Directors’ report
of Rainbow Tours S.A.
for 2014.
Łódź, 30 APRIL 2015
Directors’ Report of Rainbow Tours S.A. for 2014
1. Basic information about the company:
Business name of the Company - Rainbow Tours Spółka Akcyjna
The registered office of the Company - 90-361 Łódź, Piotrkowska 270
NIP (Tax Identification Number): 725-18-68-136
Regon (Business Registry Number): 473190014
Registration in National Court Register KRS 0000178650
The company is registered in District Court for Łódź – Śródmieście in Łódź XX Economic Department
of National Registry Court in commercial register under KRS No 0000178650. Core business of the
company constitutes (according to KRS) activities of tour operators (PKD 7912 Z). Pursuant to
classification of Warsaw Stock Exchange the company operates in “hotel and restaurants” sector.
As at 31 December 2014 composition of the Management Board and the Supervisory Board was as
follows:
Management Board:
Grzegorz Baszczyński
Remigiusz Talarek
Tomasz Czapla
- the President of the Management Board
- the Vice –chairman of the Management Board
- the Vice –chairman of the Management Board
Composition of the Management Board did not change in 2014 as well as to the date of submitting the
financial statements.
The Supervisory Board:
Paweł Walczak
Paweł Niewiadomski
Grzegorz Kubica
Joanna Stępień-Andrzejewska
Paweł Pietras
-
the
the
the
the
the
Chairman of the Supervisory Board
Vice – chairman of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Composition of the Management Board did not change in 2014 as well as to the date of submitting
the financial statement.
2.
Description of basic economic and financial data, presentation of untypical factors
and events, and discussing perspectives of expansion in the new financial year
2.1.
Description of basic economic and financial data
Separate results of Rainbow Tours for 2014 are definitely the best in history of the company.
Additionally, the Management Board believes the company is second best on the market in Poland.
Currently, the issuer is ranked at second place on the market.
The Management Board of Rainbow Tours S.A. emphasizes that exceptionally good financial
performance on basic operations (production and sales of tourism services) was influenced by
numerous factors, the most important of which are:
1) Geopolitical situation, including stable economic situation in Poland, which translates into
optimism
2) Consumers and their purchase decisions,
3) Stable exchange rates of EUR and USD throughout most of the year (except two last months),
taking into account the system of currency hedges used by the Company
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Directors’ Report of Rainbow Tours S.A. for 2014
4)
5)
6)
7)
More effective filling of seats in charter planes
Intensification of marketing activities
Drop in fuel prices, especially aviation fuel
Increasing consolidation of tourism market, which translates into rising number of customers for
Rainbow Tours
Ad. 1
Economic conditions in Poland remain stable compared with other EU economies. Steady growth of
GDP, which makes us stand from other countries, allows looking to the future with optimism,
especially, taking into account the fact that GDP growth forecasts are optimistic. It seems that
Eurozone problems do not affect much Polish economy. In the same way, the Management Board
assess the effects of economic sanctions imposed by European Union on Russian Federation. A
greater threat poses tight situation in the Ukraine and other armed conflicts, even if they do not affect
tourist destinations. Another threat is the possibility of infectious diseases epidemics spreading (e.g.
Ebola Virus). In case of the conflict in Ukraine the Management Board was forced to cancel charters to
Crimea and customers were reallocated to other holiday destinations. On the other hand, reduction of
travels by costumers from Ukraine and Russia to Turkey or Egypt took off the pressure to increase
prices by hotel owners in those destinations (which are also very popular in Poland). It is worth to
mention that events in East Ukraine have impacted substantial rise in currency exchange rates
(especially USD).
The Ebola virus was a problem more brought out by media than a real one. However, the Company
suspended its winter travels to Gulf of Guinea region (charters to Gambia).
Negative geopolitical factors did not adversely affect the interest of Polish customers for international
travel, especially taking into account widespread optimism of consumers. Additionally, percentage of
costumers, who purchase travels to international long-distance holiday destination, is still low.
Tourists who spend their holidays at Baltic Sea are a potential target group. The Management Board
believes there is some significant percentage of tourists, for whom international travel can be
attractive.
Ad. 2
A price of package travel is calculated on the base of currency costs, mainly USD and EUR. Therefore,
the key issue is to determine so called budget rates, which are used to determine sale prices in PLN
and to estimate organization costs of package travel. Volatility of the currency market is a significant
factor and it affects profitability of the company. Accordingly, the parent company has implemented
policy of currency hedges for currency forward contracts. In 2014 the company provided currency
hedges for around 40% of total purchases of USD and almost 36% of total purchases of EUR.
Additionally, in the opinion of the Management Board, the currency market in 2014 was the most
stable in several years. Accordingly currency hedges brought expected measurable benefits since the
difference between budget rates and real purchase rates was a significant factor for profitability of
sales. The chart below presents average exchange rates published by NBP in 2014.
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Directors’ Report of Rainbow Tours S.A. for 2014
Kursy Średnie NBP w 2014
4.5000
4.0000
3.5000
3.0000
2.5000
1/2/2014
2/2/2014 3/2/2014
4/2/2014
dolar amerykański
5/2/2014
6/2/2014
euro
7/2/2014
8/2/2014
9/2/2014 10/2/2014 11/2/2014 12/2/2014
Linear (dolar amerykański)
Linear (euro)
Ad. 3
The aim of the tour operator is to sell all seats purchased in planes. Even if the exchange rates are
attractive for the company, the key issue is to “fill all seats in airplanes” what determines the
profitability of the overall package travel. In 2014 the seats in planes were filled in 96.9 %. In 2013
the ratio came to 94.5%.
Ad 4.
The marketing budget came to PLN 24.5 million and to PLN 13.5 million in 2013 what according to the
Management Board increased recognizability of the brand.
Ad 5.
The price of aviation fuel is dependent on a price of crude oil. A drop in crude oil prices is related to a
drop in cost of aviation transport. The Company is able to substantially reduce costs of charter
transportation due to a substantial drop in prices of aviation fuel.
Cena paliwa EIP JET - dla paliwa samolotowego
1050
950
850
750
650
550
450
1/2/2014
2/2/2014 3/2/2014
4/2/2014
5/2/2014
6/2/2014
7/2/2014
8/2/2014
9/2/2014 10/2/2014 11/2/2014 12/2/2014 1/2/2015
2/2/2015
Ad. 6
A number of buyers went up to 32.5 % over the year before. The essential season for the company is
the period of provision of services with respect to summer offer. In 2014 number of the customers in
the summer season went up by 35% over a year before, which shows that sales of the company are
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Directors’ Report of Rainbow Tours S.A. for 2014
over the average compared with tourism market in Poland. Total number of costumers went down
due to decrease in sales of block of seats in charter planes and reduction in volume of offers of other
tour operators sold by ABC Świat Podróży.
Year
Winter offer - I quarter
Summer offer
Winter offer - IV quarter
total
2012
2013
2014
Dyn 2013/2012
Dyn 2014/2013
1
2
3
4=2/1
5=3/2
16 002
18 455
29 145
15,3%
57,9%
122 208
152 174
205 449
24,5%
35,0%
8 831
14 858
20 048
68,2%
34,9%
147 041
185 487
254 642
26,1%
37,3%
Total sales revenues came to PLN 950,859 thousand, up by 23.5 % over the year before. The
increase in number of customers translated to substantial increase in revenue from sales of tourism
services. However total sales revenues of the company are characterized by lower growth dynamics
than the growth dynamics of number of customers. The table below presents sales revenues by
segment.
2014
2013
January – December
1
change
%
4=2-3
5=4/3
January – December
2
3
Revenue from sales of package travels
766 781
580 462
186 320
32,1%
Sales revenue – agency services
184 678
189 665
-4 987
-2,6%
Total revenues
951 459
770 127
181 333
23,5%
The revenue from sales of package holidays in total amount of PLN 766,781 thousand confirms that
number of customers has substantially risen. Sales revenue from agency came to PLN 184.768
thousand, down by 2.6%. The drop in sales revenue earned on agency services was influenced by
reduction in number of seats in planes chartered by the Company and sold to other tour operators.
Additionally, agency services (flight broker) earn low margins, which don’t exceed 2% of the value.
However, these services will be continued due to benefits derived from substantial contracts with
airlines.
In 2014 a structure of revenue from sales of package holiday also changed in individual distribution
channels. In 2014 sales by agency went down to 48.8 % for the benefit of branded sales offices
(including own sales offices and franchise offices) as well as Call Centre and the website:
www.rainbowtours.pl. Additionally, in 2014 value of sales in own sales offices substantially rose over
the year before by 49.3 %. The table below presents sales revenue by distribution channel, structure
and dynamics in years 2014 and 2013.
2014
Structure
2013
Structure
Dynamics
Sales by agency
374 213
48.8%
316 440
54.50%
18.3%
Sales by own sales offices and Call Centre
359 155
46.8%
240 511
41.40%
49.3%
other
33 413
4.4%
23 511
4.10%
42.1%
total
766 781
100.0%
580 462
100.0%
32.1%
Cost of organization of package tours for the period in question came to total of PLN 808,442
thousands, up by PLN 130,423 thousands. Growth dynamics of costs were substantially lower than for
revenues and amounted to 19.2 %. Gross margin, which is relation of sales revenues to costs of
operations, came to 15.0 % in the period in question and to only 12.0% in the same period of 2013.
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Directors’ Report of Rainbow Tours S.A. for 2014
The increase in gross profitability of the Company was generally affected by accurate decisions taken
with respect to policy of currency hedges. The continued use of currency hedges for future periods
(90 to 120 days in advance) provided measurable results. The policy guarantees secure exchange
rates in relation to catalogue prices. Moreover, the Company attempts to make the contracts in the
periods with lowest exchange rates(i.e. in so called holes).
Gross profit on sales earned by the Company came to PLN 143,017 thousand, up by PLN 50,913
thousand after IV quarters of 2013, which constitutes increase by 55.3 %. Total costs of operations
(cost of sales and overheads) were at PLN 105,139 thousand. Growth dynamics went to 37.1% over
the year before. The table below presents the dynamics of costs of sales and costs of overheads:
2014
2013
January -December
1
2
Change
%
4=2-3
5=4/3
January -December
3
Cost of sales
87 468
64 771
22 697
35.00%
Overheads
17 671
11 788
5 883
49.90%
105 139
76 559
28 580
37.10%
Total costs of sales include costs of agents’ commission, which sell the offer of the company, costs of
sales offices, costs of production department and costs of marketing. Costs of sales in the period have
increased due to:


the agents’ commission, which was correlated with sales revenue earned by agents (the
increase in commission costs has higher growth dynamics)
substantially lower growth dynamics for costs of sales incurred by networks of own sales
offices (increase in costs of sales, namely costs of sales offices, went up by 12.7 % and
revenue from sales of package tours through this distribution channel rose by 49.3 %),
substantial increase in costs of production departments and post – sale expenses of the
headquarter by as much as 37.9 %, increase in marketing expenses incurred in the period in
question, which went up by 81.3 %. The accounted for costs of marketing amounted to PLN
24.5 million.
The overheads of the Issuer also rose. Growth dynamics for the period in question came to 49.9 %.
Main factor, which affected the increase in costs of overheads is especially accounting for provisions
for awards in the amount of PLN 2.8 million, which are related to the profit earned.
In 2014 net profit of the Group came to PLN 30,399 thousand up by PLN 19,210 thousand on the year
before. EBIDTA for the company came to PLN 30,037 thousand. Net profitability, which is the relation
of net profit to sales revenues, came to PLN 3.2 %, where in 2013 the ratio amounted to 1.45 %
2.2. Untypical events
In 2014 no events occurred, which would influence operations of tourism branch – the only negative
factor was the situation in Ukraine. According to the Management Board the conflict is not significant
for operations of the Company, however, economic sanctions imposed on Russian Federation by
European Union and United States have adversely influenced currency exchange market, but on the
other hand, they had a positive effect on prices on aviation fuel market.
An encouragement to international travel was also stabilization of currency exchange rates prevailing
in 2014, what, according to the Management Board, has substantially affected demand for services
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Directors’ Report of Rainbow Tours S.A. for 2014
provided by Rainbow Tours. The chart below presents average prices in the period from December
2009 to April 2015. The chart for 2014 does not show any deviations from average annual exchange
rate of USD and EUR.
average NBP exchange rates published from 31.12.2009 to 23.04.2015
4.9000
4.5195
4.4000
4.0250
4.3205
4.1505
4,2623
4.24404.1748
dolar
ameryk
ański
3.9582 3.9366
3.9000
3.4513
3.4000
3.5072
3.5139
3.2563
3.1074
3.0753
3.1338
euro
3.0485
Srednia
roczna
USD
2.8296
2.9000
2.4000
Srednia
roczna
EUR
1.9000
2.3. Perspectives for business development
Rainbow Tours operates on Polish tourism market for over 25 years and since 2003 as a joint stock
company. Growth dynamics of sales are considerably higher compared with development of tourism
market in Poland. In the last six years turnover of the Company increased fourfold and the Company
is ranked as second best taking into account volume of sales. The Management Board of the Issuer
sees the possibility for further grow, especially because the market is expanding: number of
participants in package holiday amounts to around 4%, whereas the very same numbers for Germany
come to 16-19%, or 8% for Czech Republic. We can expect that the market for the Company will
expand, and the expansion dynamics will be strictly correlated with income of Polish citizens. We
should emphasise that annual growth of Rainbow Tours S.A. has reached from 10% to 40% in recent
years. Operations of a mass scale tour operator are strictly regulated by law and UOIKIK (Office of
Competition and Consumer Protection) and exposed to numerous types of risk (unrest, wars, severe
weather, volcano eruptions etc.), which affects its financial performance.
The Management Board of the Issuer has been diversifying the offer for several years, except for B2C
activities i.e. a mass market tour operator, the Company operates in B2B sector i.e. organisation of
business trips, incentive trips and congresses as well as consolidation and sales of seats in charter
planes. The Management Board of the Issuer formed a capital group and each of the group’s entities
provide various tourist services. Rainbow Tours Capital Group comprises following entities: Portal
Turystyczny sp. z o.o, ABC Świat Podróży sp. z o.o., Rainbow Tours – Biuro Podróży sp. z o.o. and
Bee&Free sp. z o.o.
The Strategy of the Management Board for 2015 and the years to come provides for consistent
building of strong and recognizable Rainbow Tours brand for mass market and a strong capital group
covering all aspects of tourism market. In 2015 the Company plans numerous operations, which
would bring positive outcomes, especially:

expansion of a reservation system,

restructuring with respect of efficiency and levels of employment,

diversification of revenue in tourist services sector,
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Directors’ Report of Rainbow Tours S.A. for 2014

concentration of operations in the seat of the Parent Company.
Services provided by the Company reach a final recipient through various distribution channels:
widespread network of agents, direct sales in own sales offices, sales in franchise offices and online
sales in corporate call centre and corporate website. In the coming period the Company will strive to
increase sales through own sales network as well as franchise and corporate websites. These allow
relatively lowering costs of sales as well as retaining full control over quality and form of sales.
3. The factors of risks and threat the Issuer is exposed to
3.1. Risk connected with disasters in tourist destinations
Operations of the Company can be indirectly affected by all kinds of political and economic
developments throughout the world. Tragic affairs and disasters in tourist destinations have direct
effect on tourism market demand. Armed conflicts, terrorist attacks, social unrest, epidemics, or
natural disasters e.g.: floods, earthquakes or prolonged droughts can adversely impact performance of
the Company. Yet, currently terrorist attacks and social unrest that makes headlines have less
significant impact on purchase decisions than it used to be a few years ago. Moreover, the Company
organizes and sells holidays to dozens of destinations all over the world, and in case of a local crisis in
a one destination, the Company can operate in other destinations.
3.2. Risk connected with the competition
Changes on the tourism market prove that substantial development of on-line sales can in a longer
run pose a threat to market share of a Company with traditional sales channels only. The Company
have taken some actions to prevent such threat by developing modern sales channels.
Additionally, the Company competes with other traditional tour operators. Consistent development of
strong and recognizable brand, which cover all aspects of tourism market (a producer – a tour
operator in Poland, traditional distribution – network of traditional sales offices, Internet – corporate
portal), definitely enables to successfully compete with other market players.
3.3. Risk connected with seasonality of sales
Sales generated by the Company, as for the majority of tourism industry entities, are seasonal. The
demand for products and services of the Company rises in second and third quarter of a year. Thus,
financial results for that period have significant influence over final performance for a whole year.
Moreover, the Company attempts to level down seasonality of sales in winter season (IV and I quarter
of the year) by introducing more and more interesting and attractive offers of exotic holidays (based
mainly on direct charters to Mexico, Cuba and Thailand). Introduction of charter transportation to
exotic destinations have resulted in rapidly growing interest in such offer. This situation may affect the
proportion of sales in summer and winter season.
