Directors’ report of
Rainbow Tours
Capital Group for 2013
Łódź, 30 April 2014
Directors’ report of Rainbow Tours Capital Group for 2013
1. Basic information about the company:
The name of the Company - Rainbow Tours Joint Stock Company
The registered office of the company - 90-361 Łódź, Piotrkowska 270
NIP (tax Id): 725-18-68-136
Regon (National Business Registry Number): 473190014
Registered in National Registry Court under 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. The core business of the
company constitutes (according to KRS) activities of tour operators (PKD 7912 Z). Pursuant to the
classification of Warsaw Stock Exchange the company operates in “hotel and restaurants” sector.
The Management Board and the Supervisory Board as at 30 June 2013 comprised as follows
The 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
The composition of the Management Board did not change in the year covered by the report as well as
to the date of submitting the financial statement.
The Supervisory Board:
Paweł Walczak
Paweł Niewiadomski
Grzegorz Kubica
Joanna Stępień-Andrzejewska
Paweł Pietras
- the Chairman of the Supervisory Board
- the Vice – chairman of the Supervisory Board
-the Member of the Supervisory Board
- the Member of the Supervisory Board
- the Member of the Supervisory Board
The composition of the Supervisory Board did not change in the year covered by the report as well as
to the date of submitting the financial statements.
Apart from the parent company the Capital Group comprised following entities, which are controlled by
the parent company based on share in votes the General Meeting of Shareholders (percentage value):
2. Description of basic economic and financial data, presentation of untypical factors and
events, and discussing perspectives of expansion in the new financial year
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Directors’ report of Rainbow Tours Capital Group for 2013
2.1. Description of basic economic and financial data
2013 should be considered an exceptionally successful year for the biggest tour operators. Dynamics
of sale of the Summer 2013 offer (over 27%) as well as the winter offer (mainly exotic travel package
over 50 % of growth) was exceptionally high, what present the performance of the group below. The
market was further consolidated, and currently three major players (Itaka, Rainbow Tours and TUI)
possess over 50 % of the whole market. Bankruptcies of tour operators in 2012 made customers
predominantly opt for holidays organized by big and financially stable tour operators, which give the
guarantee that customer not only will go on holiday but they will also comeback. The price of the holiday
ceased to be the key criteria for customers choosing a holiday trip. The customers influenced by media
taken into account other than price criteria when choosing holiday travel package.
Other issues are currently more important: the recognisability of the brand, the amount of the insurance
guarantee, the opinions of the tour operator, the availability of the offer in all sales channels (starting
from websites, through call centres and own sales offices) and the variety of interesting offers. Rainbow
Tours Offer has all these features: a recognizable brand (thanks to interesting marketing campaigns),
substantial amount of the guarantees (presently over 74 million), positive online opinions, the extensive
sales network (currently 100 own and franchise sales offices and a well -organized call centre). The sale
of Rainbow Tours offer by ABC Świat podróży – the subsidiary as the franchise agent brought expected
results. The sales offices started to use Rainbow Tours trademark, which is considered to be a stable
tour operator brand.
What also matters is that Rainbow Tours as first big tour operator offers advance sales of summer travel
package. Great number of reservations made in the period from October to December is a sign of
confidence of potential customer in the Issuer.
The offer of package travel provided by Rainbow Tours should be separately considered. In 2013
Bee&Free introduced a new offer for young and less demanding customers, who have interest in
different holiday activities (active holiday proposals - starting from the variety of the sport activities to
clubs and discotheques). Additionally, Rainbow Tours, under its brand. organized a number of new
travel programmes and substantially extended the offer of holiday resorts.
The holiday season in 2013 (April through October) was successful as well as IV quarter of the year,
which was abundant in positive signals. The growth of turnover was dynamic (from December by about
90%). For a several years Rainbow Tours has been an undisputed leader of exotic travel package, but
only since November 2013 company’s customers have had the opportunity to fly directly from Warsaw
to Cuba, Mexico, Thailand and Sri Lanka. Additionally, a new exotic destination was established –
Gambia (for the first time in Poland). Another factor that affects the purchase of travel package by the
customers was the stabilization of exchange rates. The detailed description of the results generated by
the Issuer was attached in the non- consolidated results.
The reversing of the trend on the tourism market in 2013 for the companies of the Group affected their
performance. After several years of losses, the company earned net profits in 2013, which resulted in
greater net profit of the Capital Group.
The above factors substantially affected the increase of sales revenue in 2013 compared with 2012. All
those activities strengthened the position of Rainbow Tours Capital Group as the leader of exotic travel
package and coach tours on the Polish market, and the parent company recorded the greatest increase
in the sector of holiday travel package. According to the assessment of the Management Board Rainbow
Tours has been listed the second biggest tour operator in Poland (after Itaka, and before TUI). When
the company went public (in 2007) the tour operator was listed 7th.
The additional factor that improved profitability was increase of currency hedges, in periods when the
prices of currencies were substantially higher compared with the budget plans. These factors brought
good financial results for Rainbow Tours Capital Group in 2013.
The analysis of the financial performance for the period from 1 January to 31 December 2013 shows
that the total sales revenue generated by the Capital Group amounted to PLN 776,649 thousand, up by
27.8 thousand on the year before. The increase in revenue was affected by the substantial increase in
the revenue from sales of travel package by as much as 33.00% and revenues from agent activities
(the sales of charter blocks), which went up by 25.4%. The table below presents the sales structure.
.
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Directors’ report of Rainbow Tours Capital Group for 2013
2013
2012
January – December
January – December
2
3
1
change
%
4=2-3
5=4/3
Revenue from sales of travel package
583 628
438 842
144 786
32,99%
Revenue from agent activities
191 198
152 477
38 721
25,39%
other
Total revenues
1 823
16 212
-14 389
-88,76%
776 649
607 531
169 118
27,84%
The growth of the revenue on sales of travel package was affected by two operating factors: that is the
growth of the number of the customers taking part in travel package by as much as 28 % and increasing
the price of the trip by 7.7 %. It should be added, that in IV quarter 2013 the company has generated
a substantial increase in revenues thanks to introduction of new exotic travel package, which average
price is definitely higher. Moreover launching charter planes to such destination as Thailand, Cuba or
Mexico has substantially increased the volume of customers. The number of customers in 2013 came
to PLN 208 thousand people and in 2012 the number amounted to 179 thousand people
Cost of organization of travel package for the analysed period came to PLN 681,148 thousand up by
PLN 142.784 thousand. Growth dynamics were at mere 26.5%. Gross margin which is the relations of
sales revenue to costs of operations came to 12.3% and was higher than the gross margin of the
comparative period by 0.9 percentage point.
Gross margin on sales earned by the company in 2013 came to PLN 95,501 thousand went up by PLN
26.334 thousand on the year before, an increase of 38.1%. Total costs of operations (costs of sales and
overheads) went to PLN 77,792 thousand. Growth dynamics were at 19.8% on the year before. The
increase of sales costs had higher dynamics than overheads. The table below presents dynamics of
costs of sales and overheads.
1
2013
2012
January - December
January - December
2
Change
3
%
4=2-3
5=4/3
Costs of sales
65 051
52 959
12 092
Overhead costs
12 741
11 962
779
6,51%
77 792
64 921
12 871
19,83%
22,83%
The issuer earned net profit in the amount of PLN 13,646 thousand went up by PLN 10.833 thousand
on the year before. The EBITDA of the enterprise came to PLN 17,137 thousand.
Net profitability, which is the relation of net profit to sales revenue in the period in question, came to
1.76%, while the ration in 2012 amounted to mere 0.46%.
The factor eliminating currency exchange risk was conclusion of forward transactions, which constitute
hedges to currency purchases in 2013 for currency pairs EUR/PLN and USD/PLN. The parent company
secured, within the whole period, around 44.3% of currency demand for EUR/PLN and 38.2 % of
currency demand for USD/PLN. The management board of the company estimates that the strategy
enables to reduce the costs of currency purchase by around PLN 0.6 million.
The advance sale of Summer 2014 offer started from the second half of the October of 2013, and that
proves that Rainbow Tours in 2014 is able to have sales of PLN 1 billion, under the condition that political
and social factors will not disturb the positive economic trend.
2.2. Untypical events
In 2013 there were no events, which affected the operations of tourism companies - the only negative
factor was introduction of the martial law in Egypt – however it was not of the matter to the company.
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Directors’ report of Rainbow Tours Capital Group for 2013
The incentive to travel abroad for the customerwas the stabilization of currency exchange rates, what,
in the opinion of the Management Board, directly affects the demand for services of Rainbow Tours.
The table below presents the chart of average exchange rates in the period from December 2007 to
April 2014. The chart for 2013 does not show any departures from average annual exchange rate of
USD and EUR.
average NBP exchange rates published from 31.12.2007 to 22.04.2014
4.8999
4.9000
4.3282
4.4000
3.9000
3.5129
3.4000
4.1770
3.8978
2.4061
4,5135
4,1976
4,1790
4,1721 4,0465
3.50663.25813,5777
3,161
3,065
4.1852
4.1196
3.9939
3.4916
3,1181
2.9000
2.4000
4.5642
2.9636
3.0179
3,1509 3,0690
1.9000
dolar amerykański
euro
Srednia roczna USD
Srednia roczna EUR
2.3. Perspectives of operations development
Rainbow Tours S.A. has been operating on tourism market in Poland for more than 24 years, and as a
joint-stock company from 2003. Dynamics of sale growth considerably exceeds development of tourism
market in Poland. Throughout the last 6 years Rainbow Tours has quadrupled its turnover and the
company is presently listed on second or third position based on the volume of travel package sold. The
Management Board of the Issuer sees opportunity for further growth, especially due to the fact that the
market has been expanding. Number of customers buying organized travel package constitute only
around 3.5-4.0% of total population of Poland, compared with Germany with to 16 -19 % of the
population or Czech Republic, with number of customers of travel agencies reaching 8% of the
population. These data shows that the market has potential for development. Growth dynamics of
tourism market in Poland is closely related with income of Polish citizens, and despite slower economic
development in the recent years the Issuer managed to reach the annual growth at the level of 10% to
40%. The operations of Issuer (mass market tour operator) are rather restrictively regulated by the law
and activities of Office of Competition and Consumer Protection, and also exposed to numerous risk
(among others: riots, wars, exceptional weather conditions, volcano eruptions etc.), which affects
financial results.
The Management Board of the Issuer has been diversifying the offer for a few years. Except for B2C
activities, that is activities of tour operator for mass market, the company operates in B2B sector as
well, especially in the scope of organizing business travel package, incentive travels, conventions, and
consolidation and sales of charter planes seats. The Management Board of the Issuer has formed the
capital group, in which each of the companies provides different tourism services. Rainbow Tours SA’ s
Capital Group comprise following entities: TravelOvo sp. z o.o., 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 2014 and subsequent assumes consistent building of a
strong and recognizable Rainbow Tours brand for mass market customers, supplementary brand
Bee&Free for younger clientele and strong capital group embracing all aspects of the tourism market.
In 2014 the issuer plans to take different measures to provide for cost restructuring of the entities within
the group and the enterprise of the issuer, especially as follows:

Development of own reservations systems.
