Opinion on the audited financial statements of B3System S.A. for the period from January 1, 2009 to December 31, 2009 SPIS TREŚCI

Transcription

1 SPIS TREŚCI I. GENERAL PART OF THE REPORT Identification data of the unit Information on the financial statements for the previous year Identification data of the entity authorized to audit financial statements and statutory auditor auditing the financial statements Identification data of the financial statements External audits... 9 II. FINANCIAL ANALYSIS OF THE COMPANY Balance sheet Profit and loss account (with classification of expenses by function) Basic economic ratios Interpretation of ratios and general economic situation III. DETAILED PART OF THE REPORT Assessment of correctness of the applied accounting system Asset stock-taking Information on selected profit and loss account items Intangible assets Long-term investments Short-term receivables Short-term investments Short-term liabilities Financial revenue Introduction to the financial statements, notes Statement of changes in shareholders equity Cash flow statement Management Board s report on the Company s activities IV. FINAL INFORMATION AND PROVISIONS /23

2 I. GENERAL PART OF THE REPORT 1. Identification data of the unit Name and legal status B3System Spółka Akcyjna (joint-stock company) Unit s registered office ul. Taneczna 7, Warszawa Company s business In the audited period, changes took place with regard to the Company s operations. According to the entry in the register, the current operations of the Company include: reproduction of written information media, production of office machinery and equipment, apart from computers and peripheral devices, installation of manufacturing machinery, hardware and equipment, production of computers and peripheral devices, wholesale of computers, peripheral devices and software, wholesale of office furniture, wholesale of other office machinery and equipment; road transport of goods, services connected with removals, wired telecommunications, wireless telecommunications, excluding satellite telecommunications, satellite telecommunications, other telecommunications, broadcasting widely available and licensed TV programs, rental and lease of car vehicles, excluding motorcycles, rental and lease of other machinery, devices and goods not classified elsewhere, rental and lease of water transport means, information technology consulting, publishing activities in the scope of computer games, publishing activities in the scope of other software, software activities, other services in the scope of IT and computer technologies, 2/23

3 IT device management, data processing, website management (hosting) and similar activities, other service activities in the scope of IT technologies, scientific research and development works in the scope of other nature and technical sciences, scientific research and development works in the scope of biotechnology, services connected with forestry, public relations and communication, other business and management consultancy activities; other professional, scientific and technical activities not classified elsewhere, activities which support education, accounting activities, tax consultancy, activities of financial groups of companies, activities of head offices and groups of companies, excluding financial groups of companies, teaching foreign languages, technology, basic vocational schools, out-of-school physical education and organizing sport and recreation activities, out-of-school artistic education, other out-of-school forms of education, not classified elsewhere, other service activities, not classified elsewhere. The operations conducted in the audited period did not go beyond the scope of activities specified in the National Court Register and was mostly limited to the sales of computers, peripheral devices and software as well the provision of implementation and maintenance services. Legal basis of operations B3System S.A. conducts its operations based on: Articles of Association in the form of a notarial deed signed on June 6, 2006 Rep. A no. 1455/2006). Changes to the Articles of Association are included in the unified text in the form of a notarial deed, Rep. A no. 3265/2009 of December 28, Code of Commercial Companies. B3System S.A. was established as a result of transforming B3System M. Kaliński i W. Sędzielski Spółka Jawna registered partnership into a joint-stock company. On June 6, 2006, the Company shareholders adopted a resolution on the transformation. On June 22, 2006, the change was registered by the Court. B3System S.A. was established for an unlimited time. 3/23

4 Registration in the District Court On June 22, 2006, the Company was entered into the National Court Registered at the District Court for the Capital City of Warsaw in Warsaw, 13th Economic Division, under KRS no Previously, the Company was registered under no as a Registered Partnership. Tax and statistical registration The Company has the following identification numbers: REGON (statistical ID) , NIP (tax ID) The Company is also registered as payer of VAT-UE. Share capital and its changes during the reporting period The share capital as of December 31, 2009, amounted to PLN 946, and was divided into 9,466,156 shares (including 1,000,000 A series shares, 4,000,000 B series shares, 750,000 C series shares, 100,000 D series shares, 1,080,000 E series shares, 1,170,000 F series shares, 205,600 G series shares, 1,054,870 H series shares and 105,686 I series shares) with a value of PLN 0.10 each. All A series shares are privileged for votes in a way that each A series share gives right to two votes at the General Meeting. A part of the shares with a total value of PLN 234, has been taken up in return for an in-kind contribution. In 2009, changes took place in the entity s ownership structure. Share capital was increased by PLN ,60 by issuing I series shares with a nominal value of PLN 0.10 each, directed to eligible Company employees as part of the Incentive Scheme. The shares have been taken up at an issue price of PLN 1.62 per share, and their total value amounted to PLN 171,211,32. The difference between the issue price and the nominal price in the amount of PLN 160, was added to the supplementary capital. 4/23