3.4. Risk connected with financial situation of subsidiaries.
Rainbow Tours S.A.’s Capital Group comprises following entities: Portal Turystyczny Sp. z o.o. (100 %
of the share capital, the Company has been completing works in an individual reservations portal i.e.
dynamic packaging), Rainbow Tours – Biuro Podróży Sp. z o.o. (100 % of the share capital), ABC
Świat Podróży sp. z o.o. (100% of the share capital), the company operates 12 franchise Rainbow
Tours sales offices) as well as Bee&Free (100% of the share capital), the company specializes in
consolidation and sales of charter plane seats). In 2012 the Company undertook number of
restructuring activities, which brought desired effects and profit earned by subsidiaries.
3.5. Risk connected with micro-economic situation in Poland
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Directors’ Report of Rainbow Tours S.A. for 2014
Economic problems of EU countries may affect an economic situation in Poland and this in turn may
translate to deterioration of consumer moods, including a desire of Polish citizens to buy international
travel. Purchase of package travel is affected by a complicated political situation in Ukraine and a risk
of conflict escalation between Russia and Ukraine. However, considerable increase in turnovers and
advance sales of Summer 2015 offer in the first quarter does not seem to prove those fears.
3.6. Risk connected with changing legal regulations
Changes in legal provisions or different interpretations of the law pose risk to operations of the
Company. Any changes in legal provisions, especially tax regulations may have adverse effects on
operations of the Company. Legal regulations in Poland are in the course of changing due to
implementation of EU laws and may affect legal environment of company’s business. Frequent
changes in interpretation of tax regulations are especially dangerous. Practice of tax offices and court
judgment on taxation lacks consistency. Tax interpretation different from the interpretations provided
by tax offices may deteriorate financial situation of the Company and in result adversely affect
financial performance.
3.7. Currency risk
The Parent Company pays in for package travels in foreign currencies (usually Euro or American
Dollar). And customers in Poland pay for package travels in Polish zloty. Unfavourable currency
exchange rates within the period between when customers pay for a travel and the time when
company makes payments to foreign contractors may lower profitability and profits earned by the
Company. However, we should take into account that the depreciating trend of Polish currency was
already stopped and according to analyses possessed by the Management Board Polish zloty should
strengthen in the mid and long term. Moreover, the Company uses hedges to secure future currency
transactions: options and forwards.
3.8. Risk connected with rising prices of crude oil
Relatively high price of crude oil in recent time has increased costs of aviation and coach transport.
Greater demand for crude oil in the summer season resulting from increased activity of airlines may
affect a growth of prices in that period. This can translate into increase in cost of package travels
(denominated in foreign currencies).
4.
Declaration on application of corporate governance rules by the parent company
4.1. Corporate governance rules applied by the issuer
In 2014 the Parent Company applied and was subjected to corporate governance rules published in
“Code of Best Practices for WSE listed Companies” attached to the Resolution No 19/130/2012
concerning adoption of changes in “Code of Best Practices for WSE listed Companies” of 21 November
2012. The rules are available on the Internet, under the following address: http://www.corpgov.gpw.pl.
The Warsaw Stock Exchange Rules (i.e. the document adopted by the Resolution No 1/1110/2006 of
WSE Supervisory Board dated 4th January 2006 as amended) do not impose an obligation to apply
the corporate governance rules, but only an obligation to report about them.
According to the provisions of section 29.2 of the WSE Rules “the issuers should apply the rules of
corporate governance. The rules of corporate governance determined in the resolution are not
regulations governing the exchange within the meaning of the Exchange Rules”
Pursuant to the provisions of section 29.3 of WSE Rules: “Should a specific corporate governance rule
not be applied on a permanent basis or be breached incidentally, the issuer shall publish a report
containing information about which rule is not applied at all or has not been applied on an occasion,
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Directors’ Report of Rainbow Tours S.A. for 2014
under what circumstances and for what reasons and how the issuer intends to remove effects, if any,
of not having applied a given rule on an occasion or what steps it intends to take to mitigate the risk
of the corporate governance rules not being applied in the future. The report should be published at
the issuer’s official website and in the way analogous to that applied to submission of current reports.
The obligation to publish the report should be performed as soon as the issuer becomes reasonably
convinced that a given rule will not be applied at all or on an occasion, in any case promptly after an
event representing a breach of a corporate governance rule occurs.”
At the same time, according to the provisions of section 29.3 of the WSE Rules: “The Exchange
Management Board may resolve that the obligation to publish a report referred to in sub-paragraph 3
shall not apply to a specified part of corporate governance rules”. Pursuant to provisions of the
Resolution No 1014/2007 of the Warsaw Stock Exchange Management Board dated 11 December
2007 concerning partial waiver of the obligation to publish reports concerning the corporate
governance rules applicable on the WSE Main Market, the WSE Management Board decided to waive
the obligation of publishing the reports mentioned in section 29 point 3 of the WSE Rules with
reference to corporate governance rules contained in part one of “Code of Best Practices for WSE
Listed Companies” (Recommendation for Best Practice for WSE listed Companies).”
According to the provisions of article 29 section 5 of the Warsaw Stock Exchange Rules: “The issuer
shall attach a report on application of corporate governance rules at the company to the annual
report. „The Exchange Management Board may determine the extent and structure of such report.”
The scope and the structure of the report concerning application of corporate governance rules at the
company attached to the annual report of the Issuer have been resolved pursuant to the provisions of
the Resolution No 1013/2007 of the Warsaw Stock Exchange Management Board dated 11 December
2007 concerning the scope and structure of the reports on application of corporate governance rules
by listed companies.
The legal base of the declaration on application of corporate governance rules is:
1) § 91.5 point 4) in connection with section 92.4 on current and periodic information provided by
issuers of securities and on conditions, under which information required by legal regulations
of a third country may be recognised as equivalent (Dz.U. (Journal of Laws) from 2014, item
13), according to which the directors’ report as well the capital group’s directors’ report should
include the declaration on application of corporate governance rules, which constitutes a
separate part of such reports. The declaration should present at least information indicated in
the provisions mentioned in the Regulation of the Minister of Finance of 19 February 2009.
2) § 29.5 of the Warsaw Stock Exchange Regulations and the Resolution No 1013/2007 of the
Warsaw Stock Exchange Management Board of 11 December 2007 concerning scope and
structure of reports on application of corporate governance rules by listed companies. EU law in
a form of Recommendations of the European Commission on quality of corporate governance
reporting (the attitude: observe and explain) of 09.04.2014 [2014/208/UE] constitutes
additional corporate governance law.
4.2. Indication and explanation of departures from application of corporate governance
rules
In 2014 the Company failed to apply corporate governance rules published in "Code of Best Practices
for WSE listed Companies”, which are applicable in 2014. The rules were adopted by Resolution No
12/1170/2007 on 4 July 2007 concerning adoption of “Code of Best Practice for WSE Listed
Companies”, which takes into account amendments applicable from 1 January 2013 (introduced
pursuant to the provisions of the Resolution of the Warsaw Stock Exchange Supervisory Board No
19/130/2012 dated 21 November 2012 concerning introduction of amendments to Code of Best
Practices for WSE listed Companies in accordance with the consolidated text of this document,
applicable in 2014, adopted by the Resolution of Warsaw Stock Exchange Supervisory Board No
19/130/2012 dated 21 November 2012 on adoption of amendments to “Code of Best Practices for
WSE listed Companies”.
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Directors’ Report of Rainbow Tours S.A. for 2014
Part I –Recommendations for Best Practice for Listed Companies
Rule I 1
“A company should pursue a transparent and effective information policy using both traditional
methods and modern technologies and latest communication tools ensuring fast, secure and effective
access to information. Using such methods to the broadest extent possible, a company should in
particular:
- operate a company website, which scope and method of presentation should be based on a model
investor relations service available at http://naszmodel.gpw.pl/
- ensure adequate communication with investors and analysts, also with the use of modern methods
of Internet communication”
In 2014 the Company failed to comply fully with the rule:
1)
the Company’s website, including the corporate governance relations section does not fully
comply with the model available at: http://naszmodel.gpw.pl/; this was mainly the result of
specific construction of the corporate website, which is suited to commercial purposes of
provision of services, which constitute a main business object of the Company
2)
the Company failed to implement the rules of corporate governance rules with respect to:
“ensuring adequate communication with investors and analysts, and using to this purpose also
modern methods of Internet communication” and thus failed to implement:
 rule No I.12 - enabling shareholders to exercise a voting right during a General Meeting either
in person or through a plenipotentiary, outside the venue of the General Meeting, using
electronic communication means - the explanations are provided with the description of the
rule NoI.12;
 rule No II.1.9a- ensuring recording of the General Meeting in audio or video format and
publishing on the website – explanation is provided in the description of the rule: No II.1.9a;
 rule No IV.10- a practice of enabling shareholders to participate in a General Meeting by using
electronic communication means through: real life broadcast of General Meetings and real
time bilateral communication where shareholders may take the floor during a General Meeting
from a location other than the General Meeting– explanation with description of the rule No
IV.10.
Except for the above facts the Company strives to ensure adequate communication with investors and
analysts (i.e. direct meetings) by using modern methods of electronic communication.
Rule I 5
“A company should have a remuneration policy and rules of defining the policy. The remuneration
policy should in particular determine the form, structure, and level of remuneration of members of
supervisory and management bodies.” Commission Recommendation of 14 December 2004 fostering
an appropriate regime for the remuneration of directors of listed companies (2004/913/EC) and
Commission Recommendation of 30 April 2009 complementing that Recommendation (2009/385/EC)
should apply in defining the remuneration policy for members of supervisory and management bodies
of the company.”
The above rule was not applied in 2014 with respect to the obligation of keeping remuneration policy
for members of the Supervisory Board, the remuneration of the members of the Supervisory Board
was determined based on the resolution of the General Meeting of the Company (the resolution No 22
of the Ordinary General Meeting dated 11 June 2012 concerning determination of remuneration for
the members of the Supervisory Board, which was covered by the minutes – the notarial deed written
by a Notary Public in Łódź, Anna Bald Register A No 2224/2012). Pursuant to the Resolution of the
Supervisory Board No 6/05/2011 dated 27 May 2011, the Supervisory Board of Rainbow Tours
pursuant to § 19.2 second sentence and § 22 letter c) of the Articles of the Association adopted and
introduced the document providing a remuneration policy for members of the Management Board of
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Directors’ Report of Rainbow Tours S.A. for 2014
the Company (the remuneration policy for members of the Management Board of Rainbow Tours
S.A.), which was applied by the Company in 2014.
Rule I 9
“The WSE recommends to public companies and their shareholders that they ensure a balanced
proportion of women and men in management and supervisory functions in companies, thus
reinforcing the creativity and innovation of the companies’ economic business”.
In 2014 only men were members of the Management Board, and only one, out of 5 members, sat on
the Supervisory Board, although, proportion of women to men in the Company is balanced. The
Company and its shareholders aim to, in potentially reasonable and justified time, and if it is
objectively possible, ensure well-balanced proportion of women and men in roles in the Management
Board and Supervisory Board of the Company, and thus reinforce creativity and innovation of the
company’s business.
Rule I 12
“A company should enable its shareholders to participate in the general meeting of shareholders either
personally or through plenipotentiary outside the venue of the meeting using electronic
communication means”
In 2014 the Company failed to apply and do not intend to apply in 2015 the above rule, because the
issue of distant voting is presented in Part I “Code of Best Practices for WSE listed Companies”, and
this means that the rule is only recommendation and the information on non-application of the rule
does not need to be published in current reports, and at the same time, the obligation to publish the
information apply only to annual reports (according to provisions of the Resolution No 1014/2007
Management Board of Warsaw Stock Exchange dated 11 December 2007 on partial exclusion of the
obligation the publish reports concerning corporate governance rules on WSE; in 2014 the company
failed to implement, and does not intend to implement in in the current financial year (2015),
solutions, which would enable its shareholders to exercise voting rights during a General Meeting
either in person or through a plenipotentiary, outside the venue of the General Meeting, using
electronic communication mean.
The Company believes that introduction of such solutions -concerning enabling its shareholders to
exercise voting rights during General Meeting either in person or through a plenipotentiary, outside
the venue of the General Meeting, using electronic communication means - should involve an
introduction of appropriate formal and legal provisions into internal regulations of the Company
(Articles of Association, Rules and Regulation of the General Meeting of Shareholders). The provisions
should enable such participation in the General Meeting of Shareholders, however, this will pose many
formal, practical and technical problems: i.e. geographical diversification of shareholders, number of
shareholders, a language of communication, time delay in two way communication, ensuring security
of the voting process, confidentiality in certain circumstances or possibility of split voting, and thus
may constitute an additional factor, which would increase costs of organization and convening of the
General Meeting of Shareholder. Additionally, this would mean introduction of corporate solutions,
which are disproportionate to potential effects and current expectations of shareholders in this
respect.
Part II – Best Practices for management boards of joint stock companies
Rule II 1.2a
“A company should operate a corporate website and publish on it, in addition to information required
by legal regulations: (…) 2a) on an annual basis, in the fourth quarter –information about the
participation of women and men respectively in the Management Board and in the Supervisory Board
of the company in the last two years (…)”
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Directors’ Report of Rainbow Tours S.A. for 2014
Information on composition of the Management Board and the Supervisory Board is presented on the
website of the Company in current and interim reports published by the Company. The Company
intends to apply this rule directly.
Rule II 1.6
“A company should operate a corporate website and publish on it, in addition to information required
by legal regulations: (…) 6) annual reports on the activity of the Supervisory Board taking account of
the work of its committees together with the evaluation of the internal control system and the
significant risk management system submitted by the Supervisory Board (…)’”
(…)”
The rule concerning publication of an annual report on works of a committee of the Supervisory
Board on the corporate website of the Issuer was not applied in 2014 and is not applied in 2015. No
committees were separated in the Supervisory Board, including an audit committee, and all members
of the Supervisory Board fulfilled their duties collectively. Information on activities of the Supervisory
Board is systematically published – on the website of the Issuer – in the reports on activities of the
Supervisory Board for full financial years.
Rule II 1.9a
“A company should operate a corporate website and publish on it, in addition to information required
by legal regulations: (…) 9a) a record of the General Meeting in audio or video format, (…)"
In 2014 the Company failed to implement and in the current year (2015) does not intend to
implement solutions concerning recording of the General Meeting in audio or video format. Thus, the
company does not intent to implement the rule No II 1.9.
The Company believes that all essential information on convening the General Meeting of
Shareholders will be published on the website and in current reports, including for the purpose of
ensuring transparency and symmetry of information between the company and the shareholders or
the shareholders themselves by assuring compliance with the rule mentioned in point II.7 of the
“Code of Best practices for WSE listed Companies” – i.e. apart from information required by law, the
company should also publish questions of shareholders concerning the matters put on an agenda,
which will be asked before and during the General Meeting of the Shareholders, including answers to
the questions.
The company believes that taking records of the General Meeting of Shareholders and publishing it on
the website may additionally increase costs of organization and convening the General Meetings of
Shareholders and introduction of corporate solutions will be disproportionate to its potential affects
and expectations of the shareholders in this respect.
However, the position of the company, which is consistent with a stance provided in a preamble to
“Code of Best Practices of WSE listed Companies”, is as follows: applying best practices should be
natural and not forced or fictitious. Therefore in the future the company will consider introduction of
solutions complying with the rule II.1.9a, in particular through implementation of solutions connected
with recording General Meeting of Shareholders and publishing it online audio format, taking into
account that the position of Company that the rule should be implemented gradually without too
much financial and organizational burden.
Rule II 1.13
“A company should operate a corporate website and publish on it, in addition to information required
by legal regulations: (…) 13) a statement on compliance with the corporate governance rules
contained in the last published annual report, as well as the report referred to in § 29.5 of the
Exchange Rules, if published.”
The Company publishes declaration on application of corporate governance as attachments to annual
financial statements, and are published on the corporate website. The reports are presented in
accordance with provisions of the Regulation of the Minister of Finance of 19 February 2009 on
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Directors’ Report of Rainbow Tours S.A. for 2014
current and periodic information provided by issuers of securities and on conditions under which
information required by legal regulations of a third country may be recognised as equivalent (Dz.U. No
33, item 259 as amended). This is consistent with the provision of the Resolution No 718/2009 of
Warsaw Stock Exchange Management Board dated 16 December 2009 and equivalent to submitting
the report described in section 29.5 of the Regulations of the Warsaw Stock Exchange to WSE.
However, subject to the fact that the company presented all the information in section 1 of the
Resolution No 1013/2007 of the Warsaw Stock Exchange Management dated 11 December 2007.
Rule II 1.14
“A company should operate a corporate website and publish on it, in addition to information required
by legal regulations: (…) 14) information about the content of the company’s internal rule of changing
the company authorized to audit financial statements or information about the absence of such rule.”