•
restructuring activities with respect to efficiency and the level of employment

Diversification of revenues from different sectors of tourism services
•
concentrating activities at the seat of the parent company
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Directors’ report of Rainbow Tours Capital Group for 2013
Services provided by the company reach the final recipient through various distribution channels:
through agents’ network, direct sales in sales offices, sales at franchise offices and online sales through
call centre and websites. In the near future the Company will strive to increase sales through franchise
network and through own websites. This would enable to decrease sales cost relatively and to retain
full control over quality and the form of sale.
2.4. Competition risk
Changes on the market of tourism services and great development of online sales can, in a longer
perspective, pose a threat of losing market share by companies with only traditional sales network. The
company has taken actions to mitigate the risk by developing modern channels of sales.
Despite that fact the company competes also on the market of traditional tour operators with other
companies. Consistent building of a strong and recognizable Rainbow Tours brand and strong capital
group embracing all aspects of tourism market (the producer – tour operator in Poland, traditional
distribution – network of own sales offices, Internet – own portal) will enable to compete successfully
with other market players.
2.5. Risk connected with seasonality of sales
Sales for the company, as for most companies in tourism branch, are seasonal. The demand for products
and services provided by the company rises in the second and third quarter of the year. That is why the
performance for this period has a decisive influence on the final result of the whole year. However, it
should be mentioned, that the Company attempts to level down the effect of seasonality by offering in
winter season (IV and I quarter of the year) more and more interesting and attractive travel package
(mainly direct charters to Mexico, Cuba and Thailand). Charter airplanes used for transportation to
exotic destinations made such holidays very popular. The situation lead to a change in proportion of
sales between summer and winter season.
2.6. Risk connected with financial condition of the subsidiaries
Rainbow Tours Capital Group comprise following entities: Portal Turystyczny sp. z o.o. (100% of the
share capital, the company completes the works on the portal, which specializes in individual
reservations that is dynamic packages), Rainbow Tours – Biuro Podróży sp. z o.o. (100% of the share
capital, the company has 12 franchise sales offices for Rainbow Tours), and also Bee&Free sp. z o.o
(100% of the share capital, the company specializing in consolidation of seats in charter planes and
sales of charter tickets).
2.7. Risk connected with macroeconomic situation of Poland
Economic problems of EU countries may affect economic condition of Poland, and the economic situation
may result in deterioration of consumer moods, including the inclination of Polish costumers to travel
abroad. The purchases of travel package are also affected by confusing political situation in Ukraine and
risk of possible Russian Ukrainian conflict. However the increase in turnovers and advance sales of
Summer 2014 offer do not seem to prove these fears.
2.8. Risk connected with changes in legal regulations
Changes in legal provisions or their different interpretations pose risk to activities of the company. Any
changes in legal provisions, especially tax regulations may have adverse effects on the 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 the business of the Issuer. Frequent changes in interpretation
of tax regulations are especially dangerous. Tax offices activities and court judgments with respect to
taxation lack consistency. Tax interpretation different from interpretation provided by tax offices may
worsen financial situation of the company and in turn negatively influence the performance of the
company.
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Directors’ report of Rainbow Tours Capital Group for 2013
2.7.
Currency risk
Company pays for the travel package ordered in foreign currencies (usually Euro or USD).The travel
package are sold to customer in Poland in national currency. Unfavourable exchange rates differences
between the periods of payments from customers and the payments to foreign contractors may reduce
profitability and profits of the company. However, depreciation of Polish zloty has been stopped and
according to analyses submitted to the management board the national currency should strengthen in
the mid- and long term. The company uses forward transaction to hedge future currency transactions.
2.8.
Risk connected with growing prices of crude oil
Relatively high price of crude oil in the last period translates into growth of costs of aviation and bus
transport. Higher demand for crude oil in the summer season resulting from intensified activity of
airlines, may lead to additional price growth in this period, and in turn, to rising prices of travel package
(denominated in in foreign currencies).
3. Declaration on applying corporate governance rules
3.1. Corporate governance rules adopted by the issuer.
In 2012 the issuer adopted, and was subject to the rules of corporate governance published in “Code
of Best Practices for WSE Listed Companies” adopted by resolution No 12/1170/2007 of Warsaw Stock
Exchange Supervisory Board on 4th July 2007 on adopting “Code of Best Practices for WSE Listed
Companies”. The unifrom text of the document, which contains the changes valid from 1 January 2013
(introduced pursuant to the Resolution of Exchange Supervisory Board No Board 19/130/2012 dated 21
November 2012 and constitute the attachment to the resolution).
The rules are available on the Internet, under the following address: http://www.corp-gov.gpw.pl
The Warsaw Stock Exchange Rules (that is the document adopted by the Resolution No 1/1110/2006
of WSE Supervisory Board dated 4th January 2006 as amended) does not impose on the company the
obligation to apply the corporate governance rules, but only the obligation to report about them.
According to 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,
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 to
publish by the issuer the reports mentioned in section 29 point 3 of the WSE Rules with reference to
corporate governance rules included 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 the 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.”
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Directors’ report of Rainbow Tours Capital Group for 2013
The scope and the structure of the report concerning application of corporate governance rules in 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 reports on the application of corporate governance rules by
listed companies
The legal base of drawing up a declaration on application of corporate governance rules is:
section 9.5 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 (Dziennik Ustaw from 2009, No. 33, item 259, as amended),
according to which the directors’ report as well the capital group directors report should include
declaration on application of corporate governance rules, which is 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)
Section 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 the scope and
structure of reports on the application of corporate governance rules by listed companies
3.2. Indication and explanation of the departures from application of corporate
governance rules
In 2013 the issuer did not applied the corporate governance rules below published in "Code of Best
Practices for WSE listed Companies”, which are applicable from 2013. The rules were adopted by
Resolution No 12/1170/2007 on 4 July 2007 concerning the adoption “Code of Best Practice for WSE
Listed Companies” considering and including the changes 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 introducing amendments to Code of Best Practices
for WSE listed Companies), according to the consolidated text of this document adopted by Resolution
of Exchange Supervisory Board No 19/130/2012 dated 21 November 2012 on adoption of amendments
in “Code of Best Practices for WSE listed Companies”,
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:
- maintain a company website whose scope and method of presentation should be based on the model
investor relations service available at http://naszmodel.gpw.pl/
- ensure adequate communication with investors and analysts, and use to this purpose also modern
methods of Internet communication.”
In 2013 the Issuer failed to comply fully with the rule, and that is:
1)
the issuers website, including corporate governance relations does not comply with the model
available at: http://naszmodel.gpw.pl/; this was caused mainly by the specificity of construction of the
website of the tour operator, which is adjusted to the commercial purposes of offering services, which
are the basic business object of the Issuer
2)
the company did not implement these 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 concerning enabling shareholders to exercise the 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, concerning ensuring recording of the General Meeting in audio or video format
and publishing on the website – the explanation in the description of the rule: No II.1.9a;
rule No IV.10, concerning the practice of enabling the shareholders to participate in a General
Meeting by using electronic communication means through: real life broadcast of General Meetings and
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Directors’ report of Rainbow Tours Capital Group for 2013
real time bilateral communication where shareholders may take the floor during a General Meeting from
a location other than the General Meeting– the explanation with the description of the rule No IV.10.
Except for the above the Company strives to ensure adequate communication with investors and
analysts (direct meetings) using new 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 rule was not applied in 2013 with respect to obligation of having remuneration policy of
members of the Supervisory Board, the remuneration of the member of the Supervisory Board was set
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 setting remuneration of the members of the
Supervisory Board, which was covered by the minute – the notarial deed prepared by the Notary Public
in Łódź Anna Bald Rep. A No 2224/2012). Pursuant to the resolution of the Supervisory Board of the
Issuer No 6/05/2011 dated 27 May 2011 the Supervisory Board of Rainbow Tours acting pursuant to §
19. 2 second sentence and § 22 letter c) of the Articles of the Association adopted and introduces the
document describing the remuneration policy for the members of the Management Board of the
Company (the remuneration policy of the members of the Management Board of Rainbow Tours S.A.),
which was used by the Issuer in 2013.
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 2013 only men were members of the Management Board, and only one woman in the Supervisory
Board out of 6 members, although, the proportion of women to men in the company is balanced. The
company and its shareholders aims, in potentially right time and if it will be objectively possible, to
ensure well-balance proportion of women and men in roles in the Management Board and Supervisory
Board of the Company, reinforcing in this way the creativity and innovation of the companies’ economic
business.
Rule I 12
“A company should enable its shareholders to exercise the voting right during a General Meeting either
in person or through a plenipotentiary, outside the venue of the General Meeting, using electronic
communication means”
In 2013 the issuer did not applied and won’t be applying the rule in 2014, because the issue of distant
voting is present in Part I “Code of Best Practices for WSE listed Companies”, that is the rule is only
recommendation and the information of non-application of the rules does not need to be published in
current reports, where the obligation of its publishing remains for annual reports (due to the provisions
of the Resolution No 1014/2007 Management Board of Warsaw Stock Exchange dated 11 December
2007 on the partial exclusion of the obligation the publish reports concerning corporate governance
rules on WSE; in 2013 the company failed to implement and does not intend to implement in the financial
year 2014 the solutions enabling its shareholders to exercise the 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 issuer believes that introduction of such solutions concerning enabling its shareholders to exercise
the voting right during a General Meeting either in person or through a plenipotentiary, outside the
venue of the General Meeting, using electronic communication means should involve introduction of
appropriate formal and legal provisions in the internal regulations of the company (the Articles of
Association, the 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: that is 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 therefore may be an
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Directors’ report of Rainbow Tours Capital Group for 2013
additional factor increasing the costs of organization and convening of the General Meeting of
Shareholders, and it could also introduce corporate solutions which are disproportionate to the potential
effects and current expectations of the shareholders in this respect.
Part II – Best Practice for Management Boards of Listed 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 (…)” due to unintended omission, the rule was not applied, whereas
information concerning the personnel of Management Board and the Supervisory Board of the Issuer
are published on the website of the Issuer and also result indirectly from the content of other documents
published on the website of the Issuer, including the content of current and interim reports of the
Company. The Issuer 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 publishing an annual report on works of the committee of the Supervisory Board
on the corporate website of the issuer was not applied in 2013 an is not applied in 2014. No committees
were separated in the Supervisory Board, including an audit committee, and all members of the in
Supervisory Board fulfilled their duties collectively. Information on activities of the Supervisory Board
are systematically published – on the website of the Issuer – in the content of the reports on activities
of the Supervisory Board for full financial year.
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 2013 the company failed to implement and does not intend to implement in 2014 the solutions
concerning record of the General Meeting in audio or video format. Thus the company does not intent
to implement the rule No II 1.9.
The issuer 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 ensuring compliance with the rule mentioned in point II.7 of the “Code of Best practices
for WSE listed Companies” - that is publishing on the corporate website, except for information required
by the law of the and also the questions of shareholders concerning the matters covered by the agenda,
which will be asked before and during the General Meeting of the Shareholders including the answers
to the questions
The company believes that recording of the General Meeting and publishing it on the website will be
disproportionate to its effects and current expectations of the shareholders in this respect.
