PZ CORMAY S.A.ir.pzcormay.pl/userfiles/file/Kwartalne/3_2009/ang/Individual financial... · PZ CORMAY S.A. | B. INTRODUCTION TO INDIVIDUAL FINANCIAL STATEMENT 6 2009-09-30 2008-12-31

PZ CORMAY S.A.

Individual financial statement

Q3 2009

2009-07-01 – 2009-09-30

PZ CORMAY S.A. |

2

Contents

A. FINANCIAL STATEMENTS __________________________________ _____________________4

I. BALANCE SHEET ___________________________________________________4

II. PROFIT AND LOSS ACCOUNT _________________________________________ 8

III. CASH FLOWS ______________________________________________________ 9

IV. CHANGE IN EQUITY _________________________________________________ 11

B. INTRODUCTION TO INDIVIDUAL FINANCIAL STATEMENT 13

I. GENERAL INFORMATION _____________________________________________ 13

1. GENERAL CHARACTERISTIC OF PZ CORMAY S.A. _________________________ 13

2. COMPOSITION _______________________________________________________ 13

II. INFORMATION ON POSSIBLE CHANGES IN THE REPORTING PERIOD_ ___________ 14

1. GOING CONCERN PRINCIPLE __________________________________________ 14

2. BUSINESS COMBINATION OF THE COMMERCIAL COMPANIES ______________ 14

3. APPLIED ACCOUNTING PRINCIPLES (POLICY) ____________________________ 14

3.1 Change of the accounting principles in the reporting period_________________ 14

3.2 Intangible assets _________________________________________________ 14

3.3 Fixed assets_____________________________________________________ 15

3.4 Tangible fixed assets under construction _______________________________ 16

3.5 Investments in the subordinated entities and other long-term investments _____ 16

3.6 Other short-term investments (excluding the pecuniary assets and financial assets) ______________________________________________ 17

3.7 Lease __________________________________________________________ 17

3.8 Stocks _________________________________________________________ 17

3.9 Short- and long-term receivables _____________________________________ 17

3.10 Transactions in foreign currency ____________________________________ 18

3.11 Pecuniary assets and equivalents of pecuniary assets ___________________18

3.12 Prepayments and accrued income___________________________________18

3.13 Share capital ___________________________________________________18

3.14 Provisions______________________________________________________18

3.15 Bank credits and loans and financial liabilities intended to be traded_________19

PZ CORMAY S.A. |

3

3.16 Deferred income tax _____________________________________________19

3.17 Impairment loss _________________________________________________19

3.18 Presentation of revenues__________________________________________19

3.19 Sale of goods and products________________________________________20

3.20 Interests_______________________________________________________20

3.21 Dividends______________________________________________________20

3.22 Social assets and provisions for Company Social Benefit Fund ____________20

4. EXCHANGE RATES ____________________________________________________ 20

5. FINANCIAL DATE (EURO) 21

C. ADDITIONAL INFORMATION AND EXPLANATION ___________________________________22

1. INFORMATION ON IMPORTANT EVENTS CONCERNING THE PREVIOUS YEARS, INCLUDED IN THE FINANCIAL STATEMENT FOR THE RELEVANT PERIOD ______22

2. INFORMATION ON IMPORTANT EVENTS WHICH OCCURRED AFTER BA LANCE DATE AND WERE NOT INCLUDED IN THE FINANCIAL STATEMENT. ___________22

3. CHANGES IN THE ACCOUNTING PRINCIPLES (POLICY) IN THE FISCAL YEAR 22 4. COMPARABILITY OF THE FINANCIAL DATA FOR THE YEAR COVERED

BY THE FINANCIAL STATEMENT _________________________________________ 22 5. REMUNERATION TO KEY MANAGEMENT PERSONNEL OF PARENT COMPANY 22 6. EVENTS AFTER BALANCE DAY 23

PZ CORMAY S.A. | B. INTRODUCTION TO INDIVIDUAL FINANCIAL STATEMENT

4

A. FINANCIAL STATEMENTS

I. BALANCE SHEET

BALANCE SHEET AS FOR 30-06-2009

30-09-2009 31-12-2008 30-09-2008 Assets State as for the closing date of

books in k PLN A. Fixed assets 8 211 7 744 7 389 I. Intangible assets 261 306 308 1. Costs of finished R&D works 58 71 76 2. GOODWILL 3. Other intangible assets 203 235 232 4. Advances for intangible assets II. Tangible fixed assets 7 406 7 066 6 927 1. Fixed assets 7 295 6 644 6 709 a) Lands (including perpetual usufruct rights)