The Company does not apply any defined rule concerning changes of the company authorized to audit
financial statements, and the Company failed to publish such information on the investor relations
webpage. The company authorized to audit financial statements was changed last time in 2011
pursuant to the resolution No 9/05/2011 of the Supervisory Board of 27 May 2011
The financial statements for the financial years: 2008, 2009 and 2010 were audited by Kancelaria
Biegłych Rewidentów „Josef Welt” Sp. z o.o. in Łódź. Since 2011 as well as in 2012 and 2013 the
financial reports were audited by DGA Audyt Spółka z o.o. in Poznań.
In order to apply this rule of corporate governance (rule II 1.14) the Company intends to publish on
its corporate website the respective rule concerning lack of an internal rule concerning changing a
company authorized to audit financial statements of the issuer.
Rule II.2
“A company should ensure that its website is also available in English, at least to the extent described
in section II.1.”
Since 1 January 2009 the Company has been operating corporate webpage of investor relations in
English. However due to considerable delay in translation of ongoing information and the fact that it is
out of date the Issuer suspended operations of its investor relations webpage in English. In the future
the Company intends to apply the rule to some extent by translating some basic information covered
by Part II of “Code of Best Practices of WSE listed Companies”.
C Part III –Best Practice for Supervisory Board Members.
Rule III.1
“In addition to its responsibilities laid down in legal provisions the Supervisory Board should:
1)
once a year prepare and present to the Ordinary General Meeting a brief assessment of the
company’s standing including an evaluation of the internal control system and the significant risk
management system
2)
(deleted),
3) review and present opinions on issues subject to resolutions of the General Meeting”
In 2014 the rule was not applied with respect to presentation of content of the report on activities of
the Supervisory Board in the financial year 2013 and the information on assessment of internal control
system and the system of managing significant risk of the Company. The information on activities of
the Supervisory Board in 2013 and a brief description of the situation of the company were provided
in the report on activities of the Supervisory Board in 2013, which was presented at the general
meeting of shareholders. The reports on activities of the Supervisory Board for the finished financial
years are presented on the website of the Company.
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Directors’ Report of Rainbow Tours S.A. for 2014
Part IV – Best Practices of Shareholder
Rule IV.10
“A company should enable its shareholders to participate in a General Meeting using electronic
communication means through:
1) real-life broadcast of General Meeting,
2) real –life bilateral communication where shareholders may take the floor during a General Meeting
from a location other than the General Meeting.”
In 2014 as well as in previous periods when the rules was introduced to “the Code of Best Practices
for WSE listed Companies” the Company failed to enable and does not enable its shareholders
participation in General Meeting through electronic communication means in a manner indicated in the
Rule IV.10. In the future the Company will consider possibility of introducing the rule: real-life
broadcast and real–life bilateral communication where shareholders may take the floor during a
General Meeting from a location other than the General Meeting using electronic communication
means.
In the opinion of the Company introduction of real-life broadcasting and real–life bilateral
communication where shareholders may take the floor during a General Meeting from a location other
than the General Meeting should entail introduction of appropriate formal and legal provisions into
internal regulations of the Company (Articles of Association, Rules and Regulation of the General
Meeting of Shareholders). The provisions should enable such participation in the General Meeting of
Shareholders but that will pose many formal, practical and technical problems e.g.: geographical
diversification of shareholders, number of shareholders, the language of communication, time delay,
ensuring security of the voting process, the confidentiality in certain circumstances or the possibility of
split voting, and thus that may be an additional factor, which would increase costs of organization and
convening of the General Meeting of Shareholders, and could also introduce corporate solutions, which
are disproportionate to potential effects and current expectations of shareholders in this respect.
The position of the Company – which is consistent with the stance described in a preamble to “Code
of Best Practices of WSE listed Companies”, is as follows: application of best practices should be
natural and not forced or fictitious. Therefore in the future the company will consider introduction of
solutions with respect to compliance with the rule II.1.9a, in particular through implementation of
solutions connected with recording General Meeting of Shareholders and publishing it online audio
format, taking into account the position of Company that rule should be implemented gradually
without too much financial and organizational burden.
In other respects, apart from the departures described, in 2014 the company applied corporate
governance rules obligatory for the Company in 2014, which are published “Code of Best Practices of
WSE Listed Companies” adopted by the Resolution WSE Supervisory Board No 12/1170/2007 on 4 July
2007 concerning adoption of “Best practices for WSE Listed Companies”, which covers the
amendments applicable from 1 January 2013 (introduced pursuant to the Resolution of the WSE
Supervisory No 19/130/2012 dated 21 November 2012 concerning adoption of amendments in “Code
of Best Practices for WSE Listed Companies”) according to the consolidated text adopted by the
Resolution of WSE Supervisory Board No 19/130/2012 dated 21 November concerning the adoption of
amendments in “Code of Best Practices for WSE Listed Companies”, and in the situation when such
case (factual or legal) referred to the rule was not recorded – the issuer declared to comply with the
rule in 2014.
4.3. Main features of internal control and risk management system in the company with
respect to the process of drawing up financial statements
Rainbow Tours S.A. has implemented fully functional internal control system with respect to
accounting and drawing up financial statements. The aim of the system is to ensure clear and reliable
presentation of the Company standing and financial liquidity. Direct supervision over the system is
exercised in accordance with applicable legal provisions and internal regulations of the Management
Board. The internal control system functions on three levels:
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Directors’ Report of Rainbow Tours S.A. for 2014



With respect to accounting rules – documentation of accounting rules adopted, which
describes accounting policy stipulated in the Accounting Act of 29 September 1994 (the
consolidated text Dz.U. of 2013, item 330 as amended) approved by the Management Board.
The accounting rules are applied continuously to ensure comparability of financial statements.
With respect to documentation – a procedure of document flow and approval, which ensure
content-related as well as formal control of the documents entered to a computer data
processing system.
With respect to a computer data processing system – the company uses systems, which meet
the requirements of the points above and applies adequate methods of securing access to
data in computer data processing system, including keeping and securing accounts and source
documents.
Annual separate financial statements of the Issuer and annual consolidated financial statements of the
Capital Group of the Issuer are subject to the verification (audit) of an external entity with relevant
powers, while half-year financial statements are reviewed. Rainbow Tours SA’s financial statements
are published in accordance with requirements of applicable legal regulations.
4.4. Shareholders holding directly or indirectly substantial blocks of shares
The table below presents shareholders with substantial blocks of shares as at the date of submitting
this report that is as at 31 December 2014.
shareholder
Number of shares held
Number of votes at GM
attached to shares
Share in share capital of
the
[%]
Share in total number of
votes at GM of the
Company
[%]
Grzegorz Baszczyński
2.292.000
4.147.000
15,75
19,42
Remigiusz Talarek
2.035.800
3.680.800
13,99
17,24
Tomasz Czapla
1.990.000
3.600.000
13,68
16,86
Sławomir Wysmyk
1.878.346
3.448.346
12,91
16,15
Aviva Investors Poland SA
1.316.319
1.316.319
9,05
6,16
Accordingly: total number of
shares and total number of votes
at GM of the Company
14.552.000
21.352.000
The above information about a number of shares held by shareholders (including members of
governing bodies of the Company) with at least 5% of total votes at General Meeting of Shareholders
were drawn up in particular based on current ( as at 31 December 2013) disclosures in a register of
shares (for registered shares) as well as information received from shareholders. The information was
acquired through fulfilling the obligation imposed pursuant to the provisions of the Act on Public
Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading and
Public Companies (art. 69 and 69a) and the Act on Trading in Financial Instruments (art. 160 and
next) dated 29.07.2005.
According to information in possession of the Company number of the shares held by shareholders
with at least 5% of the total votes at the General meeting of Shareholders did not change after the
reporting period till a publication date of this report.
4.5. Holders of securities with special control rights and the description of those rights
The Company’s capital does not include shares or any other securities with special controlling powers.
The share capital of the Company comprises vote preference shares, with two votes attached to each
share at the General Meeting. These are A and C1 series shares held by i.e. members of the
Management Board of the Company (Grzegorz Baszczyński – the President of the Management Board,
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Directors’ Report of Rainbow Tours S.A. for 2014
Remigiusz Talarek – the Vice – Chairman of the Management Board of the Issuer and Tomasz Czapla
– the Vice – Chairman of the Management Board of the Issuer) and:
(1) on 11 January 2013 the Company entered into the agreement with a shareholder of the
company, who previously held preference shares (Mr. Sławomir Wysmyk), pursuant to which
the Company purchased and Mr. Sławomir Wysmyk sold 40,000 (forty thousand) preference C1
shares under Share Buyback Programme, which was implemented pursuant to the Resolution
No 22 of the Ordinary General Meeting of 29 June 2011 on providing the authorisation of the
Management Board of the Company to acquire company’s own shares for redemption or resale.
(2) on 19 March 2013 the Company entered into the agreement with the shareholder of the
Company, who previously held preference shares (Mr. Sławomir Wysmyk), pursuant to which
the Company purchased and Mr. Sławomir Wysmyk sold 80,000 (eighty thousand) preference
C1 shares under Share Buyback Programme, which was implemented pursuant to the
Resolution No 22 of the Ordinary General Meeting of 29 June 2011 on providing the
authorization to the Management Board of the Company to acquire company’s own shares for
redemption or resale
Thus, as at 31 December 2014 and up to the date of publication of this report series A and series C1
shares (preference shares) are held by the shareholders, including by the Company (shares acquired
by the Company under Share buyback Programme, which was implemented pursuant to the
Resolution No 22 of the Ordinary General Meeting of 29 June 2011 on providing the authorisation to
the Management Board of the Company to acquire company’s own shares for redemption or resale):
Shareholders
Number of A series shares
Number of C1 series shares
Total preference shares
Sławomir Wysmyk
1.350.000
220.000
1.570.000
Grzegorz Baszczyński
1.325.000
530.000
1.855.000
Remigiusz Talarek
1.175.000
470.000
1.645.000
Tomasz Czapla
1.150.000
460.000
1.610.000
TOTAL
5.000.000
1.680.000
6.680.000
Rainbow Tours SA
0
120.000 *
120.000
TOTAL
5.000.000
1.800.000
6.800.000
* own shares of the company, According to the art. 364 § 2 of the Code of Commercial Companies and
Partnerships the company does not exercise rights attached to its own shares except for the right to sell them or
carrying out activities, which are aimed at keeping these rights.
4.6. Limitations with respect to exercising voting rights
Starting from the financial year 2011 the Company, acting pursuant the provisions of the Resolution
No 22 of the Ordinary General Meeting of 29 June 2011 concerning authorization of the Management
Board of the Company to acquire own shares for redemption or resale, has been operating Share
Buyback Programme through Dom Maklerski BZ WBK SA with its seat in Poznań, which acted pursuant
to the agreement on activities of agent acquiring shares dated 1 September 2011.
Thus, the issuer held as at 31 December 2014 following shares:
(i) 56.618 dematerialized ordinary bearer shares – own shares entitling to 56,618 votes at the General
Meeting
(ii) 120,000 vote preference shares – own shares entitling to 240,000 votes at the General Meeting,
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Directors’ Report of Rainbow Tours S.A. for 2014
that is as at 31 December 2014 the Company held in total 176,618 own shares which was 1.39% of
the share capital of the Company, and entitled to total of 296,618 votes at the General Meeting and
constituted 1.39% share of total number of votes at the General Meeting.
On 28 November 2014 the Company sold, pursuant to the resolution No 22 of the Ordinary General
Meeting of 29 June 2011 on providing authorization to the Management Board of the Company to
purchase own shares of the company for the redemption of resale – disposal in a package transaction
at Warsaw Stock Exchange, 56,618 own shares i.e. all ordinary bearer shares, which are traded on a
regular WSE market, i.e. official quotation market, and which were previously acquired by the
Company under the Share Buyback Programme pursuant to the respective resolution No 22 of the
Ordinary General Meeting dated 29 June 2011.
The Company published all relevant information in current ESPI report No 34/2014 of 28 November
2014. Current reports of the Company are published among others on investor relations website of
the Company and through information agency pursuant to art.58 para 1 of the Act on Public Offering
dated 25.07.2005
Accordingly, after the disposal of 56,618 of own shares as at 31 December 2014 and as at the date of
publication of this report the Company held 120,000 own shares (Preference C1 shares), which make
0.83% of the total number of company’s shares and entitle to 240,000 votes at the General Meeting
of Shareholders. According to art. 364 § 2 of the Code of Commercial Companies and Partnerships the
Company does not exercise rights attached to its own shares except for the right to sell them or
carrying out activities, which are aimed at keeping these rights
The voting rights attached to shares are not limited, however subject to that fact and taking into
account limitations of the art.364 § 2 of the Code of Commercial Companies, the Company may not
exercise rights attached to its own shares, unless exercising of voting rights (rights attached to
shares) will refer to exercising a right to disposal or carrying out activities, which are aimed at keeping
those rights.
4.7. Limitations concerning transferring Issuer’s ownership of securities
According to provisions of the Articles of Associations, a shareholder is obliged to give a written notice
to the Management Board of the Company about an intention to dispose preference shares, so that
the Management Board could inform other holders of preference shares with pre-emptive rights:
According to § 11 of the Articles of Association:
The Shareholder is obliged to inform in writing the Management Board about the intention to dispose
preference shares and should provide all information, which would enable to assess the Management
Board the conditions of the transaction of disposal of preference shares, including its legality, and the
shareholder is in particular obliged to provide following information: the data of the contractor
(including direct contact data), number of shares for disposal, the transaction price agreed with the
contractor (total and per unit), conditions of payment. To fulfil the obligations the shareholder is
especially obliged to present any copies of documents, which are the base of agreements with the
contractor concerning the disposal of preference shares (the letter of intent, preliminary agreement of
share disposal, contingent agreement of share disposal, etc.)
2. In connection with the provisions of the section above, the Management Board of the Company is
entitled to verify all factual and legal circumstances related with the transaction of preference shares
disposal and in this respect it may ask questions and demand from the shareholder wishing to dispose
preference shares, including, however, any limitations resulting from law or other legal acts which
prohibit to disclose personal data, the secret of the company, protection of classified data etc. In case
of limitations mentioned above, before receipt of data subject to limitations, the Management Board is
obliged to present declaration of confidentiality if this will be sufficient to obtain the information or
data effectively and without its infringement.
3. The Management Board will immediately advise in writing about the intention to dispose shares of
other shareholders holding preference shares. The companies holding preference shares have the
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Directors’ Report of Rainbow Tours S.A. for 2014
right of pre-emption, where the conditions of transactions of preference share disposal in such case
cannot be less attractive for the person disposing the shares with respect to transaction price and
dates of payment – from the conditions presented by the shareholder and confirmed by the
Management Board pursuant to section 1 and 2 of this provision of the Articles of Association. The
pre-emptive right may be exercised by submitting to the Management Board a written declaration of
the intention to acquire shares within two weeks from receipt of the notification.
4. If other shareholders with preference shares won’t provide declaration about the intention to
exercise the pre-emptive right or its partial exercise, the Management Board may, within two weeks of
the lapse of the date of submitting the offers of purchase of preference shares, indicate a third person
as the acquirer, where the conditions of preference share disposal in such case cannot be less
attractive for the person disposing shares – with respect to the transaction price and dates payment
from the conditions presented by the shareholder and confirmed by the Management Board pursuant
to section 1 and 2 of this provision of the Articles of Association
5. If there are no recommendations of the Management Board or if the indicated acquirer (the third
party) won’t pay the price within two weeks of the submission of the declaration, the shareholder may
freely dispose its shares
6. The disposal of shares in other way is ineffective towards the company.
6.1. Description of the rules of appointing and dismissing members of the management
board and their rights
Rules concerning appointment, dismissal and operations of the Management Board are strictly
stipulated in Regulations of the Rainbow Tours S.A’s Management Board approved by resolution No
1/06/2007 of Rainbow Tours S.A. dated 18 June 2007 by the Resolution of the Rainbow Tours SA’s
Supervisory Board No 1/06/2007 dated 28 June 2007, and in Articles of Association of Rainbow Tours
S.A. and legal provisions regulating the subject.
Appointing and dismissing the members of the Management Board of the Company:
The Management Board comprises 2-5 members appointed and dismissed by the General
Meeting of the Company.
The members of the Management Board are appointed for the common term of the office by
the General Meeting of the Company.
The common term of the office is five years.
The members of the Management Board may be reappointed for the common term of the
office into the Management Board.
The number of the members of the Management Board shall be defined by the General
Meeting of the Company.
The Management Board or its individual members may be dismissed before the end of the
common term of the office.
 the mandates of the members of the Management Board expire at the latest on the day of the
meeting of General Assembly to approve financial statement of the Company for the last full
financial year, while serving as a member of the Management Board, or during the term of the
office: in the case of dismissal by the General Meeting, resignation, or death of the member of
the Management Board.
