association, notices to convene general meetings of
shareholders, as well as other messages to the shareholders, shall be made through an
advertisement in Svenska Dagbladet and Post- och Inrikes tidningar.
Preferential rights to subscribe for shares
Under Swedish law, shareholders must approve each issue of additional shares. The general meeting
of the shareholders may authorize the board of directors to decide on the issuance of additional
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The Prospectus of Reinhold Polska AB
shares, provided that no change in the company's articles of association is required. Such
authorization may include a right for the board to decide on issues deviating from existing
shareholders' preferential rights. Existing shareholders have preferential rights in proportion to their
shareholdings with respect to issuances, except when payment is made in kind, of shares, convertible
debentures and warrants, unless the resolution for the issue itself, terms and conditions which have
been issued in conjunction with an earlier issue of warrants or in conjunction with an earlier issue of
convertible instruments or the articles of association provide otherwise. A resolution approving or
authorizing an issuance where the preferential right for existing shareholders is not to be applied
generally requires a majority of two-thirds of the votes cast at the meeting and two-thirds of the shares
represented at the meeting.
Limitations on voting and shareholding
There are no limitations imposed by Swedish law or by Reinhold Polska AB’s articles of association on
the rights of non-residents or foreign persons to hold or vote their shares other than limitations that
apply to all shareholders,
Board of directors and auditors
Pursuant to Reinhold Polska AB’s articles of association, Reinhold’s board of directors shall be elected
by the annual general meeting of the shareholders. According to the articles of association Reinhold’s
board of directors shall consist of not less than three and not more than seven members.
Miscellaneous
Under Swedish law, a general meeting of shareholders may not adopt any resolution that is likely to
give an undue advantage to a single shareholder, a group of shareholders or a third party to the
detriment of the company or any of the company’s other shareholders, except with the consent of all
shareholders. The board of directors or other representatives may not enter into transactions or
undertake other measures that are likely to give an undue advantage to a single shareholder, a group
of shareholders or any third party to the detriment of the company or any other shareholders, except
with the consent of all shareholders.
Owner of shares of class A and class B have equal right to dividends in Reinhold Polska, distributed
pro rata their number of shares.
Under Swedish law, if a shareholder (by itself or jointly with any subsidiary or subsidiaries) owns more
than nine-tenths of the shares of a company, such shareholder is entitled to acquire the remaining
outstanding shares in the company. In addition, a holder of shares subject to such a purchase right
may require the shareholder (who is entitled to purchase) to purchase that holder's shares. The
purchase price for the shares is determined pursuant to an arbitration proceeding, unless otherwise
agreed by the parties.
Under Swedish law, limited liability companies are divided into two categories: private and public
companies. Only the shares of public companies may be traded on a stock exchange or other
organized market places.
Reinhold Polska AB is a public limited liability company.
A Swedish public limited liability company whose shares are traded on a stock exchange, an
authorized market place or another regulated market place is entitled to purchase its own shares
under certain conditions. A purchase by a company of its own shares may take place, among others,
if:
- the purchase is authorized by a general meeting of the shareholders by a two-thirds majority of
votes cast at the meeting and two-thirds of the shares represented at the meeting;
- the purchase is effected on a stock exchange or in some other regulated market either in the EEA
or outside the EEA (in the latter case with the approval of the Swedish Financial Supervisory
Authority) or pursuant to an offer to all shareholders or holders of a specific class of shares;
- the funds used in connection with such purchase could legally have been distributed as a
dividend; and
- the company and its subsidiaries do not hold or, as a result of the purchase, will not hold in excess
of ten percent of all of the company's outstanding shares.
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Redemption of shares
Under the Swedish Companies Act a reduction of the share capital may for example be made for the
repayment of shareholders through the retirement of shares (redemption). A redemption of shares
may take place, among others, if:
the redemption is authorized by a general meeting of the shareholders by a two-thirds majority of
votes cast at the meeting and two-thirds of the shares represented at the meeting; and
the redemption is approved by the Swedish Company Authority.
The articles of association of Reinhold Polska AB do not include any specific provisions regarding the
redemption of shares.
Conversion of shares
According to the Swedish Companies Act a company may prescribe in its articles of association that
shares of one class can be converted into shares of another class on the request from a shareholder
of such shares.
The articles of association of Reinhold Polska AB includes a conversion right for holders of shares of
class A to convert the shares of class A to shares of class B.
Statement of the resolutions, authorizations and approvals by virtue of which the securities
have been or will be issued
Date of
registration
27 June 2006
New Issue
1,000 shares
Founding meeting held May 30, 2006
10 October 2006
800,000 shares of class A
10 October 2006
6,000,000 shares of class B
Authorization
yet registered
Authorization given to the
Board of Directors to issue
new shares of class B
General Shareholders’ Meeting held on 14
September 2006
General Shareholders’ Meeting held on 18
October 2006
General Shareholders’ Meeting held on 30
August 2007
not
Approval
The expected issue date of the securities falls in November 2007.
Mandatory takeover bids and/or squeeze-out and sell-out rules in relation to shares
To the extent the Reinhold Polska’s shares are not listed on a Swedish Stock Exchange there no
mandatory bids regulations under Swedish law.
As regards squeeze-out and sell out rules, if a shareholder (by itself or jointly with any subsidiary or
subsidiaries) owns more than nine-tenths of the shares of a company, such shareholder is under
Swedish law entitled to buy-out the remaining outstanding shares in the company. In addition, a holder
of shares subject to such a buy-out right may compel the shareholder (who is entitled to purchase) to
purchase that holder's shares. The purchase price for the shares is determined pursuant to an
arbitration proceeding, unless otherwise agreed by the parties.
During the last financial year and the current financial year, there have been no indications of public
takeover bids by third parties in respect of the Reinhold Polska’s equity.
Lock-up agreements
Reinhold Group BV will not, prior to 180 days after the first trading day of the Offer Shares, sell,
contract to sell any Shares of Reinhold Polska AB, provided that the aforementioned restrictions will
not apply to the Offer Shares sold in the Combined Offering.
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The Prospectus of Reinhold Polska AB
TAXATION
A summary of Polish and Swedish tax consequences of an investment in the Offer Shares is set forth
below. The summary is for general information only and does not purport to be a comprehensive
description of all the tax considerations which may be relevant to a decision to invest in or hold
Shares.
Prospective investors should consult their own tax advisers as to the particular tax consequences of
their purchasing, owning and disposing of the Shares, including the applicability and effect of state,
local, foreign and other tax laws and possible changes in tax law.
Taxation in Poland
Rules for the Taxation of Trading in and Income Derived from Securities in Poland
The information below is of a general nature only and takes into account the tax provisions binding at
the date of this Prospectus and should therefore not be relied upon in isolation when assessing the tax
consequences of any investment decision. It is recommended that before making any investment
decision, a prospective investor should consult a tax adviser or legal counsel on any potential tax
consequences.
Individuals who have their place of residence in Poland are subject to Polish Personal Income Tax
(“PIT”) on their worldwide profits, irrespective of the location of the source of income. Individuals who
do not have a place of residence in Poland are subject to PIT only as regards the profits that they
derive from Polish sources.
Legal entities, companies in organizations and other entities with no legal personality (with the
exception of certain types of partnerships) that have their registered seats or their management in
Poland, are subject to Polish Corporate Income Tax (“CIT”) on their worldwide profits irrespective of
the country from which they were derived. The aforementioned entities (including foreign partnerships
that have no legal personality, if treated as a legal entity under the tax law of a given country and if
they are subject to taxation in that country on their worldwide income) that do not have their registered
seat or their management in Poland, are subject to CIT only as regards profits that they derive in
Poland.
Taxation of Profits from the Disposal of Shares
Taxation of Profits Derived by Polish Individuals from the Transfer of Shares
Under the PIT provisions, the profits derived by individuals, as Polish tax residents, from the transfer
of shares for consideration, are subject to PIT at a flat rate of 19 per cent. on the amount of profit. The
profits from the transfer of shares for consideration derived by individuals is not aggregated with their
income from other sources.
Profits are calculated as the difference between the income derived from the transfer of shares for
consideration and the tax deductible cost. The income constitutes the value of the shares as
represented by the price specified in the relevant agreement, reduced by the cost of transfer for
consideration as defined by the Polish Personal Income Tax Act of 1991, (the “PIT Act”). If the price
differs significantly from the market value of shares, for reasons that cannot be justified, it may be
open to questioning by the tax authority. The PIT Act specifies what costs can be treated as tax
deductible.
Individuals are obliged to declare the profits received from the transfer of shares for consideration, and
pay the due tax by 30 April of the year following the year in which the profits were received. The above
rules do not apply when the shares are sold by Polish individuals within the scope of their business
activity. In such circumstances, the profits received from the transfer of shares for consideration is
either subject to PIT at the flat rate of 19 per cent., or according to a progressive scale, which in 2007
varies between 19 and 40 per cent. (depending on the form of taxation chosen by the individual).
Taxation of Profits Derived by Polish Entities from the Transfer of Shares
Under the Polish Corporate Income Tax Act of 1992 (the “CIT Act”), the profits derived by entities that
are Polish tax residents from the transfer of shares for consideration are subject to CIT at the standard
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rate of 19 per cent. The profits received from the transfer of shares for consideration derived by
entities is aggregated with their other profits. Profits are calculated as the difference between the
income derived from the transfer of shares for consideration and the tax deductible cost, as defined by
the CIT Act.
The entities that transfer shares for consideration are obliged to declare income (or loss) derived from
such sources in their monthly tax returns and pay the amount of tax due.
Taxation of Profit Derived by Non-Polish Residents from the Transfer of Shares
According to prevailing Polish tax practice, the profits derived by non-Polish residents from the transfer
of shares listed for consideration on the Warsaw Stock Exchange are treated as profits from a Polish
source. Such profits are taxed in Poland according to the general rules stipulated by Polish tax law,
unless the relevant tax treaty on the avoidance of double taxation between Poland and the country of
residence of the non-Polish investor states otherwise.
Taxation of Income from Dividends
Taxation of Dividends Paid to Polish Individuals
Under the PIT act, the dividends are taxed at the flat rate of 19%. The tax shall be withheld at the date
of the payment by the company which executes the payment of the dividend. The payers are obliged
to transfer the amounts withheld to the account of the relevant tax office by the 20th day of the month
following the month in which the tax was withheld. Dividends are not further taxable at the general
progressive income tax rates and the withholding tax is not credited against the individual income tax
liability. The dividend income subject to the flat 19% PIT rate is not aggregated with profit from other
sources. Such dividend income should also not be revealed by the taxpayer in the annual return
concerning the amount of income achieved by the taxpayer in given year.
Taxation of Dividends Paid to Polish Entities
There is no definition of dividends for tax purposes, but dividend income generally includes, besides
regular profit distributions, liquidation and redemption proceeds. Under recent case law, the same
treatment applies upon the capitalization of reserves and provisions (stock dividends), regardless of
the origin of the reserves or provisions. Dividends paid by resident companies to other resident
companies are subject to a 19% withholding tax. In respect of tax withheld before 1 January 2008, a
credit for the tax is granted against the shareholder's corporate income tax liability, even though the
dividends are not included in taxable income. Any excess credit may be carried forward indefinitely.
The tax shall be withheld at the date of the payment by the company which executes the payment of
the dividend. However, if certain condition are met the exemption from tax on dividend can be applied
(so called “participation exemption”). Such exemption is applicable provided that:
- the payer is a company that is an income taxpayer with its seat or place of management in Polish
territory;
- the beneficiary is a company subject to unlimited tax liability in Poland; and
- the beneficiary holds not less than 15% of the payer’s shareholding.
Polish tax law provision also provide for a time requirement in respect of the shareholding.
Specifically, the exemption applies if the substantial shareholding is maintained for an interrupted
period of at least two years.
Civil Law Transactions Tax
Generally, the sale of shares in non-Polish companies is subject to 1 per cent, civil law transaction tax
on their market value. However, the sale of brokerage financial instruments (including securities) to
investments firms or through their intermediation or sale of the brokerage financial instruments on the
regulated market or on the alternative market in Poland, is exempt from civil law transaction tax.
Acts in civil law (including the sale of rights) are not subject to civil law transactions tax, if at least one
party, when performing such an act, is subject to VAT or is VAT exempt (subject to certain
exceptions).
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Taxation in Sweden
This section describes the material Swedish income and net wealth tax consequences of owning and
disposing of our Shares for investors that are not considered to be Swedish residents for Swedish tax
purposes. This section applies only to investors that have acquired their Shares in the Offering as a
portfolio investment representing less than ten percent of our capital and votes. This section is not
applicable if the Shares pertain to a permanent establishment in Sweden such as a fixed place of
business in Sweden. Residents of Sweden should see the Swedish Prospectus for further information.