51

51

51

b) Buildings premises and civil and maritime engineering features

1 678

1 715

1 727

c) Machines and devices 984 1055 1104 d) Means of transport, 641 705 644 e) Other fixed assets 3 941 3 118 3 183 2. Tangible fixed assets under construction 111 422 190 3. Advances for tangible fixed assets under

28

4. Fixed assets for sale III. Long-term receivables 1. From other entities 2. From related entities IV. Long-term investments 220 220 70 1. Real property 2. Intangible assets 3. Long-term financial assets 220 220 70 a) In related entities 220 220 70 - shares 220 220 70 - other securities - Granted loans - other long-term financial assets b) in other entities - shares - other securities - Granted loans - other long-term financial assets 4. Other long-term investments V. Long-term prepayments and accrued income 324 152 84 1. Assets due to the deferred income tax

42

84

74

2. Other prepayments and accrued income 282 68 10


5

B. Current assets 17 994 16 708 12 454 I. Stocks 8 566 7 374 5 764 1. Materials 3 124 1 830 1 438 2. Semi-finished products and products in progress 228 68 120 3. Finished products 1 242 1 126 874 4. Goods 3 972 4 350 3 332 5. Advances for deliveries

I. Short -term receivables 6 997 5 283 5 809 1. Receivables from related entities 1 238 1 363 2 066 a) due to deliveries and services with maturity date: 1 238 1 363 1 941 - up to 12 months 1 238 1 363 1 941 - over 12 months b) other 125 2. Receivables from other entities 5 759 3 920 3 743 a) due to deliveries and services with maturity date: 5 156 3 563 3 232 - up to 12 months 5 033 3 492 3 232 - over 12 months 123 71 b) due to taxes, subsidies, social and health insurances and other benefits

469

246

407

d) other 134 111 104 d) proceeded at court III. Short-term investments 2 037 3 699 78 1. Short-term financial assets 2 037 3 699 78 a) In related entities - shares - other securities - Granted loans - other short-term financial assets b) in other entities 1 180 - shares - other securities - Granted loans 1 180 - other short-term financial assets c) cash and other pecuniary assets 893 3 699 78 - Cash at hand and in bank 893 3 699 78 - other cash - other pecuniary assets 2. other short-term investments IV. Short-term prepayments and accrued income 358

352

803

Total assets 26 205 24 452 19 843


6

2009-09-30 2008-12-31 2008-09-30

Liabilities State as for the closing date of books in k PLN

A. Own equity 20 052 17 991 13 279 I. Share capital 11 862 11 862 9 877 II. Called up share capital (negative value)

III. Own shares (negative value) IV. Supplementary capital 6 170 4 814 2 242 V. Revaluation reserve VI. Other reserve capitals VII. Profit (loss) from previous years -1 -1 -1 VIII. Net profit (loss) 2 021 1 316 1 161 IX. Write-off of net profit during the fiscal year (negative value)

B. Liabilities and provisions for liabilities 6 153 6 461 6 564 I. Provisions for liabilities 241 271 222 1. Provision due to the deferred income tax

208

210

201

2. Provision for retirement and similar benefits 33 33 21 - long-term 33 33 21 - short-term 3. Other provisions 28 long-term short-term 28 II. Long-term liabilities 433 538 55 1. To related entities 2. To other entities 433 538 55 a) Credits and loans 51 51 55 b) arising from issuance of debt securities c) other financial liabilities 382 487 d) other III. Short-term liabilities 5 188 5 300 5 910 1. To related entities 240 122 194 a) due to deliveries and services with maturity date: 240 122 174 - up to 12 months 240 122 174 - over 12 months b) other 20 - Credits and loans - Others 20 2. To other entities 4 884 5 156 5 667 a) Credits and loans 1 275 1 058 1 722 b) arising from issuance of debt securities c) other financial liabilities 136 141 669 d) due to deliveries and services with maturity date: 2 845 3 496 2 550 - up to 12 months 2 845 3 496 2 550 - over 12 months e) received advances for deliveries f) bill-of-exchange liabilities g) tax, customs, insurance and other liabilities

402

231

512

h) payroll liabilities 214 227 198 i) other 12 3 16 3. Special funds 64 22 49


7

IV. Prepayments and accrued income 291 352 377 1. Negative goodwill 279 335 354 2. Other prepayments and accrued income 12 17 23 - long-term 9 11 14 - short-term 3 6 9 Total liabilities 26 205 24 452 19 843


8

II. PROFIT AND LOSS ACCOUNT

PROFIT AND LOSS ACCOUNT (MULTI-STEP VERSION) For the period 01.01.2009-30.09.2009

Description 01.07.09-

30.09.09

01.01.09-

30.09.09

01.07.08-

30.09.08

01.01.08-

30.09.08 A. Net revenues from sale and equivalents 7 274 21 949 5 804 16 690

I. Net revenues from sales of products 4 426 13 069 3 248 9 719 - From related entities 1 999 4 256 II. Net revenues from sales of goods and materials 2 848 8 880 2 556 6 971