5 The composition of shareholders as of December 31, 2008 was the following: Shareholders Number of shares Value in PLN Stake in the share capital (%) TOTMES S.A. Group of Companies 1,744, , Mirosław Kaliński 1,552, , B3System-Security Sp. z o.o. 1,080, , Władysław Sędzielski 741,882 74, Piotr Jurzysta 453,000 45, Others 3,778, , TOTAL 936,047, , The composition of shareholders as of December 31, 2009 was the following: Shareholders Number of shares Value in PLN Stake in the share capital (%) TOTMES S.A. Group of Companies 1,733, , Mirosław Kaliński 1,402, , B3System-Security Sp. z o.o. 1,080, , Władysław Sędzielski 450,000 45, Piotr Jurzysta 453,000 45, Others 4,347, , TOTAL 9,466, , Share capital shown in the financial statements corresponds to the current extract from the National Court Register and the Company s Articles of Association. Share capital of B3System S.A. as of the balance-sheet date amounts to: 5/23

6 Specification Amount in thousands PLN Initial capital 947 Due payments for initial capital 0 Treasury shares 0 Supplementary capital Revaluation capital 0 Other reserve capitals 0 Profit (loss) from previous years -257 Net profit (loss) 101 Write-offs from net profit in the fiscal year 0 Total Management Board In the audited period, the Management Board consisted of: Mirosław Kaliński President of the Management Board Władysław Sędzielski Vice-President of the Management Board Piotr Jurzysta Vice-President of the Management Board Until the end of the audit, no changes were made in this field. The Company was represented by the President and Vice-President (independently), by two other members of the Management Board (not the President or Vice-President) jointly or by a member of the Management Board jointly with the Proxy. From January 18, 2010, the Company is represented by two Members of the Management Board or one Member of the Management Board jointly with the Proxy. Supervisory Board In the audited period, the Supervisory Board consisted of: Tadeusz Kuranowski Chairman of the Supervisory Board, Hanna Ciejka Member of the Supervisory Board, Mirosław Hejduk Member of the Supervisory Board, Krzysztof Przyłucki Member of the Supervisory Board, Waldemar Nowak Member of the Supervisory Board until January 4, 2010, Jacek Grochowina Member of the Supervisory Board until December 31, 2009, Jerzy Katana Member of the Supervisory Board until January 11, 2010, Andrzej Woźniakowski Member of the Supervisory Board until January 11, 2010, Until the end of the audit, no changes were made in this field. 6/23

7 Employment Average employment in 2009 was persons. The function of Chief Accountant was performed by Mrs. Izabella Pobudkiewicz. Affiliated entities B3System S.A. is the parent entity in B3System S.A. Group of Companies. The Company s affiliated entities as of December 31, 2009 are: Navipro Sp. z o.o. with a registered office in Warsaw (100% shares), Commcord Sp. z o.o. with a registered office in Warsaw (52% shares), Prokonekt S.A. (formerly HS Partner Pro-Test S.A.) in Warsaw (75.06% shares). On April 20, 2009, the Management Boards of B3System S.A. and Pro-Test Sp. z o.o. passed a resolution concerning the merger of B3System S.A. with PRO-TEST Sp. z o.o. subsidiary. The merger was registered by the Court on September 30, Under Article 44a item 1 of the Accounting Act, the merger was settled and entered into the accounting books of B3System S.A. as of the day of the merger, i.e. September 30, 2009, by the acquisition method. Profits and losses of Pro-Test Sp. z o.o. (the taken-over company) achieved between the day of taking control and the day of the merger were added to the shareholders equity of the parent company B3System S.A. 2. Information on the financial statements for the previous year The basis for the opening balance of the accounting books were the financial statements for the period from January 1, 2008 to December 31, 2008, which were audited by System Rewident Sp. z o.o. with a registered office in Warsaw and obtained an opinion without reservations. The Company s financial statements for the period from January 1, 2008 to December 31, 2008 was approved by Resolution no. 3 of the General Meeting of Shareholders of April 28, By resolution no. 17 of April 28, 2009, the General Meeting of Shareholders decided to allocate the total net profit of PLN 2,025, for the Company s supplementary capital. The financial statements for 2008 were submitted to Warszawa-Ursynów Tax Office on May 7, 2009 and to the District Court for the Capital City of Warsaw in Warsaw, 13th Economic 7/23