Taxation of Dividends
A Swedish dividend withholding tax at a rate of 30 percent is imposed on dividends paid by a
Swedish company such as a listed Swedish company to non-residents of Sweden. The same
withholding tax applies to certain other payments made by a Swedish company including payments
as a result of redemption of shares and repurchase of shares through an offer directed to its
shareholders. Exemption from the withholding tax or a lower tax rate may apply by virtue of a tax
treaty. For example, under the Sweden/US treaty, the withholding tax on dividends paid on portfolio
investments to eligible U.S. Holders shall not exceed 15 percent.
Generally, withholding tax at the applicable treaty rate should be withheld by the payer of the
dividends. With regard to dividends paid in respect of shares in companies registered with VPC (such
as our Shares), a reduced rate of withholding tax under a tax treaty is generally applied at the source
by VPC or, if the shares are registered with a nominee, by the nominee, as long as the person
entitled to the dividend is registered as a non-resident and sufficient information regarding the tax
residency of the beneficial owner is available to VPC or the nominee.
In cases where Swedish withholding tax is withheld at the rate of 30 percent and the person that
receive the dividends is entitled to a reduced rate of withholding tax under a tax treaty, a refund may
be claimed from the Swedish Tax Agency before the end of the fifth calendar year after the
distribution of the dividend.
Taxation of Capital Gains
Generally, non-residents of Sweden are not liable for Swedish capital gains taxation with respect to
the sale of shares. However, under Swedish tax law, capital gains from the sale of Swedish shares
(and certain other securities) by a private individual are taxed in Sweden at a rate of 30 percent (or at
30-57 percent if the special tax provisions regarding so-called closely-held companies are applicable)
if the individual has been a resident of Sweden or has lived permanently in Sweden at any time
during the year of sale, or the ten calendar years preceding the year of sale. This provision may,
however, be limited by tax treaties which Sweden has concluded with other countries. For example,
the Sweden/US treaty does not limit Sweden’s right to tax gains at any time during the ten years
following the date on which the individual has ceased to be a resident of Sweden.
Net Wealth Taxation
The Shares are not subject to Swedish net wealth taxation in the hands of an investor that is not
resident in Sweden.
Prospective investors should consult tax advisors regarding the Swedish and other tax con-sequences
of acquiring, owning and disposing of our Shares in their particular circumstances.
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SECURITIES MARKET
The Following chapter provides certain information about the Polish and certain provisions of Polish
law and Polish securities market regulations in effect as of the date of this Prospectus.
Warsaw Stock Exchange
General information
The stock exchange in Poland is operated by the company Gielda Papierow Wartosciowych w
Warszawie Spolka Akcyjna (the “Warsaw Stock Exchange”). The Warsaw Stock Exchange conducts
its activity and operates pursuant to statutory regulations including, among others, the Act of 29 July
2005 on Trading in Financial Instruments (Ustawa o obrocie instrumentami finansowymi) (the “Trading
Act”), as well as its internal rules regulating issues connected with stock exchange markets operated
by it.
As of 31 August 2007, there were 315 companies listed on the Warsaw Stock Exchange, of which 15
were foreign issuers. As of the same day, the total capitalization of the companies listed on the
Warsaw Stock Exchange was PLN 822 billion. In 2006, 38 new companies (including six foreign
issuers) debuted on the Warsaw Stock Exchange. This made the Warsaw Stock Exchange the fifth
largest European stock exchange market and the largest CEE market in terms of new issuers
admitted to listing. The Management Board of the Warsaw Stock Exchange expects that in 2007,
approximately 60 new companies will be listed on the Warsaw Stock Exchange.
Trading and settlement
The securities, in order to be traded on the Warsaw Stock Exchange, must be:
(a) admitted to listing on the Warsaw Stock Exchange (such admission may cover the securities that
do not exist as of the date of admission) and
(b) admitted to trading on the Warsaw Stock Exchange (such admission must cover the existing
securities that were allocated to the subscribers).
The decision on both admissions is issued by the Management Board of the Warsaw Stock Exchange
at the request of the issuer. If, within the six months following the admission of shares to listing on the
Warsaw Stock Exchange, the issuer will not apply for admission of the shares to trading on the
Warsaw Stock Exchange, the Management Board of the Warsaw Stock Exchange may revoke its
decision on the admission to listing. The securities listed on the Warsaw Stock Exchange are quoted
in Polish Zloty. The settlement of the transactions concluded on the Warsaw Stock Exchange takes
place outside the Warsaw Stock Exchange through the KDPW.
Regulation of the Polish securities market
General information
The information below outlines selected Polish law regulations which are applicable to trading of
securities and to publicly-listed companies as of the date of the Prospectus.
Reinhold Polska AB has its registered office in Sweden, and is therefore a foreign entity governed by
Swedish law. Therefore, certain Polish legal considerations may not apply or may be irrelevant. Before
taking any action specified below, the prospective investor should seek the advice of a professional
attorney in order to determine whether such action is or is not permitted.
Reduction of publicly traded securities to book-entry form (dematerialization)
Under Polish law, the securities which are offered in a public offering or admitted to trading on a
regulated market shall have no documentary form and shall be registered in the depository-settlement
system operated by the KDPW. Before the commencement of a public offering or before applying for
the securities to be admitted to trading on a regulated market the issuer shall conclude the agreement
with the KDPW for the registration of securities in the depository-settlement system operated by the
KDPW.
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The rights attached to the dematerialized securities are established upon their registration in their
respective securities accounts. The transfer of such securities becomes effective once the appropriate
record has been made in the relevant securities account.
At the request of the holder of a securities account, the entity keeping the account shall issue a written
deposit certificate in the name of the holder (the “deposit certificate”). The deposit certificate confirms
the holder’s entitlement to exercise such rights attached to the securities specified in such certificate
that are not or cannot be exercised solely on the basis of the registration in the securities account. As
of the date the deposit certificate is issued, the number of securities specified in such certificate will
not be traded until the lapse of the certificate’s validity period, or its earlier return to the certificate
issuer. The certificate issuer will block the relevant number of securities in the account for the duration
of the deposit certificate validity period.
Notification duties related to the purchase and sale of substantial blocks of shares
The Public Offering Act stipulates that the shareholder who:
- has achieved or exceeded 5 per cent., 10 per cent., 20 per cent., 25 per cent., 33 per cent., 50 per
cent. or 75 per cent. of the total number of votes in a public company; or
- held at least 5 per cent., 10 per cent., 20 per cent., 25 per cent., 33 per cent., 50 per cent. or 75
per cent. of the total number of votes in a public company, and as a result of the reduction of its
equity interest, now holds 5 per cent., 10 per cent., 20 per cent., 25 per cent., 33 per cent., 50 per
cent. or 75 per cent. or less of the total number of votes in a public company;
shall notify the Polish Financial Supervision Commission and this public company of such change in
the number of votes represented by the shares held by such shareholder. The notification shall be
filed within four days from the date of a change in such shareholder’s share in the total number of
votes, or from the date on which the shareholder becomes, or by exercising due care could have
become, aware of such change.
The notification requirements specified by the Public Offering Act also apply to a shareholder who:
- held over 10 per cent. of the total number of votes in a public company and his/her share has
changed by at least: (a) two per cent. of the total number of votes — in the case of a public
company whose shares have been admitted to the trading on the official listing market or (b) five
per cent. of the total number of votes — in the case of a public company whose shares have been
admitted to the trading on a regulated market other than the official listing market; or
- held over 33 per cent. of the total number of votes and this share has changed by at least one per
cent. of the total number of votes.
The public company notified by the shareholder about the facts specified above will publish, within 24
hours from obtaining such notification, a relevant current report including the information provided by
the shareholder.
Mandatory public tender offers
Pursuant to the Public Offering Act, in certain situations the entity acquiring the shares in a public
company is obliged to acquire such shares by way of a public tender offer to subscribe for the sale or
exchange of shares (the “public tender offer”) announced by the acquirer.
The first type of mandatory public tender offer refers to the acquisition of shares in a public company
in a number that increases a shareholder’s share in the total number of votes by more than:
- 10 per cent. within less than 60 days — in the case of a shareholder holding the shares
representing less than 33 per cent. of the total number of votes at the general meeting of
shareholders in a public company; or
- 5 per cent. within less than 12 months — in the case of a shareholder holding the shares
representing at least 33 per cent. of the total number of votes at the general meeting of
shareholders in a public company.
The second type of mandatory public tender offer refers to the acquisition of shares in a public
company that will result in the acquirer exceeding 33 per cent. of the total number of votes at the
general meeting of shareholders in such public company. Such acquisition may only be executed by
way of the public tender offer concerning a number of shares which confers the right to 66 per cent. of
the total number of votes at the general meeting of shareholders in such public company, unless the
33 per cent. threshold is to be exceeded as a result of the public tender offer concerning all the
remaining shares in a public company (as described below).
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The third type of mandatory public tender offer refers to the acquisition of shares in a public company
that will result in the acquirer exceeding 66 per cent. of the total number of votes at the general
meeting of shareholders in such public company. Such acquisition may be executed only by way of
the public tender offer concerning all the remaining shares in this company.
The Public Offering Act also includes regulations regarding the minimum price for the tendered
shares. For the purposes of the obligations referring to substantial blocks of shares, the shareholdings
of affiliates, parties acting in concert and certain other entities associated with the shareholders shall
be aggregated.
Insider trading
“Insider information” is defined in Polish law as specific information relating to, directly or indirectly, the
issuer, financial instruments (including securities) or acquisition or disposal of such financial
instruments, if such information has not been disclosed to the public and, if so disclosed, it could
materially influence the price of such financial instruments (or the price of derivative rights arising from
such financial instruments).
Subject to certain exceptions, the issuer is obliged to disclose the insider information promptly upon
the occurrence of events or circumstances which require the disclosure, or upon becoming aware of
such events or circumstances, but not later than within 24 hours. The issuer is also obliged to disclose
such information on its website, except for personal data of any persons to whom such information
refers. Subject to certain exceptions, any individual who acquires insider information as a result of his
position in a company’s governing bodies or as the owner of a company’s shares, or as a result of his
employment in such company, or any other similar legal relationship, is prohibited by law from using or
disclosing such information to third parties. The above also applies to individuals who illegally obtain
insider information or obtain such information in another manner, but should have known that such
information was insider information.
Market manipulation
Share price manipulation is defined by reference to a number of activities, including, without limitation,
taking actions whose effect could be misleading as to the actual demand, supply or price of the shares
in question or actions involving placing orders or executing transactions that cause an artificial fixing of
the share price, unless the grounds on which such actions were effected are legitimate and such
actions have not infringed the established market trading rules. Manipulation may also include
disseminating false or inaccurate information that may mislead investors, as well as placing orders or
executing transactions in order to profit from investors having been misled as to the price or value of
the shares in question. Manipulation is prohibited under Polish law.
Taking into account that the provisions regarding public companies refer to the corporate nature of
such entities, it is not clear whether such provisions will apply to the Company solely on the basis of
the fact that they have been implemented by Polish law.
Rules for publication of information for investors in Poland
Each company whose shares are listed on the Warsaw Stock Exchange is obliged to provide investors
with current and periodic information regarding this company and its activity. The issuer with its
registered office outside the territory of the Republic of Poland, whose securities of the same type as
those admitted to trading on the Warsaw Stock Exchange are also admitted to trading on the
regulated market in at least one EU member state, is obliged to provide Polish investors with the
current and periodic reports published by such issuer on the market where such issuer’s securities are
traded.
The current and periodic reports shall be published in Poland at the same time as they are published
on the foreign regulated market on which the issuer’s securities are traded.
Foreign issuers may publish current and periodic reports in English. However, each current report
shall be supplemented by a short summary in Polish. The periodic report shall be published together
with a translation of selected items of financial statements presenting basic information on the issuer’s
financial standing. The full content of the current or periodic report translated into Polish shall be
published by the issuer as soon as is practically possible, but in any case no later than within five days
(with respect to the current report) or three weeks (with respect to the periodic report).
Current and periodic reports are disseminated through the Electronic System for Provision of
Information (Elektroniczny System Przekazywania Informacji) (the “ESPI System”), which is a
dedicated system used by the issuers of securities. Current or periodic reports sent by the issuer via
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the ESPI System are delivered at the same time to the Polish Financial Supervision Commission and
the Warsaw Stock Exchange and, after 20 minutes, to the Polish Press Agency. The Polish Press
Agency publishes current and periodic reports on its website.
Corporate Governance Code of the Warsaw Stock Exchange
In connection with the proposed listing of the Shares on the Warsaw Stock Exchange, the Company is
required to make a statement of compliance or non-compliance with the Corporate Governance Rules
of the Warsaw Stock Exchange. The Company is required to declare which of the principles of the
Code it intends to comply with, as well as to enumerate the principles which it does not intend to
comply with, and to state the reasons for non-compliance.
Detailed information regarding compliance or non-compliance, as well as required explanations, will
be included in the full text of the Company’s statement regarding the Corporate Governance Rules of
the Warsaw Stock Exchange, which will be filed with the Warsaw Stock Exchange at the time of the
Company’s application for listing and will be available on the website of the Company.