- From related entities 175 951 B. Operating activity costs 4 504 13 380 3 721 10 922 I. Manufacturing costs of sold products 2 320 6 663 1 985 6 068 -to related entities 1 741 3 547 II. Value of goods and materials sold 2 184 6 717 1 736 4 854 -to related entities C . Profit (loss) from sales (A-B) 2 770 8 569 2 083 5 768 D. Selling costs 1 810 5 369 1 369 3 312 E. General administrative costs 259 927 496 1 470 F. Profits (loss) from sales (C-D-E) 701 2 273 218 986 G. Other operating revenues 150 255 499 676 I. Profit from sales of non-financial fixed assets 367 422

II. Subsidies 20 III. Other operating revenues 150 255 132 234 H. Other operating costs 190 346 123 140 I. Loss from sales of non-financial fixed assets 15

II. Revaluation on non-financial fixed assets 140 140 III. Other operating costs 190 331 -17 I. Profit (loss) from operating activities (F+G+H) 661 2 182 594 1 522

J. Financial revenues 179 305 28 49 I. Dividends and profit sharing II. Interests 43 123 1 22 III. Gain on disposal of investments IV. Revaluation on investments V. Other 136 182 27 27 K. Financial costs 37 111 25 182 I. Interests 37 95 51 128 II. Loss on disposal of investments III. Revaluation on investments IV. Other 16 54 L. Profit (loss) from business activity (I+J-K) 803 2 376 597 1 389

M. Result on extraordinary events I. Extraordinary profit II. Extraordinary loss N. Gross profits (loss) (L+/M) 803 2 376 597 1 389 O. Income tax 32 355 71 228 Current 128 314 49 157 Deferred -96 41 22 71 P. Net profit (loss) 771 2 021 526 1 161


9

III. . CASH FLOWS

CASH FLOW STATEMENTS INDIRECT METHOD for the period 01.01.2009-30.09.2009

I T E M end of Q3 30.09.09

Q3 cumulative 01.07.09 – 30.09.09

end of Q3 30.09.08

Q3 cumulative 01.07.08 – 30.09.08

A. Cash-flows from the operating activity

I. Net financial result 2 021 2 021 1 161 1 161 II. Total adjustments: -2 878 -486 -146 268 1. Amortization 804 804 679 679 2. Profit/loss due to the exchange differences

-193 -193 133

3. Interests and share in profits (dividends)

4. Profit (loss) from investment activity 15 15 -422 5. Stocks change -29 -139 3 14 6. Reserve change -1 192 1 621 -313 869 7. Receivables change -1 715 -1 135 125 -525 8. Short-term liabilities change except for the financial liabilities -328 -1 394 -22 -46

9. Change in prepayments and accrued income

-240 -64 -562 -434

10. Other adjustments- interests -56 B. Net cash-flows from investment activity

I. Inflows 480 1. Disposal of intangible and tangible fixed assets 480

2. Disposal of investments in real property and in intangible assets

3. From financial assets, including: a) In related entities b) in other entities

- Sales of financial assets - Dividends and profit sharing

- repayment of granted long-term loans - Interests - Other inflows from financial assets

4. Other investments inflows 1. Purchase of intangible and tangible fixed assets

1 098 1 354 2 203 1 259

2. Investments in real property and in intangible assets

15 15 -421

3. For financial assets, including: a) In related entities b) in other entities - Purchase of financial assets - Granted long-term loans 4. Other investments outflows C. Cash-flow from financial activities I. Inflows 562 -1 371 523 -521 1. Net inflows from issuance of shares and other capital instruments and from capital contributions


10

- Taking / repayment of long-term loans -300 2. Credits and loans 217 -465 523 366 3. Issuance of debt securities 4. Other financial inflows 305 304 49 5. Increase (+) / decrease (-) of own equity

40 -1 210 -636

II. Outflows -1 397 -59 123 -210 1. Purchase of own shares 2. Dividends and other payments to shareholders

3. Other than payments to shareholders, expenses due profit division

4. Credits and loans -1 180 80 123 5. Buy-out of debt securities 6. due other financial liabilities 7. Payments of the liabilities due to the financial lease agreements

-106 -28 -28

8. Interests -111 -111 -182 9. Other financial outflows D. Total net cash-flows (A.III+/-B.III+/-C.III)

-2 806 -1 264 -308 -139

E. Balance change of pecuniary assets including

-2 806 -1 264 -308 -139

- change in pecuniary assets due exchange differences

F. Opening balance of pecuniary assets

3 699 2 157 386 217

G. Closing balance of pecuniary assets (F+/-D), including:

893 893 78 78

- with limited disposal possibility


11

IV. CHANGE IN EQUITY

CHANGES IN EQUITY For the period 01.01.2009 to 30.09.2009

Value in k PLN Description 01.01.09- 30.09.09

01.01.08-30.09.08

01.01.08-31.12.08

Opening balance of equity after adjustments 17 991 12 118 12 118 I.