Powers of the Management Board:
-manages current activities of the Company,
- represents the Company in external dealings with authorities, offices and third parties, in
proceedings before court and outside it,
- manages assets of the Company,
- bears responsibility for the appropriate book-keeping,
- defines the strategy of the development for the Company and main objectives of its operation,
- makes all decisions which are not reserved for the competence of other bodies of the
Company,
- the members of the Management Board may take part in the meetings of the Supervisory
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Directors’ Report of Rainbow Tours S.A. for 2014
Board,
 the Management Board is authorized to increase share capital (may give shares in exchange
for cash and in-kind contribution), issue subscription warrants, waive, with consent of the
Supervisory Board, pre-emptive rights concerning each increase of share capital made within
the limits of authorized capital
The authorization of the Management Board of the Company to increase share capital as part of
targeted share capital [the authorization expired].
According to provisions of article 13 section 2 and 3 of the Articles of Association:
2.The Management Board is authorized to one or more increase in the share capital of the Company
in the amount not greater than of PLN 900,000 through issue of no more than 9,000,000 ordinary
bearer shares with the face value of PLN 0.10 (ten groszy) each (“the target capital”) according to the
following rules:
a) authorization, defined in this section, was granted for the period of three years starting
from the date of entering the change of the Articles of Association, through adding this section 3;
b) shares issued as a part of target capital may be subscribed in return for cash or non-cash
contribution;
c) issue price of the shares issued as a part of the target capital will be determined by the
Management Board through a resolution concerning increasing target capital, within the scope of this
authorization;
d) the Resolution of the Management Board adopted in accordance with the authorization given in this
article of the Articles of Association, replaces the resolution of the Management Board concerning
increasing share capital
3. The Management Board is authorized to exclude pre-emptive right of the previous shareholders.
The adoption of resolution by the Management Board in this matter requires approval of the
Supervisory Board.
However, taking into account the fact that in 2013 a three year period during which the Management
Board was authorised to increase the share capital as a part of target capital has expired, thus
according to the provisions of art. 444 § 2 of the Code of Commercial Partnerships and Companies the
authorisation to increase the share capital within target capital may be granted for future periods but
not longer than for three years and requires a relevant amendment of the Articles of Association. Until
the expiry of the authorisation the company, pursuant to the relevant resolution of the Management
Board dated 12 August 2010 increased the share capital (within the limits of target capital) by PLN
250,000 thousand (two hundred fifty thousand) by issuing 2,500,000 (two million five hundred) series
F ordinary bearer shares.
Authorisation for the Management Board to acquire own shares.
Pursuant to the provisions of Resolution No 22 of the Ordinary General Meeting of 29 June 2011
concerning the authorization of the Company to acquire own shares for redemption or resale,
hereinafter referred to as “Resolution No 22” (the resolutions adopted by the Ordinary General
Meeting on 29 June 2011 was published in the current report No 30/2011 of 30 June 2011). The
General Meeting of the Company pursuant to article 363 section 1.5 and 8 and section 2 of
Commercial Companies Code has authorized the Management Board of the Company to acquire own
shares of the company, i.e.:
1)
2)
ordinary bearer shares traded at the main market of Warsaw Stock Exchange (“WSE”), which is
an official quotation market
preference shares – in case of declaring an intention to dispose preference shares by a
shareholder subject to provisions of section 11 of the Articles of Association
Subject to other relevant provisions of the Resolution No 22, the Company will acquire fully paid up
own shares (including ordinary bearer shares traded at the main market of WSE and preference
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Directors’ Report of Rainbow Tours S.A. for 2014
shares) pursuant to article 362 section 1 point 8 of the Commercial Companies Code according to the
rules below:
1) total face value of own shares acquired, including ordinary bearer shares traded at the main
market of WSE and preference shares, will not exceed 20% (twenty percent) of share capital
value of the Company, that is the nominal amount of the shares of PLN 241,040 (two hundred
forty one thousand zloty), which is equivalent to 2,410,400 (two million forty ten thousand
four hundred) shares with the face value of PLN 0.10 (ten groszy) each, taking also into
account the face value of the remaining own shares, which were not disposed by the
Company,
2) Total maximum share purchase price plus the cost of acquisition should not exceed PLN
15,000,000 (fifteen million zloty)
3) the unit price, which the Company will pay for own shares - ordinary bearer shares traded at
the main market of WSE, should not exceed the higher of: the price of the last independent
transaction or a current highest independent price offered in a transaction executed during
WSE trading sessions
4) the unit price, which the company will pay for own shares – preference shares - should not
exceed the closing price of shares quoted during WSE trading sessions on a trading date
preceding the date of conclusion of the civil law agreement of sales of shares plus 10% (ten
per cent)
5) Authorization for the Management Board to acquire own share in accordance with article 362
section 1 point 8) of the Commercial Companies Code is granted for the period from the date
commencing after the date of adopting the resolution No 22, that is from 30 June 2011 to 31
May 2016, however, no longer than the time of exhaustion of the funds intended for
acquisition of own shares
6) Own shares of the Company – ordinary bearer shares traded at the main market of WSE may
be acquired through brokerage house (an investment company within the meaning of the
regulations on trading in financial instruments) in stock exchange transactions and margin
transactions, including anonymous trading as well as block transactions,
7) Own shares of the company – preference shares may be acquired by the Company through
civil law agreement (agreements) concerning disposal of shares with a shareholder
(shareholders) willing to dispose preference shares in accordance with provisions of section 11
of the Articles of Association of the Company i.e. taking into account
a) An obligation of a Shareholder to give a written notice to the Management Board about an
intention to dispose registered shares
b) Pre-emptive rights of other shareholders holding preference shares and a respective
procedure referring provided for by the provisions of section 11 of the Articles of
Association
c) The right of the Management Board to indicate a third person, including a company as
purchaser of preference shares
8) Own shares acquired by the Company may be intended for:
a) Resale of own shares, including through take overs and acquisition of entities operating in
the same branch as the Company or the entities of the Capital Group, in particular resale
of the shares to shareholders/stockholders in the acquired entities in return for
stock/shares of these entities,
b)
Redemption of own shares of the Company and reduction of the share capital of the
Company
9) In order to pursue the aims described in point 8 above the Management Board have been
authorized to indicate the aim of acquiring own shares, and a manner of their exploitation
through the resolution of the Management Board, whereas the resale of own shares
mentioned in point 8 letter a) is not applicable and does not refer to own shares of the
Company – preference shares.
Rainbow Tours S.A.
21 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
The Management Board in the pursuit of the company’s interest and after consultation with the
Supervisory Board is entitled to: (i) to cease acquisition of own shares before 31 May 2016 or before
exhaustion of funds intended for their acquisition (ii) resign from acquisition of some or all shares.
Additionally, pursuant to the Resolution No 22, the General Meeting of the Company pledged and
authorized the Management Board to take all actual and legal actions to acquire own shares of the
Company (including ordinary bearer shares traded at the main market of WSE and preference shares)
in accordance with article 362 section 1 point 8) of Commercial Companies Code and according to the
conditions stipulated in the Resolution 22, including entering into an agreement with brokerage house
(investment company within the meaning of the regulations on trading in financial instruments)
concerning acquisition of shares in stock exchange transaction and margin transactions, including
anonymous trading as well as block transactions. The Management Board was also authorized to
define other rules of acquisition of own shares, not provided for in Resolution 22, in particular by
establishing Share Buyback Program.
According to provisions of article 363 section 1 of the Commercial Companies Code, and in the period
for which the authorization was granted to the Management Board and pursuant to the Resolution No
22 and within the scope of its application, the Management Board is obliged to present at each
General Meeting information on current state of acquisition of own shares referring to:
1) Reasons for or purpose of acquisition of owns shares of the Company
2) Number and face value of own shares acquired and their share of the share capital of the
Company,
3) Total purchase price and other cost of acquisition of own shares.
After completion of the Share Buyback pursuant to Resolution No 22, and in case of intention
stipulated in section 2 point 1.8 letter b) of the Resolution No 22 (intention to redeem own shares of
the company and reduction of the share capital) the Management Board will convene General Meeting
in order to adopt resolutions concerning redemption of own shares, reduction of the share capital and
amendments to the Articles of Association.
In connection with adoption of resolution No 22 dated 29 June 2011 by the Ordinary General Meeting
of 29 June 2011 the General Meeting also adopted at the meeting the Resolution No 23 concerning
determination of resources to finance acquisition of own shares of the Company (hereinafter referred
as Resolution No 23) pursuant to which the General Meeting decided - in accordance with article 362
section 2 point 3- and in relation with article 362 section 1 point 8), article 396 section 4 and 5 of
Commercial Companies Code, and taking into account provisions of section 9 and 27 point 2 letter m
and n of the Articles of the Association as follows:
(i)
To create a supplementary capital (fund) named “Funds for acquisition of own shares” as part of
reserve capitals allocated for financing acquisition of own shares by the Company, according with
provisions of the Resolution No 22
(ii) To allocate from reserve capitals of the company the amount of PLN 15,000,000 (fifteen million)
and oblige the Management Board to transfer the respective amount to the supplementary capital
named “Funds for acquisition of own shares” which are allocated for accounting for the total
purchase price of shares plus a cost of share acquisition according to provisions of the Resolution
No 22, whereas during the period of validity of the Resolution No 23 the supplementary capital
“Funds for acquisition of own shares” may be increased by amounts of net profit of the Company
allocated for this purpose in a next financial year of operations of the Company by resolutions of
the General Meeting
(iii) to authorize the Management Board of the Company to expend the amounts accumulated in
“funds for acquisition of own shares” pursuant to the rules defined in Resolutions No 22 and 23.
In 2011 the Company, pursuant to the provision of the said Resolution No 22, implemented the Share
Buyback Programme through Dom Maklerski (Brokerage House) BZ WBK S.A. with its seat it Poznań,
which was operated according to provision of the agreement concerning agency with respect to
acquisition of shares dated 1 September 2011.
Rainbow Tours S.A.
22 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
As at 31 December 2013 the company held:
(i)
56.618 dematerialized ordinary bearer shares – own shares, which give 56,618 votes at the
General Meeting of the Company
(ii) 120.000 vote preference shares- own shares entitling to 240,000 votes at the General Meeting of
the Company,
and accordingly as at 31 December 2014 the Company held in total 176,618 own shares, which is
1.21% of the share capital of the Company and entitled to total of 296,618 votes at the General
Meeting and constituted 1.39% share of the total number of votes at the General Meeting.
The total purchase price of 176,618 own shares came to PLN 663,307.18 with the average unit price
of PLN 3.76 per share.
On 28 November 2014 the Company dispose pursuant to the resolution No 22 of the Ordinary General
Meeting of 29 June 2011 on providing authorization to the Management Board of the Company to
purchase own shares of the company for the redemption of resale –56,618 own shares in a package
transaction at Warsaw Stock Exchange i.e. all ordinary bearer shares, which are traded on the regular
WSE market – an official quotation market- and which were previously acquired by the Company
under the Share Buyback Programme pursuant to the resolution No 22 of the Ordinary General
Meeting dated 29 June 2011. The Company published all respective information in current ESPI report
No 34/2014 of 28 November 2014. Current reports of the Company are published among others on
the investor relations website of the Company and through an information agency pursuant to art.58
para. 1 of the Act on Public Offering dated 25.07.2005.
Accordingly, after disposal of 56,618 of own shares, as at 31 December 2014 and as at the date of
publication of this report, the Company held 120,000 own shares (Preference C1 shares), which make
0.83% of a total number of company’s shares and entitle to 240,000 votes at the General Meeting of
Shareholders, and which make 1.12% of the total number of votes at the General Meeting of the
Company. According to art. 364 § 2 of the Code of Commercial Companies and Partnerships the
Company does not exercise rights attached to its own shares except for the right to sell them or to
carry out activities, which are aimed at keeping these rights
Thus, after disposal of 56,618 of own shares, the Company held 120,000 own shares (Preference C1
shares), which make 0.83% of the total number of company’s shares and entitle to 240,000 votes at
the General Meeting of Shareholders, and which constitute 1.12% of the total number of votes at the
General Meeting of the Company as at 31 December 2014 and as at the date of publication of this
report. According to art. 364 § 2 of the Code of Commercial Companies and Partnerships the
Company does not exercise rights attached to its own shares except for the right to sell them or to
carry out activities, which are aimed at keeping these rights
6.2. Description of rules of amending the articles of association or company’s
memorandum of association
Amendments to the Articles of the Association may be introduced by the General Meeting. Each time
after registration of amendments, the Supervisory Board defines the consolidated text of Articles of
Association.
6.3. Mode of operations of the General Meeting and its essential powers
In 2014 a manner of operations of the General Meeting was described in provisions of the Articles of
Association and the Regulations of the General Meeting of Rainbow Tours S.A., which was resolved
pursuant to provisions of Resolution No 6 of the Extra-Ordinary General Meeting of Rainbow Tours
S.A. of 29 March 2011 concerning annulment of the previous Regulations and resolving the new
Regulation of the General Meeting of the Company (based on the resolution of the General Meeting in
connection with amendments introduced to the Commercial Companies Code, especially related to
organization and rules of participation in the General Meetings of public companies acting pursuant to
Rainbow Tours S.A.
23 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
provision of section 27.2 letter s of the Articles of Association decided to annul whole previous
Regulations of the General Meeting approved by resolution No 1/05/2007 of the Ordinary General
Meeting of 14 May 2007 and resolved new Regulations of the General Meeting of the Company).
The General Meeting can be ordinary or extraordinary. The ordinary General Meeting is summoned
annually by the Management Board not later than within 6 months after the end of each financial
year.
Extraordinary General Meeting is summoned by the Management Board on its own initiative, at the
request of the Supervisory Board, or the request of a shareholder or shareholders representing at
least one twentieth of the share capital of the company. The request of the Supervisory Board should
be filed in writing and contain relevant justification - at the latest in the month before the date of the
Extraordinary General Meeting proposed by the Supervisory Board.
A shareholder or shareholders representing at least one twentieth of the share capital of the Company
may request summoning the Extraordinary General Meeting and putting specific items on the agenda.
The request to summon the Extraordinary General Meeting should be made in writing or by using
electronic means of communication. The request should be justified. The Extraordinary General
Meeting should be summoned within two weeks of the receipt of the request.
Moreover, the Supervisory Board is obliged to summon the General Meeting in case when the
Management Board fails to summon the Ordinary General Meeting in a specific time and in case,
when, despite filing of the request, the Management failed to summon the Extraordinary General
Meeting.
The Supervisory Board, as well as a shareholder or shareholders representing at least one twentieth of
the share capital may require putting specific items on the agenda of the next General Meeting. The
request should be filed to the Management Board not later than before 21 (twenty one) days before
setting the date of the Meeting. The request should contain justification or draft resolution referring to
the proposed item of the agenda. The request may be filed using electronic means of communication.
The Management Board is obliged to announce immediately, however, not later than at 18 (eighteen)
days before the date set for General Meeting, amendments introduced in the agenda at the request
of the shareholders or Supervisory Board. The announcement is made in a way to typical for
summoning of the General Meeting.
A shareholder, personally or through plenipotentiary (based on proxy granted in writing or by
electronic communication means), as well as members of the Management Board and Supervisory
Board and other persons indicated by the relevant legal provisions and the Regulations of the General
Powers of the General Meeting
















Reviewing and approving the directors’ report and the financial statements for the previous
financial year,
distribution of profit and loss coverage
setting the date of acquiring dividend rights and the date of dividend payment.
granting approval of the performance of duties
changing the scope of Company’s business,
appointing and dismissing members of the Management Board;
appointing and dismissing members of the Supervisory Board and determining remuneration
rules;
amending the articles of association ,
increasing and reducing share capital
issuing all types of bonds,
acquiring own shares in circumstances stipulated in Article 362 section 1 point 2 of
Commercial Companies Code
redemption of shares,
using share capital,
creating earmarked funds,
merger, reorganization and division of the Company,
dissolution and liquidation of the Company
Rainbow Tours S.A.
24 |Page
Directors’ Report of Rainbow Tours S.A. for 2014



disposal and leasing of the enterprise or its organized part and establishing on them limited
property right
all provisions concerning claims to redress the damage resulting from the management and
supervision tasks
resolving the Regulations of the General Meeting
Shareholders’ rights and execution of the rights
Rights and duties attached to shares of the company are stipulated in the provisions of the
Commercial Companies Code, Articles of Association and other legal regulations.
- Pre-emptive right to subscribe new shares with respect to the number of shares held (rights
issue) taking into account requirements mentioned in art. 433 of Commercial Companies Code
The shareholder may be deprived of this right in whole or partially pursuant to the resolution
of the General Meeting adopted by the majority of at least four fifth of the votes if it is in
interest of the company. The requirement to acquire at least 4/5 of the votes is not applied
when the resolution concerning increase of the share capital stipulates that new shares must
be subscribed in whole by financial institution (sub-issuer) and the institution has the
obligation to offer shares to shareholders in order to enable them exercising the subscription
right on conditions stipulated in the resolution, and when the resolution states, that new
shares may be subscribed by the sub-issuer in case when the shareholders with subscription
rights fail to subscribe the part or whole shares offered. The shareholders may be deprived of
the subscription right when the issue was put on the agenda of the General Meeting.