8 Division of the National Court Register, on May 4, The financial statements were also published in Monitor Polski B on July 10, 2009, no. 1096, item Identification data of the entity authorized to audit financial statements and statutory auditor auditing the financial statements System Rewident Sp. z o.o. with a registered office in Warsaw, ul. Rakowiecka 30A, is an entity authorized to audit financial statements, entered on the list under no The audit was conducted based on agreement concluded on July 3, 2009 between B3System S.A. as the orderer and System Rewident Sp. z o.o. as the contractor. Katarzyna Sztanga, entered on the list of statutory auditors under no , conducted the audit on behalf of the authorized entity. System Rewident Sp. z o.o. as an authorized entity was chosen to audit the financial statements of B3System S.A. for the fiscal year 2009 by the Supervisory Board by resolution no. 7/2009 of April 22, We represent that System Rewident Sp. z o.o. as an authorized entity and the statutory auditor who conducted the audit on its behalf meet the conditions necessary for expressing an impartial and independent opinion on the audited financial statements, pursuant to Article 56 of the Act of May 7, 2009 on statutory auditors and their self-government, entities authorized to audit financial statements and the public supervision. The audit was conducted in the Company s registered office from March 9 to March 23, 2010 and from April 1 to April 7, The Company provided the statutory auditor with the requested data as well as information and explanations necessary for the audit, and submitted a statement of completeness, reliability and correctness of the financial statements and the underlying accounting books; it also informed about significant events that occurred between the balance sheet date and the date of submitting the statement. The statutory auditor was not restricted in choosing appropriate audit methods, expressing an opinion and preparing the report. 4. Identification data of the financial statements The subject of the audit were the consolidated financial statements of B3System S.A. for 2009, including: 8/23

9 Introduction to the financial statements; Balance sheet as of December 31, 2009, showing a balance-sheet total of PLN 34,917,000; Profit and loss account for the period, showing a net profit of PLN 101,000; Statement of changes in shareholders equity for the period from January 1, 2009 to December 31, 2009, showing a decrease in the shareholders equity by PLN 131,000; Cash flow statement for the period, showing a decrease in cash by PLN 1,223,000; Notes The Management Board s report on the Company s activities in 2009 was also presented to the statutory auditor. 5. External audits No external audits were conducted in the unit in /23

10 II. FINANCIAL ANALYSIS OF THE COMPANY Selected items from the profit and loss account, balance sheet and basic financial ratios are presented below. 1. Balance sheet (in thousands PLN) ASSETS % of total assets % of total assets % of total assets Fixed assets % % % Intangible assets % % % Property, plant and equipment % % % Long-term receivables % 0 0.0% 0 0.0% Long-term investments % % % Long-term accruals % % 0 0.0% Current assets % % % Inventories % % % Short-term receivables, including: % % % - payable within the period of over 12 months 0 0.0% 0 0.0% 0 0.0% Short-term investments % % % Short-term accruals % % % TOTAL ASSETS % % % LIABILITIES Shareholders equity (fund) % % % Initial capital (fund) % % % Supplementary capital (fund) % % % Revaluation capital (fund) 0 0.0% 0 0.0% 0 0.0% Profit (loss) from previous years % % % Net profit (loss) % % % Write-offs from net profit during the fiscal year (negative value) 0 0.0% 0 0.0% Liabilities and provisions for liabilities % % % Provisions for liabilities % % % Long-term liabilities % % % Short-term liabilities % % % - payable within the period of over 12 months 0 0.0% 0 0.0% 0 0.0% Accruals % 0 0.0% % TOTAL LIABILITIES % % % 10/23

11 2. Profit and loss account (with classification of expenses by function) (in thousands PLN) Year ended on December 31, /2008 dynamics Year ended on December 31, /2007 dynamics Year ended on December 31, 2007 Sales revenue % % Revenue from sales of products % % Revenue from sales of goods and % % materials Cost of products, goods and materials sold, including: % % Manufacturing costs of products sold % % Value of goods and materials sold % % Gross profit (loss) on sales % % Costs of sale % % General administrative costs % % Profit (loss) on sales % % Other operating revenue % % 149 Profit on sale of fixed assets Subsidies % 9 Other operating revenue % % 140 Other operating costs % % 90 Profit on sale of fixed assets 0 0.0% % 3 Revaluation of non-financial assets % 20 Other operating costs % % 67 Profit (loss) on operating activities % % Financial revenue % % 140 Dividends % Interest % % 140 Profit on sale of investments Revaluation of investments Other Financial costs % % 111 Interest % % 58 Loss from sale of investments Revaluation of investments Other % % 53 Profit (loss) on business activities % % Result on extraordinary events Profit (loss) before tax % % Corporate income tax % % 297 Net profit (loss) % % /23