- adjustment of fundamental errors la. Opening balance of equity after

adjustments 17 991 12 118 12 118

1. Opening balance of basic capital 11 862 9 877 9 877 1.1. Basic capital increase – due to: 1 985

- new shares establishment -- shares issue 1 985

1.2. Basic capital decrease – due to: - redemption of shares 1.3. Closing balance of basic capital 11 862 9 877 11 862 2. Opening balance of called up share

capital

2.1. Increase of called up share capital – due to:

2.2. Decrease of called up share capital – due to:

2.3. Closing balance of called up share capital

3. Opening balance of own shares 3.1. Increase - due to 3.2.. Decrease – due to ….. 3.3. Closing balance of own shares 4. Opening balance of supplementary

capital 4 814 673 673

4.1. Supplementary capital increase – due to: 40 2 573 - profit division - shares issue above the nominal value 2 573

- share issue costs reduction 40 4.2 Supplementary capital decrease – due

to: 1

- transfer to reserve fund - loss from previous years 1

4.3 Closing balance of supplementary capital 4 854 673 3 245

5. Opening balance of revaluation reserve

5.1. Revaluation reserve increase due to 5.2 Revaluation reserve decrease due to - sale of fixed assets (transfer to

supplementary capital)

5.3. Closing balance of revaluation reserve

6. Opening balance of other reserve capitals

6.1. Increase of other reserve capitals – total, including due to:

- transfer from supplementary capital - profit division - transfer of revaluation reserve - shares issue above nominal value


12

(aggio) - others 6.2 Decrease of other reserve capitals –

total, including due to:

- loss financing - additional dividend allocations - increase of number / value of basic

capital shares allocations

- others 6.3. Closing balance of other reserve

capitals

7. Opening balance of profit(loss) from

previous years 1315 1 568 1568

7.1. Opening balance of profit from previous years 1316 1569 1569

- adjustment of fundamental errors - opening balance of profit from

previous years after adjustments 1316 1569 1569

7.2 Decrease of pervious years income in financial year - due to:

a) transfer to reserve capital b) transfer to supplementary capital c) paid dividend d) CSBF allocations e) donations allocations 7.3. Closing balance of profit from

previous years 1316 1569 1569

7.4. Opening balance of loss from previous years after adjustments 1 1 1

- adjustment of fundamental errors - Opening balance of loss from

previous years after adjustments

7.5 Previous years losses increase in financial year due to 1 1 1

7.6 Previous years losses decrease in financial year due to financing from reserve capital

7.7. Closing balance of loss from previous years 1 1 1

7.8. Closing balance previous years financial result – per balance 1315 1568 1568

8. Financial year net result (a-b-c) 2 021 1 161 1 316 a) net profit 2 021 1 161 1 316 b) net loss c) write-offs on profit II. Closing balance of own equity 20 052 13 279 17 991 IIa. Planned profit share – outside own

equity (dividends etc.)

I Ib. Closing balance own equity, including proposed profit share outside own equity

20 052 13 279 17 991


13

B. INTRODUCTION TO INDIVIDUAL FINANCIAL STATEMENT I . GENERAL INFORMATION

1. GENERAL CHARACTERISTIC OF PZ CORMAY S.A.

Company’s name PZ Cormay Spółka Akcyjna Seat office Łomianki District Court

District Court for the capital city Warsaw in Warsaw XIV Business Department of the National Court Register

Entrepreneurs Register No.

0000270105

Tax identification number 1181872269 REGON 140777556

Business activity acc. to European Classification of Activity:

2466- Manufacture of other chemical products n.e.c.

The duration of the Company is unlimited according to the Articles of Association.

2. COMPOSITION OF THE MANAGEMENT BOARD

In the reporting period there were no changes in the headcount of the Management Board of PZ Cormay S.A.

Headcount of the Management Board as of 30.09.2009:

President of the Board Tomasz Tuora

Member of the Management Board Barbara Tuora-Wysocka

Headcount of the Supervisory Board as of 30.09.2009

Chairman of the Supervisory Board Stefan Jackowski

Member of the Supervisory Board Marek Stępień

Member of the Supervisory Board Włodzimierz Jaworski

Member of the Supervisory Board Ryszard BłaŜejewski

Member of the Supervisory Board Paweł Edward Nowak

Member of the Supervisory Board Stanisław Szczurek


14

II. INFORMATION ON MANAGEMENT BOARD, SUPERVISORY BOARD AND POSSIBLE CHANGES IN THE REPORTING PERIOD

1. GOING CONCERN PRINCIPLE

The financial statement of the Company was prepared assuming applying the going concern

principle by the Company within the period at least 12 months after balance day. As of the date of

singing the financial statement the Company’s Management Board does not state any facts and

circumstances which may indicate the hazard for the going concern principle in the period at least

12 months after the balance date as a result of intended or forced omission or important limitation

in the present business activity.