However, the position of the company – which is consistent with the position contained in the preamble
to “the 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
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Directors’ report of Rainbow Tours Capital Group for 2013
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 concerning application of corporate governance in the form of
attachments to annual financial statements, which are published on the corporate website. The reports
are presented in accordance with the provisions of the Regulation of the Minister of Finance of 19
February 2009 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. 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 to WSE the report mentioned in section 29.5 of the Regulations of the Warsaw Stock
Exchange to WSE. However, subject to the fact that the issuer presented all information mentioned in
section 1 of the Resolution No 1013/2007 of the Warsaw Stock Exchange Management.
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 have any defined rule concerning changes of the company authorized to audit
financial statements, and the company failed to publish such on information on the investor relations
webpage. The company authorized to audit financial statements was changed for the last time in 2011
pursuant to the resolution No 9/05/2011 of the Supervisory Board of 27 May 2011
The financial statements for financial years: 2008, 2009 i 2010, were examined by Kancelaria Biegłych
Rewidentów „Josef Welt” Sp. z o.o.in Łódź. Starting from 2011 and also in 2012 and 2013 the financial
reports were audited by DGA Audyt Spółka z o.o. in Poznań.
Therefore, the Company applied the rule (regulation) of changing “every three year” the company
authorized to audit financial statement. However, the rule is not formally defined and applicable in the
Company.
In order to apply this rule of the corporate governance (rule II 1.14) the Company intends to publish a
respective rule concerning lack of internal rule concerning changing the company authorized to audit
financial statements of the issuer on its corporate website.
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.”
Starting from 1 January 2009 the Issuer had 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 with rule to some extent by translating some basic information covered
by Part II of „Code of Best Practices of WSE listed Companies”.
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 system2)
(deleted), 3) review and present opinions on issues subject to resolutions of the General Meeting”
In 2013 the rule was not applied with respect to presentation of the content of report of the activities
of the Supervisory Board and information on assessment of the system of internal control and the
system of managing significant risk for the company. Information on activities of the Supervisory Board
in 2012 and brief description of the situation of the company were provided in the report on activities
of the Supervisory Board in 2012, which was presented during 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 Issuer.
Part IV – Best Practices of Shareholder
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Directors’ report of Rainbow Tours Capital Group for 2013
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 2013 and 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 – due to its
shareholder structure - participate in a General Meeting through electronic communication means in the
way indicated in the Rule IV.10. In the future the company will consider the 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 in the
internal regulations of the company (the Articles of Association, the Rules and Regulation of the General
Meeting of Shareholders). The provisions should enable such participation in the General Meeting of
Shareholders but they will pose many formal, practical and technical problems: 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 therefore may be an additional factor increasing the costs of organization and convening
of the General Meeting of Shareholders, and it could also introduce corporate solutions which are
disproportionate to potential effects and current expectations of the shareholders in this respect.
The position of the company – which is consistent with the position contained in the preamble to “the
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 that the position of Company that rule should implemented gradually
without too much financial and organizational burden.
In other respects, apart from departures mentioned, in 2013 the Issuer applied the corporate
governance rules applicable for the company in 2013, 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 uniform 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) was not
stated for the rule – the issuer declared to comply with the rule in 2013.
3.3. 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 at three levels:
 With respect to accounting rules – a documentation of accounting rules adopted, which
describes accounting policy stipulated in the Accounting Act of 29 September 1994 (the
consolidated text Dz.U. of 2009, No 152, item 1223 as amended) approved by the Management
Board. The accounting rules are applied continuously to ensure comparability of financial
statements.
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Directors’ report of Rainbow Tours Capital Group for 2013

With respect to documentation – the procedure of document flow and approval, which ensure
content-related as well as formal control of the documents entered to the computer data
processing system.
 With respect to computer data processing system – the company uses the systems, which fulfil
the requirements arising from 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.
The annual separate financial statements of the Issuer and the annual consolidated financial statements
of the Capital Group of the Issuer are subject to the verification (audit) of external entity with relevant
powers, while the half-year financial statements are reviewed. Rainbow Tours SA financial statements
are published in accordance with requirements of relevant legal regulation
3.4. Shareholders holding directly or indirectly substantial blocks of shares
The table below presents shareholders with substantial blocks of shares as at 31 December 2013.
Number of shares
held
shareholder
Number of votes attached
to shares at GM
Share capital
[%]
Share in the total number
of votes at GM
[%]
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
Sławomir Wysmyk
1.990.000
1.878.346
3.600.000
3.448.346
13,68
12,91
16,86
16,15
1.324.724
1.324.724
9,10
6,02
14.552.000
21.352.000
Quercus Towarzystwo
Funduszy Inwestycyjnych SA
Respectively total number of
shares and total number of
votes at GM
The information on shares of the company held by shareholders (including member of the governing
bodies of the company) with at least 5% of total number of votes at the General Meeting of Shareholders
was prepared based on in particular on current (as at 31 December 2013) disclosures in Share Register
kept by the Company (for registered shares) as well as from information from shareholders, which have
such obligation imposed as shareholders of public companies pursuant to Public offer of financial
instruments act (art. 69 and art. 69a) and trading in financial instruments act (art. 160 and next) dated
29.07.2005
In the period subsequent to the reporting period to the publication of this report the Issuer was advised
pursuant to art. 69.1 of the Public offer of financial instruments act dated 29.07.2005 (that is Dz.U. of
2013, item 1382) about the change (reduction) of the shares of over 5% in total number of votes at
the General Meeting of shareholders to less than 5% of the total number of votes by the shareholder
of the company Quercus Towarzystwo Funduszy Inwestycyjnych SA in Warsaw (on behalf of managing
investing funds - Quercus Parasolowy SFIO, Quercus Absolute Return FIZ and Quercus Absolutnego
Zwrotu FIZ2), referred to as the “Fund”. On 25 February 2014 the issuer published the Current Report
Nr 4/2014, in which it informed, pursuant to art. 70 of the act above, about receipt of the notification
in this matter from the shareholder of the company. According to the information from the Fund, which
was published in the Current Report No 4/2014, the Fund held 855.157 shares of the company, which
is 5.88 % of the share capital and 855.157 votes attached to shares, which is 4.01 % shares in the total
number of votes in the General Meeting.
Taking into account the current information above the structure of shareholders with substantial blocks
of shares as at the date of publication of this report was presented in the table below.
shareholder
Number of shares held
Number of votes attached to
shares at GM
Grzegorz Baszczyński
Remigiusz Talarek
Tomasz Czapla
2.292.000
2.035.800
1.990.000
4.147.000
3.680.800
3.600.000
Sławomir Wysmyk
1.878.346
3.448.346
Rainbow Tours Capital Group
shareholder
Number of shares held
15,75
13,99
13,68
12,91
19,42
17,24
16,86
16,15
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Directors’ report of Rainbow Tours Capital Group for 2013
Respectively total number of shares
and total number of votes at GM
14.552.000
21.352.000
3.5. Holders of securities with special control rights and the description of those rights.
The share capital of the Company comprise vote preference shares, in that two votes at the General
Meeting are ascribed to each share. These are A and C1 series shares held by i.e. members of the
Issuer’s Management Board (Grzegorz Baszczyński – the President of the Management Board, 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) whereas:
(1) On 11 January 2013 the Issuer made an agreement with the holder of preference shares (Mr
Sławomir Wysmyk) pursuant to which the issuer acquired and Mr Sławomir Wysmyk disposed of
40,000 (forty thousand) C1 series preference shares. The shares were sold as a part of Share
Buyback Programme pursuant to the Resolution No 22 of the Ordinary General Meeting of the
Company dated 29 June 2011 concerning authorization of the Management Board of the Company
to acquire treasury shares for redemption or resale,;
(2) On 19 March 2013 the Issuer entered into an agreement with the shareholder holding preference
shares (Mr Sławomir Wysmyk), pursuant to which the Issuer acquired and Mr Sławomir Wysmyk
disposed of 80,000 (eighty thousand) C1 series preference shares as a part of Share Buyback
Programme operated pursuant to the Resolution No 22 of the Ordinary General Meeting of the
Company dated 29 June 2011 concerning authorization of the Management Board of the Company
to acquire treasury shares for redemption or resale.
Taking into account these information, as at 31 December 2013 following shareholders held A and C1
series shares (preference shares), including shares held by the Issuer (shares acquired by the Company
as part of Share Buyback Programme operating pursuant to Resolution 22 of the Ordinary General
Meeting of 29 June 2011 concerning authorization of the Management Board of the Company to acquire
treasury shares for redemption or resale). Shares as at 31 December 2013 and 30 April 2014.
shareholder
Number of series A shares
Number of series C1 shares
Total preference shares
[piece]
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
RAZEM
5,000,000
1,680,000
6,680,000
Rainbow Tours SA
0
120,000 *
120,000
RAZEM
5,000,000
1,800,000
6,800,000
*own shares of the company pursuant to the art. 364 § 2 of the Commercial Companies Code the company does
not exercise shares rights except for the right to dispose and activities intended to keep these rights.
3.6. Limitations with respect to exercising voting rights
Starting from the financial year 2011 the Issuer, 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 treasury 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 dated 1 September 2011 concerning activities of agent acquiring shares. Thus, the issuer
held as at 31 December 2013:
(i) 56,618 dematerialized ordinary bearer shares – treasury shares entitling to 56,618 votes at the
General Meeting
(ii) 120,000 vote preference shares – treasury shares entitling to do 56.618 votes at the General
Meeting, that is as at 31 December 2013 the Issuer held in total 176,618 own shares which was
1.21% of the share capital of the Company, and which entitled to total of 296,618 votes at the
General Meeting, and constituted 1.39% share in the total number of votes at the General Meeting,
whereas due to the provision of the article 364 section 2 of Commercial Companies Code, the Issuer
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Directors’ report of Rainbow Tours Capital Group for 2013
does not exercise rights attached to shares except for rights to dispose these rights or taking actions
to retain these rights.
The shares of the Issuer are not limited with respect to exercising voting right. However bearing in mind
the points above and taking into consideration limitation resulting from provision of the article 364
section 2 of the Commercial Companies Code, the Issuer cannot exercise the rights attached to the
shares including voting rights, unless exercising of the voting right (right attached to a share) will refer
to exercising the right to dispose the rights attached to shares or taking actions to retain those rights
3.7. limitations concerning transferring Issuer’s ownership of securities
According to the provisions of the Articles of Associations, the shareholder is obliged to give written
notice to the Management Board of the Company about the 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:
1. 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 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.
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Directors’ report of Rainbow Tours Capital Group for 2013
6. the share disposal without observing the above mode is ineffective with respect to the Company.
3.8. 3.8. Description of rules with respect to appointing and dismissing members of
the management board and their rights
Rules concerning appointing, dismissing and functioning of the Management Board are strictly described
in Regulations of the Rainbow Tours S.A. 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 Supervisory Board
No 1/06/2007 dated 28 June 2007, and in the Articles of Association of Rainbow Tours 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 or due to resignation, and in the case of 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 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
According to provisions of article 13 section 2 and 3 of the Articles of Association:
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 waive pre-emptive rights of the current shareholders.
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Directors’ report of Rainbow Tours Capital Group for 2013
The resolution of the Management Board in this respect requires the approval of the Supervisory
Board.”