The respective resolution will be approved by the Board Of Directors on 24 October 2007.
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TERMS AND CONDITIONS OF THE COMBINED
OFFERING
The Combined Offering comprises of up to 1,400,000 Offer Shares for sale: (i) up to 1,000,000 New
Shares offered by Reinhold Polska AB, (ii) up to 400,000 shares offered by Selling Shareholders.
The maximum Offer Price shall be 150 SEK per share.
The Combined Offering is addressed for Institutional Investors in Poland and certain EU member
states (see: Selling restrictions) as well as Individual Investors in Poland.
General information
Interest of parties involved in the Combined Offering
All parties involved, will receive remuneration and commissions in connection with the Combined
Offering.
Assuming the maximum Offer Price of Reinhold Polska AB shares at 150 SEK per share, the parties
will receive the total remuneration of around 820,000 EUR, including advisory services and offering,
documentation, legal advisory, auditing and other costs related to a promotion, registry and admission
to trading.
New shares of Reinhold Polska AB
Pursuant to a resolution of the shareholders’ meeting dated August 30, 2007, the Board of Directors
were authorized for the time until the next Annual General Meeting of Shareholders to increase the
share capital of the Company by a new issue of shares Class B, with or without deviation from the
shareholders’ preferential rights, and also decide upon other conditions relating to the share issue.
Based on the above-mentioned authorization, the Board of Directors intends on 24 September 2007 to
resolve to increase the share capital of the Company by maximum SEK 500,000 by issuing maximum
1,000,000 New Shares, of class B with deviation from existing preferential rights, to offer the issued
shares in a public offering in Poland and to apply for the shares to be admitted to public trading on a
regulated market in Poland, to apply for the existing (prior to the share issues) Shares of class B to be
admitted for trading on a regulated market in Poland, to enter into agreements with the Polish and, to
the extent necessary, Swedish national securities depositories, that the maximum Offer Price for a
newly issued share shall be 150 SEK, that the Subscription Period shall run from 26 October 2007 to
31 October 2007, that the Offer Period shall run from 24 October 2007 to 9 November 2007, and that
the final subscription and Offer Price shall be determined on or about 26 October 2007, and to take
any other action necessary to effect the Offer.
The Lead Manager expects to deliver the Offer Shares through the facilities of the Polish NDS on or
about 9 November 2007 following full prepayment for allotted Offer Shares.
Selling shareholders
The Board of Directors and the larger shareholders are endeavoring to effect a new issue of shares
based on the above-mentioned authorization as well as to sell shares, which will increase the number
of shareholders in the company.
Up to 400,000 existing ordinary Class B shares of Reinhold Polska AB, which currently represent a
portion of the share capital of SEK 0,5 each, will be sold by existing shareholders. The ISIN for the
Existing class B Shares and the Offer Shares is SE0001856519.
List of shareholders who are selling shares:
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Shareholder’s name
Reinhold Group BV
TOTAL
Current holding
1,060,000
1,060,000
Shares for sale in IPO
400,000
400,000
The shares of Reinhold Polska AB were created based on the provisions of the Swedish Companies
Act and in accordance with the company’s founding memorandum and articles of association. They
are subject to the laws of Sweden.
All shares of Reinhold Polska AB are registered with, and the register of shareholders is kept by, the
computerized book-entry share registration system administrated by VPC AB and there are no
physical share certificates. Following payment and registration of the shares, a note will be sent out
evidencing that the paid shares are registered on the purchaser’s relevant account. Shares referable
to purchaser’s who in the application have provided information that the shares should be held by a
certain bank or similar institute will be registered at such account and the purchaser will be notified in
accordance with any such bank’s and institute’s routines.
Title to the Offer Shares will thus be transferred in accordance with the rules of that clearing system.
The Offer Shares are denominated in SEK (Swedish Krona).
Transferability of the Shares
All issued A and B shares are freely transferable.
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Terms and conditions of the Offering
Expected timetable
The Offering will be conducted pursuant to the following indicative timetable:
24 – 25 October
up to 3 p.m. CET
26 October
26 – 31 October
5 November
By 9 November
Book-building process among Institutional Investors
Determination of the Offer Price and the final number of Offer Shares
Subscription period
Allotment date
Settlement and Delivery date
Reinhld Polska AB, with the agreement of the Lead Manager, reserves the right to change the above
timetable of the Combined Offering, including the dates for accepting subscription orders. Information
on timetable changes, if any, shall be published in the same manner as this Prospectus.
Moreover, the Combined Offering can be revoked or suspended a day before opening the subscribtion
period as the latest, depending on the following criteria:
- situation on the Polish and international capital markets;
- unsatisfactory issue price achieved in book-building
The information on revoking or suspending of the Combined Offering will be published by means of an
ad-hoc announcement on an electronic news information system and also, in Poland in the Gazeta
Gieldy “Parkiet” and will be published in the same way as the Prospectus and in the form of a current
report. Such information will be provided to the Polish Financial Supervision Authority and the Warsaw
Stock Exchange in accordance with article 54 section 3 of the Polish Public Offering Act.
If Reinhold Polska AB will decide on revoking or suspending the Combined Offering, all book-building
declarations will be automatically cencelled.
Lead Manager and Co-Managers
Offer Shares will be offered in a public offering to:
- Institutional Investors in Republic of Poland by Suprema Securities S.A. seated in Warsaw
(Poland), Jasna Street 14/16A, phone: +48 22 345 84 00; fax: +48 22 345 84 11; e-mail:
[email protected]
- Individual Investors in Poland by Beskidzki Dom Maklerski S.A., seated in Bielsko-Biala (Poland),
Stojalowskiego Street 27, phone: +48 33 812 84 40, fax: +48 33 812 84 42; e-mail:
[email protected]
The Offer Shares will be offered through road shows and sales activities undertaken by financial
institutions.
Book-building
Prior to commencement of the Subscription Period, a book-building process will take place amongst
Institutional Investors invited by the Lead Manager during which such Institutional Investors, interested
in subscribing for the Offer Shares, will indicate the number of the Offer Shares they will be willing to
acquire and the offer price at which they will be willing to subscribe for.
In book-building process, investors may submit bids for any number of shares within the range from 1
to 1,400,000, expressing the number of Offer Shares and price. There are no restrictions in respect to
number of bids submitted for Offer Shares.
While submitting book-building declarations, investors declare unrevokable obligation to subscribe for
the Reinhold Polska AB shares during subscribtion period, providing the Combined Offering will not be
revoked or suspended. Investors are not allowed to withdraw book-building declaration.
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Prospective Institutional Investors seeking to take part in the book-building process and to subscribe
or purchase Offer Shares are advised to contact Suprema Securities S.A. for further details regarding
the subscription process.
Suprema Securities S.A.
14/16A Jasna Street
00-041 Warsaw, Poland
Phone: +48 22 345 84 13
Fax: +48 22 345 84 11
e-mail: [email protected]
Determination of the Offer Price
The Offer Price will be determined by the Board of Directors with the agreement of the Lead Manager,
following the completion of the book-building process among Institutional Investors.
The price will be determined based on the following criteria and rules:
- the current and anticipated situation on the Polish and international capital markets;
- the assessment of the growth prospects, risk factors and other information relating to the
Company’s activities as described in this Prospectus;
- the book-building process.
The final Offer Price will be published on or about 26 October 2007, 10:00 am CET, by means of an
ad-hoc announcement on an electronic news information system and also, in Poland in the Gazeta
Gieldy “Parkiet” and will be published in the same way as the Prospectus and in the form of a current
report.
Moreover, such information will be provided to the Polish Financial Supervision Authority and the
Warsaw Stock Exchange in accordance with article 54 section 3 of the Polish Public Offering Act. No
expenses or taxes will be charged to the subscribers for or the purchasers of the Offer Shares, except
for customary banking charges.
Allotment
After closing book-building process Lead Manager will allot shares among Institutional Investors.
Purchase orders will be evaluated on the basis of the offer prices and investor demand. Other factors
that will be considered include the quality of the investor, whether the investor has a long-term
investment strategy, the goal of maximizing the proceeds from the Combined Offering and the goal of
supporting the development of an orderly and liquid secondary market for the Offer Shares.
All bids submitted below the final Offer Price will be cancelled.
The final number of shares in a specific tranches for both Institutional and Individual Investors will be
determined in the absolute discretion of the Board of Directors and the Lead Manager, with the
assumption of the results of book-building. However the Lead Manager plans to distribute minimum
20% (280,000 shares) of offered shares to individual investors.
The information on the split for different tranches will be published in line with publication of the issue
price. Any further changes may be intoroduced under following rules and conditions:
1) the demand in one tranche will be higher then the number of shares supplied,
2) the demand in another tranche will be lower then the number of shares supplied.
After the shares are allocated, Lead Manager will issue invitation to investors to subscribe for Offer
Shares – by fax stated in book-building declaration. In the invitation Suprema Securities S.A. will
specify the number of shares granted to the investor, issue price as well as the value of the bid.
Reinhold Polska AB and the Lead Manager have not introduced any policy regarding preferential
treatment to certain classes on investors or certain affinity groups in the allotement or any discrepancy
by firm the subscribtion is made.
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Offer Period
The period during which investors may purchase Offer Shares in the Combined Offering (the “Offer
Period”) will run from 26 October 2007 until 31 October 2007, 17.00 CET. The payment for shares
must be delivered during the Offer Period, no later then 31 October 2007 (date, payment is received).
Applications for allotted Offer Shares from Institutional Investors, who have been invited to place
orders following the completion of the book-building process, will be accepted at the registered office
of Suprema Securities S.A. at 14/16A Jasna Street, Warsaw, Poland.
Applications from Individual Investors will be accepted at the registered Orders Reception Points of
Beskidzki Dom Maklerski listed in Annex D.
Multiple subscriptions and offers to purchase will be accepted from Individual Investors, providing the
total amount of shares will not exceed 25,000 shares. In the case of any unsuccessful subscriptions,
to the extent that any payment in excess of that required for the Offer Shares allotted has been made,
The number of Offer Shares allocated to Individual Investor in the Public Offering will be determined in
the absolute discretion of the Board of Directors and the Lead Manager, however the Lead Manager
plans to distribute minimum 20% (280,000 shares) of Offered Shares to Individual Investors. Polish
Individual Investors are expected to be allocated Offer Shares on a pro rata basis with no minimum
allotment.
Prospective investors are advised to contact Beskidzki Dom Maklerski S.A. for details regarding the
refund of monies.
Purchase bids
Prospective international investors seeking to purchase Offer Shares in the Combined Offering are
advised to contact either the Lead Manager, or their bank, broker or other financial adviser for further
details regarding the manner in which purchase bids for Offer Shares are to be processed.
For specific information about the Global in Poland see “Additional Information relating to the Polish
Public Offering”.
Delivery and Settlement
The Lead Manager expects to deliver the Offer Shares through the facilities of the NDS on or about 9
November 2007 following full prepayment for allotted Offer Shares.
Admission to trading
Reinhold Polska AB has applied for listing of the Existing Bearer Shares and the Offer Shares on the
Main Market of the Warsaw Stock Exchange and expects trading on the Warsaw Stock Exchange to
start on or about 12 November 2007.
Reinhold Polska’s shares will be traded on the WSE at PLN.
Underwriting
Reinhold Polska AB and the Lead Manager did not signed Underwriting Agreement.
Stabilization
Reinhold Polska AB and the Lead Manager did not signed Stabilization Agreement.
Over-allotment
Reinhold Polska AB did not granted or signed any over-allotement option to the Lead Manager or any
other brockerage firm.
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The Prospectus of Reinhold Polska AB
Green-shoe
Reinhold Polska AB did not granted or signed any green-shoe option to the Lead Manager or any
other brockerage firm.
Pre-emptive purchase rights
Under the authorization of Extraordinary General Meeting of Shareholders, held on 30 August 2007,
The Board of Directors of Reinhold Polska AB resolved to increase a share capital by no more then
500,000 SEK by a new share issue of no more then 1,000,000 shares od class B with deviation from
the shareholder’s preferential rights.
Private placements
Under the authorization of Extraordinary General Meeting of Shareholders, held on 30 August 2007,
The Board of Directors of Reinhold Polska AB resolved to increase a share capital by no more than
500,000 SEK by a new share issue of no more then 1,000,000 shares of class B with deviation from
the shareholder’s preferential rights. New shares shall be subscribed by Institutional and Private
Investors in Poland. No securites of the same class or other classes were issued in order to become a
subject of private placements.
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The Prospectus of Reinhold Polska AB
SELLING RESTRICTIONS
The Offer Shares is carried out in the Republic of Poland. This Prospectus is approved by the Swedish
Financial Supervisory Authority and notified only to the Polish Financial Supervision Commission on
the basis of the EU prospectus passport procedure.