2. BUSINESS COMBINATION OF THE COMMERCIAL COMPANIES

In the reporting period for which the financial statement was prepared the Company does not

merge with any other business entity.

3. APPLIED ACCOUNTING PRINCIPLES (POLICY)

The financial statement was prepared pursuant to the provisions of the Act of 29th September 1994 on Accountancy (uniform text Dz.

U. No. 76 of 2002 with further amendments-hereinafter referred as to AA). The profit and loss

statement was prepared in the multi-step version. The cash-flow statement was prepared by

indirect method.

The financial data in the financial statement was presented in thousands zlotys, unless there is stated otherwise.

3.1 Change of the accounting principles in the reporting period

3.2 Intangible assets

The intangible assets are recognized if it is possible that in the future they will cause the inflow the

economic benefits to the Company, which may be directly connected with these assets. The initial

presentation of the intangible assets is performed pursuant to the purchase price or manufacturing

cost. After the initial presentation the intangible assets are valued pursuant to the purchase price

of manufacture costs diminished by the depreciation and impairment losses. The intangible

assets are depreciated linearly in the period corresponding to the estimated period of economic

utility.


15

The foreseen period of the economic utility is as follows:

Costs of finished R&D works 3-5 -10 years

Patents, licenses and trade marks up to 3 to 10 years

Computer software up to 2 to 5 years

Other intangible assets up to 2 to 5 years

The estimations concerning the period of economic utility and the depreciation method are a

subject of review at the end of every fiscal year in order to verify whether the applied methods and

the depreciation period comply with the foreseen time schedule of the economic benefits brought

by the relevant intangible assets.

As of the balance day the Company assesses whether the balance value of the presented assets

does not exceed the value of foreseen economic benefits. If there are assumptions which indicate

that, the balance value of the assets is reduced to the net sale price. Impairment losses are

included to the other operating costs.

3.3 Fixed assets

The fixed assets are valued at the purchase price, manufacturing cost or the post-revaluation

value diminished by the depreciation and the impairment losses. The lands are valued pursuant to

the purchase price diminished by the impairment losses. The post-revaluation occurs under the

separate regulations. The result from the post-revaluation is charged against the revaluation

capital. After the sale of liquidation of the fixed assets, the amount remained in the revaluation

capital is transferred to the reserve capital. Any post-revaluation occurred during the Company’s

activity.

The costs incurred after putting the tangible fixed assets in use such as the repair and check costs

and maintenance fees affect the financial result of the reporting period, when they were incurred.

If it is possible to prove that these costs caused the increase of the expected benefits in the future

due to the possession of this fixed asset over the initially planned benefits, in such case they

increase the initial value of the fixed asset. The fixed assets, except for the lands, are depreciated

linearly in the period corresponding to the estimated period of their economic utility.

The Company applies the foreseen utility periods as

follows:

Buildings premises and civil and maritime engineering

features

10 to 40 years

Machines and devices up to 2 to 40 years

Means of transport up to 3 to 10 years

Other fixed assets up to 2 to 15 years


16

Fixed assets with the low initial value, it means below 1.000,- PLN are entered as the costs at

once.

In 2008 the Company entered at once as costs the fixed assets with the initial value up to 0 PLN

to 3,500.-PLN. Since 01.01.2009 the amount of the fixed assets entered at once as the costs has

been changed into the amount 1,000.-PLN. The total value of the fixed assets purchased in the 3

quarters of 2009 with the value up to 0 to 1,000 PLN was 7 k PLN. Within the period 01.01.2009 to

30.09.2009 the fixed assets with the unit price up to 0 to 1,000 PLN with the total value 19 k PLN

were purchased. In case of the application in 2009 the principle of writing off at once against the

costs only the fixed assets up to 1,000 PLN to 3,500 PLN, the gross profit for the period

01.01.2009 -30.09.2009 would be lower by 47 k PLN and net profit by 38 k PLN.

3.4 Tangible fixed assets under construction

The tangible fixed assets under construction are valued in the amount of the total costs directly

related to their purchase or manufacture, included financial costs, reduced by the impairment

losses. As the tangible fixed assets under construction the investment materials are presented.

The tangible fixed assets are not depreciated till the construction will be completed and

commencement.