Pursuant to the provisions of Resolution No 22 of the Ordinary General Meeting of 29 June 2011
concerning authorization of the Company to acquire treasury shares for redemption or resale,
hereinafter referred to as “Resolution No 22” (the content of 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 acting 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 , that is:
1)
ordinary bearer shares traded at the main market of Warsaw Stock Exchange („WSE”), which
is the official
2)
preference shares – in case of announcing intention to dispose of preference shares by the
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 own shares
(including ordinary bearer shares traded at the main market of WSE, and preference shares), fully paidup 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 amounting to PLN 241,040 (two hundred forty
one thousand zloty), which is equivalent to the number of 2,410,400 (two million forty ten thousand
four hundred) shares with the face value of PLN 0.10 (ten groszy) each, taking into account also face
value of the remaining own shares, which were not disposed by the company,
2)
Total maximum share purchase price plus cost of acquisition should not exceed PLN 15,000,000
(fifty million zloty)
3)
A 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
the current highest independent offer in transaction executed during WSE trading sessions
4)
Unit price, which the company will pay for own shares – preference shares - should not exceed
closing price of shares quoted during WSE trading sessions after the trading day before the date of
entering by the company into civil law agreement (agreements) to sell these shares plus 10% (ten per
cent)
5)
Authorization of the Management Board to acquire own share in accordance with article 362
section 1 point 8) of the Commercial Companies Code include the period from the day after the date of
adopting resolution No 22, that is from 30 June 2011 to 31 May 2016, however not longer than to
exhaustion of 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 (investment company within the meaning of the regulations on
trading in financial instruments) in stock exchange transaction 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
entering civil law agreement (agreements) concerning disposal of shares with shareholder
(shareholders) willing to dispose preference shares in accordance with provisions of section 11 of the
Articles of Association of the Company , that is, among others, taking into account:
a)
The obligation of the Shareholder to give written notice to the Management Board about the
intention to dispose registered shares
b)
Pre-emptive rights of other shareholders holding preference shares and a respective procedure
referring to that stipulated by relevant 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 the entities from the
industry identical with the industry in which the Company or entities of the Capital Group operate in,
especially resale to shareholders/stockholders in the acquired entities in return for stock/shares of this
entities,
b)
Redemption of own shares of the Company and reduction of the share capital of the Company,
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Directors’ report of Rainbow Tours Capital Group for 2013
9)
With respect to aims described in point 8 above the Management Board have been authorized
to indicate the aim of acquiring own shares, and their exploitation through the resolution of the
Management Board, whereas resale of own shares mentioned in point 8 letter a) is not applicable and
does not refer to treasury shares of the Company – preference shares.
The Management Board pursuing the Interest of the Company, and after consulting the Supervisory
Board is entitled to: (i) to stop acquisition of own shares before 31 May 2016 or before exhaustion of
funds intended for their acquisition (ii) resign from acquisition of own shares in part or whole.
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, especially 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, pursuant to Resolution No 22 and
within the scope of its application, is obliged to present, at each General Meeting, information on the
current state of acquisition of own shares referring to:
1)
Reasons for or aim of the acquisition of owns shares of the Company
2)
Number and face value of acquired own shares and their share in the share capital of the
Company,
3)
Total purchase price and other cost of acquisition of own shares.
After completing 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 treasury shares, reduction of the share capital and
amendment of the Articles of Association.
In connection with the adoption of resolution No 22 dated 29 June 2011 by the Ordinary General Meeting
of 29 June 2011 the General Meeting adopted also, in the course of meeting Resolution No 23 concerning
determination of funds to finance acquisition of own shares of the Company (hereinafter referred as
Resolution No 23) pursuant to which The General Meeting decided - acting 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, 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 establish a supplementary capital (fund) named “Funds for acquisition of own shares” as part of
the reserve capitals intended for financing acquisition of own shares by the Company, according with
provisions of the Resolution No 22,
(ii) To separate from reserve capitals of the company the amount of PLN 15,000,000 (fifteen million)
and pledge the Management Board to transfer the amount to the supplementary capital named “Funds
for acquisition of own shares” which is intended for paying the total purchase price of shares plus of
cost of acquisition of shares 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 intended for this purpose from the net profit of the Company in next financial
year of operations of the Company by resolutions of the General Meeting
(iii) to authorize the Management Board of the Company to spend the resources accumulated “resources
for acquisition of treasury shares” pursuant to the rules defined in Resolutions No 22 and 23.
In connection with implementation of the Share Buyback Programme by the Management Board of the
Issuer, which was operated from 2011 to 30 April 2013 , the Issuer as at 30 April 2013, held shares in
total amount of:
(i) 56,618 dematerialized ordinary bearer shares – own shares, which give 56,618 votes at the General
Meeting of the Company
Rainbow Tours Capital Group
18
Directors’ report of Rainbow Tours Capital Group for 2013
(ii) 120,000 vote preference shares- own shares entitling to 240,000 votes at the General Meeting of
the Company,
and in this way as at 30 April 2013 the Issuer held in total 176,618 of own shares, which is 1.21% of
the share capital of the company, which entitled to total 296,618 votes at the General Meeting and
constituted 1.39% share in the total number of votes at the General Meeting.
The total purchase price of 176,618 shares amounted to PLN 663,307.18 which is the average unit price
of PLN 3.76 per share.
3.9. Description of rules of changing 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 consolidated text of Articles of Association is determined by the
Supervisory Board.
3.10.
Mode of operations of the General Meeting and its essential powers
In I half-year of 2013 the mode of operations of the General Meeting was stipulated in provisions of the
Articles of Association and the Regulations of the General Meeting of Rainbow Tours S.A. resolved
pursuant to the 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 new Regulation
of the 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
provision of section 27.2 letter s of the Articles of Association has 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 the 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 month before the date of the
extraordinary General Meeting proposed by the Supervisory Board.
The 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 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 the specific time and in case,
when, despite the filing request, the Management failed to summon the Extraordinary General Meeting.
Shareholders representing at least half of the share capital or at least half of total votes in the Company
may summon the extraordinary General Meeting. The Shareholders appoint the chairman of the 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 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 Meeting
have the right to participate in General Meeting.
Rainbow Tours Capital Group
19
Directors’ report of Rainbow Tours Capital Group for 2013
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
- 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
- approving the Regulations of the Supervisory Board
Shareholders’ rights 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. These are among
others:
- 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
Rainbow Tours Capital Group
20
Directors’ report of Rainbow Tours Capital Group for 2013
the
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
date of the General Meeting (article 407 section 2 of Commercial Companies Code)
3.11.
Composition, changes and description of the governing bodies of the
company
The Management Board of the companies comprise as follows:
 Grzegorz Baszczyński – the President of the Management Board,
 Tomasz Czapla – the Vice - Chairman of the Management Board
 Remigiusz Talarek – the Vice - Chairman of the Management Board
In 2013 and also since the beginning of operations of Rainbow Tours SA, the composition of the
Management Board did not change.
The works of the Management Board are managed by the President of the Management Board, who
summons the 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 the works of
the Management Board. The meetings of the Management Board are held if necessary at least once a
month. The members of the Management Board take part in the meetings in person. The Management
Board takes decisions in the form of resolutions. The President of the Management Board informs all
members of the Management Board about the date, the place and the agenda of the meeting at least
one week in advance. The participation at the meetings is obligatory. Resolutions are adopted by the
majority of the votes of the present members of the Management Board present, with at least half of
the members of the Management Board present at the meeting. In case of the same amount of votes
the vote of the chairman of the meeting is prevailing. If it is particularly urgent the resolution may be
adopted in writing.
The scope of activities, composition, rules of representation, the mode of work and the way 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.
The Supervisory Board in 2013 comprised as follows:
- Grzegorz Kubica – the member of the Supervisory Board (in whole financial year 2013, that is
in the period from 1 January 2013 to 31 December 2013)
- Paweł Niewiadomski – the Vice- chairman of the Supervisory Board (in whole financial year
2013, that is in the period from 1 January 2013 to 31 December 2013),
- Paweł Pietras – the member of the Supervisory Board (in whole financial year 2013, that is in
the period from 1 January 2013 to 31 December 2013)
- Joanna Stępień-Andrzejewska – the member of the Supervisory Board in whole financial year
2013, that is in the period from 1 January 2013 to 31 December 2013)
- Paweł Walczak – the Chairman of the Supervisory Board (in whole financial year 2013 that is in
the period from 1 January 2013 to 31 December 2013).
In 2013 the composition of the Supervisory Board did not changed, and with the connection of expiry
in 2013 of mandates of the members of the Supervisory Board due to the lapse of joint three year term
of the Supervisory Board of the Company, the General Meeting of Shareholders acting pursuant to § 20
section 1 and 2 and § 27 section 2 letter. g) of the Articles of Association and in connection with art.
385 § 1 of the Commercial Companies Code has decided to reappoint all above persons to the
Supervisory Board for another fourth join term. Current fourth term expires on 11 June 2016, and the
mandate of each member of the Supervisory Board expires at the latest at the date of convening the
General Meeting of Shareholders to approve the financial statements for the last full financial year when
fulfilling the duties in the Supervisory Board.
Rainbow Tours Capital Group
21
Directors’ report of Rainbow Tours Capital Group for 2013
The Supervisory Board comprises at least 5 members appointed and dismissed by the General Meeting
of the Company. Its members are appointed for the common term of office. The term of office of the
Supervisory Board is 3 years. Mandates of the 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 serving as a member of the Supervisory 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 coopt 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
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 co-optation 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, the mode of appointment of the Supervisory Board, rights and obligations of the members
of the Supervisory Board, competence, managing works, summoning meeting, convening meeting of
the Supervisory Board and adopting resolutions are described in detail in the Regulations of the
Supervisory Board, which are available at the investor relations website under the address:
http://ir.rainbowtours.pl as well as in the Articles of Association published also on the same website
4.
Court proceedings, arbitration proceedings, proceedings before administrative body
Rainbow Tours Capital Group
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Directors’ report of Rainbow Tours Capital Group for 2013
As at 31 December 2013 and at the date of submitting this report neither issuer nor related entities
were a party to court or arbitration proceedings, in which the unit or total value of the subject of
litigation would exceed 10% of equity of the Issuer.
5. 5. Information on basic products manufactured and services provided by the
companies in the Group.
The revenues of the parent company comprise mainly the sales of foreign travel package organized by
the company and the activities of agent selling travel package and airline tickets offered by other
suppliers. The structure with respect to the quantities and value is as follows
Value:
2013
Revenue
Sales of travel package
2012
Change
%
January –
December
583 628
January –
December
438 842
144 786
32.99%
13 870
11 226
2 644
23.55%
177 328
141 251
36 077
25.54%
1 823
16 212
-14 389
-88.76%
776 649
607 531
169 118
27.84%
Revenues from activities as agent
Charter tickets
other
Total revenue
Quantity:
2013
Number of customers buying travel package
Travel package: holiday with airplane journey
Travel package holiday with coach journey, self- organized
journey
Agents selling airline tickets
January –
December
Change
January –
December
%
167 782
148 206
19 576
13.21%
41 025
31 287
9 738
31.12%
218 762
117 220
101 542
86.63%
7 233
9 620
-2 387
-24.81%
434 802
306 333
128 469
32.80%
Other
Total revenue
2012
Products of the group are offered exclusively on the Polish market.