No actions has been or will be taken in any jurisdictions other then Sweden and Poland then would
permit a public offering of the Offer Shares or the possession, circulation or distribution of this
Prospectus or any other material relating to the Company of the Offer Shares in any jurisdiction where
action for that purpose is required. Accordingly, the Offer Shares may not be sold, directly or indirectly,
and neither this Prospectus not any other offering material or advertisement in connection with the
Offer Shares may be distributed or published in any form or in any country or jurisdiction except under
circumstances that will result in compliance with any applicable laws, rules and regulations of any
such country or jurisdiction. The Company and the Lead Manager require that the persons to whom
this Prospectus is available familiarize themselves with all restrictions regarding the Combined
Offering of the Offer Shares and the distribution of this Prospectus and comply with them.
The Lead Manager has acknowledged that it has not been offered, sold or delivered and will not offer,
sell or deliver any of the Offer Shares directly or indirectly, or distribute this Prospectus or any other
offering material relating to the Offer Shares, in or from any jurisdiction except under circumstances
that will result in compliance with the applicable laws and regulations thereof and will not impose any
obligations on the Company.
Notice to investors in the United States
The Offer Shares have not been and will not be registered under the U.S. Securities Act of 1933 (the
“Securities Act”) as well as any other state’s securities law and may not be offered or sold within the
United States.
Notice to investors in the European Economic Area
In relation to each member state of the European Economic Area which has implemented the
Prospectus Directive (each, a “Relevant Member State”), an offer to the public of any Offer Shares
which are the subject of the Combined Offering contemplated by this Prospectus may not be made to
the public in that Relevant Member State, except that an offer of Offer Shares may be made to the
public in that Relevant Member State at any time under the following exemptions under the
Prospectus Directive, if they are implemented and in accordance with the implementing legislation in
that Relevant Member State:
- to legal entities which are authorized or regulated to operate in the financial markets or, if not so
authorizd or regulated, whose corporate purpose is solely to invest in securities;
- to any legal entity which has two or more of (i) an average of at least 250 employees during the
last financial year; (ii) a total balance sheet of more than €43,000,000 and (iii) an annual net
turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
- to fewer than 100 natural or legal persons (other than qualified investors as defined in the
Prospectus Directive) subject to obtaining the prior consent of the Managers for any such offer; or
- in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no
such offer of Offer Shares shall result in a requirement for the publication by the Company or Lead
Manager of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression “offer of any Offer Shares to the public” in relation to
any Offer Shares in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and any Offer Shares to be offered so as to
enable an investor to decide to purchase any Offer Shares, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member State, and the
expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
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The Prospectus of Reinhold Polska AB
Notice to investors in Poland
This Prospectus may not be distributed to the public and the Offer Shares may not be publicly offered
for sale, purchase or barter in Poland, other than in compliance with the Public Offering Act.
This Prospectus may not be distributed to the public prior to the completion of the following actions:
- the Polish Financial Supervision Commission is provided by the SFSA with a notification
document confirming the approval of this Prospectus and a copy of the approved Prospectus
along with a Polish translation of the Prospectus summary,
- the Polish Financial Supervision Commission notifies the Company on obtaining the documents
specified above, and
- upon the abovementioned notification of the Polish Financial Supervision Commission the
Company publishes this Prospectus in Poland.
The Offer shares may not be publicly offered for sale, purchased or bartered in Poland before the
completion of the actions specified above.
The Offer Shares may be subject to a promotional campaign, provided that all promotional materials
unequivocally state:
- that they are exclusively of an advertising or promotional nature,
- that this Prospectus has been or will be published,
- the location where this Prospectus is or will be available.
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The Prospectus of Reinhold Polska AB
DOCUMENTS ON DISPLAY
The Company hereby declares that during the validity of this prospectus, copies of documents listed
below
- the Articles o Association of the Company, in their respective valid form;
- this Prospectus;
- the decisions of Swedish Financial Supervisory Authority regarding Prospectus;
- the notification of Polish Financial Supervision Authority regarding Prospectus approved by
Swedish Financial Supervisory Authority;
- the Audited Consolidated Financial Statement dated on December 31, 2006;
- the Interim Consolidated Financial Statement dated on June 30, 2007;
can be inspected at:
- Registered office of Reinhold Polska AB located at Västmannagatan 52, 113-21 Stockholm,
Sweden;
- Warsaw office of Reinhold Polska AB located at Jerozolimskie 53 Avenue, 00-697 Warsaw,
Poland;
- Katowice office of Reinhold Polska AB located at Francuska Street 35-37, 40-027 Katowice,
Poland;
- Cracow office of Reinhold Polska AB located at Karmelicka Street 27, 31-131 Cracow, Poland;
- Poznan office of Reinhold Polska AB located at Wolnosci Square 8, 61-738 Poznan, Poland;
- Wroclaw office of Reinhold Polska AB located at Kosciuszki Street 29, 50-012 Wroclaw, Poland.
Copies of the Prospectus and Polish translations of Summary as well as application forms will be
available at the following addresses (excluding public holidays) during usual business hours:
- Reinhold Polska AB’s registered office in Stockholm, Sweden set forth above;
- Warsaw office of Reinhold Polska AB set forth above;
- Katowice office of Reinhold Polska AB set forth above;
- Cracow office of Reinhold Polska AB set forth above;
- Poznan office of Reinhold Polska AB set forth above;
- Wroclaw office of Reinhold Polska AB set forth above;
- Suprema Securities SA at Jasna Street 14/16A, 00-041 Warsaw;
- orders reception points of Beskidzki Dom Maklerski SA (for the addresses and phone numbers
see Annex D).
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The Prospectus of Reinhold Polska AB
ANNEX A: ARTICLES OF ASSOCIATION &
RESOLUTIONS
Bilaga 1/Appendix 1
N.B. The English text is an in-house translation
BOLAGSORDNING
ARTICLES OF ASSOCIATION
För / for
REINHOLD POLSKA AB
(org nr / Reg. No. 556706-3713)
Antagen på extra bolagsstämma den 30 augusti 2007.
Adopted at the Extraordinary Shareholders’ Meeting on 30 August, 2007.
1§
Firma/Name
Bolagets firma är Reinhold Polska AB. Bolaget är publikt (publ).
The company´s name is Reinhold Polska AB. The company is a public company (publ).
2§
Styrelsens säte/Registered office of the board of directors
Styrelsen har sitt säte i Stockholm.
The board of directors’ registered office shall be situated in Stockholm, Sweden.
3§
Verksamhetsföremål/Business
Bolaget har till föremål för sin verksamhet att, direkt eller indirekt, förvärva, äga och förvalta fastigheter
samt bedriva därmed förenlig verksamhet.
The object of the company´s business is to, directly or indirectly, acquire, own and administer real
properties and to conduct any other business compatible therewith.
4§
Aktiekapital/Share capital
Bolagets aktiekapital skall uppgå till lägst 3,000,000 kronor och till högst 12,000,000 kronor. Bolagets
aktier skall kunna utges i två serier, serie A och serie B. Aktie av serie A skall medföra tio (10) röster
och aktie B skall medföra en (1) röst. Aktier av varje aktieslag kan ges ut till ett antal motsvarande hela
aktiekapitalet.
The share capital of the company shall be not less than SEK 3,000,000 and not more than SEK
12,000,000. Two classes of shares may be issued, class A and class B. Each share of class A shall
carry ten (10) votes, and each share of class B shall carry one (1) vote. Shares of each class may be
issued up to a number corresponding to the entire share capital.
5§
Antal aktier/The number of shares
Antalet aktier i bolaget skall uppgå till lägst 6,000,000 stycken och till högst 24,000,000 stycken.
The number of shares shall be not less than 6,000,000 and not more than 24,000,000.
6§
Omvandlingsförbehåll
Ägare till aktier av serie A skall äga rätt att påfordra att aktie av serie A omvandlas till aktie av serie B.
Begäran om omvandling, som skall ske skriftligt och ange det antal aktier som skall omvandlas, skall
göras hos bolaget. Bolaget skall utan dröjsmål anmäla omvandlingen till Bolagsverket för registrering.
Omvandlingen är verkställd när registrering sker.
Owners of shares in class A shall be entitled to demand that shares of class A be converted to shares
of class B. A request for conversion shall be done in writing to the Company and state the number of
shares to be converted. The Company shall without delay file the conversion with the Company
Authority for registration. The conversion is effective once the registration is done.
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The Prospectus of Reinhold Polska AB
7§
Nyemission m.m./New issue etc
Vid nyemission av aktier av serie A och serie B som inte sker mot betalning med apportegendom,
skall ägare av aktier av serie A och serie B äga företrädesrätt att teckna nya aktier av samma
aktieslag i förhållande till det antal aktier innehavaren förut äger (primär företrädesrätt). Aktier som inte
tecknats med primär företrädesrätt skall erbjudas samtliga aktieägare till teckning (subsidiär
företrädesrätt). Om inte sålunda erbjudna aktier räcker för den teckning som sker med subsidiär
företrädesrätt, skall aktierna fördelas mellan tecknarna i förhållande till det antal aktier de förut äger
och i den mån det inte kan ske, genom lottning.
In the event of new issues of shares of class A and class B where payment is not to be made in kind,
owners of shares of class A and class B shall enjoy preferential rights to subscribe for new shares of
the same class pro rata to the number of shares previously held by them (primary preferential right).
Shares which are not subscribed for pursuant to the primary preferential rights shall be offered to all
shareholders for subscription (secondary preferential right). If the shares thus offered are not sufficient
for the subscription pursuant to the secondary preferential rights, the shares shall be allocated
between the subscribers pro rata to the number of shares previously held and, to the extent such
allocation cannot be effected, by the drawing of lots.
Vid nyemission av aktier av serie A eller serie B som inte sker mot betalning med apportegendom,
skall samtliga aktieägare, oavsett om deras aktier är av serie A eller serie B, äga företrädesrätt att
teckna nya aktier i förhållande till det antal aktier de förut äger.
In the event of new issues of shares of class A or class B where payment is not to be made in kind, all
shareholders shall, irrespective of whether their shares are of class A or class B, have preferential
rights to subscribe for new shares pro rata to the number of shares previously held by them.
Vid emission av teckningsoptioner och konvertibler som inte sker mot betalning med apportegendom,
skall ägare av aktier av serie A och serie B äga företrädesrätt på motsvarande sätt som anges ovan.
In the event of issues of warrants or convertible debentures where payment is not to be made in kind,
owners of shares of class A and class B shall enjoy preferential rights, in accordance with the above.
Vad som ovan sagts skall inte innebära någon inskränkning i möjligheten att fatta beslut om emission
med avvikelse från aktieägarnas företrädesrätt.
The above shall not limit the right to resolve upon an issue with a deviation from the shareholders’
preferential rights.
8§
Räkenskapsår/Financial year
Bolagets räkenskapsår skall omfatta 1 januari – 31 december.
The financial year shall comprise 1 January – 31 December.
9§
Redovisningsvaluta/Accounting currency
Bolaget ska ha sin redovisning i euro.
The currency for the company accounts shall be Euro.
10 §
Styrelse/Board of directors
Styrelsen skall bestå av lägst tre (3) och högst sju (7) styrelseledamöter, med högst fem (5)
styrelsesuppleanter.
The board of directors shall consist of not less than three (3) members and not more than seven (7)
members, with not more than five (5) deputy members.
11 §
Revisor/Auditor
Bolaget skall ha lägst en (1) och högst två (2) revisorer utan eller med högst två (2)
revisorssuppleanter. Till revisor samt, i förekommande fall, revisorssuppleant skall utses auktoriserad
revisor eller registrerat revisionsbolag.
The company shall have not less than one (1) and not more than two (2) auditors, without or with not
more than two (2) deputy auditors. As auditor and, when applicable, deputy auditor, shall be elected
an authorised public accountant or a registered public accounting firm.
12 §
Kallelse till bolagsstämma/Notice of shareholders’ meeting
Kallelse till årsstämma samt till extra bolagsstämma där fråga om ändring av bolagsordningen
kommer att behandlas skall utfärdas tidigast sex och senast fyra veckor före stämman. Kallelse till
annan extra bolagsstämma skall utfärdas tidigast sex och senast två veckor före stämman.
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The Prospectus of Reinhold Polska AB
Notice of annual shareholders’ meetings as well as of extraordinary shareholders’ meetings at which
matters regarding amendments to the articles of association are to be addressed, shall be issued not
earlier than six weeks and not later than four weeks prior to the shareholders’ meeting. Notice of other
extraordinary shareholders’ meetings shall be issued not earlier than six weeks and no later than two
weeks prior to the shareholders’ meeting.
Kallelse till bolagsstämma sker genom kungörelse i Post – och Inrikes tidningar samt i Svenska
Dagbladet.
Notice of shareholders’ meetings shall be published in Post – och Inrikes Tidningar( the Swedish
Official Gazzette) and Svenska Dagbladet.