3.5 Investments in the subordinated entities and other long-term investments

Investments in the related entities and semi-related entities and in the associated entities and

other long-term investments are valued pursuant to the historical cost diminished by the possible

impairment loss.

The impairment loss of the shares in the subordinated entities is estimated as for each balance

day.

The balance value of such assets every time is a subject of review in order to state whether it

does not exceed the values of the future economic benefits.

In case when the balance value exceeds the value of foreseen economic values, it s reduced to

the net sale price. Decreasing the investment’s value previously post-revaluated to the amount, by

which the revaluation reserve was increased, if the difference amount from revaluation was not

accounted to the day of estimation, decreases such reserve. In other cases the effects of

decreasing the investments value are classified to the financial costs. The increase of the relevant

investment's value related to the previous decreasing its value, classified to the financial costs, is

taken to the amount of this cost as the financial revenues.


17

3.6 Other short-term investments (excluding the pecuniary assets and financial assets)

Other short-term investments excluding the pecuniary assets and financial assets are valued

pursuant to the purchase price or market price depending on which one is lower, and the short-

term investments for which the active market does not exists are valued at the fair value. The

effects of increase or decrease of the short-term investments value evaluated pursuant to the

market prices are classified correspondingly to the financial revenues or expenses.

3.7 Lease

The Company is a party of the leasing agreements under which it takes to the paid use or taking

benefits the foreign assets or intangible assets for the agreed period.

In case of leasing agreements under which the transfer of total risk and benefits following the

possession of the assets which are a subject of agreement occurs, the subject of lease is included

in the assets as the fixed assets and at the same the provision in the amount equal to the value of

the minimal leasing fees set as of the date of lease beginning. The leasing fees are divided

between the financial costs and reducing the balance of the liabilities in the manner enabling to

achieve the constant interest rate form the liability to be paid. The financial costs are presented

directly in the profit and loss statement.

The fixed assets which are a subject of financial lease are depreciated in a manner specified for

the own fixed assets. However when there is any doubt regarding the transfer the ownership of

the subject of agreement then the fixed assets used under the financial leasing agreement are

depreciated by the shorter from two periods: foreseen period of use or lease period.

3.8 Stocks

The stocks are valued pursuant to the lower from two values: purchase price or manufacturing

cost and the net sale price.

The costs incurred in order to bring the stocks to their present location and condition are

presented by FIFO method. The manufacturing costs of the finished products and products in

progress are included in the costs of direct materials and workmanship and the justified part of the

indirect manufacturing costs, agreed at the normal usage of the production capacity.

The net sale price is possible to be achieved as of the balance day the purchase price without the

VAT tax and excise tax, reduced by the rebates, discounts and similar costs related to the

adjustment of the asset to sale and execution of such sale.

3.9 Short- and long-term receivables

The receivables are presented in the payable amount reduced by the writes down. The value of

the receivable is written down considering the degree of possibility to be paid by making the write

down. The allowances for bad debts are classified correspondingly to the other operating costs or

to the financial costs – depending on the kind of receivable, to which this write down concerns.

The receivables amortized, expired or non-collectible reduce the write down.

The receivables amortized, expired or non-collectible, from which the write down was not made or


18

the write down was made in the not full amount are classified correspondingly to the other

operating costs or financial costs.

3.10 Transactions in foreign currency

Transactions expressed in the other currencies than polish zloty are recalculated into the polish

zloty applying the exchange rate binding on the day before the transaction day.

As of the balance day the assets and liabilities expressed in the currencies other than polish zloty

are recalculated into the polish zloty applying the average exchange rate for this day published for

this currency by the National Polish Bank. The exchange differences arisen from the recalculation

are presented properly in the item of financial revenues of expenses or in cases specified by law,

in the assets value.

3.11 Pecuniary assets and equivalents of pecuniary assets

The pecuniary assets in bank and in hand are valued pursuant to the nominal value.

The item pecuniary assets presented in the cash-flow statement consists of cash in hand and

bank deposits with the maturity date not longer than 3 months which were not treated as the

investment activity.

3.12 Prepayments and accrued income

The Company settles the prepaid expenses if they are related to the future reporting periods.

Accrued expenses are settled in the amount of possible liabilities in the relevant reporting period.

3.13 Share capital

The share capital is presented in the amount specified in the Articles of Association and the court

register. The differences between the fair value of payments and nominal value of shares are

presented in the reserve capital. The costs incurred for the issue of new shares reduce the

reserve capital due to the issue of shares exceeding their nominal value to the amount of this

capital. Other costs are classified to the financial expenses.