12 3. Basic economic ratios Return on assets net profit 0.32% 7.16% 6.19% average assets Return on equity net profit 0.64% 13.47% 14.77% average shareholders equity Net return on sales net profit 0.20% 4.14% 3.46% revenue on sales of products and goods Gross return on sales result on sales of products and goods -0.04% 4.08% 4.03% revenue on sales of products and goods Liquidity ratio I total current assets* short-term liabilities* Liquidity ratio II total current assets* inventories short-term liabilities* Liquidity ratio III short-term investments short-term liabilities* Receivables turnover (days)** average gross trade receivables x 365 days revenue on sales of products, goods and materials Liabilities turnover (days)** average gross trade liabilities x 365 days costs of products, goods and materials sold + costs of sale + general administrative costs Inventory turnover (days) average inventories x 365 days costs of products, goods and materials sold + costs of sale + general administrative costs General debt ratio total debt total assets Shareholders equity to debt ratio shareholders equity loan capital Fixed capital to fixed assets ratio shareholders equity + long-term liabilities*** fixed assets Shareholders equity and long-term provisions to fixed assets shareholders equity + long-term provisions fixed assets Permanence of financing structure shareholders equity + long-term provisions + long-term liabilities*** total assets * excluding trade liabilities payable within the period of over 12 months, ** the numerator values include VAT, the denominator values do not, *** including trade liabilities payable within the period of over 12 months /23

13 Earnings per share Book value per share net profit shares outstanding shareholders equity shares outstanding Interpretation of ratios and general economic situation Structure of Company s assets: The vertical analysis of the Company s assets shows an increase in the share of current assets in the asset structure in Their share in the balance-sheet value of assets at the end of 2009 amounted to 63.4%. Main items under current assets were trade receivables. The main item in fixed assets were shares in subordinates, acquired in previous reporting periods. The horizontal analysis of assets shows that in 2009, the balance sheet sum increased by 20.57% year-over-year. Structure of sources of financing: A vertical analysis of balance sheet liabilities shows that in , the assets held by the Company were to a larger extent financed by shareholders equity, whereas in 2009 by loan capital. In 2007, loan capital constituted 51.2% of the financing structure, in %, and in %. Among shareholder s equity, the biggest item was supplementary capital, whereas among loan capitals, the biggest item were trade liabilities. Profit and loss account: Sales revenue was the following: in 2008, it increased by 34.9% year-over-year, while in fiscal year ended on December 31, 2009, it increased by 0.9% year-over-year. The operating cost dynamics showed a similar tendency and was the following: in 2008, operating costs increased by 34.79% year-over-year, while in 2009, the costs increased by 5.28% year-over-year and amounted to PLN 49,391, /23

14 Therefore, in , the Company s result on sales was positive, while in 2009 it was negative. This means that in the audited period, the Company was not profitable in its basic operations. In , the Company achieved a profit on other operating activities, while in 2009 it sustained a slight loss. The negative result in 2009 was mainly due to calculating depreciation of goodwill as a result of merger with Pro-Test Sp. z o.o. subsidiary, contractual penalties as well as revaluation of receivables. In , the Company achieved a positive result on financial activities, mainly because of dividends received from its subsidiaries. Profitability ratios: In , the profitability ratios were at a similar level. In 2009, the ratios fell compared to the previous years, due to achieving a significantly lower net profit by the Company. In the fiscal year 2009, each zloty (PLN 1) of the Unit s assets and each zloty of revenue generated an average net profit below one grosz (PLN 0.01). Efficiency ratios: The average period after which the Group of Companies collected trade receivables increased to 104 days in 2009 from 70 days in The inventory turnover in showed a growth tendency. In 2009, inventories were replenished on average every 7 days. The deferred payment cycle for trade liabilities was extended. In 2009, the Company paid its current liabilities on average every 103 days, while in 2008 the deferred payment cycle amounted to 83 days, which shows a decrease in the Company s liquidity in the audited year. In the audited period, the working capital cycle in the Group of Companies was unfavorable, because the deferred payment deadlines were shorter than the periods of freezing cash in inventories and short-terms receivables. In 2009, B3System S.A. Group of Companies paid its suppliers 8 days before the liquidation of inventories and collection of receivables from customers (in 2008 it was 8 days and in days, but after the liquidation of inventories and collection of receivables from customers). Debt ratios: The Company s debt in was changeable. The typical debt to assets ratio in the Polish economy amounts to approx The value of this ratio in B3System 14/23