6. Information on agreements significant for the operations of the Group
The agreement is considered significant – if it is worth 10% of revenue from the last four financial
quarters, and if the agreements refers to operations of the issuer (transport services agreement, lodging
services agreement, loans to finance current operations etc.) and 10% of the equity in other cases
(long-term investments, other).
Following agreements were considered significant in 2013:
1.
The agreement entered into on 23 November 2012 between Rainbow Tours S.A. and charter
airline, Enter Air sp. z o.o., about which the Issuer advised in the Current Report No 10/2013 of 31
March 2013.
The agreement concerns provisions of charter airline services in the tourism season Summer 2013 and
Winter 2013/2014, which are indispensable for core business operations of the Issuer at different holiday
destinations. The execution of the agreement starts on 25 April 2013, and the last flight is scheduled
for 24 April 2014.
According to the provisions of this agreement, its value at the date of the agreement amounts to USD
40,921,608 (forty million nine hundred twenty one thousand six hundred eight US dollars), which is
equivalent of PLN 129,451,414.75 (in words: one hundred twenty nine million four hundred fifty one
thousand four hundred fourteen zloty 75/100) translated using average NBP exchange rate of 23
November 2012 published in the table No 230/A/NBP/2012 of 23 November 2012. Payments resulting
Rainbow Tours Capital Group
23
Directors’ report of Rainbow Tours Capital Group for 2013
from this agreement will be settled on a daily basis and according to the charter flight timetable.
Rainbow Tours S.A. is able to change number of flights based on increasing or decreasing demand,
which can affect the value of the whole agreement. The agreement contain standard termination
provisions. The Agreement does not contain contractual penalty clause.
2.
The agreement entered into on 2 January 2013 between Rainbow Tours S.A. and Travel Service
with its seat in Prague and A.S. Travel Service sp. z o.o. with its seat in Warsaw, about which the Issuer
advised in Current Report No 11/2013 of 31 March 2013.
The agreement concerns provisions of charter airline services in the tourism season summer 2013 and
Winter 2013/2014, which are indispensable for core business operations of the Issuer, at different
holiday destination. The execution of the agreement will start on 25th April 2013, and the last flight
have been expected on 18 April 2014. According to the provision of the agreement, the value of services
at the date of entering into agreement amounts to: USD 17,962,938.00 (seventeen million nine hundred
sixty two thousand nine hundred thirty eight US dollars), which is equivalent of PLN 73,057,065.14 (in
words: seventy three million fifty seven thousand sixty five zloty, 14/100) translated at average NBP
exchange rate of 2 January 2013 published in the table No 001/A/NBP/2013 of 2nd January 2013.
Payments resulting from the agreement will be settled on a daily basis and according to the timetable
of the charter flights. Rainbow Tours S.A. is able to change number of flights based on increasing or
decreasing demand, which can affect the value of the whole agreement. The agreement include
standard termination provisions. The Agreement does not contain contractual penalty clause.
4.
Entering into significant agreement -The contract entered into between Rainbow Tours S.A.
and Towarzystwo Ubezpieczeniowe Europa SA with its seat in Wrocław ("Guarantor"), on 30 July 2013
concerning granting the guarantee for Rainbow Tours SA, as tour operator and tourism intermediary by
the Guarantor. The beneficiary of the guarantee is Marshall of Łódzkie Province (“the Beneficiary”).
The subject matter of the agreement is to define rules of granting the guarantee (”the guarantee”) by
the Guarantor in connection with art. 5.1 point 2 letter a) of Act on tourism services (Dz.U. No 133 item.
844, as amended.) in the scope:
a) To cover the costs of return of customers of the travel agency (Obligor) to the country, if the Obligor
(Rainbow Tours SA) does not fulfil its obligation
b)
b.
To cover the cost of payments for the trip bought by the customers of the Obligor
(Rainbow Tours S.A.), if for the reasons dependent on the Obligor (Rainbow Tours SA) or persons acting
on its behalf, the trip will be not executed.
c)
To return part of the payments for the trip, which are equivalent to the part of the trip, which
will be not executed for the reason dependent on the Obligor (Rainbow Tours SA) or persons acting on
its behalf.
According to the provisions of the contract, its value at the date of conclusion of the contract, and at
the same time the value of the guarantee granted by the Guarantor for the Beneficiary amounts to PLN
70,288,493.92 (seventy million two hundred eighty eight thousand four hundred ninety three zloty two
groszy), which is equivalent of EUR 17,282,214.33 (seventy million two hundred eighty two thousand
two hundred fourteen euro and 33 eurocents), translated using average euro exchange rate published
by National Bank of Poland for the first time in the year when guarantee was granted, that is 2 January
2013, which amounted to: 1 EURO = 1 euro = PLN 4.0671 PLN, published in the table No
01/A/NBP/2013 of 2 January 2013.
The guarantee will secure payment of claims resulting from events mentioned in point 1 letter a), b)
and c) above resulting from the agreements concerning provision of tourism services entered by
Rainbow Tours SA in the period from 17 September 2013 to 16 September 2014.
In case when the beneficiary of the guarantee demands payments from the guarantee, the Obligor is
obliged, at the request the Guarantor, to respond in writing to the demand within 3 days from the date
of delivery of the request by the Guarantor, and attach the copy of the respective contract.
In case of drawing on the guarantee by the Guarantor for the benefit of the Beneficiary, the Obligor
will pay back the Guarantor the amount paid out from the Guarantee within 7 days from the receipt of
the default notice with costs (any costs incurred) from the Guarantor, and in case of delay in payment
- additionally with statutory interest.
Previous guarantee contract (in force up to 16 September 2013) entered into with Towarzystwo
Ubezpieczeniowe Europa SA (the company informed about concluding this contract in the current report
published through ESPI (electronic communication system) No 20/2012 of 17 August 2012) was for the
Rainbow Tours Capital Group
24
Directors’ report of Rainbow Tours Capital Group for 2013
amount of guarantee of PLN 46,305,000, which is an equivalent of PLN 10,372,984, thus the current
amount of guarantee (PLN 70,288,493.92 ) resulting from the reported contract dated 30 July 2013 is
higher by PLN 23,983,493.92 that is by around 51.80 % than the current amount of guarantee.
The Performance bond for this contract (securing claims of the Guarantor to repay amounts paid out
from the guarantee for the benefit of the Beneficiary of the Guarantee), will be:
a.
Deposit determined according to market value
b.
Mortgage on the real estate of the Obligor,
c.
Blank promissory note with the stipulation without protest.
The value of commission due to the Guarantor from the Obligor for issuance of the guarantee was set
according to market conditions. The Guaranteed Insurance Agreement does not contain or provide for
penalty clauses.
1.
The agreement entered into on 21 November 2013, which original was received by the issuer
on 28 November 2013 between Rainbow Tours SA and Enter Air sp. z o.o.
The agreement concerns provision of charter services in the season Summer 2014 and Winter
2014/2015, which are necessary to maintain core business operations of the company at different
holiday destinations. The execution of the agreement commences on 24 April 2014, and the last flight
is planned for 24 April 2015.
According to the Agreement the value of the services upon the date of signature is estimated at USD
48.250,000 (forty eight million two hundred fifty five thousand USD), which is equivalent of PLN
150,670,275.00 (one hundred fifty million six hundred seventy thousand two hundred seventy five
zloty), calculated using the average exchange NBP rate dated 21 November published in the table No
225/A/NBP/2013.
The payments resulting from this agreement will be made according to the schedule of charter flights.
Settlement will be paid on a daily basis and according to the charter flight timetable. Rainbow Tours
S.A. is able to change number of flights based on increasing or decreasing demand, which can affect
the value of the whole agreement. The agreement contain standard termination provisions. The
agreement does not contain contractual penalty clause.
s.
The Management Board considered the agreement significant based on section 1 point 44 letter b of
the Regulation of the Minister of Finance dated 19 February 2009 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. No 33, item. 259 as amended). The issuer
submitted the information on 7 April 2014 in the current report No r 9/2014
2.
The agreement entered into on 28 January 2013 between Rainbow Tours S.A. and Travel
Service with its seat in Prague and A.S. Travel Service sp. z o.o. with its seat in Warsaw.
The agreement concerns provisions of charter airline services in the tourism season summer 2014 and
Winter 2014/2015, which are indispensable for core business operations of the Issuer, at different
holiday destination. The execution of the agreement will start on 25th April 2014, and the last flight
have been expected on 23 April 2015.
According to the provision of the agreement, the value of services at the date of entering into agreement
amounts to: USD 22,913,413.66, which is equivalent of PLN 70,738,290.65 (in words: seventy million
seven hundred thirty eight thousand two hundred ninety 65/100) translated at average NBP exchange
rate of 28 November January 2013 published in the table No 230/A/NBP/2013. Payments resulting from
the agreement will be settled on a daily basis and according to the timetable of the charter flights.
Rainbow Tours S.A. is able to change the number of flights according to stronger or weaker market
demand, which can affect the value of total agreement. The agreement contains standard termination
provisions. The agreement does not contain or provide for penalty clauses.
The Management Board considered the agreement significant pursuant to section 1 point 44 letter b of
the Regulation of the Minister of Finance dated 19 February 2009 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. No 33, item. 259 as amended). The issuer
submitted the information on 7 April 2014 in the current report No r 9/2014
Rainbow Tours Capital Group
25
Directors’ report of Rainbow Tours Capital Group for 2013
7. Information on organizational or capital ties with other entities.
The table below present main organizational and investment relations as at 31 December 2013
No
Subject of the
investment
Object of the Investment
relation
Value
(thousand)
1
Way of
financing
Shares
Portal Turystyczny Sp. z o.o.
subsidiary (61.0%)
130
cash
2
Shares
Rainbow Tours – Biuro Podróży Sp. z
o.o.
subsidiary (100%)
450
Debt
contribution
3
Shares
ABC Świat Podróży Sp. z o.o.
subsidiary (100%)
9 295
cash
4
Shares
Bee&Free sp. z o.o.
subsidiary (100%)
3 250
cash
8. Information on significant transactions concluded by the issuer or its subsidiary with
related entities, which are not arm’s length transactions.
The issuer concludes sale transactions with majority of related entities. All transactions are arm’s length
transactions used for transactions with other enterprises.
9. Information on loan and credit agreements entered into and terminated in the
financial year.
Bank Ochrony Środowiska S.A. – Multipurpose line of credit
On 13 November 2013 the company signed the annex to multipurpose line agreement and increased
the line by PLN 4,000 thousand to the amount of PLN 9,500. The multipurpose line agreement, according
to the new annex, is valid till 14 November 2017. Additionally, on 13 November 2013, the company
signed the bank guarantee line agreement. The limit for the line is PLN 4.000 thousand. The agreement
is valid till 30 October 2015. The agreement bears variable interest rate which comprise a WIBOR 1M
rate of reference, standard market based bank premium. As at 31 December 2013 the company used
credit in the amount of PLN 1 thousand.
Bank Polskiej Spółdzielczości S.A. - current account overdraft facility,
The credit line amounts to 4,000 thousand. It is short term credit to finance current operations of the
company, and bears variable interest rate which comprise a WIBOR 1M rate of reference, standard
market based bank premium. The agreement is valid till 27 October 2013. The Company did not annex
the agreement, which means that the agreement was terminated.
