Open Finance S.A. Group. Consolidated Financial Statements for the year ended on 31 December 2015

Transcription

1 prepared in accordance with International Financial Reporting Standards

2 CONTENTS I. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED ON 31 DECEMBER II. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER III. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON 31 DECEMBER IV. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31 DECEMBER V. GENERAL INFORMATION... 8 VI. BASIS FOR THE PREPARATION OF THESE CONSOLIDATED FINANCIAL STATEMENTS VII. SIGNIFICANT FIGURES BASED ON PROFESSIONAL JUDGEMENT AND ESTIMATES VIII. ACCOUNTING POLICY Statement of compliance with International Financial Reporting Standards Currency of measurement and presentation Changes in accounting principles New standards and interpretations issued but not yet effective Changes in accounting policy comparative data Consolidation principles Investments in associates Material accounting principles IX. OPERATING SEGMENTS X. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Revenue Operating costs Other operating revenue Other operating costs Financial revenue Financial costs Income tax Tax liabilities Effective tax rate Deferred income tax Earnings per share ( per share) Tangible fixed assets Financial leases Intangible assets Investments in associates Investment property Prepayments and accrued revenue (current assets) Other non-financial short-term assets Trade receivables Other receivables Cash and cash equivalents Share capital and other reserve capital Share capital Notes V - XIX to these consolidated financial statements, as contained in pages 8 69 are an integral part of these statements. 2

3 19.2 Shareholders in the parent company Other capital reserves Credit, loan and finance lease liabilities Operating leases Bonds issued Trade liabilities Other non-financial liabilities Accruals including accrued remuneration (liabilities) Provisions Contingent assets and liabilities Lawsuits Tax settlements XI. FINANCIAL INSTRUMENTS Fair values of different classes of financial instruments Net gains and losses broken down by financial instrument category, recognised in the statement of comprehensive income XII. ADDITIONAL EXPLANATIONS RELATING TO THE CASH FLOW STATEMENT XIII. TRANSACTIONS WITH RELATED PARTIES XIV. INFORMATION OF AUDITOR S FEES XV. OBJECTIVES AND PRINCIPLES OF FINACIAL RISK MANAGEMENT XVI. CAPITAL MANAGEMENT XVII. EMPLOYMENT STRUCTURE XVIII. SIGNIFICANT EVENTS OCCURRING BETWEEN THE DATE OF THESE CONSOLIDATED FINANCIAL STATEMENTS AND THE DATE OF THEIR APPROVAL FOR PUBLICATION XIX. CORRECTIONS OF ERRORS IN THE PREVIOUS REPORTING PERIOD Notes V - XIX to these consolidated financial statements, as contained in pages 9 68, are an integral part of these statements 3

4 I. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED ON 31 DECEMBER 2015 CONTINUED OPERATIONS 1 Jan Dec Jan Dec.2014 Sales revenue X Operating costs X Gross profit on sales Other operating revenue X Other operating costs X Operating profit Financial revenue X Share of the associate's profit X The result of the loss of control of a subsidiary V Financial costs X Gross profit Income tax X Net profit for the financial year attributable to shareholders in the parent company attributable to non-controlling shareholders Note Other comprehensive income - - Comprehensive income for the reporting period attributable to shareholders in the parent company attributable to non-controlling shareholders Net profit per share basic profit per share from profit for the period () X.8 0,53 0,47 diluted profit per share from profit for the period () X.8 0,53 0,47 Comprehensive income per share basic income per share (from profit for the period () 0,53 0,47 diluted income per share (from profit for the period () 0,53 0,47 As was described in more detail in Note V, the Group did not discontinue any of its operations in any of the financial years. Notes V - XIX to these consolidated financial statements, as contained in pages 8 69 are an integral part of these statements. 4