- Right to dividend
- Right to share in company assets remained after satisfying or securing creditors in case of
liquidation of the company. The Articles of Association does not provide for any preferential
treatment in this respect,
- Right to establish pledge or usufruct on shares held. In the period, when shares of public
companies on which pledge or usufruct has been established, are recorded in securities
account of brokerage house or bank holding securities account, the shareholder has the right
to vote attached to shares (article 340 section 3 of Commercial Companies Code)
- Right to participate in General Meeting (article 412 section 2 of Commercial Companies Code
and the right to vote at the General Meeting (article 411 section 1 of Commercial Companies
Code). One vote at General Meeting is ascribed to each share.
- Right to file a request concerning summoning of the General Meeting
- Right to appeal resolutions of the General Meeting
- Right to request election of the Supervisory Board by separate groups,
- Right to obtain information about the Company,
- Right to share certificate
- Right to request copy of the Directors’ report and the financial statements,
- Right to look through list of shareholders at the premises of the Management Board,
- Right to demand copies of request filed concerning issues on the agenda in one week before
the date of the General Meeting (article 407 section 2 of Commercial Companies Code)
6.4. Composition, changes and description of the governing bodies of the company
In 2014 composition of the Management Board was as follow (and as at the date of drawing up this
report):



Grzegorz Baszczyński – The President of the Management Board (during the whole financial
year 2014. That is in the period from 1 January to 31 December 2014),
Tomasz Czapla – the Vice-Chairman of the Management Board (during the whole financial
year 2014. That is in the period from 1 January to 31 December 2014),
Remigiusz Talarek – the Vice- Chairman of the Management Board (during the whole financial
year 2014. That is in the period from 1 January to 31 December 2014).
In 2014 and since the beginning of operations of Rainbow Tours SA, composition of the Management
Board did not change.
Rainbow Tours S.A.
25 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
The current, second and common 5-year term of the Management Board expired on 25 June 2014,
however, taking into account the fact that the second common five-year term expired after the
Ordinary General Meeting of Shareholders, which took place on 3rd June 2014 (the subject of the
Meeting was to approve the financial statements for the financial year 2013), mandates of members
of the Management Board expire as at the date of convening the General Meeting, which approve the
financial statements for the last full financial year, during which the member sat on Management
Board of the second common term, that is on the date of convening of General Meeting, which
approves the financial statements for 2014.
Works of the Management Board are coordinated by the President of the Management Board, who
summons meetings of the Management Board on its own initiative or at the request of other members
of the Management Board or the Supervisory Board, chairs the meetings, coordinates the works of
other members of the Management Board, and is responsible for documenting works of the
Management Board. Meetings of the Management Board are held if necessary at least once a month.
The members of the Management Board take part in meetings in person. The Management Board
takes decisions in a form of resolutions. The President of the Management Board informs all members
of the Management Board about a date, a place and agenda of a meeting at least one week in
advance. Participation in meetings is obligatory. Resolutions are adopted by majority of votes casted
by members of the Management Board present at a meeting, with at least half of members of the
Management Board present at the meeting. If the same number of votes is casted the chairman has a
casting vote. If it especially urgent the resolution may be adopted in writing.
Scope of activities, composition, rules of representation, a mode of work and a manner of adopting
resolutions are described in detail in the Regulations of the Management Board available at: investor
relations website of the Issuer at the address of http://ir.rainbowtours.pl, as well as in the Articles of
Association published there.
In 2014 (and as at the date of drawing up this report) the Supervisory Board comprised as follows:

Grzegorz Kubica – the member of the Supervisory Board (during the whole financial year 2014
that is from 1 January 2014 to 31 December 2014).
 Paweł Niewiadomski – as the vice – chairman of the Supervisory Board (during the whole
financial year 2014 that is from 1 January 2014 to 31 December 2014).
 Paweł Pietras – the member of the Supervisory Board (during whole financial year 2014, that
is from 1 January 2014 to 31 December 2014)
 Joanna Stępień-Andrzejewska – the member of the Supervisory Board (during the whole
financial year 2014, that is from 1 January 2014 to 31 December 2014),
 Paweł Walczak – the member of the Supervisory Board (during the whole financial year 2014
that is from 1 January 2014 to 31 December 2014).
In 2014 composition of the Supervisory Board did not change.
The current, fourth term expires on 11 June 2016, and mandates of each member of the Supervisory
Board expire as at the date of convening the General Meeting, which approves financial statements
for the last full financial year, in which the member sat on the Board.
The Supervisory Board comprises at least 5 members appointed and dismissed by the General Meeting
of the Company. Its members are appointed for a common term of office. The term of office of the
Supervisory Board is 3 years. Mandates of members of the Supervisory Board expire, at the latest, on
the day of the General Meeting to approve the financial statement of the Company for the last
financial year, while sitting on the Board, or due to his/ her death, resignation, or dismissal.
According to section 20 point 5 and 6 of the Articles of Association:
„5. In case of the expiration of a mandate of one or more members of the Supervisory Board before
the end of common term of office, in the period before convening General Meetings, the Supervisory
Board loses its capacity to adopt resolutions, other members of the Supervisory Board have the right
to co-opt one or more members of the Supervisory Board so that the Supervisory Board comprise at
least 5 members.
6. The member of the Supervisory Board elected in accordance with the previous point must be
Rainbow Tours S.A.
26 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
approved by the next General Meeting. In case when the General Meeting fails to approve a new
member or members of the Supervisory Board co-opted, the General Meeting will elect the new
member of the Supervisory Board in the place of the member not approved. Supervisory activities and
decisions taken by the member or with participation of the member, which appointment through cooptation was not approved – are valid in the period from appointment (co-option) up till adoption of
the resolution concerning lack of approval to the member.”
The Powers of the Supervisory Board are as follows:

exercise permanent supervision over activities of the Company in all domains of its
activities,
 assessment of directors’ reports and financial statements and proposals of the
Management Board with respect to the distribution of a profit and covering a loss, as well
as submitting an annual report on the results of this assessment in writing
 concluding and terminating employment contracts with members of the Management
Board including determination of remuneration rules,
 appointment of the auditor,
 reviewing and giving opinion on the plans of the operations of the company and its
enterprises,
 reviewing and giving opinion to the plans of the operations of the company and its
enterprises submitted by the Management Board
 giving opinion on all the documents and requests of the Management Board submitted to
the General Meeting
 approval of the Regulations of the Management Board,
 resolving the Regulations of the Supervisory Board
 accepting conditions of every incentive plan introduced in the Company by simple majority
vote,
 forming other enterprise by the Company,
 agreeing to purchase and disposal of real property by the company, perpetual usufruct or
share in the real property or in right to usufruct
 approval of the selection of the insurance companies insuring against business risk and
terms of the insurance.
Composition, a manner of appointment of the Supervisory Board, rights and obligations of members
of the Supervisory Board, powers, coordination of works, summoning meetings convening meetings of
the Supervisory Board and adopting resolutions are described in detail in the Regulations of the
Supervisory Board, and the Articles of Association, which are available at the investor relations website
under the address: http://ir.rainbowtours.pl.
7. Court proceedings, arbitration proceedings, proceedings before administrative body
As at 31 December 2014 and at the date of submitting this report neither the issuer nor related
entities constituted a party to court or arbitration proceedings, which unit or total value of the subject
of litigation would exceed 10% of the equity of the Issuer.
8.
Information on basic products manufactured and services and the sales market
Products provided by the Company are offered exclusively on Polish market. Revenues of the issuer
comprise in particular: sales of international package travel organized by the Company, and agency of
sales of package travel, airline tickets offered by other suppliers. The structure with respect to
numbers and value is presented below.
2014 Value:
Package tours and holidays with airline transportation – PLN 666.8 million of revenue (70.1 of total
revenues)
Rainbow Tours S.A.
27 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
Package tours and holidays with coach or own transport - PLN 66.6 million of revenue (7.1 % of total
revenues)
Sales of B2B travel, incentives, etc. - PLN 31.5 million (3.3 %)
Agency of sales pf package travel and airline tickets – PLN 184.7 million of revenue (19.4 % of total
revenues)
Other – PLN 1.9 million (0.1 %)
2014 Numbers:
package tours and holidays with airline transportation – 213,216 passengers (46.0 % of total
passengers)
Package tours and holidays with coach or own transport– 41,426 passengers (9.0 % of total
passengers)
Sales of B2B travel, incentives, etc. – 6,888 passengers (1.5 % of total passengers)
Agency of sales pf package travel and airline tickets – 202,198 passengers (43.5 % of total
passengers)
revenues
Sales of package travels of Rainbow Tours
Revenue from agency
Charter tickets
Other
Total revenues
2014
2013
January- December
January- December
764,9
579,7
185,2
31,90%
8,9
9,3
-0,4
-4,30%
175,8
180,4
-4,6
-2,50%
1,9
0,7
1,2
171,40%
951,5
770,1
181,4
23,60%
change
%
2013 Value:
Package tours and holidays with airline transportation – PLN 496.6 million of revenue (64.5% of total
revenues)
Package tours and holidays with coach or own transport - PLN 60.4 million of revenue (7.8 % of total
revenues)
Sales of B2B travel, incentives, etc. - PLN 22.8 million (3.0 %)
Agency of sales pf package travel and airline tickets – PLN 189.7 million of revenue (24.6 % of total
revenues)
Other – PLN 0.7 million (0.1 %)
2013 Numbers:
Package tours and holidays with airline transportation – 151,107 passengers (36.7 % of total
passengers)
Package tours and holidays with coach or own transport– 34,380 passengers (8.4 % of total
passengers)
Sales of B2B travel, incentives, etc. – 7,233 passengers (1.7 % of total passengers)
Agency of sales pf package travel and airline tickets – 218,762 passengers (53.2% of total
passengers)
revenues
Sales of package travels of Rainbow Tours
Revenue from agency
Charter tickets
Other
Total revenues
2013
January- December
2012
January- December
change
%
579,7
412,4
167,3
40,60%
9,3
6,6
2,7
40,90%
180,4
153,7
26,7
17,40%
0,7
16,2
-15,5
-95,70%
770,1
588,9
181,2
30,80%
9. Information on material agreements from the point of view of the operations of the
Group
Rainbow Tours S.A.
28 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
The agreement is classed as material – if it is worth 10% of the revenue from the last four financial
quarters, and if it relates to operations of the Issuer (agreements to purchase transport services,
agreements to purchase lodging services, loans to finance ongoing operations etc.) and in other cases
- 10% of the equity (long-term investments, other).
In 2014 Rainbow Tours classed the following agreement as material:
1. The agreement entered on 28 November 2013 by Rainbow Tours S.A. with charter airlines Enter
Air sp. z o.o. about which the issuer informed in the current report No 9/2014 on 7 April 2014.
The agreement refers to provision of charter services in Summer 2014 season and Winter 2014/2015
season, which are necessary for basic business operations of the Company in various holiday
destinations. Performance of the agreement starts on 24 April 2014, and the last flight is scheduled
for 24 April 2014.
According to the provisions of this agreement the value of the services is estimated at USD
48,250,000 USD (forty eight million two hundred fifty thousand American dollar), which is equivalent
of PLN 150,670,275.00 (say: one hundred fifty million six hundred seventy thousand two hundred
seventy five zloty) translated using average exchange rate set by NBP of 21 November 2013,
published in the table No 225/A/NBP/2013.
Payments under this agreement will be settled on a daily basis and according to a timetable of charter
flights. Rainbow Tours S.A. is able to change number of flights taking into account growing or falling
market demand, which can affect a value of the whole agreement.
This agreement does not contain or provide for penalty clauses.
2. The agreement entered into on 28 November 2013 between Rainbow Tours S.A. and Travel Service
A.S. with its seat in Prague and Travel Service sp. z o.o. with its seat in Warsaw. The issuer advised
about the agreement in the Current Report No 10/2014 of 7 th April 2014. The agreement concerns
provisions of charter airline services in the tourism season summer 2014 and Winter 2014/2015,
which are necessary for core business operations of the Issuer in different holiday destination.
Performance of the agreement commenced on 25th April 2014, and the last flight has been
expected on 23 April 2015.
According to provisions of the agreement, value of the services at the date of entering into the
agreement amounts to: USD 22,913,413.66 (twenty two million nine hundred thirteen thousand
four hundred thirteen 66/100 US dollars) which is equivalent to PLN 70,738,290.65 zloty (in words:
seventy million seven hundred eight thousand two hundred ninety 65/100 Polish zloty) translated
according to average NBP exchange rate of 28 November 2013 published in the table
230/A/NBP/2013.
Payments resulting from the agreement will be settled on a daily basis and according to a
timetable of charter flights.
Rainbow Tours S.A. is able to change number of flights based on increasing or decreasing demand,
which can affect value of the whole agreement. The agreement contains standard termination
provisions. The Agreement does not provide for a contractual penalty clause.
3. The agreement entered into between Rainbow Tours and Polskie Linie Lotnicze (Polish airlines) Lot
S.A. with the seat in Warsaw on 7 April 2014. The issuer advised the respective information in the
current report No 11/2014 of 8 April 2014.
The agreement concerns provision of charter services in seasons Winter 2014/2015 and Winter
2015/2016, with the use of Boeing 787 Dreamliner, which are necessary for core business
Rainbow Tours S.A.
29 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
operations of the Issuer in a winter season in holiday destinations especially: Thailand, Vietnam,
RPA, Mexico, Cuba, Sri Lanka and Costa Rica. Performance of the agreement starts on 1 November
2014 and the last flight is scheduled for 28 March 2016.
According to provisions of this agreement, value of the services as at the date of signing the
agreement amounts to 28,084,582.00 USD (twenty eight million eighty four thousand five hundred
eighty two US dollars) and 1,347,961.00 EUR (one million three hundred forty seven thousand and
nine hundred sixty one Euro) 39,837,802.00 PLN (thirty nine million eight hundred thirty seven
thousand eight hundred and two zloty), which is equivalent to 130,971,587.94 (in words: one
hundred thirty million nine hundred seventy one thousand five hundred eighty seven 94/100 zloty)
translated using the average NBP exchange rate dated 7 April 2014, published in the table No
067/A/NBP/2014. Payments resulting from this agreement will be settled on an ongoing basis and
according to a timetable of charter flights. This agreement does not contain or provide for a
penalty clause.
4. The agreement entered into on 16 June 2014 between Rainbow Tours and Towarzystwo
Ubezpieczeniowe (Insurance Company) Europa S.A. with its seat in Wrocław (“the Guarantor”),
concerning the insurance guarantee provided by the Guarantor for Rainbow Tours SA, as a tour
operator and a travel agent, which benefits a Marshall of Łódzkie Province (“the Beneficiary”). The
agreement is to supplement the amount of the guarantee provided under the agreement of
30.07.2013 (the company advised about conclusion of the agreement in current ESPI Report No
26/2013 of 30.07.2013). The issuer provided the information in the Current Report No 20/2014 of
17 June 2014.
(1) The subject of the agreement is to determine rules of providing the insurance guarantee (“the
Guarantee”) by the guarantor for the company as a tour operator and a travel agent. The
beneficiary of the insurance guarantee (“the Guarantee”) is a Marshall of Łódzkie Province
(“the beneficiary”). The Guarantee supplements the guaranteed amount for the guarantee
No GT 96/2013 of 30 June 2013 in connection with z art. 5.1 point 2 letter a) of the Act on
Tourism Services of 29 August 1997 (the consolidated text Dz.U. of 2014, item 196) in the
scope:
a) Reimbursing costs of a return of the company’s customers (the obligor) to the country, when
the Obligor (Rainbow Tours SA), despite its obligation, fails to ensure the return.
b) Repaying payments made by customers of the Obligor (Rainbow Tours SA) for a travel
package in case when, for reasons dependent on the Obligor (Rainbow Tours SA) or
persons, who act on its behalf, the service was not provided
c) Repaying part of the payment made by the customer for a travel package, which is
equivalent to the part of the service, which was not provided for reasons dependent on
Obligor (Rainbow Tours SA) or persons, who act on its behalf.
According to provisions of the contract, its value upon signature, and at the same time value of
the guarantee provided by the Guarantor for the Beneficiary as a supplement to the guaranteed
sum for the guarantee No Gt 96/2013 of 30 July 2013 amounts PLN 14,411,740.35 (fourteen
million four hundred eleven thousand seven hundred forty 35/100 zloty) which is equivalent to EUR
3.461.780,97 translated using an average euro exchange rate published by National Bank of Poland
for the first time in the year of issuance of the guarantee, that is on 2nd January 2014, which
amounts to EURO 1= euro 1= PLN 4.1631 published in the table No 0 01/A/NBP/2014 dated 2nd
January 2014. The previous guarantee amount provided by the guarantee No GT 96/2013 of 30
July 2013 came to PLN 70,288,493.92, which is equivalent to EUR 17,282,214.33 translated using
average euro exchange rate published by National Bank of Poland for the first time in the year of
issuance of the guarantee i.e. 2nd January 2013, which amounts to 1 Euro= PLN 4.0671 published
in the table No 01/A/NBP/2013 of 2nd January 2013.