Raiffeisen Bank Polska S.A - Multipurpose line of credit
On 9 November the company signed an annex to the multipurpose line and decreased the limit. Ne limit
amounts to PLN 10,000 thousand. As the part of the limit company has revolving credit in the amount
of PLN 5.500 thousand and the renewable credit in the amount of PLN 4.500 thousand. The revolving
credit will be totally repaid on 31 May 2013, and the limit of the renewable credit was valid till 30 May
2014.
On 26 November 2013 the company signed an annex No 8 to the multipurpose line. The limit amount
to PLN 4,500 thousand. The company may lend from the current account to the amount of PLN 4,500
thousand and ask for issuance of the bank guarantee for the amount of PLN 1,000 thousand. The total
Rainbow Tours Capital Group
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Directors’ report of Rainbow Tours Capital Group for 2013
debt from the limits in the form of products cannot PLN 4,500 thousand. The credit will be totally repaid
on 24 December 2014. As at 31 December 2013 the company did not use the limit.
Getin - investment credit
The credit was taken for the purchase of passenger car. The credit agreement is valid till 31 May 204.
As at 31 December the credit amounts to PLN 25 thousand.
10. Information about the entity authorised to audit financial statements
Supervisory Board acting 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 on 22 June
2012 the resolution concerning appointment of the company to audit financial statements for 2012, the
consolidated financial statements for 2012 and review of non-consolidated and consolidated half-year
financial statements for the first half of 2012. The agreement for provision of services was concluded
on 8th August 2012.
The selected entity is as follows:
DGA Audyt Spółka z o.o.
ul. Towarowa 35
61-896 Poznań,
(the entity registered on the list of entities authorized to examine financial statements under registration
number 380
The entity provided following services:
1.
Reviewed the interim extended financial statements of Rainbow Tours S.A. and the abridged
consolidated financial statement of Rainbow Tours for I half-year of 2011,
2.
Examined the financial statements of Rainbow Tours S.A. for 2011 and,
3.
Examined the consolidated financial statements of Rainbow Tours for 2011 and
4.
Reviewed the interim extended consolidated financial statements which include the abridged
financial statements of Rainbow Tours S.A. and the abridged consolidated financial statements of
Rainbow Tours S.A. Group for I half-year of 2012
5.
Examined the financial statements of Rainbow Tours S.A. for 2012 and,
6.
Examined the consolidated financial statements of Rainbow Tours Group for 2012 and
7.
Reviewed the interim extended consolidated financial statements which include abridged
financial statements of Rainbow Tours S.A. and abridged Consolidated Financial Statements Rainbow
Tours S.A. Group for I half-year of 2013
Remuneration for the entity for the services provided in 2013
for revision of the non-consolidated financial statements for I half-year of 2013 r. – PLN7.0
thousand net (paid)
for revision of the consolidated financial statements for I half-year of 2013. – PLN 6.0 thousand
net (paid),
for examination of the non –consolidated financial statements for 2013 – PLN 18.0 thousand
net (due)
for examination of the non-consolidated financial statements for 2013 – PLN 9.0 thousand net
(due)
Total value of services: PLN 40.0 thousand net
Remuneration of the entity for the services provided in 2012:
for revision of the non-consolidated financial statements for I half-year of 2012 r. – PLN 7.0
thousand net (paid)
for revision of the consolidated financial statements for I half-year of 2012 r. – – PLN 6.0
thousand net (paid),
for examination of the non –consolidated financial statements for 2012 r. – PLN 18.0 thousand
net (paid),
for examination of the non-consolidated financial statements for 2012 r. – PLN 9.0 thousand
net (paid),
Rainbow Tours Capital Group
27
Directors’ report of Rainbow Tours Capital Group for 2013
Total value of services: PLN 40.0 thousand net
11. Proceeds from issuance of shares
In 2013 the company failed to issue shares.
12. Explanation of differences between financial results and forecasts for the given year
The company failed to publish forecasts for 2013.
13. The structure of assets and liabilities in the consolidated balance sheet from the view
point of liquidity of the capital group of the issuer.
The parent company provides financing for subsidiaries in the Group. None of the subsidiaries uses
borrowings. The parent company, apart from its own resources, has credit lines which secure the
liquidity of the Group. The Management Board of the Group believes that the amounts of credit lines
are adequate to the volume of activities of the Group. In 2013 the parent company generated substantial
surpluses of liquid funds. As at the end of 2013 cash at bank, bank deposits and equivalents of cash
amounted to more than PLN 70 million and constituted 45.5 % of the property of the company.
Receivables of the Group according to the consolidated balance sheet came to almost PLN 49 million,
which is 31.6 % of the balance sheet sum. Total current assets amount to PLN 132.2 million. The table
below presents the structure of individual groups of assets in the consolidated balance sheet.
Description
31.12.2013
Structure
fixed assets
21 974
14,2%
6 729
4,4%
14 814
9,6%
196
0,1%
Long- term receivables
0
0,0%
Related parties
0
0,0%
Investment in subsidiaries
0
0,0%
Investments in associates accounted for using equity method
0
0,0%
Other financial assets
0
0,0%
0
0,0%
235
0,2%
Tangible fixed assets
Intangible assets
Investment property
Finance lease receivables
Deferred tax assets
Other assets
Current assets
Stocks
Trade and other receivables
Other financial assets
Finance lease receivables
Cash and other cash equivalents
Other assets
Fixed assets held for sale
Total assets
0
0,0%
132 287
85,8%
13
0,0%
48 818
31,6%
0
0,0%
0
0,0%
70 168
45,5%
13 288
8,6%
0
0,0%
154 261
100,0%
Equity of the group came to PLN 9.5 million as at the balance sheet date, which is 32.1 %, and the
external capitals in the form of short-term and long-term liabilities constitute in total PLN 104.7 million,
Rainbow Tours Capital Group
28
Directors’ report of Rainbow Tours Capital Group for 2013
which is 67.9 %. The table below presents the structure of the individual groups of liabilities in the
consolidated balance sheet.
Description
Equity
Initial capital
Supplementary capital (without results)
Revaluation reserve
Own shares
Accumulated profit
Previous years’ profit (loss)
Net profit of the financial period
Currency translation differences of entities operating abroad
Equity attributable to shareholders of the parent company
Minority interest
Long-term liabilities
Bank loans and credits
Other financial liabilities
31.12.2012
Structure
49 517
32,1%
1 455
0,9%
32 384
21,0%
-498
-0,3%
-663
-0,4%
16 353
10,6%
2 707
1,8%
13 646
8,8%
0
0,0%
49 031
31,8%
486
0,3%
90
0,1%
0
0,0%
0
0,0%
Deferred tax liabilities
78
0,1%
Pension liabilities
12
0,0%
0
0,0%
Finance lease liabilities
Long-term provisions
Short-term liabilities
Trade and other liabilities
0
0,0%
104 654
67,8%
90 397
58,6%
Pension and leave liabilities
0
0,0%
Short-term financial lease liabilities
0
0,0%
Short-term l bank oans and credits
Other financial liabilities
Short –term provisions
Liabilities directly associated with fixed assets held for sale
Total liabilities
27
0,0%
659
0,4%
13 571
8,8%
0
0,0%
154 261
100,0%
The ratio of long –term and short-term liabilities to current assets is 79 %, which means that all liabilities
in the balance sheet at the end of 2013 may be repaid. Additionally a surplus of PLN 27.5 million may
arise.
14. Important events, which have significant influence on operations and the performance
of the capital group of the issuer in the financial year, or which can have an effect in
subsequent years
The performance of the Group in the future periods will be mainly affected by following factors:
•
•
•
•
•
•
•
sale of Summer 2014 offer
Stabilization at the exchange rates market
Stabilization of prices at the fuel market ,
Maintaining stable economic trend with respect to economic situation in Poland,
Improvement of consumer moods by maintaining the level of consumption
Stabilization of political and social situation in Ukraine.
Stabilization of political and social situation in North African countries ( Egypt)
Rainbow Tours Capital Group
29
Directors’ report of Rainbow Tours Capital Group for 2013
•
Cost restructuring made in previous quarters in order to reduce current costs of operations in the
Capital Group.
15. Description of main capital investments and capital expenditures within the capital
group of the issuer in the financial year.
In 2013 the structure of the Capital Group was changed. As a result of transaction of sale Travelovo, a
directly control entity left the Capital Group. The loans granted to related parties by the company as at
31 December 2013.
repayment (+) /
extended(-)
Loans granted to
Travelovo sp. z o.o.
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
Loans granted as at 31.12.2012
Capital
Interests
total
Loans granted as 31.12.2013
Capital
Interests
total
-944
2 566
5 048
5 048
5 048
944
2 470
0
0
0
0
12
0
0
0
944
2 482
0
0
0
0
5 000
5 000
5 000
5 000
0
48
48
48
48
0
5 048
5 048
5 048
5 048
16 766
3 414
12
3 426
20 000
192
20 192
It should be highlighted that in 2013 the subsidiaries repaid the loans in the total amount of PLN 3.426
thousand.
16. Description of the organization of the capital group of the issuer and indication of
entities subject to consolidation and description of changes in organization of the
capital group of the issuer and the reason for the changes
As at the balance sheet date the capital group comprised following subsidiaries:
No.
Object of
investment
Subject of investment
tie
Value
thousand.
Financing
1
Shares
Portal Turystyczny Sp. z o.o.
Subsidiary (100%)
130
cash
450
Debt
contribution
2
Shares
Rainbow Tours – Biuro Podróży Sp. z o.o.
Subsidiary (100%)
3
Shares
ABC Świat Podróży Sp. z o.o.
Subsidiary (100%)
9 295
cash
4
Shares
Bee&Free sp. z o.o.
Subsidiary (100%)
3 250
cash
All subsidiaries were covered by the consolidated financial statements.
17. Description of policies with respect to development directions of the capital group of
the issuer.
The Strategy of the Management Board in 2014 provides for consolidation of operations in 3 companies:
Rainbow Tours SA (tour operator, IATA agent, B2B), ABC Świat Podróży (network of sales offices –
currently Rainbow Tours franchise) and Bee&Free sp. z o.o. (consolidation and reselling charter tickets).
The Management Board does not plan any new investments in 2014 and intends to focus on increasing
profitability and reducing costs of operations of the entities. The Management Board intends to focus
on consistent building of strong and recognizable “Rainbow Tours” brand” and big Capital Group
covering with its operations all aspects of tourism market in Poland: apart from the services provider
(tour operator) the group comprise solid traditional distribution channel- that is the network of own
sales offices and the network of ABC Świat Podróży sales offices operating currently as a franchisee.
The company will continue to develop modern distribution channels: the call centre and the Internet,
which considered as cheaper and more effective may well in a few years’ time, compete with the
traditional channel. Additionally Bee & Free may continue to consolidate the market of charters so as to
resell the tickets for profit to other smaller tour operators. .
18. Assessment of financial resources management
Rainbow Tours Capital Group
30
Directors’ report of Rainbow Tours Capital Group for 2013
Taking into account the fact that the parent company uses borrowing in its operations the Management
Board stress out the potential difficulties in management of financial liquidity in low tourism season
(from November to December), taking into account the fact the parent company supports its operations
with borrowings. The company has not any defaults towards the state budget and social insurance, and
its liabilities to the contractors are paid on a daily basis. Presently, the company has credit lines, which
support the liquidity of the company. The company aims to diversify such activities, which optimize
costs of borrowings.