5 II. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER Dec Dec Dec.2013 Note (restated) (restated) ASSETS Fixed Assets Tangible fixed assets X Intangible assets X Investment in associates X Investment property X Deferred income tax assets X Other long-term accounts receivables X Other non-financial long-term assets Current Assets Trade receivables X Current income tax receivables Other short-term receivables V, X Prepayments and accrued revenue, including accrued commission X.14 revenue Other non-financial short-term assets Other financial short-term assets X Cash and cash equivalents X TOTAL ASSETS LIABILITIES AND EQUITY Equity Share capital X Other reserve capital X Retained earnings Capital attributable to non-controlling shareholders Total equity Long-term liabilities Provision for deferred income tax X Long-term provisions X Financial lease liabilities (long-term liabilities) X.10,X Bonds issued (long-term liabilities) X Short-term liabilities Credits, loans and financial lease liabilities (short-term liabilities) X.10,X Bonds issued (short-term liabilities) X Short-term provisions X Share acquisition liability (Home Broker S.A.) Trade liabilities X Accruals and deferred revenue, including accrued remuneration X Current income tax liabilities Other short-term non-financial liabilities X Total liabilities TOTAL LIABILITIES AND EQUITY Notes V - XIX to these consolidated financial statements, as contained in pages 9 68, are an integral part of these statements 5

6 III. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON 31 DECEMBER 2015 for the year ended on 31 December 2015 Share capital Supplementary capital Attributable to shareholders in the parent company Other capital reserves Capital reserve for the repurchase of shares Share-based payments (equity item) Nota Capital attributable to non-controlling shareholders Total equity As at 1 January 2015 X Change of accounting policy - (4 770) As at 1 January 2015 (restated) Net profit for the period Other comprehensive income Dividend paid from Open Finance TFI SA (3 613) (3 613) Repurchase of shares in Open Finance TFI S.A. - (7 124) (7 124) (1 982) (9 106) Distribution of profit: (5 734) Transfer of net profit for 2014 to supplementary capital (5 734) As at 31 December 2015 X Retained earnings Total for the year ended on 31 December 2014 Share capital Supplementary capital Attributable to shareholders in the parent company Other capital reserves Capital reserve for the repurchase of shares Share-based payments (equity item) Note Capital attributable to non-controlling shareholders Total equity As at 1 January 2014 X Change of accounting policy - (41 501) - - (30 722) (72 223) - (72 223) As at 1 January 2014 (restated) Net profit for the period Change of accounting policy (4 421) (4 421) - (4 421) Other comprehensive income Dividend paid from Open Finance TFI S.A (618) (618) Distribution of profit: (52 017) Transfer of net profit for 2013 to supplementary capital (52 017) As at 31 December 2014 X Retained earnings Total Notes V - XIX to these consolidated financial statements, as contained in pages 9 67, are an integral part of these statements 6

7 IV. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31 DECEMBER 2015 Cash flows from operating activities Note 1 Jan Dec Jan Dec.2014 Net profit Total adjustments: (514) Depreciation/amortisation X.9,X.11, X Profit (loss) on investing activities 795 (26 580) Interest expence Change in trade receivables XII (808) Change in trade liabilities XII (5 648) Change in deferred income tax assets / provisions XII Change in other long-term receivables XII Change in other short-term receivables XII (920) (285) Change in other non-financial short-term assets XII 2 (40) Change in other non-financial long-term assets XII (1 225) 523 Change in other financial short-term assets XII (5 922) Change in accruals and prepayments XII (10 999) (12 916) Change in the share acquisition liability - (3 000) Change in other non-financial (short- and long-term) liabilities XII Change in provisions XII (25) - Current income tax presented in the statement of comprehensive income X Income tax paid (4 169) (4 851) Other (15 908) (14 653) Net cash from operating activities Cash flows from investing activities Sale of tangible fixed assets and intangible assets Acquisition of tangible fixed assets (173) (4 224) Acquisition of intangible assets (26 794) (47 337) Settlement of acquisition of Home Broker S.A. - (833) Dividend paid to minority shareholders (3 613) (618) Dividend from Open Brokers S.A Redemption of shares in a subsidiary Open Finance TFI S.A. V (9 105) - Sale of shares in Open Brokers S.A. V Net cash from investing activities (23 026) (52 800) Cash flows from financing activities Proceeds from issue of bonds X Proceeds from credit X Proceeds from loan X Payment of interest on bonds (8 486) (7 346) Repayment of financial lease liabilities (776) (633) Repayment of interest of financial lease (88) (155) Interest on borrowings paid (145) (100) Interest on loan paid (748) (81) Bonds redemption X.22 (64 000) - Net cash from financing activities (22 243) Increase (decrease) in net cash and cash equivalents Net exchange differences - - Opening balance of cash X Closing balance of cash X including cash not fully disposable - - Notes V - XIX to these consolidated financial statements, as contained in pages 9 67, are an integral part of these statements 7