13 §
Aktieägares rätt att delta i bolagsstämma/Shareholder’s right to participate in
shareholders’ meeting
Aktieägare som vill delta i bolagsstämma skall dels vara upptagen som aktieägare i sådan utskrift och
annan framställning av hela aktieboken som avses i 7 kap 28 § tredje stycket aktiebolagslagen
(2005:551), avseende förhållandena fem vardagar före stämman, dels anmäla sitt deltagande till
bolaget senast kl 16.00 den dag som anges i kallelsen till stämman. Sistnämnda dag får inte vara
lördag, söndag, nyårsafton, midsommarafton, julafton eller annan allmän helgdag och inte infalla
tidigare än femte vardagen före stämman.
Shareholders who want to participate in shareholders’ meetings, shall be listed in such print-outs or
other representation of the entire shareholders’ register as stated in the Swedish Companies Act
(2005:551), Chapter 7 Section 28 Paragraph 3, concerning the circumstances five weekdays prior to
the meeting, as well as notify the company not later than 4.00 pm (CET) the day which is specified in
the notice to the meeting. The last-mentioned day may not be a Saturday, Sunday, New Years Eve,
Midsummer Eve, Christmas Eve or other public holiday and not fall earlier than the fifth weekday prior
to the meeting.
Aktieägare får vid bolagsstämma medföra ett eller två biträden, dock endast om aktieägare anmält
detta enligt föregående stycke.
Shareholders may bring up to two counsels at shareholders’ meetings only if the shareholder is giving
notice of the number of counsels to the company in accordance with the previous paragraph.
14 §
Ärenden på årsstämma/Business at annual shareholders’ meetings
Vid årsstämma skall följande ärenden förekomma till behandling:
1. val av ordförande vid bolagsstämman;
2. upprättande och godkännande av röstlängd;
3. godkännande av dagordningen;
4. val av en eller två justeringspersoner att underteckna protokollet;
5. prövning av om stämman blivit behörigen sammankallad;
6. framläggande av årsredovisning och revisionsberättelse samt, i förekommande fall,
koncernredovisning och koncernrevisionsberättelse;
7. beslut om fastställande av resultaträkning och balansräkning samt, i förekommande fall
koncernresultaträkning och koncernbalansräkning;
8. beslut om dispositioner beträffande bolagets vinst eller förlust enligt den fastställda
balansräkningen;
9. beslut om ansvarsfrihet åt styrelseledamöter och verkställande direktör;
10. fastställande av antalet styrelseledamöter och styrelsesuppleanter och, i förekommande fall,
antalet revisorer och revisorssuppleanter;
11. fastställande av arvoden åt styrelsen och, i förekommande fall, revisorerna;
12. val av styrelseledamöter och styrelsesuppleanter och, i förekommande fall, revisorer och
revisorssuppleanter;
Annat ärende som ankommer på bolagsstämman enligt aktiebolagslagen eller bolagsordningen.
The following business shall be addressed at annual shareholders’ meetings:
1. Election of chairman of the meeting;
2. Preparation and approval of the voting list;
3. Approval of the agenda;
4. Election of one or two persons who shall approve the minutes;
5. Determination of whether the meeting was duly convened;
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The Prospectus of Reinhold Polska AB
6. Submission of the annual report and the auditors report as well as, where applicable, the
consolidated financial statements and the auditors’ report for the group;
7. Resolutions regarding the adoption of the income statement and the balance sheet as well as,
where applicable, the consolidated income statement and the consolidated balance sheet;
8. Resolutions regarding appropriation of the company’s profit or loss pursuant to the adopted
balance sheet;
9. Resolutions regarding discharge of the members of the board of directors and the managing
director from liability;
10. Determination of the member of the members and deputy members of the board of directors as
well as, where applicable, the number of auditors and deputy auditors;
11. Determination of fees for the members of the board of directors and, where applicable, the
auditors;
12. Election of the members and deputy members of the board of directors, as well as, where
applicable, auditors and potential deputy auditors;
Other matters, which rest upon the shareholders’ meeting, pursuant to the Swedish Companies Act or
the articles of association.
15 §
Avstämningsförbehåll/Central securities depository clause
Bolagets aktier skall vara registrerade i ett avstämningsregister enligt lagen (1998:1479) om
kontoföring av finansiella instrument.
The company’s shares shall be registered in a securities register in accordance with the Swedish
Financial Instruments Accounts Act (1998:1479).
___________________________
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The Prospectus of Reinhold Polska AB
STYRELSEPROTOKOLL
fört
vid
styrelsemöte
per
capsulam i
Reinhold Polska AB, 556706-3713, den 30
juli 2007 i Stockholm.
MINUTES
from Meeting of the Board of Directors kept per
capsulam in Reinhold Polska AB, 556706-3713,
on 30 August 2007 in Stockholm.
Närvarande / Present:
Anders Lettström
Gösta Gustafsson
Jens Engvall
Torgny Krook
Hans Håkansson
Anders Bäckman
Gustaf Leijonhufvud
§1
Öppnande av mötet samt val av ordförande och protokollförare /
Opening of the meeting and election of Chairman and Keeper of the Minutes
Mötet öppnades av Anders Lettström som valdes till ordförande. Anders Bäckman
utsågs till protokollförare.
The meeting was opened by Anders Lettström who was elected Chairman at the meeting.
Gustaf Leijonhufvud was appointed to keep the minutes.
§2
Val av justeringsmän / Appointment of person for approval of minutes
Torgny Krook utsågs att jämte ordföranden justera dagens protokoll.
Torgny Krook was appointed to approve the minutes together with the Chairman.
§3
Förslag om bemyndigande till styrelsen att notera bolagets aktier i serie B på
Warszawabörsen / Proposal on authorization of the Board of Directors to list the
company’s shares of class B on the Warsaw Stock Exchange
Det beslutades att till bolagsstämman framlägga förslag till beslut angående
bemyndigande till styrelsen att inregistrera samtliga av bolagets B-aktier (efter
nyemission) för allmän handel på Warszawabörsen samt att i samband därmed
vidta samtliga erforderliga åtgärder.
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It was decided to submit to the General Shareholder’s Meeting a proposal on a resolution to
authorize to the Board of Directors to list all shares of class B (following issue of shares as
set forth below) on the Warsaw Stock Exchange and to, in connection therewith, undertake
all necessary actions.
§4
Förslag om bemyndigande till styrelsen att emittera nya aktier av serie B /
Proposal to on authorization of the Board of Directors to issue new shares of class B
Det beslutades att till bolagsstämman framlägga förslag till beslut angående
bemyndigande till styrelsen att intill nästa årsstämma emittera nya aktier i serie B,
med eller utan avvikelse från aktieägarnas företrädesrätt, samt att besluta övriga
villkor för emissionen.
It was decided to submit to the General Shareholders’ Meeting a proposal on a resolution to
authorize the Board of Directors to issue new shares of class B, with or without deviation
from the shareholders’ preferential rights, and to decide upon the other conditions relating to
the share issue.
§5
Mötets avslutande / Closing of the meeting
Det noterades att alla beslut fattats enhälligt. Då inga ytterligare ärenden förelåg
förklarade ordföranden mötet avslutat.
It was noted that all decisions were taken unanimously. As there were no further items to
discuss, the Chairman declared the meeting closed.
Vid protokollet / Keeper of the minutes
Anders Bäckman
Justeras / Verified:
Anders Lettström
Torgny Krook
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The Prospectus of Reinhold Polska AB
ANNEX B: FINANCIAL STATEMENT FOR 2006
Annual Financial Statement
and
Consolidated Statement of the Group
for the financial year
2006-06.27 – 2006.12.31
for:
Reinhold Polska AB (publ)
Org. no. 556706-3713
Contents:
Report of the Management Board
Profit and Loss Account of the Group
Balance Sheet of the Group
Cash Flow Statement of the Group
Profit and Loss Account of the Parent Company
Balance Sheet of the Parent Company
Cash Flow Statement of the Parent Company
Change in Equity
Accounting Principles
Notes with Comments on the Statement
Page:
1
3
4
6
7
8
10
11
12
14
{The Swedish-Polish translator’s note: ‘(Pages 1 to 18 are initialed in the lower left corner –
translator’s note)’}
{Pages 1 to 21 of the Swedish-Polish translation are sealed with a round seal ‘Emilia Fabisiak, M.A.,
Sworn Translator in Warsaw, 1’, numbered 246/2007 and initialed.
(round seal) ‘Emilia Fabisiak, M.A., Sworn Translator in Warsaw, 1’;
(rectangular stamp) ‘Sworn Translator of Swedish / Auktoriserau Translator från/till Polska / Emilia
Fabisiak / ul. Bialobrzeska 39, 02-340 Warszawa / phone/fax (+48 22) 823 49 52 / e-mail:
[email protected];
(stamp) ‘Member of the Management Board
/~/ Janusz Reniewicz’;
(stamp) ‘I certify this is a true copy’
(stamp) ‘Member of the Management Board
/~/ Piotr Jaskowski
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The Prospectus of Reinhold Polska AB
(p. 1 (19))
Annual Financial Statement and Consolidated Statement of Reinhold Polska AB (publ) Group
The management board and the managing director of Reinhold Polska AB (publ) hereby submit a
financial statement and consolidated statement of the group for the financial year 2006-06-27 – 200612-31.
Report of the Management Board
Reinhold Polska AB (publ) focuses on purchasing, developing, increasing the value and selling of real
estate and land in Poland. The company’s vision is to become Poland’s leading developer. The
company’s strategy is to conduct local activities on Polish local markets, including Warsaw, Krakow,
Katowice, Poznan and Wroclaw. On these markets, Reinhold Polska intends to develop ded (the word
does not appear in Swedish – {Swedish-Polish} translator’s note) a network of advisors and copartners.-/Report on Activity
Reinhold Polska commenced its activity in October 2006, following an increase in its share capital and
distribution of the right of ownership to shares of Reinhold Polska AB (publ). Most of the last quarter
was dedicated to building of an organization on the basis of permanent locations, as well as to
identifying and preparing of various projects. The Polish real estate market is presently booming, and
the company intends to acquire projects entailing minimal risks, and simultaneously ones included in
the physical management plans or ones for which a construction permit is available. The company’s
real estate portfolio will include commercial, residential and office buildings at various geographical
locations.-/Sales
Considering that the company is new, its activity having just started, no sales were reported in the
previous financial year.-/Company’s Financial Result
The result after financial items was SEK -1,231,000.-/Investment
During the last financial year, the company completed a conditional purchase of an office/commercial
building in the city center of Warsaw. The investment’s value as at 31 December 2006 was SEK 8,4
million. The estimated value of the investment with regard to the entire project is SEK 131 million.-/Financial Standing
The period-end solvency ratio was 97 %. The group’s cash item was SEK 310,6 million.-/-
(p. 2 (19))
Events after the end of the financial year
After the end of the financial year, a transaction of purchase was completed for a plot of land of ca.
7,000 sq m located in Wroclaw, to be used for construction of commercial and residential buildings.
The estimated value of investment under the project is ca. SEK 131 million.-/Future development
The company has tried possible approaches to many different projects, which will probably result in
purchasing of five to seven new pieces of real estate in March 2007. It is assumed that the project
portfolio will be full by summer. The company assumes that the financial result of 2007 will be SEK
minus 2 million. This will be due to the fact that the company plans no sales during this year.-/Proposed resolution on division of the company’s profits or covering of the company’s loss
Group
The Group’s total loss is SEK 1,230,911, including the loss of the previous year of SEK 1,230,911.-/-
121
The Prospectus of Reinhold Polska AB
Parent Company
Proposal for covering of loss
The management board and the managing director of Reinhold Polska AB (publ) propose to bring
forward the total loss of SEK 1,132,580 to the new period.-/The parent company’s and group’s results and financial standing are presented in the Profit and Loss
Account, the Balance Sheet, the Cash Flow Statement and the Notes. All amounts are provided in
SEK thousands unless indicated otherwise.-/-
(p. 3(19))
Profit and Loss Account
GROUP
Amounts in SEK thousands
note
2006-06-27
2006-12-31
Operating revenue etc.
Net sales
0
Operating cost
Other external cost
Payroll
Depreciation of tangible fixed assets
2,14
3
4
Operating result
Profit/loss on financial investment
Other revenue from interest and similar result items
Cost of interest and similar result items
Result after financial items
-2,933
5
Corporate income tax for the financial year
Profit/loss of the financial year
6
Result per share
Result per share before dilution
Result per share after dilution
7
122
-2,772
-157
-4
1,704
-2
-1,231
-1,231
-0.18
-0.18
The Prospectus of Reinhold Polska AB
(p. 4(19))
Balance Sheet
GROUP
Amounts in SEK thousands
ASSETS
Tangible fixed assets
Equipment
note
2006-12-31
8
16
16
Current assets
Inventories etc.