19. Assessment of investment opportunities, including capital expenditures
The Group aims to focus its efforts on developing previous investments in accordance with the
assumptions stipulated in Issue Prospectus of Rainbow Tours S.A
20. 21. Assessment of factors and untypical events, which affect profit or loss on operations
for the financial year.
The issue is described in points 2.1 and 2.2 of this document.
21. External and internal factors, which are significant for the development of the
enterprise and description of the perspectives for development in the following financial
year
21.1.
22.1.
External factors
21.1.1. Economic trend
Poland has been seen as one of the few countries in the region, which has the chance to sustain positive
GDP despite world financial crisis. These facts in correlation with still low of development of tourist
services can be considered as potential for further growth of branch. Tourism services constitute higher
need and satisfied after elementary needs, and the purchase of the services is related to the wealth of
the society. The purchase of the services is also affected by weather conditions, exchange rates, prices
of fuel, geopolitical situation and most of all the condition of Polish economy. Favourable exchange rates
and other factors may not affect so much the consumer decisions as expected future economic situation
(consumer optimism); therefore the key factor for the development of the Group is economic growth.
21.1.2. Competition
Another significant factor is competition environment. The company is one of the five biggest tour
operators in Poland and the second best in Poland. The biggest competitors of the company are Itaka,
TUI, Wezyr Holidays i Exim Tours. Consistent building of strong and recognizable brand and strong
capital group encompassing all activities of tourism market (starting from the product for the customer,
through its distribution both through traditional channel – own sales offices as well as modern channel
– call centre and the Internet, through consolidation of charter flights and ending with organization of
business travel package for companies) will definitely enable to successfully compete with other market
players.
21.2.
Internal factors
21.2.1. Organization of the Company and the Capital Group.
As at 31 December 2013 the Capital Group activities covered all aspects of tourism branch (tour operator
activities, agent selling tourism services). That enables to continue operations through intensified
internal development of all entities. In order to ensure full control over subsidiaries the members of the
management board of the parent company (the Issuer) sits also in the management boards of the
subsidiaries. The table below presents personal ties with subsidiaries.
Rainbow Tours Capital Group
31
Directors’ report of Rainbow Tours Capital Group for 2013
Name and surname
RT S.A.
ABC
RT BP
PT
BF
Grzegorz Baszczyński
Remigiusz Talarek
Tomasz Czapla
The President of
theVice
Managment
The
- chairman
Board
The Vice
- chairman
The Vice - chairman
The President of
theVice
Management
The
- chairman
The President of
the
TheManagement
Vice - chairman
The Vice - chairman
The President
of the
Management
The President
The Vice chairman
of the
The
President
of
Management
the
Management
of the
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.
Due to sale of Travelovo shares the organizational structure of the group changed in December 2013.
21.3.
Development perspectives for the group
Development perspectives for the next financial year were described in point 2.3 of the report.
22. Changes in basic rules of the issuer enterprise management and the capital group.
The Management Board of the Parent company consistently implements its management policy taking
care of the best possible efficiency. Procedures aimed at all the time in order to optimizing process of
management, efficient flow of information in the company and exchange of information in the group
and in the nearest environment of the company are improved all the time.
Obligation to provide information imposed on the company in connection with admitting company shares
to trade ensure that the company is transparent, and all decisions are taken in the appropriate time and
for the welfare of the company in mind. In the first half – year of 2013 no significant changes in policy
of enterprise management took place. The company has quality management system ISO, confirmed
with certificate No 606/2007 proving that the management system fulfils 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)
23. 24. Agreement entered with the members of the management board which would
envisage compensation in case of resignation or dismissal.
As at the date of publication of this report there are no agreements concluded with managing persons
who would provide for compensation in case of resignation or dismissal from the job.
24. Value or remuneration, awards and benefits for the Management Board and the
Supervisory Board.
a. Remuneration of the Management Board paid out in 2013 (PLN thousand)
Title of payment
person
With respect to
employment contract in
RT SA
Due
Paid
Baszczyński Grzegorz
Czapla Tomasz
Talarek Remigiusz
169 632
144 972
144 972
459 576
total
155 496
132 891
132 891
421 278
With respect to function
in the Management
Board of RT SA
Due
Paid
135 900
123 672
123 672
383 244
124 575
113 366
113 366
351 307
Awards in RT SA
Due
total
Paid
119 834
108 863
108 863
337 560
Due
119 834
108 863
108 863
337 560
425 366
377 507
377 507
1 180 380
Paid
399 905
355 120
355 120
1 110 145
b. Remuneration for the Management Board paid in 2012 in PLN thousand
Title of payment
person
With respect to
employment contract in
RT SA
Due
Paid
Baszczyński Grzegorz
Czapla Tomasz
Talarek Remigiusz
total
Rainbow Tours Capital Group
92 988
81 243
81 243
255 474
84 472
74 162
74 162
232 796
With respect to function
in the Management
Board of RT SA
Due
Paid
129 025
117 392
117 392
363 809
127 650
116 136
116 136
359 922
Awards in RT SA
total
Due
Due
Paid
0
0
222 013
198 635
198 635
619 283
Paid
212 122
190 298
190 298
592 718
32
Directors’ report of Rainbow Tours Capital Group for 2013
c. Remuneration for the Supervisory Board paid in 2013 in PLN thousand
Person
Due
Paid
Kubica Grzegorz
Niewiadomski Paweł
Pietras Paweł
Stępień-Andrzejewska Joanna
Walczak Paweł
total
12 000
12 000
12 000
12 000
18 000
66 000
11 000
11 000
11 000
11 000
16 500
60 500
d. Remuneration for the Supervisory Board paid in 2012 in PLN thousand
Person
Due
Kubica Grzegorz
Niewiadomski Paweł
Pietras Paweł
Stępień-Andrzejewska Joanna
Walczak Paweł
total
Paid
9 000
9 000
9 000
9 000
12 500
48 500
8 000
8 000
8 000
8 000
11 000
43 000
25. The total number and value of shares held by members of the management board and
the supervisory board
The table below presents shares of Rainbow Tours SA held by members of the management boards and
supervisory board as at 31.12.2013
shareholder
Number of shares
Value of shares (PLN)
2.292.000
229.200,00
Remigiusz Talarek
The President of the
Management
The Vice - chairman
2.035.800
203.580,00
Tomasz Czapla
The Vice - chairman
1.990.000
199.000,00
Grzegorz Baszczyński
function
The share capital of the company comprises vote preference shares in that two votes at the general
meeting are attached to the share. These are series A and C! shares held by the members of the
management board (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) as follows:
Number of A series
Number of C1 series
Total preference
Shareholder
shares
shares
shares
Grzegorz Baszczyński
Remigiusz Talarek
Tomasz Czapla
1,325,000
1,175,000
1,150,000
530,000
470,000
460,000
1,855,000
1,645,000
1,610,000
26. Information on agreements, which could in future change the structure of the share
capital
27.
On 1st September 2011 Rainbow Tours Management Board has adopted resolution concerning
establishment and launch of Share Buyback Programme, in accordance with the authorization granted
by 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 the acquisition of own shares for resale and redemption according to the
conditions and the methods stated in the Resolution mentioned. In the opinion of the Board current
market valuations are considerably different from the real value of shares, and the possibility to buy
back some of shares at the price discounted to this value will be favourable for the shareholders, which
do not intend to withdraw investments in shares of the company.
Rainbow Tours Capital Group
33
Directors’ report of Rainbow Tours Capital Group for 2013
The programme of share buyback will be implemented from 1 September 2011 according to conditions
stated in the Current Report No 38/2011 of 1st September 20011. Other conditions of share buyback
were described in the Resolution No 22 of the Ordinary General Assembly of 29 September 2011.
As at 31 December 2012 the company held 56 618 shares with value of PLN 242 363.19, with the
average purchase price of PLN 4.28 per share. At the date of publishing this report, that is 30 April
2012, the company held 56 618 own shares, which is 0.39 % of the total number of shares and 0.26 %
of the total votes at the General Meeting of Shareholders.
The Management Board of Rainbow Tours S.A. has informed on 30 November 2012, that it became
aware of, in accordance article 69.2 point 1 letter a of Public Offering Act, the reduction of share in total
number of votes at the General Meeting from the shares held by Mr Sławomir Wysmyk (referred to as
“the Shareholder”, which was connected with conversion of 200,000 C1 preference shares into ordinary
bearer shares. According to the notification:
1.
Share in total number of votes at the General Meeting, held by the shareholder of the company
was converted in connection with obtaining by the Shareholder the resolution of the Management Board
concerning conversion of 200,000 C1 preference shares into ordinary bearer shares.
2.
before conversion of C1 series preference shares into ordinary bearer shares the shareholder
held in total 1,998,346 shares, which was 13.73 % of the share in the share capital of the company and
entitled to exercise 3,888,346 votes at the General Meeting of the Company, which was 18.04% of the
total number of votes at the General Meeting, and within this amount the shareholder held:
•
1,350,000 A series vote preference shares, which was 9.28% share in the share capital of the
company and entitled to 2,700,000 votes, which constituted 12.53% of total votes at the General
Meeting,
•
540,000 C1 vote preference shares, which was 3.71% share in the share capital and entitled
1,080,000 votes, which constituted 5.01% of the total votes at the General Meeting of the Company,
•
108,346 ordinary bearer shares (shares admitted to trade at the regulated market), which was
0.74% share in the share capital of the company and entitled to 108,346 votes, which constituted 0.50%
of total votes at the General Meeting of the Company,
3.
currently, after conversion of C1 series vote preference shares to ordinary bearer shares the
Shareholder holds in total 1,998,346 shares of the company, which is 13.73% share in the share capital
of the Company and entitles to exercise 3,688.346 votes at the General Meeting, which is 17.27% of
total votes at the General Meeting, and the Shareholder holds:
•
1,350,000 A series vote preference shares, which is 9.28% share in the capital share and entitles
to 2,700,000 votes, which is 12.65% of total votes at the General Meeting
•
340,000 C1 vote preference shares, which is 2.34% share in the share capital of the company
and entitles to 680,000 votes, which is 3.18% of the total votes at the General Meeting,
•
200,000 C1 series ordinary bearer shares, which is 1.37% share in the share capital of the
company and entitles to 200,000 votes which is 0.94% of total votes at the General Meeting
•
108,346 of ordinary bearer shares (shares admitted to trade at the regulated market), which is
0.74 % share in the share capital of the company and entitles to 108,346 votes, which is 0.51% of the
total number of votes at the General Meeting.
The Management Board of the Company will take any actual and legal actions with respect to conversion
of preference shares to ordinary bearer shares, including:
•
Make all relevant conversions of preference shares to ordinary bearer shares in stock ledger,
which is kept pursuant to provisions of article 341 of the Commercial Companies Code,
•
Immediately after adoption by the next General Meeting resolution or resolutions connected
with the conversion, the Management Board will file a request to register and disclose relevant
amendments in the Articles of Association and changes in the structure of the share capital in the
register of commercial companies of National Registry Court. The share capital of the company, which
currently amounts to PLN 1,455,200, will not change, however the number of votes will change, which
currently amounts to 21,352,000.