Rainbow Tours S.A.
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Directors’ Report of Rainbow Tours S.A. for 2014
The guarantee will secure repayment of debts resulting from events mentioned in point 1 letter a),
b) and c) above, which have occurred pursuant to the contracts to provide tourism services
entered by Rainbow Tours in the period from 17 June 2014 till 16 September 2014. According to
provisions of the agreement concerning issuance of the guarantee No 96/2013 of 30 July 2013 (the
Company informed about the agreement on 30.07.2013 in the current ESPI report No 26/2013 of
30.07.2013), the guarantee No GT 96/2013, which secures repayment of claims arising from the
agreements for provision of services made by Rainbow Tours in the period from 17 September
2013 to 16 September 2014.
Since the amount of the guarantee was increased (pursuant to the reported agreement on issuance
of the guarantee of 16 June 2014), the total amount of the guarantee, which secures repayment of
claims arising from the agreements for the provision of tourism services entered by Rainbow Tours in
the period from 16 September 2014, amounts to PLN 84,700,234.27.
If the Beneficiary of the Guarantee will demand payments under the Guarantee, the Obligor, at the
request of the Guarantor, is obliged to reply in writing to the demand within 3 days of the receipt of
the request of the Guarantor and attach the copy of the agreement referring to the payment
demand.
If the Guarantor effects the guarantee for the benefit of the Beneficiary of the Guarantee, the
obligor will repay to the Guarantor the amount paid under the Guarantee within 7 days of delivery of
the request by the Guarantor and costs (any costs incurred) and in case of the late payment
additionally with statutory interest.
(2)
Security for the claims of the Guarantor concerning repayment of the amounts under the
Guarantee to the Beneficiary of the Guarantee will be:
1)
A deposit made according to market value and pursuant to the agreement entered into
between the Obligor and the Guarantor. The deposit will be stipulated in the agreement to
make a deposit of 30.07.2013 and arrangement of 30.07.2013 and arrangements of 19;12;2013
as well as the agreement to make deposit of 14.08.2012, whereas both parties allow the
possibility of changing the security to an unconditional bank guarantee payable at first demand,
which content will be accepted by the Guarantor. This security constitutes at the same time the
security for the guarantee No GT 96/2013 of 30.07.2013, which are:
2)
A notarially certified blanket mortgage on a property of the Obligor i.e. the property situated at
Piotrkowska 270 in Łódź. The mortgage also constitutes the security for the guarantee No GT
96/2013 of 30.07.2013
3)
A blank promissory note with “no protest” clause
The amount of commission payable to the Guarantor from the Obligor for the issuance of the
guarantee was determined at the market level. The agreement on issuance of the guarantee does
not stipulate or provide for penalty clauses.
5. Conclusion of the material agreement – the agreement to provide the guarantee - on 13 August
2014 the Company entered into agreement with Towarzystwo Ubezpieczeniowe Europa S.A. with
its seat in Wrocław (“the Guarantor”), concerning the insurance guarantee provided by the
Guarantor for Rainbow Tours SA, as a tour operator and travel agent, which benefits a Marshall of
Łódzkie Province (“the Beneficiary”).
The subject of the agreement is to determine rules of providing the insurance guarantee (“the
Guarantee”) by the Guarantor in connection with art. 5 section 2 point 2, letter a of the Tourism
Services Act dated 29 August 1997 (Dz.U. No 133, item 844 as amended) in the scope:
Rainbow Tours S.A.
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Directors’ Report of Rainbow Tours S.A. for 2014
a) reimbursing the costs of a return of the company’s customers (the obligor) to the country,
when the Obligor (Rainbow Tours SA) despite its obligation fails to ensure the return.
b) Repaying the payments made by the customers of the Obligor (Rainbow Tours SA) for the
travel package in case when, for the reasons dependent on the Obligor (Rainbow Tours SA) or
persons, who act on its behalf, the service was not provided
c) Repaying part of the payments for the travel package, which are equivalent to the part of the
services, which not provided for reasons dependent on the Obligor (Rainbow Tours SA) or
persons, who act on its behalf.
According to provisions of the contract, its value upon signature, and at the same time value of
the guarantee provided by the Guarantor for the Beneficiary amounts PLN 100,573,901.39 (one
hundred million five hundred seventy three thousand nine hundred 1 39/100 zloty) hereinafter
referred as “the amount of the guarantee” which is equivalent of EUR 24.158.415,94 (twenty four
million one hundred fifty eight thousand four hundred fifteen, 94/100 euro) translated using the
average euro exchange rate published by National Bank of Poland for the first time in the year of
issuance of the guarantee i.e. on 2nd January 2014, which amounts to EURO 1= euro 1= PLN
4.631 published in the table No 0 01/A/NBP/2014 dated 2nd January 2014.
The guarantee will secure repayment of the claims arising from events mentioned in point 1 letter
a), b) and c) above, resulting the contracts to provide tourism services entered by Rainbow Tours
in the period from 17 June 2014 till 16 September 2015.
If the Beneficiary of the Guarantee will demand a payment under the Guarantee, the Obligor at the
request of the Guarantor is obliged to reply in writing to the demand within 3 days of the receipt of
the request of the Guarantor and attach the copy of the agreement related to the payment.
In case when the guarantee is effected by the Guarantor for the beneficiary of the Guarantee, the
obligor will repay to the Guarantor the amount paid under the guarantee within 7 days of the
receipt of the request of the guarantee payment with costs (all costs incurred) and in case of late
payment with statutory interest.
The previous agreement on providing the insurance guarantee (in force till 16 September 2014)
was supplemented with a new guarantee agreement (also in force till 16 September 2014), about
which Management Board advised in the current ESPI report No 20/2014 of 17 June 2014.
thus:
 The originally concluded agreement No GT 96/2013 to provide the guarantee to Towarzystwo
Ubezpieczeniowe Europa S.A. (the Company advised about the conclusion of the agreement in
the ESPI current report No 26/2013 of 30 July 2013), which stipulated that the amount of the
insurance guarantee came to PLN 70,288,493.92 which is equivalent to EUR 17,282,214.33
translated using average euro exchange rate published by National Bank of Poland for the first
time when the guarantee was issued that is on 2 nd January 2013, which amounted to 1 EURO =
4.0671 resulted from the reported agreement of 30 July 2013. The guarantee is valid from 17
September 2013 till 16 September 2014.
 as a supplement the Company concluded the agreement No GT 98/2014 to provide the
guarantee to Towarzystwo Ubezpieczeniowe Europa S.A. (the company informed about the
agreement in ESPI current report No 20/2014 of 17 June 2014) which stipulated that the
amount of the insurance guarantee came to PLN 14,411,740.35 which is equivalent to EUR
3,461,780.97 translated using the average euro exchange rate published by the National Bank
of Poland for the first time when the guarantee was issued that is on 2 nd January 2014, which
amounted to 1 EURO = 4.1631 PLN, resulting from the reported agreement on 17 June 2014.
The guarantee is valid from 17 June 2014 till 16 September 2014.
Rainbow Tours S.A.
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Directors’ Report of Rainbow Tours S.A. for 2014
The above guarantees will secure the repayment of the claims arising from events mentioned in
point 1 letter a), b) and c) above, which occurred under the contracts to provide tourism services
entered by Rainbow Tours till 16 September 2015 for the total amount of PLN 84,700,234.27
(eighty four million seven hundred thousand two hundred thirty four zloty twenty seven grosz).
The amount of the new guarantee, which is valid from 17 September 2014 to 16 September
2015,has been increased by PLN 15,873,667.12 PLN i.e. the amount of the new guarantee went up
by 18.74% compared with amounts of previous guarantees.
6. The agreement entered into on 25 November 2014 between Rainbow Tours S.A. and Travel Service
A.S. with its seat in Prague and Travel Service sp. z o.o. with its seat in Warsaw. The issuer advised
about the agreement in the Current Report No 6/2015 of 31 March 2015.
The agreement concerns provisions of charter airline services in summer 2015 and Winter
2015/2016 season, which are necessary to run the business of the Issuer in different holiday
destination. Performance of the agreement commences on 26th April 2015, and the last flight has
been scheduled for 23 April 2016.
According to provisions of this agreement, value of the services upon the signature amounts to:
USD 23,936,298.73 (twenty three million nine hundred thirty six thousand two hundred ninety
eight 73/100 US dollars) which is equivalent to PLN 80,296,707.71 (in words: eighty million two
hundred ninety six thousand seven hundred seven 71/100 Polish zloty) translated according to the
average NBP exchange rate of 26 November 2014 published in the table 229/A/NBP/2014.
Payments resulting from the agreement will be settled on an ongoing basis and according to a
timetable of charter flights.
Rainbow Tours S.A. is able to change the number of flights taking into account increasing or
decreasing demand, which can affect the value of the whole agreement.
The agreement contains standard termination provisions. The agreement does not provide for
contractual penalty clause.
7. The agreement entered into between Rainbow Tours S.A. and Enter Air sp. z o.o. on 8 October
2014, the original of which the Issuer received on 15 October 2014. The Issuer provided respective
information in the Current report No 7/2015 of 31 March 2015
The agreement concerns provisions of charter airline services in Summer 2015 and Winter
2015/2016 season, which are necessary to run business of the Issuer in various holiday
destinations. Performance of the agreement starts on 24 April 2015, and the last flight is
scheduled for 23 April 2016.
According to provisions of this agreement, value of the services upon the signature is estimated at
USD 58,300,000.00 (fifty eight million three hundred thousand US dollars) which is equivalent of
PLN 192,681,500.00 (in words: one hundred ninety two millions million six hundred eighty one
thousand five hundred Polish zloty) translated using the average NBP exchange rate of 8 October
2014 published in the table No 195/A/NBP/2014 of 8 October 2014.
Payments under this agreement will be settled on an ongoing basis and according to a charter
flight timetable.
Rainbow Tours S.A. is able to change number of flights taking into on increasing or decreasing
demand, which can affect value of the whole agreement.
Rainbow Tours S.A.
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Directors’ Report of Rainbow Tours S.A. for 2014
The agreement provides for a standard termination clause.
The agreement does not contain or provide for a contractual penalty clause, however it provides
for payments in case of reduction of number of flights.
10. Information on organizational or capital ties with other entities.
The table below presents main organizational ties and investments of the Company as at 31
December 2014.
No
The subject of
investment
The object of the investment
tie
Value
(thousand)
1
shares
Portal Turystyczny Sp. zo.o.
Subsidiary (100 %)
200
shares
financing
Cash
3
shares
ABC Świat Podróży Sp. z o.o.
Subsidiary (100 %)
9 295
Contribution of
accounts
receivables
Cash
4
shares
Bee&Free sp. z o.o.
Subsidiary (100 %)
3 250
Cash
2
Rainbow Tours – Biuro Podróży Sp. z o.o.
Subsidiary (100 %)
450
11. Information on material transactions made by the issuer or its subsidiary with related
parties, which are not arm’s length transactions.
The issuer makes sale transactions with majority of related entities. All transactions are arm’s length
transactions.
12. Information on loan and credit agreements concluded and terminated in the financial
year.
In 2014 the Issuer continued cooperation with the banks, which finance its operations. Rainbow Tours
S.A. had following financial instruments in:
Bank Ochrony Środowiska S.A. – a multi-purpose line of credit
On 13 February 2013 the Company signed an annexe to the multi-purpose credit line and increased
the amount of the line by PLN 4,000 thousands to total PLN 9,500 thousands. According to the new
annexe the multi-purpose credit line agreement is valid till 30 November 2017. Additionally, on 13
November the company signed the bank guarantee agreement. The limit of the guarantee amounts to
PLN 4,000 thousand. The agreement is valid till 30 October 2015. The credit limit bears variable
interest rate, which consist of WIBOR 1M reference rate and a basic margin at the market level. As at
31 December 2014 the Company did not use the credit limit, and used the guarantee in the amount of
PLN 21 thousand.
Raiffeisen Bank Polska S.A - multi-purpose credit line
On 13 November 2014 the company signed an annexe No 9 to the multi-purpose line. The limit
amounts to PLN 4,500. Under the arrangement the Company can draw on the current account the
amount of up to PLN 4,500 and apply for issuance of bank guarantees for the amount of PLN 1,000
thousand. The total amount of the debt may not exceed PLN 4,500 thousand. The credit must be
repaid on 2 December 2015. As at 31 December 2014 the company did not use the said limit.
The bank issued guarantees for the contractor of Rainbow Tours in the amount of PLN 1,213
thousand. The guarantees are provided apart from the limit of the multipurpose line of credit.
ennium S.A. – a guarantee
On 20 August 2013 the amount of the guarantee was increased by PLN 2,000 and reached the
amount of PLN 13,500 thousand.
The agreement was valid within one year upon signature i.e. to 28 March 2014 and it was prolonged
for another year; at the same time the amount of the limit was increased by 2.500 thousand to PLN
Rainbow Tours S.A.
34 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
16,000 thousand. As at 31 December 2014 the Company used the limit in total amount of PLN 13,254
thousand.
13. Explanation of differences between financial results and previously published
forecasts of results for this year.
The Company failed to publish forecasts of financial results for 2014.
14. Information on loans granted, including to related parties in the respective financial
year.
As at 31 December 2014 the Company granted loans to following related parties:
Loans granted to:
Loans extended as at 31.12.2013
Repayment (+) /
Extended (-)
Bee & Free sp. z o.o.
ABC Świat Podróży sp. z o.o.
Portal Turystyczny sp. z o.o.
Rainbow Tours Biuro Podróży sp. z o.o
total
capital
-4 529
-24
-5 028
-5 028
-14 609
5 000
5 000
5 000
5 000
20 000
interest
Loans extended as at 31.12.2014
total
48
48
48
48
192
capital
5 048
5 048
5 048
5 048
20 192
interest
519
24
20
20
583
5 000
5 000
total
519
5 024
20
20
5 583
Granting loans to subsidiaries resulted from the possibility of obtaining more favourable interest rates
in the bank, which deposited the funds.
As at 31 December 2014 accounts of the Company present balances of loans receivables with respect
to Employee Benefit Fund:
- PLN 29 thousand– Tomasz Czapla the borrower (the vice-chairman of the Management Board)
- PLN 10 thousand – Remigiusz Talarek the borrower (the vice-chairman of the Management Board).
With respect to advances:
- PLN 8 thousand – Tomasz Czapla (the vice-chairman of the Management Board)
- PLN 3 thousand – Remigiusz Talarek (the vice-chairman of the Management Board).
15. Information on warranties and guarantees provided and received, including to related
parties in the respective financial year.
Limits of derivative transactions
The issuer has limits of derivative transactions, which allow making derivative transactions. The
company uses derivatives to hedge future foreign currency cash flows through forward transactions.
The value of debt limit is presented in the table below:
Bank
type
The amount of limit
Valid till
Millennium Bank S.A.
Transaction limit
10 000 000.00
2015-03-20
Raiffeisen Bank Polska S.A.
Transaction limit
18 000 000.00
2015-10-25
As at 31 December 2014 Rainbow Tours S. had currency forwards for purchase of USD and EUR
currency in exchange for PLN
Date of contract execution
Total
Date of contract execution
925 000
Equivalent in PLN at execution of the
transaction
3 893 273
Amount of EUR currency
Total
Rainbow Tours S.A.
2 800 000
Equivalent in PLN at execution of the
transaction
9 395 840
Amount of USD currency
35 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
Additionally, in the fourth quarter the parent company started to purchase corridor options for USD
currency. These contracts consist of the right to purchase USD currency at spot rate, if the real
exchange rate of USD will not be lower than the exchange rate fixed in in the contract. If the
exchange rate goes down below the spot rate in the contract the company is obliged to purchase
double amount of the currency in the first Call option. Construction of those Call and Put options have
embedded switch off, i.e. condition - fixed rate, which if exceeded Call and Put options are switched.
The table below presents total volumes of options bought as at the submission date of the report:
Contractual amount for Call option in USD
11 950 000
42 711 250
23 300 000
83 247 500
Contractual amount to be exchanged in PLN
Contractual amount of PUT option in USD
Contractual amount to be exchanged in PLN
Bank guarantees granted by banks to the contractors of Rainbow Tours S.A.
Under its bank guarantees the Company orders issuance of guarantees to the contractors of Rainbow
Tours S.A. In 2014 the issuer ordered issuance of the guarantees exceeding its limits. The table below
presents the guarantees issued as at 31 December 2014. The amounts of guarantees issued in foreign
currencies were translated using average NBP exchange rate of 31 December 2014.