15 amounted to 0.49 in 2007, 0.45 in 2008 and 0.55 in Consequently, the financial risk of conducted operations was on a level which is generally considered as acceptable. Liquidity ratios: The values of liquidity ratios allow to make the following conclusions: In 2009, liquidity ratios slightly deteriorated, but they stayed on the level which is considered optimal. In the analyzed period, the Company met the golden financing rule, as the amount of fixed capital was higher than the value of fixed assets held by the Company. This situation is a sign of moderate risk of financing structure. After collection of receivables, liquidation of inventories and with the use of held cash, in fiscal year 2009 the Company was able to pay 121% of current liabilities. The quick liquidity ratio (III degree) is often considered as the most reliable, as it reflects the natural financial liquidity of an enterprise. In the fiscal year ended on December 31, 2009, the cash to current liabilities ratio decreased by 11 percentage points year-over-year and amounted to 6%. 15/23

16 III. DETAILED PART OF THE REPORT 1. Assessment of correctness of the applied accounting system The Company has documents which describe its adopted accounting standards (policy), including: the fiscal year and the reporting periods, methods of valuating assets and liabilities and calculating the financial result, method of keeping accounting books as well as the data protection system. Documentation of the accounting policy has been prepared in accordance with the Accounting Act and approved by the regulation of the Management Board of June 22, The accounting books are kept at the office of the Company Management Board with the use of computers and based on the Microsoft Business Solutions-Navision finance and accounting software. We have performed a random check of the correctness of the functioning of the accounting system. We have assessed, among others, the following aspects: correctness of documenting business operations, correctness of accounting books kept with the use of computers, correctness of the applied methods of securing access to data and of the system of processing them by means of computers, linking the data from the accounting books to the financial statements, protecting the accounting documentation, accounting books and the financial statements, stock-taking and settling results of stock-taking. As a result of this assessment as well as checking the reliability of particular items from the financial statements, we have concluded that the accounting system as a whole may be considered as correct. 2. Asset stock-taking The stock-taking included: physical count of cash in hand as of December 31, 2009, confirmation of the balance of cash on bank accounts as of December 31, 2009, physical count of goods at the warehouse on January 15, 2010, confirmation of the balance of trade receivables as of December 31, 2009, by reviewing documents the balance of public receivables and liabilities as of December 31, /23

17 The results of this stock-taking were settled in the accounting books for Information on selected profit and loss account items (in thousands PLN) 3.1. Intangible assets Specification Costs of completed development works Goodwill 3,572 0 Other intangible assets Advance payments for intangible assets 0 0 TOTAL 3, In the balance sheet, intangible assets are shown in the current value (decreased by depreciation). A table of movements of intangible assets has been correctly presented in Notes. The main item under intangible assets is the Company goodwill, which results from the merger of B3System S.A. (the parent company) with the Pro-Test Sp. z o.o. (the taken-over company). The merger was registered by the Court on September 30, Under Article 44a item 1 of the Accounting Act, the merger was settled and entered into the accounting books of B3System S.A. as of the day of the merger, i.e. September 30, 2009, by the acquisition method. Profits and losses of the taken-over company achieved between the day of taking control and the day of the merger were added to the shareholders equity of the parent company. The goodwill was presented after decreasing it by write-offs for the period from the beginning of the subordination relation to the day of the merger (PLN 403,000 posted in correspondence with the result of the previous years) and the write-off for the period from the day of the merger to the balance-sheet date (PLN 50,000 added to other operating costs of the year 2009). Decreases in intangible assets in the reported period are mainly a result of amortization. Intangible assets are depreciated using the straight-line method in the estimated period of economic usability. The Management Board of B3System adopted a decision on prolonging the depreciation period to 20 years. Depreciation in the amount of PLN 152,000 was correctly calculated and added to costs of the year Depreciation of goodwill calculated for the period from the beginning of the subordination relation to the day of the merger, i.e. PLN 403,000, was settled against the result of the previous years. 17/23