8 V. GENERAL INFORMATION Grupa Kapitałowa Open Finance S.A. (Open Finance S.A. Group) comprises Open Finance S.A. ( Company, Open Finance ) and its subsidiaries. The parent company of the Open Finance S.A. Group with its registered office in Warsaw, Poland, at the address of ul. Przyokopowa 33, was incorporated on 30 January 2004 for an indefinite period of time. On 25 February 2004, it was registered under number with the National Court Register. The legal basis for the parent company s operation is its Articles of Association executed before a notary public on 30 January 2004 (as later amended). The parent company is registered for statistical purposes under (REGON) number The parent company s objects, as specified in its Articles of Association, are as follows: to provide other financial intermediation services, to provide loans in other forms, financial service activities, except insurance and pension funding. The parent company s Management Board As at 31 December 2015, the Management Board of Open Finance consisted of the following individuals: 1. Maurycy Kϋhn President of the Management Board, 2. Helena Kamińska Member of the Management Board, 3. Magdalena Łukaszewicz Member of the Management Board, 4. Paweł Komar Member of the Management Board. As at the date of approval of these consolidated financial statements the Management Board of Open Finance consisted of the following individuals: 1. Przemysław Guberow President of the Management Board, 2. Helena Kamińska Member of the Management Board, 3. Magdalena Łukaszewicz Member of the Management Board, 4. Paweł Komar Member of the Management Board. On September 8, 2015 the Open Finance S.A. Supervisory Board appointed Mr. Paweł Komar to the position of Member of the Board. On 27 January 2016, Mr. Maurycy Kϋhn resigned from his position as President of the Management Board effective 1 February On 27 January 2016 the Supervisory Board of Open Finance appointed Mr. Przemyslaw Guberow to the position of President of the Management Board for a three-year term effective 1 February Apart from the changes described above, no other changes were made to the composition of the Management Board during the twelve-month period ended on 31 December 2015 and until the date of approval of these consolidated financial statements. The parent company s Supervisory Board As at 31 December 2015, the Supervisory Board of Open Finance consisted of the following individuals: 8