3.14 Provisions

The provisions are included when the Company bears the obligation (legal or custom) resulting

from the pas events and when it is sure or highly possible that fulfillment of this obligation will

cause the necessity of inflow of assets expressing the economic benefits and when the reliable

estimation of the liability's amount is possible to be made. The Company creates the provisions for

retirement gratuity. The provisions is made in the costs of profit and loss statement in a manner


19

enabling to allocate the costs of retirement gratuities for the total period of employment. The

expenses due to the mentioned allowances are set using the actuarial method of evaluation of the

anticipated individual rights.

3.15 Bank credits and loans and financial liabilities intended to be traded

In the initial presence the bank credits and loans are classified according to the cost constituting

the value of received pecuniary assets. Liabilities due to the loans and credits are presented in

the amount of capital to be paid out.

3.16 Deferred income tax

The deferred income tax is set using the method of balance liabilities towards all temporary

differences as of the balance day between the tax value of the assets and liabilities and their

balance value indicated in the financial statement.

The provision for the deferred income tax is created in relation to all positive temporary

differences.

The asset due to the deferred income tax is included in relation to all negative temporary

differences in such amount in which it is possible that the income to be taxable will be achieved

and that will allows using the mentioned differences and losses. The balance value of the asset

due to the deferred income tax is verified as for every balance days and is subject of reduction as

far as it will be impossible to achieve the income to be taxable sufficient to partly or as a whole to

cover the asset due to the deferred income tax.

3.17 Impairment loss

As for each balance day the Company assessed if there are the objective proofs indicating the

impairment loss of assets or group of assets. If they are the Company sets the estimated,

possible to be recovered value of the assets and makes the revaluation due to the impairment loss

in the amount equal to the difference between the value possible to be recovered and balance

value. The loss resulting from impairment is included in the profit and loss statement for the

relevant period. In case when the post-revaluation of assets was made the loss reduces the value

of capitals from post-revaluation and then is charged into the profit and loss statement for the

relevant period.

3.18 Presentation of revenues

The revenues are presented in such amount in which is possible that the Company will achieve

the economic benefits, which can be reliable estimated.


20

3.19 Sale of goods and products

The revenues are presented in the moment when the important risk and benefits following the

right to ownership of goods or products was transferred into the purchaser. The revenues include

payable or received amounts from sale reduced by the value added tax.

3.20 Interests The interests’ revenues are presented in the moment of their calculation if the receipt of them is not doubtful.

3.21 Dividends

The due dividends are classified to the financial revenues as of the date of adopting by the

General Meeting of Shareholders/Partners of the Company, where the entity possesses the

shares/stocks, the resolution on profit division, unless the resolution specified other date of right to

dividend.

3.22 Social assets and provisions for Company Social Benefit Fund

The Act of 4th March 1994 (with further amendments) on the Company Social Benefit Fund states

that the Company Social Benefit Fund is created by the employers engaging at least 20 workers in

the calculation into the full time positions. The Company creates such fund and makes the

periodical write offs in the required amount. The purpose of this Fund is to subsidize the social

assets of the company and funding the social activity. The balance of the fund costs of cumulated

revenues of the Fund reduced by the non-returnable expenses of the Fund.

4. EXCHANGE RATES

Currency 30.06.2008 30.06.2009 EUR 3.3542 4.4696 USD 2.1194 3.1733 GBP 4.2271 5.2745 JPY 0.020156 0.033219 CHF 2.0907 2.9314

The balance items expressed in foreign currencies are measured at the average exchange rate of NPB for the relevant currency binding as for the relevant balance day.

PZ CORMAY S.A. | B. INTRODUCTION TO INDIVIDUAL FINANCIAL STATEMENT 21

5. SELECTED FINANCIAL DATA OF FINANCIAL STATEMENT

CALCULATED INTO EUR.

In k In k In k In k SELECTED FINANCIAL DATA PLN PLN EUR EUR

3Q cumulatively / 2009 period from 09-01-01 to 2009- 09-30

3Q cumulatively / 2008 period

from 08-01-01 to 2008- 09-30


from 09-01-01 to 2009- 09-30


from 08-01-01 to 2008- 09-30

Balance sheet total (the end of this quarter / end of the previous financial year) 26 205 24 452 6 206 5 860

Fixed assets (the end of this quarter / end of the previous financial year)

8211 7 744 1 945 1 856

Own equity (the end of this quarter / end of the previous financial year)

20 052 17 991 4 749 4 312

Revenues from the sale of goods, products and services

21 949 16 690 4 989 4 855

Net profit 2 021 1 161 459 338 Change in pecuniary assets (3 quarters cumulatively from 01.01 to 30.09.2009)

-2 806 -308 -665 -90

Change of the pecuniary assets (only 3 quarters from 01.07 to 30.09.2009

-1 264 -139 -299 -41

Profit (loss) on operating activities 2182 1 522 496 443 Gross profits (loss) 2 376 1 389 540 404 Net cash flow from operating activities (3 quarters cumulatively from 01.01 to 30.09.2009)