18 3.2. Long-term investments Specification Real property 0 0 Intangible assets 0 0 Long-term financial assets 7,934 12,015 in affiliated entities 7,934 12,015 - shares 7,934 12,015 - other securities granted loans other long-term financial assets 0 0 in other entities 0 0 Other long-term investments 0 0 TOTAL 7,934 12,015 The Company valuates long-term investments at the purchase price decreased by possible write-offs due to permanent loss of value. As of December 31, 2008, long-term financial assets included shares in subsidiaries purchased in 2007, i.e.: Navipro Sp. z o.o. PLN 2,266,000 (100% shares), Pro-Test Sp. z o.o. PLN 4,901,000 (100% shares), Commcord Sp. z o.o. PLN 995,000 (52% shares), Prokonekt S.A. (formerly HS Partner Pro-Test S.A.) PLN 3,854,000 (33.01% shares directly, 42.05% shares were held by Pro-Test Sp. z o.o.). In the audited period, B3System S.A. (the parent company) merged with Pro-Test Sp. z o.o. subsidiary (the taken-over company). The merger was registered by the Court on September 30, Profits and losses of the taken-over company achieved between the day of taking control and the day of the merger were added to the shareholders equity of the parent company. Therefore, the value of long-term investments decreased by the value of shares at the purchase price of the day of taking control over Pro-Test Sp. z o.o. (PLN 4,901,000 and it increased by the amount of PLN 820,000 due to taking up shares in Prokonekt S.A. (formerly HS Partner Pro-Test S.A.), which were a component of assets of Pro-Test Sp. z o.o. company. Thus, the long-term financial assets as of December 31, 2009 include: Navipro Sp. z o.o. PLN 2,266,000 (100% shares), Commcord Sp. z o.o. PLN 995,000 (52% shares), Prokonekt S.A. (formerly HS Partner Pro-Test S.A.) PLN 4,673,000 (75.06% shares). 18/23

19 3.3. Short-term receivables Specification Receivables from affiliates a) trade receivables payable within the period of up to 12 months over 12 months 0 0 b) other Receivables from other entities 19,228 11,656 a) trade receivables payable within the period of 17,826 10,242 - up to 12 months 17,826 10,242 - over 12 months 0 0 b) due to taxes, subsidies, customs, social and health insurance and other benefits 1, c) other d) subject to lawsuit 0 0 Net short-term receivables 19,421 11,932 Revaluations of receivables Gross short-term receivables 19,482 11,957 Short-term receivables are shown in the Company s balance sheet after deduction of revaluation write-offs. At the end of 2009, the revaluation of overdue receivables amounted to PLN 61,000. Revaluations of receivables (in thousands PLN) as of January 1, Increases 37 Decreases usage 1 Decreases release 0 as of December 31, Trade receivables have been inventoried using the method of balance confirmation as of December 31, 2009 in approximately 90%. Until March 17, 2009, trade receivables shown as of December 31, 2009 have been paid in approximately 87%. Other receivables from affiliated entities in the amount of PLN 170,000 consist of advance payments for services which are to be performed in future periods. Due to the failure to execute an agreement, the advance payment was returned to the Company on February 1, /23

20 Receivables due to taxes, subsidies, customs, social and health insurance and other benefits include mainly VAT receivables to be settled in subsequent periods, in the amount of PLN 1,095,000. The item other includes: - PLN 138,000 receivables from shareholders due to transforming a registered partnership into a joint-stock company, - PLN 17,000 deposit for rental of the property which is the Company s registered office, - PLN 11,000 advance payment for an employee. Receivables expressed in a foreign currency have been valuated as of December 31, 2009 according to the average exchange rate of the National Bank of Poland of this day Short-term investments Specification Short-term financial assets 1,061 2,067 a) in affiliated entities (granted loans) b) in other entities 0 0 c) cash in hand and other financial assets 739 1,962 - cash in hand and on bank accounts 739 1,962 - cash equivalents other cash assets 0 0 Other short-term investments 0 0 Short-term financial assets in affiliated entities consist of loans granted to Navipro Sp. z o.o. subsidiary. Cash as of December 31, 2009 consists of: cash in hand PLN 527,000, cash on bank accounts PLN 212,000. Cash in hand was confirmed by physical count conducted as of December 31, The balance of cash on bank accounts was confirmed by way of balance confirmation as of December 31, Cash in foreign currencies was valuated according to the mean exchange rate of the National Bank of Poland as of the balance-sheet date. 20/23