Operating premises
8,376
8,376
Short-term liabilities
Other liabilities
Prepayments and accrued income
418
4
422
Cash at hand and at bank
Total current assets
TOTAL ASSETS
310,466
319,264
319,280
(p. 5 (19))
Balance Sheet
GROUP
Amounts in SEK thousands
LIABILITIES
note
Equity
Share capital (7,000,000 shares)
Free reserves
Profit/loss of the previous financial year
Total equity
11
Long-term liabilities
Liabilities to credit institutions
12
Short-term liabilities
Liabilities to suppliers
Other short-term liabilities
Accruals and deferred income
TOTAL LIABILITES
Additional items
2006-12-31
3,500
306,246
-1,231
308,515
8,496
8,496
14
14
304
1,750
215
2,269
319,280
2006-12-31
Securities provided
n/a
Guarantees
n/a
123
The Prospectus of Reinhold Polska AB
(p. 6 (19))
Cash Flow Statement
GROUP
Amounts in SEK thousands
Current activity
Operating result
Adjustments of non-cash flow items etc.
Interest received
Interest paid
Flow of cash at hand from current activity before
changes in operating capital
Flow of cash at hand from changes in operating capital
Increase in value of operating premises
Increase in value of operating receivables
Increase in value of operating payables
Cash flow from current operating activity
Investing activity
Acquisition of tangible fixed assets
Cash flow from investing activity
2006-06-27
2006-12-31
-2,933
4
-2,929
1,704
-2
-1,227
-8,376
-422
2,265
-7,760
-20
-20
Financing activity
Company formation
New issue of shares
Shareholders’ additional payments received
Loans received
Cash flow from financing activity
500
284,750
24,500
8,496
318,246
Change in cash during the year
310,466
Cash at the beginning of year
Cash at the end of year
124
0
310,466
The Prospectus of Reinhold Polska AB
(p. 7 (17))
Profit and Loss Account
PARENT COMPANY
Amounts in SEK thousands
note
Operating revenue etc.
Net sales
1
2006-06-27
2006-12-31
0
Operating cost
Other external cost
Payroll
Depreciation of tangible fixed assets
1, 2
3
4
Operating result
Profit/loss on financial investment
Other revenue from interest and similar result items
Result after financial items
Corporate income tax for the financial year
Profit/loss of the financial year
-2,680
-157
-4
-2,841
5
1,708
-1,133
6
-1,333
125
The Prospectus of Reinhold Polska AB
(p. 8 (19))
Balance Sheet
PARENT COMPANY
Amounts in SEK thousands
ASSETS
note
Tangible fixed assets
Equipment
8
Financial fixed assets
Shares in the group’s companies
Receivables from the group’s companies
9
10
2006-12-31
16
16
165
1,000
Total fixed assets
1,165
Current assets
1,181
Short-term liabilities
Other liabilities
Prepayments and accrued income
414
4
418
Cash at hand and at bank
Total current assets
309,164
309,587
TOTAL ASSETS
310,783
126
The Prospectus of Reinhold Polska AB
(p. 9 (19))
Balance Sheet
PARENT COMPANY
Amounts in SEK thousands
LIABILITIES
Equity
Tied-up equity
Share capital (7,000,000 shares)
note
11
3,500
3,500
Free equity
Balance-sheet profit
Profit/loss of the previous financial year
306,250
-1,133
305,117
308,617
Total equity
Short-term liabilities
Liabilities to suppliers
Other short-term liabilities
Accruals and deferred income
14
14
TOTAL LIABILITES
Additional items
304
1,627
215
2,146
310,763
2006-12-31
Securities provided
Guarantees
2006-12-31
n/a
13
8,930
127
The Prospectus of Reinhold Polska AB
(p. 10(19))
Cash Flow Statement
GROUP
Amounts in SEK thousands
Current activity
Operating result
Adjustments of non-cash flow items etc.
Interest received
Flow of cash at hand from current activity before
changes in operating capital
Flow of cash at hand from changes in operating capital
Increase in value of operating receivables
Increase in value of operating payables
Cash flow from current operating activity
Investing activity
Loan for the group’s enterprises
Acquisition of tangible fixed assets
Acquisition of a subsidiary
Cash flow from investing activity
2006-06-27
2006-12-31
-2,841
4
-2,837
1,704
-1,333
-414
2,146
599
-1,000
-20
-165
-1,185
FINANCING activity
Company formation
Issue of shares
Shareholders’ additional payments received
Cash flow from financing activity
500
284,750
24,500
309,750
Change in cash during the year
309,164
Cash at the beginning of year
Cash at the end of year
128
0
309,164
The Prospectus of Reinhold Polska AB
(p. 11 (19))
CHANGE IN EQUITY WITH REGARD TO PARENT COMPANY’S SHAREHOLDERS
Group
Share
Shareholde Free equity Tied-up
capital
rs’
equity
additional
payment
Opening balance 2006-06-27
0
0
0
Company formation
New issue of shares
Cost of issue
Shareholders’ additional payments
received
Translation differences
Profit/loss of the previous financial year
Closing balance 2006-12-31
Parent company
Opening balance 2006-06-27
Company formation
New issue of shares
Cost of issue
Shareholders’
additional
payments
received
Profit/loss of the previous financial year
Closing balance 2006-12-31
500
3,000
3,500
0
Share
capital
0
500
3,000
Reserve
fund
0
3,500
0
0
297,000
-15,250
24,500
500
300,000
-15,250
24,500
-4
-1,231
305,015
-4
-1,231
308,515
Free equity
297,000
-15,250
24,500
Tied-up
equity
0
500
300,000
-15,250
24,500
-1,133
305,117
-1,133
308,617
0
(p. 12 (19))
NOTES
Reporting Principles
Introduction
Reinhold Polska AB (publ) is a company registered under the Swedish trade law, with its registered
seat in Stockholm. Its registered office’s address is as follows: Reinhold Polska AB (publ)
Västmannagatan 52, 113 25 Stockholm.-/The group’s financial statement for 2006 relates to the parent company and its subsidiaries,
collectively referred to as the group.-/The annual financial statement and the consolidated statement of the group were approved by the
management board on 26 March 2007. The group’s profit and loss account and balance sheet, as well
as the parent company’s profit and loss account and balance sheet will, be submitted for approval
during the General Shareholders’ Meeting on 8 May 2007.-/Reporting Principles
The financial statement was drawn up in accordance with the accounting principles set forth by the
Annual Reports Act, the International Financial Reporting Standards (IFRS). The group’s consolidated
statement was drawn up in accordance with the laws of Sweden and recommendations of the
Chartered Accountants’ Association (Redovisningsradet) RR 30:05 ‘Supplementary reporting
principles for groups of companies’. The parent company applies the same reporting principles as the
group, unless at variance with the Annual Reports Act. The parent company’s reporting principles
different from those of the group are mentioned in the chapter ‘Parent Company’s Reporting
Principles’.-/-
129
The Prospectus of Reinhold Polska AB
Group’s Statement
The statement utilizes a purchase-value approach. This means that the group’s equity includes the
equity of the parent company and such equity components of the subsidiaries which appeared in the
period of their relation to the group.-/The group’s consolidated statement incorporates balance sheets of all subsidiaries. A subsidiary is a
company in which direct or indirect interest of the parent company exceeds 50% of votes at the
shareholders’ meeting.-/Revenue
Revenue is reported when substantial risks and rewards in connection with the company’s goods are
transferred to the buyer and the company is likely to generate economic rewards.-/Taxation
Taxation of the period’s result comprises current and deferred taxation. Current taxation refers to the
tax amount to be paid or received as a refund for a given financial year. It also includes adjustments of
current taxation resulting from changes concerning previous periods. Deferred taxation refers to
reduction of future taxes due to deduction of losses, as well as periodical differences. In the current
year, the company did not activate the deferred tax with regard to deduction of loss.-/-
(p. 13 (19))
Result per Share
The result per share is calculated as net result divided by the weighted average number of shares in
circulation.-/Tangible Fixed Assets
Equipment (movable property) is assessed by the purchase value less accrued depreciation and
revaluation, if any. Depreciation of equipment (movable property) is disclosed as cost in such a way
that the asset’s value is depreciated linearly over its estimated useful life.-/The following depreciation periods are used:
Equipment
5 years. -/Operating Premises
The value of operating premises is estimated in accordance with the principles applicable to
inventories. This means that the value of the premises is reported at the lower of its purchase value or
net sale value.-/Receivables
Receivables are reported at the estimated amount to be received.-/Loan Costs
Neither the group nor the parent company activate interest in the purchase value of assets. It is, in
turn, reported as the cost of the period in which it appeared. -/Information on Related Companies
For transactions between the company and related companies please refer to Note 1 on intra-group
purchases and sales, Note 3 on managerial compensation and Note 14 on transactions with related
companies. It is assessed that all such transactions were conducted on market conditions. -/Cash Flow Statement
The cash flow statements utilize the indirect method. The reported cash flows relate only to the
transactions which cause amounts to be received or paid.-/-
130
The Prospectus of Reinhold Polska AB
(p. 14 (19))
Notes
Note 1. Information on Transactions of Purchase or Sale between the Group’s Companies.
There were no transactions of purchase or sale between the companies controlled by the group during
the previous financial year.-/Note 2. Information on Audit Fees
Group
2006
Ernst & Young
- annual audit report
- other jobs
Total:
Parent Company
2006
50
50
50
50
An auditory job includes reviewing of the financial statement, accounting principles, as well as the
managerial performance of the management board and the managing director, together with other
auditory tasks, as well as advisory services and any other assistance which might prove to be
necessary as a result of reviewing of the financial statement. Any other activities are treated as not
covered by the audit contract. -/Note 3. Average Employment, Wages, Salaries and other Benefits, Social Security Costs
Average employment:
2006
Number
employees
1
Parent company
Sweden
Parent company total
Group total
Wages, salaries etc.
of
Male employees
100%
1
100%
1
100%
2006
Wages,
salaries Social
security
and other benefits costs (including
pension scheme)
123
34
(0)
123
34
(0)
Parent company
Group
(p. 15 (19)
Wages, salaries and other benefits with
breakdown into management and employees
Parent company
Sweden
Parent company total
Group total
a
2006
Management
Other employees
Board and
Managing Director
(including
royalties etc.)
123
(0)
123
0
(0)
123
0
(0)
131
The Prospectus of Reinhold Polska AB
Compensation of the managing director
The company’s managing director Mr. Gösta Gustafsson received a compensation of SEK 107,000.-/Members of the management board and the managing director
2006
Number on the
balance date
Group
Members of the management board
Managing director
Parent company
Members of the management board
Managing director
Males
5
1
100%
100%
5
1
100%
100%
-4
-4
Parent company
2006
-4
-4
1,704
1,704
Parent company
2006
1,708
1,708
Note 4. Depreciation of Tangible Fixed Assets
Group
2006
Equipment
Total:
Note 5. Other Revenue from Interest and Equivalent Result Items
Group
2006
Interest revenue
Total:
Within the parent company’s interest revenue, an amount of SEK 4,000 is a revenue generated from
other companies in the group.-/-
(p. 16 (19))
Note 6 Corporate Income Tax
Group
2006
Current tax
Deferred tax
Total:
Parent company
2006
0
0
-1,231
345
-345
Parent company
2006
-1,133
317
-317
0
0
Effective taxation assessment
Group
2006
Result before taxation
Taxation acc. to relevant tax rate
Taxation effect – adjustment of deduction due to a
deficit
Effective taxation:
132
The Prospectus of Reinhold Polska AB
Note 7 Result per Share
Group
2006
Result per share before dilution
Profit/loss of the period
Average number of shares in thousands
Result per share before dilution
-1,231
7,000
-0.18
Result per share after dilution
Profit/loss of the period
Average number of shares in thousands
Result per share after dilution
-1,231
7,000
-0.18
Note 8 Equipment
Investment
Acquisition value, accrued, end of period
Group
2006
20
20
Parent company
2006
20
20
-4
-4
16
-4
-4
16
Planned depreciation during the year:
Planned depreciation, accrued, end of period
Carrying value at the end of period
(p. 17 (19))
Note 9 Shares in the Group’s Enterprises
Parent company
2006
Purchase
Acquisition value, accrued, end of period
Carrying value at the end of period
Company
Reinhold Polska BV
Registration
no.
605860035
165
165
165
Seat
Netherlands
Share
(%*)
100
Carrying
value
2006-12-31
165
165
Subsidiaries of Reinhold Polska BV
Company
Reinhold Polska Project 3 Sp. z o.
o.
Registration
no.