The Bank, which issued the guarantee
The amount of the guarantee issued
Millennium Bank S.A.
13 254 464.33
BOŚ S.A.
21 000.00
Raiffeisen Bank Polska S.A.
1 213 000.00
total
14 488 464.33
Insurance guarantee granted by Towarzystwo Ubezpieczeń Europa S.A.
On 13 August 2014 the parent company advised about the agreement concluded between Rainbow
Tours S.A. (the obligor), and Towarzystwo Ubezpieczeniowe Europa S.A. (the Guarantor), concerning
insurance guarantee provided by the Guarantor for Rainbow Tours SA as a tour operator and a travel
agent, which benefits a Marshall of Łódzkie Province (“the Beneficiary”). The subject of the agreement
is to determine rules of providing the insurance guarantee in the scope:
a) reimbursing the costs of the return of the customers of the company (the Obligor) to the country,
when the Obligor (Rainbow Tours SA) despite its obligation fails to ensure the return
b) Repaying the payments made by the customers of the Obligor (Rainbow Tours SA) for the travel
package in case when for reasons dependent on the Obligor (Rainbow Tours SA) or persons, who
act on its behalf, the services were not provided
c) Repaying part of the payments for the travel package, which is equivalent to the part of the
services, which were not provided, for the reasons dependent on the Obligor (Rainbow Tours SA)
or persons, who act on its behalf.
According to provisions of the contract, its value upon the signature, and at the same time value of
the guarantee provided by the Guarantor to the Beneficiary amounts PLN 100,573,901.39 (one
hundred million five hundred seventy three thousand nine hundred 1 39/100 zloty) hereinafter
referred as “the amount of the guarantee” which is equivalent of EUR 24,158,415.94 (twenty four
million one hundred fifty eight thousand four hundred fifteen, 94/100 euro) translated using the
average euro exchange rate published by National Bank of Poland for the first time in the year of
issuance of the guarantee, i.e. on 2nd January 2014, which amounts to EURO 1= euro 1= PLN 4.631
published in the table No 0 01/A/NBP/2014 dated 2nd January 2014
The guarantee will secure repayment of claims arising from events mentioned in point 1 letter a), b)
and c) above, which are resulting from the contracts to provide tourism services entered by Rainbow
Tours in the period from 17 June 2014 till 16 September 2015.
Rainbow Tours S.A.
36 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
If the Beneficiary of the Guarantee will demand a payment under the Guarantee, the Obligor, at the
request of the Guarantor, is obliged to reply in writing to the demand within 3 days of the receipt of
the request of the Guarantor and attach the copy of the agreement with the related amount.
In case when the guarantee is effected by the Guarantor to the Beneficiary of the Guarantee, the
Obligor will repay to the guarantor the amount paid under the guarantee within 7 days of the receipt
the request for payment with costs (all costs incurred) from the Guarantor and in case of a late
payment with statutory interest.
The previous agreement to provide the insurance guarantee (in force till 16 September 2014) was
supplemented with a new guarantee agreement (also in force till 16 September 2014), about which
the Management Board advised in the current ESPI report No 20/2014 of 17 June 2014. Thus:

The originally concluded agreement with Towarzystwo Ubezpieczeniowe Europa S.A. No GT
96/2013 to provide guarantee (the company advised about the conclusion of the agreement in the
current ESPI report No 26/2013 of 30 July 2013) for the amount of PLN 70,288,493.92 and is
equivalent to EUR 17,282,214.33 translated using average euro exchange rate published by
National Bank of Poland for the first time in the year of issuance of the guarantee that is on 2 nd
January 2013, which amounted to 1 EURO = 4.0671 and resulted from the reported agreement
dated 30 July 2013. The guarantee is valid from 17 September 2013 till 16 September 2014.
 Additionally, as a supplement the Company concluded the agreement with Towarzystwo
Ubezpieczeniowe Europa S.A. No GT 98/2014 to provide a guarantee (the Company informed
about the conclusion of the agreement in the current ESPI report No 20/2014 of 17 June 2014), for
the amount of PLN 14,411,740.35 which is equivalent to EUR 3,461,780.97 translated using the
average euro exchange rate published by the National Bank of Poland for the first time in the year
of issuance of the guarantee i.e. on 2nd January 2014; amounted to 1 EURO = 4.1631 PLN, and
resulted from the reported agreement on 17 June 2014. The guarantee is valid from 17 June 2014
to 16 September 2014.
As at the date of submitting this report the above guarantees secure payment of claims arising from
of events referred to point 1 letter a, b and c above under the agreements concerning to provide
tourism services concluded by Rainbow Tours on 16 September 2014 for the total amount of PLN
84,700,234.27 (eighty four million seven hundred thousand two hundred thirty four 27/100 zloty).
The amount of the new guarantee, which is valid from 17 September 2014 to 16 September 2015, is
higher by PLN 15,873,667.12 and increases the amount of the new guarantee by around 18.74%
compared with the amount of the previous guarantee.
The security for the said agreement (the security for claims of the Guarantor to repay the amounts
paid under the Guarantee to the Beneficiary of the Guarantee) will be:
a) a deposit made according to market conditions
b)a mortgage on property of the Obligor
c) a blank promissory note with “no protest” clause
Value of commission due for the Guarantor from the Obligor for the issuance of the Guarantee was
calculated according to market conditions. Details of the financial data are presented in the Financial
Statements for 2014. The agreement does not contain or provide for penalty clauses
Promissory notes issued by Rainbow Tours S.A.
Rainbow Tours S.A.
37 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
The Management Board of Rainbow Tours S.A. issued blank promissory notes, which constitute
security for credit products offered by Bank Ochrony Środowiska. The details are provided below:
A promissory note no 1, which constitutes the security to a multipurpose line of credit
S/53/10/2011/1245/K for the amount PLN 9,500,000.00 PLN. The promissory note can be executed
within 60 months from termination of the agreement, i.e. up to 14.11.2022; the amount of execution
is PLN 23,750,000.00.
A promissory note No 2, which constitutes security to a guarantee issued under multipurpose line of
credit S/117/08/2013/1245/K for the amount of PLN 4,000,000.00. The promissory note can be
executed within 60 months from termination of the agreement i.e. up to 30 October 2020. The
amount of execution is PLN 6,000,000.00
Promissory note No 3, which secures the guarantee S/117/08/2013/1245/K/3, issued under the bank
guarantees S/117/08/2013/1245/K for the amount of PLN 21,000.00. The amount of execution is PLN
21,000.00
The security for the guarantees issued by Towarzystwo Ubezpieczeniowe Europa SA with its seat in
Wrocław (the Guarantor) pursuant the agreements to provide the guarantee by the Guarantor to
Rainbow Tours as a tour operator and a travel agent, for the benefit of a Marshall of Łódzkie Province
(“the Beneficiary”) are:
 A promissory note No 4, which secures the agreement number GT 101/2012 of 17 August 2012
with the value of PLN 46 305 000 (forty six million three hundred five thousand), which is
equivalent to EUR 10,372,984 (say: ten million three hundred seventy two thousand nine hundred
eighty four) translated using the average NBP exchange rate of 2 January 2012, which amounts: 1
EURO = 1 euro = PLN 4.4640 published in the table No 01/A/NBP/2012 of 2 January 2012, which
is applicable in the period from 17 September 2012 to 16 September 2013. According to a
promissory note declaration the promissory note cannot be written for the amount higher than
PLN 46 305 000 (forty six million three hundred fiver thousand Polish zloty).
 A promissory note No 5, which secures the agreement number GT 96/2013 of 30 July 2013 with
the value of PLN 70,288,493.92 PLN (seventy million two hundred eighty eight thousand four
hundred ninety three 92/100), which is equivalent to EUR 17,282,214.33 (say: seventeen million
two hundred eighty two thousand two hundred fourteen 33/100) translated using average NBP
exchange rate of 2 January 2012, for the first time in the year of issuance of the guarantee, that is
on 2 January 2013, which amounts: 1 EURO = 1 euro = PLN 4.0671 published in the table No
01/A/NBP/2013 of 2 January 2013, which is applicable in the period from 17 September 2013 to 16
September 2014. According to promissory note declaration the promissory note cannot be written
for the amount higher than PLN 70,288,493.92 (seventy million two hundred eighty eight thousand
four hundred ninety three 92/100 Polish zloty).
 A promissory note No 6, which secures the agreement number GT 98/2014 of 30 July 2014 with
the value of PLN 14,411,740.35 (fourteen million four hundred eleven thousand seven hundred
forty 35/100), which is equivalent to EUR 3,461,780.97 (say: three million four hundred sixty one
thousand seven hundred eighty 97/100) translated using the average NBP exchange rate published
for the first time in the year of issuance of the guarantee, that is on 2 January 2014 which
amounts: 1 EURO = 1 euro = PLN 4.1631, and which was stipulated in the respective agreement
of 17 June 2014. The agreement is valid from 17 September 2014 to 16 September 2015.
According to promissory note declaration the promissory note cannot written for the amount higher
than PLN 14,411,740.35 (fourteen million four hundred eleven thousand seven hundred forty
35/100 Polish zloty).
 A promissory note No 7, which secures the agreement number GT 110/2014 of 13 September 2014
with the value of PLN 100,573,901.39 (one hundred million five hundred seventy three thousand
nine hundred one 39/100), hereinafter referred as the amount of the guarantee, which is
equivalent to EUR 24,158,415,94 (say: twenty four million one hundred fifty eight thousand four
hundred fifteen 94/100) translated using average NBP exchange rate published for the first time in
the year of issuance of the guarantee, that is on 2 January 2014, which amounts: 1 EURO = 1
Rainbow Tours S.A.
38 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
euro = PLN 4.1631 published in the table 01/A/NBP/2014 of 2 January 2014. The agreement is
valid from 17 September 2014 to 16 September 2015. According to promissory note declaration
the promissory note cannot be written for the amount higher than PLN 100,573,901.39 (one
hundred million five hundred seventy three thousand nine hundred one 39/100 Polish zloty).
Blank promissory notes with no “protest clause” issued by Rainbow Tours S.A.
16. Proceeds from issuance of shares
In 2014 Rainbow Tours did not issue shares.
17. Assessment of financial risk management
The Company incurs substantial expenses at the time of preparation of the offer for summer season.
The process takes place in III and IV quarters of the calendar year. At this time the financial expenses
are incurred to prepare the offer (catalogues) and promotion (marketing campaigns in mass media).
Additionally, in order to book hotel rooms the company makes advance payments: so called
guarantee deposits. At this stage the company transfer liquid funds or uses bank credits as in previous
years. The period of advance sales of the summer offer, which commence from launching of the offer
to provision of the services is essential. The Issuer receives down payments from advance sales.
Thus, the interest for the offer during advance sales period definitely affects liquidity of the Company.
Monitoring of advance sales proves accuracy of the offer and inclination of customers to choose the
brand as well as the situation of national economy. In 2014 the Company saw that the interest for the
offer substantially rose during the advance sales period and that affected financial resources of the
company. During 2014 available lines of credits were used by the Company only to minimal extent
(maximally to the amount of PLN 0.5 million). In summer periods the Company accumulated
substantial amounts of cash by allocating surplus funds in secure financial products. As at the end of
2014 the Company had 83 million zloty in liquid funds, which makes 38.9 % of the balance sheet sum.
The balance sheet of Rainbow Tours S.A.
2014
2013
25 402 11.80% 22 921 14.90% equity
Fixed assets
Current assets
Including short-term investments
190 118
83 774
88.20% 130 879
38.90% 68 758
85.10% liabilities
44.70%
total
215 520 100.00% 153 800 100.00% total
2014
83 945 38.90%
131 575
61.10%
2013
56 774 36.90%
97 026
63.10%
215 520 100.00% 153 800 100.00%
In the respective period the increase in cash of the Company, calculated as a difference in cash came
to PLN 15.0 million as at the end of 2014 and 2013. In the period in question the Company changed
the policy of currency hedges. The Company introduced effective model of currency risk management
and hedges for around 40% of net currency needs. The forward contracts hedged around 36% of
EUR purchases and around 40% of USD purchases.
18. The assessment of the probability of investments, including capital investments
The company aims to focus its attempts on development of investments according to the provisions
stipulated in the Issue Prospectus.
19. Assessment of factors and untypical events, which affect operating profit for the
financial year.
Financial results of Rainbow Tours S.A. will be affected in the future by the following factors:
•
sales of Summer 2015 and Winter 2015/2016 offer
Rainbow Tours S.A.
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Directors’ Report of Rainbow Tours S.A. for 2014
•
•
•
•
•

•
stabilization of exchange rates on a currency market.
stabilization of the prices and keeping them at a low level.
sustaining stable economic situation in Poland
improvement of consumers’ moods through sustained level of consumption
stabilization of political and social situation in Ukraine
Stabilization of political and social situation in North African countries (Egypt and Tunisia)
Cost restructuring introduced in previous quarters in order to lower current costs of
operations of Rainbow Tours S.A.
20. External and internal factors, which are significant for the development of the
enterprise and description of the perspectives for development in the next financial
year.
20.1.
External factors
20.1.1. Economic trend
Despite weak economic situation in the world Poland has been seen as the country with stable and
expanding economy. This fact correlated with still low development of tourism services provides a
potential for continued growth of branch. Package travel satisfies higher needs and only after
satisfaction of elementary needs, and purchase of package travel is correlated to wealth of a society.
Purchase of the package travel is also affected by weather conditions, exchange rates, prices of fuel,
geopolitical situation and most of all situation of Polish economy. Favourable exchange rates and other
factors may not affect consumer decisions so much as do expected future economic situation
(consumer optimism), thus economic growth is a key factor for development of the Group.
20.1.2. Competition
Another significant factor is competitive environment. The Company is one of the five biggest tour
operators in Poland and ranked as second best by the Management Board. The biggest competitors of
the Company are Itaka, TUI, Wezyr Holidays i Exim Tours. Consistent building of a strong and
recognizable brand and a strong capital group covering with its activities all aspects of tourism market
(e.g. preparation of the products for customers, through its distribution, both through a traditional
channel – own sales offices as well as a modern channel – a call centre and the Internet,
consolidation of market of charter flights and organization of business package travel) will definitely
enable to successfully compete with other market players.
20.2.
Internal factors
20.2.1. Organization of the Company and the Capital Group
The Capital Group consists of the following entities:
Rainbow Tours S.A.
40 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
As at 31 December 2014 the Capital Group covered all aspects of tourism branch (a tour operator, an
agency selling tourism services). This allows continuing operations through intensified internal
development of entities. In order to ensure full control over subsidiaries persons who seats on the
Board of the parent company (the Issuer), seat also on \ Boards of the subsidiaries. The table below
presents personal ties with subsidiaries:
Name and surname
Grzegorz Baszczyński
Remigiusz Talarek
Tomasz Czapla
RT S.A.
ABC
RT BP
President of MB
Management board
Vice-chairman of
MB
Vice-chairman of
MB
Vice-chairman of
MB
President of MB
President of MB
Vice-chairman of
MB
Vice-chairman of
MB
Vice-chairman of
MB
PT
BF
Vice-chairman of
MB
President of MB
President of MB
RT S.A. - Rainbow Tours S.A. , ABC - ABC Świat Podróży Sp. z o.o. , RT BP- Rainbow Tours Biuro Podróży Sp. o.o. , PT Portal Turystyczny Sp. z o.o., BF – Bee&Free sp. z o.o.
20.3.
Perspectives for the development of the Company
The perspectives for development in the next financial year were described in point 2.3 of the said
report.
21. Changes in basic rules of management of the enterprise of the issuer and the Capital
Group.
The Management Board of the Parent Company consequently implements its management policy and
takes care of its quality and efficiency. Procedures aimed at optimizing the process of management,
efficient flow of information within the company and an exchange of information in the Group and in
the nearest environment of the company are continuously improved.
Obligation of the company to provide information, which was imposed in connection with admittance
of the shares of the company to trading ensures that the company is transparent, and all decisions are
taken in the appropriate time and considers welfare of the company. In 2014 no significant changes in
policy of enterprise management were introduced. The Company keeps quality management system
ISO, confirmed with certificate No 606/2007, which proves that the management system meets PN-EN
ISO 9001:2001 norms with respect to provision of tourism services issued by Polska Izba Handlu
Zagranicznego Certyfikacja (Polish Chamber of Foreign Trade Certification).
Rainbow Tours S.A.
41 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
22. Agreements entered with the members of the management board which would
provide compensation in case of resignation or dismissal.
As at the date of publication of this report there are no agreements concluded with members of the
management, which would provide for compensation in case of resignation or dismissal from a post.
23. Value of remuneration, awards and benefits for the Management Board and the
Supervisory Board.
a.
Remuneration of the Management Board paid in 2014 (PLN thousands)
Title of payment
Person
The function in the
Employment contract in RT
Management Board in RT
SA
S.A.