9 1. Remigiusz Baliński Deputy Chairman of the Supervisory Board, 2. Leszek Czarnecki, PhD Member of the Supervisory Board, 3. Izabela Lubczyńska Member of the Supervisory Board, 4. Jarosław Augustyniak Member of the Supervisory Board, 5. Aneta Skrodzka-Książek Member of the Supervisory Board. As at the date of approval of these consolidated financial statements the Supervisory Board of Open Finance consisted of the following individuals: 1. Aneta Skrodzka-Książek Chairman of the Supervisory Board, 2. Remigiusz Baliński Deputy Chairman of the Supervisory Board, 3. Leszek Czarnecki, PhD Member of the Supervisory Board, 4. Izabela Lubczyńska Member of the Supervisory Board, 5. Jarosław Augustyniak Member of the Supervisory Board. On 14 December 2015 the Company received Mr. Marcin Dec s resignation from the position of Member of Supervisory Board effective 15 December On 15 December 2015 the Open Finance Extraordinary General Meeting appointed Mrs Aneta Skrodzka-Książek as Member of Supervisory Board for a three-year term. On 19 January 2016 the Supervisory Board of Open Finance appointed Mrs Aneta Skrodzka-Książek to the position of Chariman of Supervisory Board of Open Finance. These consolidated financial statements for the year ended on 31 December 2015 were approved for publication by the parent company s Management Board on 16 March The Open Finance S.A. Group is controlled by Leszek Czarnecki, PhD, holding, as at 31 December 2015 indirectly through subsidiaries (i.e. Getin Noble Bank S.A., Idea Bank S.A.), 54.93% of the total number of shares in Open Finance and as at the date of approval of these consolidated financial statements 55.19% of the total number of shares in Open Finance. As at the end of each of the reporting periods, the following subsidiaries were part of the Open Finance S.A. Group: Company Name Status Registered Office Core Business Percentage Share of Company's Capital 31 Dec Dec.2014 Open Finance TFI S.A. subsidiary Warsaw, Przyokopowa 33 investment fund management 76,25% 61,25% Home Broker S.A. subsidiary Warsaw, Przyokopowa 33 real estate agency services 100% 100% HB Finanse sp. z o.o. subsidiary Warsaw, Przyokopowa 33 financial intermediation 100% 0% On 1 August 2013, the Supervisory Board of Open Finance gave its consent to the sale, to individuals and legal persons, a total of 2,131,250 shares in the investment fund company Open Finance TFI. S.A., which account for 38.75% of the shares in the capital of the company, for the total amount of 1,595. The agreements to sell the shares were signed in the period from 2 August to 9 August The agreements provided for put options and call options, which is described in more detail on page 12 (Note VII). On 17 April 2015, Open Finance S.A. repurchased 9% of shares in Open Finance TFI S.A (i.e. 495 shares) from legal person for the amount of On 1 July 2015, Open Finance S.A. repurchased 6% of shares in Open Finance TFI S.A (i.e. 330 shares) from legal persons for the amount of

10 Therefore, the shares of Open Finance in the subsidiary Open Finance TFI S.A. amounts to % at the date of publication of these financial statements. On 15 June 2015, HB Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych was closed. The closure of the Fund was due to resolution adopted on 7 April 2015 by the General Meeting of Investors. On 30 October 2015 the District Court for the Capital of Warsaw, XII Commercial Department of National Court Register registered the division of Home Broker S.A. The division of the company came under Art point 4) of the Code of Commercial Companies by transferring a part of Home Broker S.A. to a newly formed company, HB Finanse Sp. z o. o. (a 100% subsidiary of Open Finance S.A.). The Board of Open Finance S.A. made a decision on 3 November 2015 on the planned merger of the subsidiary HB Finanse Sp. z o.o (acquiree) with Open Finance S.A. (acquiring company). The merger will take place without increasing the share capital of the acquiring company, due to the fact that Open Finance S.A. holds 100% of the share capital of the acquired company. This decision is the result of a multistep analysis and revenue-cost evaluation of Home Broker S.A. and Open Finance S.A. and its objective is to systematize the business activity of Open Finance in the area of financial intermediation. In the opinion of the Board, the consolidation of financial intermediation within one company, i.e. Open Finance S.A. will bring positive effects in terms of increasing the efficiency of the two companies and collate sales and organizational structure of the Open Finance group. The Management Board assumes that the above merger is a strategic business action that will positively affect the financial results of Open Finance S.A. and that it is in line with investors expectations. On 27 January 2016 the District Court. m. st. Warsaw, XII Commercial Department of National Court Register registered the Company's merger with HB Finanse sp. z o.o. The merger was effected by transferring to the Acquiring Company - as the sole shareholder of the Acquired Company - all assets of the Acquired Company by universal succession and the dissolution of the Acquired Company without carrying out its liquidation in accordance with the provisions of art point 1) of the CCC. Following the merger, Open Finance - in accordance with the provisions of art KSH - assumed all the rights and obligations of HB Finanse sp. z o.o. Given that all the shares in the share capital of the Acquired Company were held by the Acquiring Company, in accordance with Article of the Commercial Companies Code the merger was effected without increasing the share capital of the Acquiring Company. Detailed terms of the merger are set out in the Merger Plan agreed on 17 November 2015, together with the correction of the Merger Plan dated 9 December 2015 and made available free of charge to the public on the websites of the companies acquiring ( and acquired ( in accordance with Article of the CCC. Settlement of loss of control in Open Brokers S.A. On 22 October 2014, Open Finance S.A. sold to LC Corp. B.V shares of Open Brokers S.A. for 7.200, which constitutes 22,7% of its share capital. On 22 October 2014, Open Finance S.A. sold to Valoro Investments Ltd shares of Open Brokers S.A. for 4.000, which constitutes 12,6% of its share capital. On 22 October 2014, Open Finance S.A. sold to Yarus Investments Ltd Inc shares of Open Brokers S.A. for 5.000, which constitutes 15,7% of its share capital. According to the contract, the payment for shares was deferred until 30 June 2015 therefore the income and corresponding receivable were recognized in the discounted amount. Loss of control over Open Brokers S.A. and thus the effect of the settlement of the sale of shares in the consolidated financial statements of the Group were recognized at the date of contract, i.e., in October As a result of the transaction, the share of Open Finance in the company fell to 49 % and in the consolidated financial statements it has been recognized as shares in associate valued at fair value at the da te of loss of control. Until the end of October 2014 Open Brokers as a subsidiary was fully consolidated and as of 1 November 2014 it is consolidated using the equity method. The table below presents the settlement of result of the Open Finance Group on the sale of shares in Open Brokers S.A. 10