140780877
Seat
Poland
Share
(%*)
100
Carrying
value
2006-12-31
119
119
*) It indicates the ownership interest in the initial capital, which simultaneously shows the number of
votes at the general meeting vs. the total number of votes.-/-
133
The Prospectus of Reinhold Polska AB
Note 10 Receivables from the Group’s Enterprises
Parent company
2006-12-31
Investment
Acquisition value, accrued, end of period
Carrying value at the end of period
1,000
1,000
1,000
Note 11 Development of Share Capital
Year
Transaction
2006
Company
formation
New issue
2006
Increase in
number of
shares
Number of
shares in
thousands
1,000
1,000
Increase in
share capital
in thousands
of SEK
500
6,000
7,000
3,000
Total share
capital in
thousands of
SEK
500
Value of
shares
SEK/share
3,500
0.50
0.50
(p. 18(19))
Note 12 Long-term Liabilities
Long-term liabilities payable later than 5 years of the
balance sheet date
Liabilities to a credit institution
Total
Group
2006-12-31
8,496
8,496
Parent company
2006-12-31
Group
2006-12-31
Parent company
2006-12-31
8,930
8,930
0
Note 13 Securities Provided
Guarantee for a group’s enterprise
Total
0
Note 14 Information on Companies Related by Capital
Reinhold Fastigheter AB, Byggnadsfirma Reinhold Gustafsson and Reinhold Sp. z o. o. are related by
capital to Reinhold AB (publ). The following table summarizes information on transactions with these
companies.-/Group
2006
Purchases with Reinhold Fastigheter AB
Purchases with Byggnadsfirma Reinhold Gustafsson
-96
-14
Parent company
2006
-96
-14
Short-term liabilities to Reinhold Fastigheter AB
Short-term liabilities to Byggnadsfirma Reinhold
Gustafsson
-97
-3
-97
-3
-1,580
-1,580
Short-term liabilities to Reinhold Sp. z o. o.
It is assessed that all transaction between these companies were conducted on market conditions.-/-
134
The Prospectus of Reinhold Polska AB
(p. 19 (19))
Stockholm, on 26 March 2007
{Polish-Swedish translator’s note: ‘(Signatures beneath:)’}
(-) Anders Lettström
President of the Management Board
(-) Jens Engvall
(-) Hans-Gunnar Håkansson
(-) Torgny Krook
(-) Gösta Gustafsson
Managing Director
The audit report was submitted on 30 April 2007.-/Ernst & Young
(-) Mikael Ikonen, chartered auditor-/-
135
The Prospectus of Reinhold Polska AB
ERNST & YOUNG
Report on review by a chartered auditor
for the General Shareholders’ Meeting of Reinhold Polska AB
Registration no. 556706-3813
We conducted a review of the annual financial statement, the consolidated statement of the group,
accounts, and the managerial performance of the management board and the managing director of
Reinhold Polska AB for the financial year 2006-06-27 – 2006-12-31. The responsibility for financial
documents and the managerial performance, as well as for observance of the Annual Reports Act and
the International Financial Reporting Standards adopted by the EU while preparing the group’s
consolidated statement, lies with the management board and the managing director. Our duty is to
present an opinion on the annual financial statement, the consolidated statement of the group, and the
managerial performance on the basis of the review.-/The review was conducted in accordance with the Swedish good auditory practice. This means that
we planned and conducted the review in a manner which allowed us to make certain that the annual
financial statement and the consolidated statement of the group are free of basic errors. The review
has the form of inspection of selected documents with a focus on amounts and other information
included in accounting documents. The aim of the review is also to check whether the managing
director and the management board observed and supervised the observance of relevant accounting
principles, and to assess essential estimates adopted by the management board and the managing
director while preparing the annual financial statement and the consolidated statement of the group,
as well as to assess the entire information included in the annual statement and the consolidated
statement of the group. Our recommendation for acknowledgement is based on reviewing of major
decisions, activities and relationships in the company, which allowed us to establish whether a
member of the management board or the managing director had any liabilities to the company. We
also checked whether any member of the management board or the managing director in any other
way violated the Joint-Stock Companies Act, the Annual Reports Act, or the articles. We do believe
that our review fully enables the following opinion. -/The annual financial statement complies with the Annual Reports Act and properly reflects the
company’s financial result and standing in accordance with the Swedish good auditory practice. The
consolidated statement of the group complies with the International Financial Reporting Standards
(IFRS) adopted by the EU and the Annual Reports Act, and properly reflects the group’s financial
result and standing. The management board’s report is consistent with the information included in the
annual financial statement and the consolidated statement of the group.-/We hereby recommend the General Shareholders’ Meeting to approve the parent company’s and
group’s profit and loss accounts and balance sheets, to adopt a resolution with regard to the loss
incurred by the parent company as proposed in the report on the company’s activity, and to adopt a
resolution on acknowledging the fulfillment of duties by members of the management board and the
managing director with regard to their performance in the previous financial period.-/Stockholm, on 30 April 2007 -/(-)
Ernst & Young AB
Mikael Ikonen
chartered auditor -/{Swedish-Polish translator’s note:
‘I, Emilia Fabisiak, a sworn translator of Swedish, no. TP/1990/05, do hereby certify that the translation
presented in the above is consistent with the original document/copy in Swedish.
Number of characters: 24037, pages: 21.5
Warsaw, on 21.05.2007
(-)’}
136
Repertory no. 246/2007
The Prospectus of Reinhold Polska AB
137
The Prospectus of Reinhold Polska AB
ANNEX C: INTERIM FINANCIAL STATEMENT FOR
2007
INTERIM REPORT, JANUARY 1 – JUNE 30, 2007
138
The Prospectus of Reinhold Polska AB
Interim report period, January-June 2007
• Net sales amounted to 985 kSEK
• Operating loss amounted to -4,894 kSEK
• Profit after taxes amounted to 114 kSEK
• Earnings per share amounted to 0.02 SEK
• Cash flow for the period amounted to -245,306 kSEK
Most recent quarter, April-June 2007
• Net sales amounted to 822 kSEK
• Operating loss amounted to -3,149 kSEK
• Loss after taxes amounted to -565 kSEK
• Earnings per share amounted to -0.08 SEK
Comments by CEO Gösta Gustafsson
The first six months of 2007 have now ended and we have primarily been concentrating on finding
new projects and building a strong organization. New offices have been established in Warsaw,
Poznan and Krakow. Despite a very competitive market we feel that we have found good staff to build
our strength in Poland. Our decision to employ only local staff has been successful too.
We have financed our projects with good terms through several local banks such as PKO and DNB.
An agreement with Danske Bank provides us with the possibility to avoid exchange losses. We are
very pleased with our working relations with Danske Bank.
The real estate market in Poland remains strong in terms of supply and demand in most sectors. We
are now even seeing foreign investors investing in office buildings outside of Warsaw and other major
cities such as Katowice and Wroclaw. The market now seems to be stabilized at the current rent levels
and yield. Despite, contrary reports, political turmoil have not affected the growth of the Polish
economy.
Significants events during the period
During the first six months of 2007 Reinhold has started seven projects in Poland. Below is a
description of each ongoing project:
Platinum - Wroclaw
The project will offer 7,000 square meters of usable residential area and around 3,000 square meters
of commercial area in two separate buildings. A parking space will be provided in an underground
garage. The land is located in a booming residential area. In this area many new residential buildings
are developed and a couple of projects are under construction. In the vicinity there will be an office
business park.
Villa Nova - Wroclaw
The project will offer 1,850 square meters of usable floor area and 43 parking places in an
underground garage. The project will be made up of two high standard buildings. The plot of land is
located in a booming residential area. In the neighborhood we will find many new residential buildings
and construction projects. A campus of Medical Academy (attended by numerous foreign students) is
located in the vicinity. One of the largest Aqua Parks of Poland is at a driving distance of 10 minutes
from the project location. A new main road and tram connection will be built in 2007-2008.
Lipiński - Warsaw
The building has in total 3,500 square meters of usable space. Ground floor and first floor is designed
for retail and the rest four levels for exclusive office space. The property is located in CBD. In the
neighborhood there are many new office buildings, Marriott Hotel and new shopping centre – Zlote
Tarasy. There is a tram and bus stop by the plot. Within 5 min walk from the plot there is metro station
and main railway station is across the street.
Silesia Atrium - Katowice
The 18,000 square meters of the former printing company, Cartotecnica will be an A-class office
building. The after renovation there will be approximately 13,800 square meters in two and four level
139
The Prospectus of Reinhold Polska AB
buildings and 100 parking places on a two level car park. There will be possibility to build new building
replaced one existing building.
Lipiński Passage - Warsaw
The building has in total 2,400 square meters of usable area on six levels. The plot is located in CBD
next to our other project - Lipiński. In the neighborhood there are many new office buildings and new
shopping centre – Zlote Tarasy. There is a tram and bus stop by the plot. Within five minutes of
walking there is metro station and main railway station is across the street.
Villa Park-Kraków
This residential building has 1,650 square meters of usable area. The building will have five levels and
one underground parking lot. Nearby lies the modern shopping centre Galeria Kazimierz.
Zakopiańska -Kraków
Total surface of 7,181 square meters is a great location for retail and office buildings. The project
assumes a six level building with a underground parking. The project is located in the south part of
Kraków by the Zakopiańska Street, the main road leading to Zakopane. The plot is located close to the
well established retail area. You can find companies like Carrefour and Castorama there. On the other
side of the street there will be another office and retail building.
Significant events after the close of the interim period
Since the close of the interim period three additional projects are in progress, Bastylia II, Karpacka
and Sloneczna. Below is a short description of each project.
Bastylia II, Katowice
The plot is located in Katowice. This is a residential building with a total usable surface of around
10,500 square meters. There are residential buildings, schools, medical center and a post office in the
neighbourhood.
Karpacka, Wroclaw
The plot is located in the district of Muchobor Wielki in Wroclaw. This is a residential building with a
total usable surface of 4,000 square meters. The communications are very good.
Significant risks and uncertainty factors
Through its business operations, Reinhold is exposed to various risks, both financial and operational.
Operational risks relate to Reinhold’s day-to-day business and the financials risks relate to the capital
requirements of Reinhold’s different operations.
Operational risks
For a building contractor the risk-limitation-phase is during the contract-tendering process. The
strategy of Reinhold is to adopt a selective approach to tendering in order to reduce unprofitable
projects. When selecting suitable contracts, Reinhold prefers projects whose risks are identified, and
thus manageable and calculable.
Development risks
Proprietary project development in commercial properties includes a contract risk and a development
risk. Every project concept must be adapted to local market preferences and the planning
requirements imposed by public authorities. State-of-the-art skills are required to optimize the timing of
projects that have to be processed by local municipalities and possibly have to pass an appeals
process. To reduce these risks, Reinhold is developing primarily in large growth communities in
Poland. Reinhold has consciously decided to refrain from excessively niche-oriented projects intended
for narrow target groups.
Financial risks
Through its business operations Reinhold is exposed to financial risks. The principal risks are interestrate and currency risks.
140
The Prospectus of Reinhold Polska AB
Interest-rate risk
The interest-rate risk is the risk that changes in interest rates will affect net interest items and cash
flow. The projects in Poland are partly financed by interest bearing borrowings, whereby Reinhold is
exposed to an interest-rate risk.
Currency risks
The currency risk is the risk that changes in exchange rates will affect the consolidated income
statement, balance sheet and cash flow statement. To reduce currency risks Reinhold raise
investment credits in the Polish companies in local currency. As a guarantee for these credits the
Parent company are depositing the equity invested in Sweden. Hereby Reinhold are not exposed to
any currency risk, since the investment and the credit is in same currency.
141
The Prospectus of Reinhold Polska AB
Introduction statement to the financial reports below
The Reinhold Group did not conduct any operations during the period January-June 2006, whereby no
figures can be presented for that period.
CONSOLIDATED INCOME STATEMENT
2007
Apr-Jun
Amounts in kSEK
Operating income
Net sales
Other operating income
Operating expenses
Other external costs
Personnel costs
Depreciation and write-downs of tangible and
intangible assets
Other operating expenses
Operating profit/loss
Result from financial investments
Other interest income
Interest expense
Profit/loss after finansial intems
Tax on profit for the period
Net profit/loss for the period
Average number of amounts of share
Earnings per share
1
2007
Jan-Jun
2006
Jun-Dec
822
139
961
985
139
1 124
0
-2,739
-1,337
-3,757
-2,028
-2,772
-157
-15
-19
-3,149
-30
-203
-4,894
-4
-2,933
2,651
-5
-503
5,082
-5
183
1,704
-2
-1,231
-62
-69
-
-565
114
-1 231
7,000
-0.08
7,000
0.02
7,000
-0.18
Transactions with related parties
Reinhold Fastigheter AB, Byggnadsfirma Reinhold Gustafsson and Reinhold Lifestyle AB are
companies related to the Reinhold Polska Group. Related party purchases during January-June 2007
amounted to 166 kSEK.