Due
Paid
Due
Paid
Remuneration in
total
Due
Paid
Due
Paid
Baszczyński Grzegorz
169 632
169 632
216 396
209 688
581 320
581 320
967 348
960 640
Czapla Tomasz
144 972
144 972
196 920
190 816
528 100
528 100
869 992
863 888
Talarek Remigiusz
144 972
144 972
196 920
190 816
528 100
528 100
869 992
863 888
total
459 576
459 576
610 236
591 320
1 637 520
1 637 520
2 707 332
2 688 416
b. Remuneration of the Management Board paid in 2013 (PLN thousands)
Title of payment
Employment contract in RT
SA
Person
The function in the
Management Board in RT
S.A.
Due
Paid
Remuneration in RT S.A.
total
Due
Paid
Due
Paid
Due
Paid
Baszczyński Grzegorz
169 632
155 496
135 900
124 575
119 834
119 834
425 366
399 905
Czapla Tomasz
144 972
132 891
123 672
113 366
108 863
108 863
377 507
355 120
Talarek Remigiusz
144 972
132 891
123 672
113 366
108 863
108 863
377 507
355 120
Total
459 576
421 278
383 244
351 307
337 560
337 560
1 180 380
1 110 145
c. Remuneration of the Supervisory Board paid in 2014 (PLN thousands)
Person
Due
Kubica Grzegorz
Niewiadomski Paweł
Pietras Paweł
Stępień-Andrzejewska Joanna
Walczak Paweł
total
Paid
12 000
12 000
12 000
12 000
18 000
66 000
d. Remuneration of the Supervisory Board paid in 2013 (PLN thousands)
Person
Due
Kubica Grzegorz
Niewiadomski Paweł
Pietras Paweł
Stępień-Andrzejewska Joanna
Walczak Paweł
total
12 000
12 000
12 000
12 000
18 000
66 000
Paid
12 000
12 000
12 000
12 000
18 000
66 000
11 000
11 000
11 000
11 000
16 500
60 500
24. Company's shares or right to shares held by the members of the management board
and supervisory board.
The table below presents shares of Rainbow Tours S.A. held by members of the management board
and the supervisory board as at 31 December 2014.
shareholder
Grzegorz Baszczyński
Remigiusz Talarek
Tomasz Czapla
Rainbow Tours S.A.
Function
Number of shares
2.292.000
2.035.800
1.990.000
The President of MB
Vice –chairman of MB
Vice –chairman of MB
42 |Page
Value of shares
229.200,00
203.580,00
199.000,00
Directors’ Report of Rainbow Tours S.A. for 2014
The capital of the company include vote preference shares in that two votes are attached to one share
at the General Meeting. These are A i C1, which are held by the management (Grzegorz Baszczyński –
The President of the Management Board, Remigiusz Talarek – the Vice-chairman of the Management
Board and Tomasz Czapla – the Vice-chairman of the Management Board), which is presented in the
table below:
Shareholder
Grzegorz Baszczyński
Remigiusz Talarek
Tomasz Czapla
Number of A series shares
1.325.000
1.175.000
1.150.000
Number of C1 shares
530.000
470.000
460.000
Total preference shares
1.855.000
1.645.000
1.610.000
25. Information on agreements which could change the structure of the share capital in
future
On 1st September 2011 the Management Board of Rainbow Tours S.A. adopted resolution to establish
and start Share Buyback Programme pursuant to authorization granted in the Resolution No 22 of the
Ordinary General Meeting of Rainbow Tours dated 29th June 2011 (the current report No 30/2011 of
30 June 2011).
The aim of the Programme is to acquire own shares for resale and redemption according to conditions
and methods stipulated in the said Resolution. In the opinion of the Board current market valuations
considerably differ from real value of shares, and the possibility of buying back some of the shares at
the price discounted to this value will be favourable for the shareholders, which do not intend to
withdraw from investment in shares.
The above Share Buyback Programme was implemented from 1 September 2011 on the conditions
defined in the Current Report 38/2011 dated 1 September 2011. Other conditions of Share Buyback
programme were determined in the Resolution No 22 of the Ordinary General Meeting of Shareholders
dated 29 June 2011.
As at 31 December 2012 the Company held 56 618 shares with a value of PLN 242 363.19 for the
average purchase price of PLN 4.28 per share. As at the date of submitting the report i.e. 30 April
2012 the Company held 56 618 own shares, which constitute 0.39 % of the total number of the
shares and 0.26 % of total votes at the General Meeting of Shareholders.
On 30 November 2012 the Management Board of Rainbow Tours S.A. advised about the information
acquired pursuant to art. 69.2 point 1 letter a of the Act on Public Offering concerning the change
(decrease) in the share held by the shareholder of the company – Mr. Sławomir Wysmyk (hereinafter
referred to as “the Shareholder”) – the share in total number of votes at the General Meeting of
Shareholders attached to the shares held by the shareholder, resulting from conversion of 200.000
preference C1 shares to ordinary bearer shares. According to the information acquired:
1.
2.
change in the share of total number of votes at the General Meeting attached to shares held by
the shareholder, resulting from conversion of 200,000 preference C1 shares to ordinary bearer
shares.
before conversion of preference C1 shares to ordinary bearer shares the shareholders held total
of 1,998,346 shares of the company, which constituted 13.73% share of the share capital of the
company and entitled to exercising 3,888,346 votes at the General Meeting of shareholders,
which is 18.04% of the total votes at the General Meeting, and the shareholders held as follows:
•
1,350,000 vote preference A series shares, which is 9.28% of the share capital and entitles
to 2,700,000 votes, which is 12.53% of total votes at the General Meeting.
•
540,000 vote preference C1 shares, which made 3.71% of the share capital and entitled to
1,080,000 votes, which is 5.01% of votes at the General Meeting
•
108,346 ordinary bearer shares (the shares admitted to trading on the main market), which
constituted 0.74% of the share capital of the Company and entitled to 108,346 votes and
0.50% of total votes at the General Meeting.
Rainbow Tours S.A.
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Directors’ Report of Rainbow Tours S.A. for 2014
3.
currently, after conversion of preference C1 shares to ordinary bearer shares the shareholders
hold total of 1,998,346 shares of the company, which is 13.73% of the share capital and entitles
to exercising of 3,688,346 votes at the General Meeting, and the shareholders holds:
•
1,350,000 vote preference shares A series, which amounts to 9.28% of the share capital and
entitle to 2,700,000 votes, which make 12.65% of the total votes at the General Meeting
•
340,000 vote preference C1 series shares, which make 2.34% of the share capital and
entitle to 680,000 votes, which is 3.18% of the total votes at the General Meeting
•
200,000 ordinary bearer C1 series shares, which is 1.37% of the share capital and entitle to
200,000 votes, which make 0.94% of the total votes at the General Meeting,
•
108,346 ordinary bearer shares (the shares admitted to trading on the main market), which
is 0.74% of the share capital and entitle to 108,346 votes, and which constitute 0.51% of
total votes at the General Meeting
The Management Board of the Company will carry out all factual and legal activities connected with
the conversion of preference shares to ordinary bearers pursuant to the said provisions i.e. the
conversion of some of the C1 series shares to ordinary bearer shares, and in particular:
•
•
will convert preference shares to ordinary bearer shares in the register of shares, which
must be kept by the Management Board pursuant to art. 341 of the Code of Commercial
Companies and Partnerships.
immediately after the next General Meeting adopts a resolution or resolutions concerning
amendment(s) to the Articles of Association related to the respective conversion, the
Management Board will submit the respective request to register and disclose amendments
to the Articles of Association and changes in the structure of the share capital in the register
of entrepreneurs. The share capital will not change and it amounts to PLN 1,455200; at the
same time total number of votes: currently PLN 21,352,000, will change.
Additionally, on 11 January 2013 the Management Board of the Issuer pursuant to § 12 in connection
with § 5.1 point 6 of the Regulation of the Minister of Finance on current and interim information filed
by issuers of securities and condition of recognition as equivalent information required by the
provisions of non-member states (the consolidated text Journal of Laws, item 133) of 19 February
2009; on 11 January 2013 published the information, that it signed the agreement of sale of
company’s shares concluded between Rainbow Tours SA and the shareholder of the company, the
holder of the preference shares (Mr. Sławomir Wysmyk), under which Rainbow Tours S.A. acquired
and Mr. Sławomir Wysmyk sold 40,000 preference C1 shares. The transaction was executed in
accordance with the following data:
1.
2.
The shares were purchased pursuant to the provisions of Resolution No 22 of the Ordinary
General Meeting of 29 June 2011 concerning authorisation of the Management Board to acquire
shares of the Company for redemption or further resale and in connection with the Resolution of
the Management Board of the Company No 01/09/2011 of 1 September 2011 on setting up and
starting a Share Buyback Programme.
Reasons for acquisition of own shares:
a. in the letter of 24 September 2012 the Seller intended to sell 40,000 preference C1 shares
with numbers from 146001 to 1500000 for the sale price of 3.50 per share
b. The Management Board of the Company – pursuant to § 11 para. 3 of the Articles of
Association (i.e. considering the previously applied procedure provided for in § 11 of Articles
of Association concerning the pre-emptive right of other holders of preference shares to
purchase preference shares) – indicated the company – i.e. Rainbow Tours S.A. in Łódź as a
purchaser of block of 40,000 preference C1 shares with numbers from 1460001 to 1500000,
with a sale price of PLN 3.50 per share.
c. The average unit price per share amounted to PLN 3.5 share.
d. The nominal value per share amounts to PLN 0.10 and the total nominal value of the
acquired shares amount to PLN 4,000.00. The shares entitle to 80,000 votes at the General
Meeting of the Shareholders.
Rainbow Tours S.A.
44 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
e.
The Company holds total of 96,618 own shares, which is 0.66% of the share capital and
entitle to 136,618 votes at the General Meeting, which constitute 0.64% of the total number
of votes at the General Meeting.
Additionally, on 19 March 2013 the Management Board of the Issuer pursuant to § 12 in connection
with § 5.1 point 6 of the Regulation of the Minister of Finance on current and interim information filed
by the issuers of securities and condition of recognition as equivalent information required by the
provisions of non-member states (the consolidated text Journal of Laws, item 133) of 19 February
2009 published the information on 11 January 2013, that it signed the agreement of sale of
company’s shares concluded between Rainbow Tours SA and the shareholder of the company, a
holder of the preference shares (Mr. Sławomir Wysmyk), pursuant to which Rainbow Tours S.A.
acquired and Mr. Sławomir Wysmyk sold 80,000 preference C1 shares. The transaction was executed
in accordance with the following data:
1.
2.
3.
4.
5.
The shares were purchased pursuant to the provisions of Resolution No 22 of the Ordinary
General Meeting of 29 June 2011 concerning authorisation of the Management Board to acquire
shares of the Company for redemption or further resale and in connection with the Resolution of
the Management Board of the Company No 01/09/2011 of 1 September 2011 on establishing and
starting a Share Buyback Programme
Reasons for acquisition of own shares:
a. in the letter dated 31 January 2013 the Seller intended to sell 80,000 preference C1 shares
with numbers from 1700001 to 1780000, for the sale price of PLN 3.50 per share
b. The Management Board of the Company – pursuant to § 11 para. 3 of the Articles of
Association (i.e. considering the previously applied procedure provided for § 11 of Articles of
Association concerning the pre-emptive right of other holders of the preference shares to
purchase the preference shares).– indicated the company – i.e. Rainbow Tours S.A. in Łódź
as the purchaser of block of 80,000 preference C1 shares with numbers from 1700001 to
1780000, and the sale price of PLN 3.50 per share
The average unit price per share amounted to PLN 3.5 share.
The nominal value per share amounts to PLN 0.10 and the total nominal value of the acquired
shares amount to PLN 8000.00. The shares entitle to 160,000 votes at the General Meeting of the
Shareholders.
The company holds total of 176,618 own shares, which is 1.21% of the share capital and entitle to
296,618 votes at the General Meeting, which constitute 1.39 % of the total number of votes at the
General Meeting
As at 31 December 2013 the company held 176,618 shares for the total value of PLN 663,307.18,
which is the average purchase price of PLN 3.76 per share, and constitute 1.21 % of the total number
of shares and 1.39 % of the total number of votes at the General Meeting of Shareholders.
On 28 November 2014 the Company sold 56,618 own shares for the unit price (price of sale) of PLN
17.41 per share in order to pursue the objective provided for in the provisions of the Resolution No 22
of the Ordinary General Meeting of 29.06.2011 (further resale of own shares), which was intended to
increase free float of shares – number of shares in free float (minority shareholders, shareholders with
less of 5% votes at the General Meeting) among others to enable to increase liquidity of shares in
public trade (that can potentially affect the quotation of company’s shares and realizable transaction
price, which is higher than the average purchase price of own shares acquired in Share buyback PLN
3.76 per share).
As at 31 December 2014 and as at the date of submitting of this report i.e. 30 April 2015 the
Company held 120,000 own shares for the purchase price of PLN 420,000.00, which constitute 0.83
% of the total number of shares and entitle to 240,000 shares at the General Meeting, and which
constitute 1.12 % of the total number of votes at the General Meeting. The average purchase price
amounted to PLN 3.5 per share.
26. Information on control system of the Share Incentive Programme
Rainbow Tours S.A.
45 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
In 2008 the Company started to implement Share Incentive Programme. The rules of new incentive
programme were resolved at the Ordinary General Meeting on 6 June 2008. The Programme was
operated in years 2008 - 2010. Under the Programme the Company distributed 52,000 shares. The
shares were admitted to trading at the beginning of January of 2009. The remaining pool of shares
was not distributed, and the Programme was not prolonged for next years.
27. Information on the entity authorised to review financial statements
On 29 July 2014 the Supervisory Board pursuant to section 22 letter d) of the Articles of Association of
the Company and section 3 sub-paragraph 2 letter c of the Regulations of the Supervisory Board
adopted the resolution to appoint the company to audit financial statements of the Company for 2014,
the consolidated financial statements for 2014 and to review separate and consolidated half-year
financial statements for first half-year of 2014. The agreement to provide the services was concluded
on 30 July 2014.
The selected entity is as follows:
DGA Audyt Spółka z o.o.
ul. Towarowa 35
61-896 Poznań,
(the entity registered as the entity authorized to examine financial statements under registration
number 380).
The entity provided following services:
1.
reviewed the interim extended financial statements comprising the abridged financial statements
of Rainbow Tours and the consolidated financial statements of Rainbow Tours for I half-year
2011 and,
2. audited the financial statements of Rainbow Tours for 2011 and,
3. audited the consolidated financial statements of Rainbow Tour S.A.’s Capital Group for 2011 and
4. reviewed the interim extended financial statements comprising the abridged financial statements
of Rainbow Tours S.A. and the abridged consolidated financial statements of Rainbow Tours SA
for I half-year 2012 and,
5. audited the financial statements of Rainbow Tours for 2012 and,
6. audited the consolidated financial statements of Rainbow Tours S.A.’s Capital Group for 2012
and,
7. reviewed the interim extended financial statement comprising the abridged financial statements
of Rainbow Tours S.A. for I half-year of 2013.
8. audited the financial statements of Rainbow Tours S.A. for 2013 and,
9. audited the consolidated financial statements of Rainbow Tours S.A.’s Capital Group for 2013
10.
reviewed the interim extended financial statements comprising the abridged financial
statements of Rainbow Tours S.A. and the abridged consolidated financial statements of Rainbow
Tours S.A.’s Capital Group for I half-year of 2014
Remuneration of the entity for the services provided in 2014:
for the revision of the separate financial statements for I half-year of 2014– PLN 7 thousand net (paid)
- for the revision of the consolidated financial statements for I half-year of 2014 –– PLN 6 thousand
net (paid)
- for the audit of the separate financial statements for 2014 – PLN 18.0 thousand net (due)
- for the audit of the consolidated financial statements for 2014 – PLN 9.0 thousand net (due),
Total value of services: 40.0 thousand net
Remuneration of the entity for the services provided in 2013:
- for the revision of the separate financial statements for I half-year of 2013– PLN 7 thousand net
(paid)
Rainbow Tours S.A.
46 |Page
Directors’ Report of Rainbow Tours S.A. for 2014
-
for the revision of the consolidated financial statements for I half-year of 2013 – PLN 6.0 thousand
(paid)
for the audit of the separate financial statements for 2013 - PLN 18 thousand net (due),
for the audit of the consolidated financial statements for 2013 – PLN 9.0 thousand net (due)
Total value of services – PLN 4.0 thousand net
The Management Board of Rainbow Tours S.A.
Grzegorz Baszczyński – the President of the
Remigiusz Talarek –the Vice-chairman of the
Management Board
Management Board
Tomasz Czapla – the Vice-chairman of the
Management Board
Łódź, 30 April 2015
Rainbow Tours S.A.
47 |Page