-857 1 015 -195 295

Net cash-flow from operating activities (only 3rd quarter from 01.07 to 30.09.2009

1 535 1 430 349 416

Net cash flow from investment activity (3 quarters cumulatively from 01.01 to 30.09.2009)

-1 113 -1 723 -253 -501

Net cash-flow from the investment activity (only 3 quarter from 01.07 to 30.09.2009 -1 369 -838 -311 -244

Net cash flow from financial activity (3 quarters cumulatively from 01.01 to 30.09.2009)

-835 400 -190 116

Net cash-flow from financial activities (only 3 quarter from 01.07 to 30.09.2009

-1 430 -731 -325 -213

Short term liabilities (end of current quarter / end of the previous financial year)

5188 5 300 1 229 1 270

Long term liabilities (end of current quarter / end of the previous financial year)

433 538 103 129

Ordinary shares. Issued share capital (end of current quarter / end of the previous financial year)

11 862 11 862 2 809 2 843

Number of shares 11 861 977 9 877 161 11 861 977 9 877 161 Net profit per one share 0.17 0.12 0.04 0.03 The book value per share (end of current quarter / end of the previous financial year)

1.69 1.52 0.40 0.36


C . ADDITIONAL INFORMATION AND EXPLANATION

1. INFORMATION ON IMPORTANT EVENTS CONCERNING THE PREVIOUS YEARS,

INCLUDED IN THE FINANCIAL STATEMENT FOR THE RELEVAN T PERIOD

To the date of this financial statement for the third quarter that is to 30.09.2009 there were not

events concerning previous years which were not but should be included to the financial

statement.

2. INFORMATION ON IMPORTANT EVENTS WHICH OCCURRED AFTE R BALANCE DATE AND WERE NOT INCLUDED IN THE FINANCIAL STATEME NT.

3. CHANGES IN THE ACCOUNTING PRINCIPLES (POLICY) IN TH E FISCAL YEAR

- Do not occur. 4. COMPARABILITY OF FINANCIAL DATA FOR THE STATEMENT C ONCERNING FINANCIAL YEAR

The financial statement for the current and the previous reporting period was prepared

applying the same methods of data presentation. The change was applied in the accounting

policy, the fixed assets in the range up to 1,000 PLN are depreciated when they are accepted

in 100%.

5. REMUNERATION TO KEY MANAGEMENT PERSONNEL OF PARENT COMPANY

In the 3rd quarter of 2009 the members of Management Personnel of the Company received

remuneration of total value 331 k PLN gross. The value of the individual board members

remuneration is summarized below.

Name Position 01.01.2009-30.09.2009

01.01.2008-30.09.2008

Tomasz Tuora President of the Board

280 145

Barbara Tuora - Wysocka

Member of the Management Board

51 51

TOTAL 331 196


6. EVENTS AFTER BALANCE DAY

On 6th of October 2009 the Board of Issuer:

1) signed a letter of intent with the owner of the Orphée SA company's headquartered in Geneva,

Switzerland, regarding the possibility of the Issuer's capital investment in this company, which makes it

possible to carry out the due diligence process Orphee by Issuer, but not yet determined the

conditions of Orphee shares acquisition by the Issuer, except that the parties, if the Issuer decide on

the involvement of capital in Orphee, will seek to complete the transaction by the end of 2009.

2) decided to carry out a range of E series shares through private subscription (Art. 431 § 2 point 1 of

the Commercial Companies Code), which will be addressed to no more than 99 entities,

3) after the registration of above capital, the Issuer plans to float shares to the Stock Exchange in

Warsaw S.A.

Management Board of the Issuer, in connection with the provision of Article. 431 § 4 of the Commercial

Companies Code, will issue shares of E series in a manner that enables an application to register an

increase in the share capital of the Issuer to the court of registration not later than 30 December 2009

On 6 November 2009, demand book building process ended in frame of the subscription of private E

series share of PZ CORMAY SA. In the demand book building process investors took binding

declarations to cover all of 10,000,000 E series shares. The issue price of shares of Series E was

fixed at 2.30 PLN (two zlotys thirty groshes). Completion of the signing of contracts to include shares

of E Series and the closure of the offer is planned for 17 November 2009. The decisive factor in

selecting the Investors, which were directed to offer subscription of shares of E Series was to obtain

the optimum structure of the shareholding of the Company.

Documents

PZ CORMAY S.A.ir.pzcormay.pl/userfiles/file/Kwartalne/3_2009/ang/Individual financial... · PZ CORMAY S.A. | B. INTRODUCTION TO INDIVIDUAL FINANCIAL STATEMENT 6 2009-09-30 2008-12-31