Additionally, on 11th January the Management Board of the Issuer, pursuant to section 12 and in
connection with section 5 sub-paragraph 1 point 6) of the Regulations of the Minister of Finance dated
Rainbow Tours Capital Group
34
Directors’ report of Rainbow Tours Capital Group for 2013
19 February 2009 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. No 33, item. 259 as amended) has published information that the share sale agreement was
entered between Rainbow Tours S.A. and the shareholder of the company, holder of preference shares
(Mr Sławomir Wysmyk), pursuant to which Rainbow Tours S.A. acquired and Mr Sławomir Wysmyk sold
40,000 C1 preference shares
The transaction was executed in accordance with the data below:
1.
The shares were acquired pursuant to the Resolution No 22 of the Ordinary General Meeting
dated 29 June 2011 concerning authorization of the Company to acquire treasury shares for redemption
or resale and in connection with the Resolution of the Management Board No 01/09/2011 dated 1
September 2011 concerning establishment and starting of Share Buyback Programme;
2.
Reasons for share Buyback:
a.
in a written notice dated 24 September 2012, the Seller gave intended to sell 40,000 C1
preference shares with numbers from 146001 to 1500000, for the unit purchase price amounting to PLN
3.50 per share.
b.
The Management Board acting pursuant to section § 11 sub-paragraph 3 of the Articles of
Association (that is in accordance with previous implementation of the procedure stipulated in section
11 of the Articles of Association, concerning the pre-emptive right of other shareholders holding
preference shares to purchase preference shares) – indicated the Company, i.e. . Rainbow Tours S.A.
in Łódź, as a purchaser of block of shares of 40,000 of C1 series preference shares with numbers
from1460001 to 1500000 at the unit price of sale amounting to PLN 3.50 per share;
c.
Average unit purchase price amounts to 3.50 per share.
d.
Face value of one share is PLN 0.10 and total face value of shares amounts to PLN 4,000.00.
80,000 votes at the General Meeting is ascribed to the shares purchased.
e.
The company holds in total 96,618 of own shares, which constitute 0.66% of the share capital
and entitle to 136,618 votes at the General Meeting, which is 0.64% of total number of votes at the
General Meeting.
Additionally, on 19 March 2013 Rainbow Tours S.A. Management Board in accordance with section 12
and in connection with section 5 sub-paragraph 1 point 6) of the Regulation of the Regulation of the
Minister of Finance dated 19 February 2009 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. No 33, item. 259 as amended) has published the information
the agreement concerning sales of shares of the Company was entered into between Rainbow Tours
S.A. and shareholder of the company, holder of preference shares (Mr Sławomir Wysmyk), pursuant to
which Rainbow Tours S.A. acquired and Mr Sławomir Wysmyk sold 80,000 C1 vote preference shares.
The transaction was executed in accordance with the data below:
1.
The shares were acquired pursuant to the Resolution No 22 of the Ordinary General Meeting
dated 29 June 2011 concerning authorization of the Company to acquire treasury shares for redemption
or resale and in connection with the Resolution of the Management Board No 01/09/2011 dated 1st
September 2011 concerning establishment and starting of Share Buyback Programme;
2.
Reasons for share Buyback:
a.
in a written notice dated 31 September 2012; the Seller intended to sell 80,000 C1 preference
shares with numbers from 1700001 to 1780000, for the unit purchase price amounting to PLN 3.50 per
share.
b.
The Management Board acting pursuant to section § 11 sub-paragraph 3 of the Articles of
Association (that is in accordance with previous implementation of the procedure stipulated in section
11 of the Articles of Association, concerning the pre-emptive right of other shareholders holding
preference shares to purchase preference shares)) – indicated the Company, i.e. . Rainbow Tours S.A.
in Łódź, as a purchaser of block of shares of 80,000 of C1 series preference shares with numbers from
1700001 to 1780000, at the unit price of sale amounting to PLN 3.50 per share;
3.
Average unit purchase price amounts to 3.50 per share.
4.
Face value of one share is PLN 0.10 and total face value of shares amounts to PLN 8,000.00.
160,000 votes at the General Meeting is ascribed to the shares purchased.
5.
The company holds in total 176,618 of own shares, which constitute 1.21% of the share capital
and entitle to 296,618 votes at the General Meeting, which is 0.64% of total number of votes at the
General Meeting.
Rainbow Tours Capital Group
35
Directors’ report of Rainbow Tours Capital Group for 2013
At 30 April 2013 the company held 176,618 shares with value of PLN 663,307.18, which gives average
purchase price at PLN 3.76 per share 1, which is 1.21 % of the total number of votes and 1.39 % of
the total number of votes at the General Meeting of the Shareholders
ON 1 September 2011 the Management Board of Rainbow Tours adopted resolution to start Share
Buyback Programme pursuant to the authorization provided for in the Resolution No 22 of the Ordinary
General Meeting of Shareholders of Rainbow Tours SA dated 29 June 2011 (the current report 30/2011
dated 30 June 2011).
28. Significant off sheet balance items with respect to the object, subject and value
Limits of derivative transactions
The issuer has limits if derivative transactions, which enable to perform derivative transactions. The
company uses derivative instruments to secure future foreign currency flaws through performing
forward transactions
The value of treasury limits are presented in the table below
Bank
Type
The amount of the limit
Valid till
Millennium Bank S.A.
Transaction limit
10 000 000.00
2014-03-20
BOŚ S.A.
Transaction limit
14 000 000.00
2014-11-26
Raiffeisen Bank Polska S.A.
Transaction limit
12 000 000.00
2014-10-24
As at 31 December 2013 Rainbow Tours S.A. had forward transaction for the purchase of USD And EUR
for Polish zloty.
Date of performing the contract
The amount of USD
Equivalent in Polish zloty at the date of
performing the transaction
11 000 000.00
33 556 750.00
The amount of USD
Equivalent in Polish zloty at the date of
performing the transaction
3 000 000.00
12 220 200.00
total
Date of performing the contract
total
Bank guarantees granted by banks for contractors of Rainbow Tours S.A.
The company as the part of its bank guarantee lines orders issuance of bank guarantees for contractors
Rainbow Tours S.A. In 2013 the Issuer ordered issuance of the guarantees aside from limits. The table
below present the guarantees issued as at 31 December 2013. The amounts of guarantees were
translated using average NBP rate as at 31 December 2013.
The bank issuing the guarantee
The amount of guarantee issued
Millennium Bank S.A.
4 678 461.10
BOŚ S.A.
1 022 000.00
Raiffeisen Bank Polska S.A.
total
1 063 899.28
6 764 360.38
The insurance guarantees granted by Towarzystwo Ubezpieczeń Europa S.A.
On 30 July 2013 the issuer signed the contract with Towarzystwo Ubezpieczeniowe Europa S.A. with its
seat in Wrocław („the Guarantor”), concerning the insurance guarantee granted by the Guarantor for
Rainbow Tours SA, as tour operator as tour operator and travel agent, which benefits the Marshall of
Łódzkie Province („the Beneficiary”).
The subject of the contrast is describe rules of granting insurance guarantee (“The guarantee”) by the
Guarantor in connection with art. 5 section 1 point 2 letter a) of the Act on Tourism services dated 29
August 1997 (Dz.U. No 133 item. 844, with subsequent amendments) in the scope
a.
Covering the costs of the return of the company customers (the obligor) to the country, when
the Obligor (Rainbow Tours SA) despite its obligation fails to ensure the return.
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Directors’ report of Rainbow Tours Capital Group for 2013
b.
Repaying the payments made by the customers of the Obligor (Rainbow Tours SA) for the
travel package in case when, for the reasons on the side of the Obligor (Rainbow Tours SA) or persons,
who act on its behalf, the trip was not executed.
c.
Repaying some of the payments for the travel package, which is equivalent to the part of the
trip which was not executed for the reasons dependent on Obligor (Rainbow Tours SA) or persons, who
act on its behalf.
According to the provisions of the contract, its value upon signature, and at the same time the value
of the guarantee granted by the Guarantor for the Beneficiary amounts PLN 70,288,493.92 (seventy
million two hundred eighty eight thousand , four hundred ninety three zloty and 92 grosz), which is
equivalent of EUR 17,282,214.33), 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, that is on 2nd
January 2013, which amounts to EURO 1= euro 1= PLN 4.067 published in the table No
01/A/NBP/2013 dated 2nd January 2013
The guarantee will secure the repayment of debts resulting from events mentioned in point 1 letter a),
b) and c) above, which have arisen pursuant to contracts to provide tourism services entered by
Rainbow Tours in the period from 17 September 2013 till 16 September 2014.
Promissory notes issued by Rainbow Tours S.A.
The Management Board of Rainbow Tours S.A. issued blank promissory notes, which constitute security
to the bank products of Bank Ochrony Środowiska S.A. Details of the information are provided below:
a.
The promissory note No 1, which is the security for the multipurpose line No
S/53/10/2011/1245/K, for the amount of PLN 9,500,000.00 PLN. The execution is 60 months starting
from the date of contract termination that is 14.11.2022 the amount of the execution is PLN
23,750,000.00.
b.
The promissory note No 2 is security to the guarantee issued for the multipurpose line
S/53/10/2011/1245/K. The amount of guarantee issued amounts to PLN 1,000,000.00 and is valid till
30 September 2014.
c.
The promissory note No 3 is a security to the bank guarantee line S/117/08/2013/1245/K, for
the amount of 4,000,000.00 PLN. The execution is 60 months starting from the date of terminating the
contract that is 30 October 2020. The amount of the execution is PLN 6,000,000.00
d.
The promissory note 4 is a security to the bank guarantee line S/117/08/2013/1245/K, for the
amount of guarantee 22.000,00 PLN, which is valid till 10 December 2014.
e.
The promissory note No 5, which is security to the guarantees issued for the bank guarantee
line S/117/08/2013/1245/K, for the amount of guarantee USD 500,000.00, which is valid till 30
November 2014
f.
The promissory note No 6 secures the debts resulting from transactions of Limit FX Forward in
the amount of PLN 14,000,000.00 which is valid till 26 November 2014, execution till 17 November
2017. The amount of execution is PLN 35,000,000.00.
The parent company advised on 30 July 2013 that the issuer signed the agreement with Towarzystwo
Ubezpieczeniowe Europa S.A. (the Guarantor), concerning granting by the Guarantor the guarantee for
Rainbow Tours SA, as tour operator and tourism intermediary, which will benefit Marshall of the Łódzkie
province (the Beneficiary ). The security to the guarantee agreement is a blank bill issued Rainbow
Tours for TUiR Europa S.A. According to promissory note declaration the Insurer may fill in the blank
promissory note to the amount of 70,288,493.92 (seventy million two hundred eighty eight thousand
four hundred ninety three zloty ninety two grosz).
29. Information on control system of share incentive plan
In 2008 the Company started implementation of share incentive plan. Rules of new incentive plan were
resolved by the ordinary General Meeting on 6th June 2008. The Plan continued from 2008 to 2012.
52,000 shares were granted from the programme. These shares were admitted to trading at the
beginning of 2009. The remaining shares were not distributed and the programme was not prolonged
for next years.
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Directors’ report of Rainbow Tours Capital Group for 2013
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 2014
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