11 Profit from the settlement is reported under " The result of the loss of control of a subsidiary" in the statement of comprehensive income. Settlement of loss of control in Open Brokers S.A. 31 Dec.2014 Revenue from the sale of shares Discount of deferred payment (739) The fair value of residual shares Net assets of Open Brokers S.A. on the day of the loss of control (1 064) Gross profit on sale Income tax Net profit on sale As at 31 December 2015 and 31 December 2014, the Company s share of the total number of voting rights in each of the companies was equal to the Company s share in the capital of each of the companies. The Group did not discontinue any operations in the 2015 financial year or the 2014 financial year. VI. BASIS FOR THE PREPARATION OF THESE CONSOLIDATED FINANCIAL STATEMENTS The reported figures cover the Group s consolidated statement of financial position as at 31 December 2015, its consolidated statement of comprehensive income for the twelve-month period ended on 31 December 2015, i.e. from 1 January 2015 to 31 December 2015, its consolidated statement of changes in equity and its consolidated cash flow statement for the period from 1 January 2015 to 31 December The comparative figures cover the Group s consolidated statement of financial position as at 31 December 2014, its consolidated statement of comprehensive income for the twelve-month period ended on 31 December 2014, i.e. from 1 January 2014 to 31 December 2014, its consolidated statement of changes in equity and its consolidated cash flow statement for the period from 1 January 2014 to 31 December The above figures were audited by a statutory auditor. These consolidated financial statements have been prepared in accordance with the historical cost principle, except for investment properties. These consolidated financial statements are presented in the Polish currency () and all figures, unless otherwise stated, are expressed in. These consolidated financial statements have been prepared based on the assumption that the Group s companies will continue their operations in the foreseeable future, i.e. for a period of at least 12 months from the end of the reporting period, i.e. from 31 December As at the date of approval of these consolidated financial statements, no circumstances were identified which might threaten or significantly limit the continuity of the Group s operations. VII. SIGNIFICANT FIGURES BASED ON PROFESSIONAL JUDGEMENT AND ESTIMATES Professional judgement and uncertainty of estimates In applying the accounting principles (policy) described below, of utmost significance was, in addition to accounting estimates, professional judgement of management. The estimated figures, including the accounting estimates, are reviewed periodically. The effect of all the expected events is taken into account with each change. Although the estimates are based on the best knowledge of the current conditions and of the Group s activities, the actual results may be different from the estimates. 11