142
The Prospectus of Reinhold Polska AB
CONSOLIDATED BALANCE SHEET
Amounts in kSEK
2006-12-31
2007-06-30
Intangible assets
Tangible assets
Total fixed assets
115
410
525
16
16
188,538
265,555
65,123
519,216
8,376
422
310,466
319,264
TOTAL ASSETS
519,741
319,280
Equity
Share capital
Other additional capital
Other reserves
Retained earnings
Net profit/loss for the period
Total equity
3,500
306,250
-185
-1,231
114
308,448
3,500
306,250
-4
-1,231
308,515
88
-
135,550
8,496
74,609
1,046
75,655
2,054
215
2,269
519,741
319,280
Properties reported as current assets
Short term receivables
Cash and bank balances
Total current assets
2
Provisions
Long term liabilities
Current liabilities
Accrued expenses and deferred income
Total current liabilities
TOTAL EQUITY AND LIABILITIES
3
143
The Prospectus of Reinhold Polska AB
CHANGES IN SHAREHOLDERS’ EQUITY GROUP
Amounts in kSEK
Opening balance 2006-06-27
Share
capital
Other add
capital
Other
reserves
0
0
500
3,000
281,750
Retained
earnings
0
Total
equity
0
0
Formation of company
New share issue
Shareholder´s contribution
received
Translation difference
Net profit/loss for the period
Closing balance 2006-12-31
3,500
306,250
-4
-1,231
-1,231
24,500
-4
-1,231
308,515
Opening balance 2007-01-01
3,500
306,250
-4
-1,231
308,515
114
-1,117
-181
114
308,448
Translation difference
Net profit/loss for the period
Closing balance 2007-06-30
144
500
284,750
24,500
-4
-181
3,500
306,250
-185
The Prospectus of Reinhold Polska AB
CONSOLIDATED CASH FLOW STATEMENT
2007
Jan-Jun
Amounts in kSEK
Operating profit/loss
Adjustments for non-cash items
Interest receivied
Interest paid
Income tax paid
Cash flow from operating activities before working capital
changes
2006
Jun-Dec
-4,834
118
243
-64
-69
-2,933
4
1,704
-2
-
-4,606
-1,227
-180,162
-260,295
73,386
-8,376
-422
2,265
Cash flow after working capital changes
-371,677
-7,760
Purchase of equipment
Cash flow after investing activies
-538
-372,215
-20
-7,780
Formation of company
New share issue
Borrowings/repayment of debt
Shareholder's contribution received
Cash flow for the period
126,909
-245,306
500
284,750
8,496
24,500
310,466
310,467
-38
0
-
65,123
310,466
Changes in properties reported as current assets
Changes in receivables
Changes in liabilities
Cash and cash equivalent at the beginning of the period
Exchange rate differences
Cash and cash equivalent at the end of the period
4
145
The Prospectus of Reinhold Polska AB
CONSOLIDATED KEY FIGURES
Amounts in kSEK
Income statement
Net sales
Operating profit/loss
Net profit/loss for the period
2007
Apr-Jun
2007
Jan-Jun
2006
Jun-Dec
822
-3,149
-565
985
-4,894
114
-2,933
-1,231
Balance sheet
Fixed assets
Current assets
Equity
Interest bearing liabilities
Non-interest bearing liabilities
Total assets
525
519,216
308,448
135,550
75,743
519,741
525
519,216
308,448
135,550
75,743
519,741
16
319,264
308,515
8,496
2,269
319,280
Financial ratios
Equity/assets ratio, %
Debt/equity ratio, times
59.35%
0.7
59.35%
0.7
96.63%
0.0
neg
0.04%
neg
Profitability ratios
Return on shareholder's equity, %
146
The Prospectus of Reinhold Polska AB
Accounting principles, group
This interim report has been compiled in accordance with IAS 34, Interim Financial Reporting. The
interim report is compiled in accordance with International Financial Reporting Standards (IFRS) and
with International Financial Reporting Interpretations Committee (IFRIC), the interpretations of
financial standards approved by EU, as well as the Swedish Accounting Standards Council’s RR 31
recommendation, Interim Reporting for Groups, and accompanying references to Chapter 9 of the
Annual Accounts Act.
The interim report has been prepared in accordance with the same accounting principles and methods
of calculations as the 2006 Annual Report.
Note 1 Segment reporting
Reinhold is conducting its operations in one business segment and one geographical area. The
business segment is acquiring and developing commercial and residential properties. The
geographical area is Poland.
Note 2 Properties reported as current assets
Below is table listing of all on-going projects.
2007-06-30
Projects
Platinum
Villa Nova
Lipiński
Silesia Atrium
Lipinski Passage
Villa Park
Zakopiańska Plaza
Town
Wroclaw
Wroclaw
Warsaw
Wroclaw
Warsaw
Krakow
Kraków
Total
Acquisitio
n cost
34,347
13,530
71,340
15,990
32,916
3,001
2,952
174,076
2006-12-31
Total
costs
spent
2,980
887
6,588
597
1,040
412
1,958
14,462
Total
37,327
14,417
77,928
16,587
33,956
3,413
4,910
188,538
Acquisitio
n cost
8,376
8,376
Total
8,376
8,376
Note 3 Long term liabilities
Below is a table listing of all external loans related to the projects.
Projects
Platinum
Villa Nova
Lipiński
Silesia Atrium
Lipinski Passage
Villa Park
Zakopiańska Plaza
Town
Wroclaw
Wroclaw
Warsaw
Katowice
Warsaw
Krakow
Kraków
Due date
2Q - 2008
2Q - 2008
2Q - 2009
4Q - 2008
3Q - 2008
4Q - 2008
2Q - 2009
Total
2007-06-30
46,097
15,653
18,450
16,359
27,183
3,198
8,610
135,550
2006-12-31
8,496
8,496
Note 4 Changes in receivables
The change in receivables includes a deposit of cash with restricted use amounting to 243,969 kSEK.
147
The Prospectus of Reinhold Polska AB
PARENT COMPANY INCOME STATEMENT
Amounts in kSEK
Operating income
Net sales
Other operating income
Operating expenses
Other external costs
Personnel costs
Depreciation and write-downs of tangible
assets
Operating profit/loss
Result from financial investments
Other interest income
Profit/loss after finansial intems
Tax on profit for the period
Net profit/loss for the period
148
2007
Apr-Jun
2007
Jan-Jun
2006
Jun-Dec
0
59
59
0
-205
-162
-493
-663
-2,680
-157
-367
-1,097
-4
-2,841
2,351
1,984
4,839
3,742
1,708
-1,133
-
-
-
1,984
3,742
-1,133
The Prospectus of Reinhold Polska AB
PARENT COMPANY BALANCE SHEET
Amounts in kSEK
Tangible assets
Financial assets
Total fixed assets
2006-12-31
2007-06-30
46
1,165
1,211
16
1,165
1,181
Short term receivables
Cash and bank balances
Total current assets
8,782
302,914
311,696
418
309,164
309,582
TOTAL ASSETS
312,907
310,763
3,500
3,500
281,750
24,500
-1,133
3,742
312,359
281,750
24,500
-1,133
308,617
373
175
548
1,931
215
2,146
312,907
310,763
Equity
Restricted equity
Share capital
Non-restricted equity
Share premium reserve
Shareholder´s contribution received
Profit/loss brought forward
Net profit/loss for the period
Total equity
Current liabilities
Accrued expenses and deferred income
Total current liabilities
TOTAL EQUITY AND LIABILITIES
149
The Prospectus of Reinhold Polska AB
CHANGES IN SHAREHOLDERS’ EQUITY PARENT COMPANY
Amounts in kSEK
Opening balance 2006-06-27
Share
capital
Non-restricted
capital
0
0
0
500
284,750
24,500
-1,133
308,617
Formation of company
New share issue
Shareholder´s contribution received
Net profit/loss for the period
Closing balance 2006-12-31
3,500
281,750
24,500
-1,133
305,117
Opening balance 2007-01-01
3,500
305,117
308,617
3,500
3 742
308,859
3,742
312,359
Net profit/loss for the period
Closing balance 2007-06-30
150
500
3,000
Total
equity
The Prospectus of Reinhold Polska AB
PARENT COMPANY CASH FLOW STATEMENT
Amounts in kSEK
2007
Jan-Jun
2006
Jun-Dec
Operating profit/loss
Adjustments for non-cash items
Interest received
Cash flow from operating activities before working
capital changes
-1,097
-
-2,841
4
1,704
-1,097
-1,133
Changes in receivables
Changes in liabilities
31
-1,652
-414
2,146
Cash flow after working capital changes
-2,717
599
Loans to group company
Purchase of equipment
Acquisition of group company
Cash flow after investing activities
-3,559
-29
-6,305
-1,000
-20
-165
-586
Formation of company
New share issue
Borrowings/repayment of debt
Shareholder's contribution received
Cash flow for the period
54,994
-6,250
500
284,750
24,500
309,164
Cash and cash equivalent at the beginning of the period
309,164
0
Cash and cash equivalent at the end of the period
302,914
309,164
151
The Prospectus of Reinhold Polska AB
152
The Prospectus of Reinhold Polska AB
153
The Prospectus of Reinhold Polska AB
ANNEX D: ORDERS RECEPTION
BESKIDZKI DOM MAKLERSKI SA
POINTS
OF
The list of orders reception points of Beskidzki Dom Maklerski SA (individual investors only).
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
154
City
Bielsko Biala
Bytom
Cieszyn
Dąbrowa Górnicza
Jastrzębie Zdrój
Katowice
Kęty
Kraków
Lubin
Tarnów
Tychy
Warszawa
Wroclaw
Zary
Street
Postal
Code
ul. Stojalowskiego 27
43-300
ul. Rycerska 11
41-902
ul. Górna 24
43-400
ul. 3-go Maja 11
41-300
ul. Warszawska 1
44-335
ul. 3-go Maja 23
40-096
ul. Sobieskiego 16
32-650
Plac Szczepański 5
31-013
Rynek 23 (Ratusz)
59-300
ul. Krakowska 11 a
33-100
Aleja Jana Pawla II 20
43-100
ul. Garibaldiego 4/10 Rondo Wiatraczna 04-359
Plac Solny 13
50-061
ul. Wyszyńskiego 1
68-200
Phone number
033 8128-440
032 282-52-65
033 8525-266
032 262-00-10
032 47-11-440
032 2081-400
033 8450-766
012 423-22-21
076 846-67-32
014 6213-186
032 217-78-75
022 612-45-45
071 3723-540
068 375-98-51
The Prospectus of Reinhold Polska AB
ANNEX E: CERTIFICATE OF REGISTRATION
155
The Prospectus of Reinhold Polska AB
156
The Prospectus of Reinhold Polska AB
ANNEX F: LIST OF ASSIGNMENTS
157
The Prospectus of Reinhold Polska AB
158
The Prospectus of Reinhold Polska AB
159
The Prospectus of Reinhold Polska AB
160
The Prospectus of Reinhold Polska AB
161
The Prospectus of Reinhold Polska AB
162
The Prospectus of Reinhold Polska AB
163
The Prospectus of Reinhold Polska AB
164
The Prospectus of Reinhold Polska AB
165
The Prospectus of Reinhold Polska AB
166
The Prospectus of Reinhold Polska AB
167
The Prospectus of Reinhold Polska AB
168
The Prospectus of Reinhold Polska AB
169
The Prospectus of Reinhold Polska AB
170
The Prospectus of Reinhold Polska AB
Gustafsson, Sven Gösta
Lettström, Anders Gustaf
171
The Prospectus of Reinhold Polska AB
Enguall, Jens
172
The Prospectus of Reinhold Polska AB
173
The Prospectus of Reinhold Polska AB
Hăkansson, Hans Gunnar
Krook, Hans Torgny
174
The Prospectus of Reinhold Polska AB
ANNEX G: MEMORANDUM OF ASSOCIATION
175
The Prospectus of Reinhold Polska AB
THE COMPANY
REINHOLD POLSKA AB
Vastmannagatan 52
113 25 Stockholm, Sweden
Phone: +46 8 23 55 25
Fax +46 8 32 77 90
www.reinholdpolska.com
Jerozolimskie 53 Avenue
00-697 Warsaw
Phone: +48 22 356 20 50
Fax: +48 22 356 24 94
LEAD MANAGER
SUPREMA SECURITIES SA
Jasna Street 14/16A
00-041 Warsaw, Poland
Phone: +48 22 345 84 00
Fax: +48 22 345 84 11
www.suprema.com
LEGAL ADVISOR
MAGNUSSON ADVOKATBYRÅ
Mäster Samuelsgatan 6
Box 7413, SE -103 91 Stockholm, Sweden
Phone: +46 8 463 75 00
Fax: +46 8 463 75 10
KANCELARIA PRAWNICZA MAGNUSSON
Dobra 56/68
00-312 Warsaw, Poland
Phone: +48 22 55 27 555
Fax: +48 22 55 27 550
www.magnussonlaw.com
AUDITOR
ERNST & YOUNG AB
Mikael Ikonen – Authorised Public Accountant
Box 7850
S-103 99 Stockholm; Sweden
Phone: +46 (0) 8 520 590 00
www.ey.com/se
ERNST & YOUNG AUDIT SP ZOO
Rondo ONZ 1
00-124 Warsaw; Poland
Phone: +48 22 557 70 00
Fax: +48 22 557 70 01
www.ey.com/pl
176
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