12 Kick-back commission revenue The kick-back commission revenue and the commission based on the value of assets are recognised based on the results of an analysis supported by a model. The model takes into account the value of the assets deposited in customers accounts as at the balance sheet date and historical data regarding payments of such commission separately for each product sold for which commission is calculated. For reasons of prudence, the model takes into account only those products which the Company sold during a period of time earlier than twelve months in relation to the balance sheet date. Rates and method for depreciation of tangible fixed assets and amortisation of intangible assets As at the last day of each reporting period, the parent company s management participate in the process of determining amortisation and depreciation rates on the basis of the estimated useful lives of its tangible fixed assets and intangible assets. Every year the Group reviews the estimated useful lives. The estimated useful lives are presented on pages 21 and 23. Customer databases The databases purchased by the Group are classified as intangible assets if they meet the criteria for being so classified. In particular, the Group assesses the existence of future economic benefits related to the use of its databases. Such benefits are assessed on the basis of historical and expected revenue from the sale of services to customers included in such databases. The Group reviews the period and method of amortising such intangible assets (customer databases) at least at the end of each financial year. Any change identified in the review is recognised as a change of estimated values in accordance with IFRS 8. As part of an annual review of the useful lives of the Group's intangible assets, the Group changed, starting from 1 January 2015, its estimated useful lives. The change was based on an analysis of historical data. As a result, the amortisation period with respect to customer databases was extended from 5 to 7 years. In the opinion of the Group's Management, the 7-year period is the period during which each such database generates most of the future probable economic benefits (commission revenue). The useful lives for customer databases were adjusted based on the principles described in IAS 8 for adjustments of estimates, i.e. prospectively. Trademark and goodwill The trademark and goodwill are tested for impairment on an annual basis. The identified impairment loss is recognised in profit or loss. The impairment tests performed as at 31 December 2015 and 31 December 2014 showed no impairment of the trademark (Note X.11). The Company s right (call option) under investment agreements signed on 5 August 2013 The call option is the Company s right to require such individuals and legal persons to sell their shares in Open Finance TFI S.A. to Open Finance S.A. at contractually agreed prices. The purchase price would be calculated as the product of (a) the percentage of the sold shares in Open Finance TFI S.A.'s share capital multiplied by (b) Open Finance TFI S.A. s net profit for the year preceding the year of the purchase and by (c) a fixed multiplier as agreed. The call option meets the definition of financial instrument as defined in IAS 32. As such, it is recognised and measured in accordance with IAS 32 and IAS 39. Open Finance S.A. considers it impossible to measure the call option at fair value reliably, mostly because the underlying instruments are the equity instruments of an entity that is not listed in an open market. Therefore, the Company has exercised the exemption provided for in IAS 39 and recognises the call option at historical cost, which is equal to zero. 12

13 The right of persons and Companies (put option) under investment agreements signed on 5 August 2013 The put option is the Company s right to require such individuals and legal persons to sell their shares in Open Finance TFI S.A. to Open Finance S.A. at contractually agreed prices. The purchase price would be calculated as the product of (a) the percentage of the sold shares in Open Finance TFI S.A.'s share capital multiplied by (b) Open Finance TFI S.A. s net profit for the year preceding the year of the purchase and by (c) a fixed multiplier as agreed. The Management Board of Open Finance S.A believes that the payment amount arising from the option, determined as the difference between the amount based on a fixed net profit multiplier and the value of the shares is not directly linked with the value of Open Finance TFI S.A. at any time and, therefore, the option does not meet the definition of share-based payment and is does not fall within IFRS 2. The Management Board believes that the transaction does not fall within IAS 19 either, as the liability arises on the part of an entity other than that to which the services are supplied (the services are supplied to Open Finance TFI S.A. while the liability is the liability of Open Finance S.A.). Management of the Bank is of the opinion that these options should be classified as put options held by non - controlling shareholders and recognized in the consolidated financial statements in accordance with IAS 32 and IAS 39 as a liability for the expected payments under the option. The opposite side of booking is the equity of noncontrolling holders, to the amount calculated as if the minority shareholders do not have the " put" option, and other capital (value of the difference between the higher of amount of the liability and the amount of non-controlling shareholders equity). The fair value of options is measured at the reporting date using the discounted cash flow method, taking into account the conditions under which the instruments were granted. In the opinion of the Management Group will begin to recognize liabilities expected payments under the option in the statement of financial position when the price of these options will be determined reliably and when it is probable that the other conditions of exercise of the " put" option of will be met. The Companies right (call option) under investment agreements signed on 22 October 2014 On 22 October 2014, Open Finance sold 51 of shares of Open Brokers S.A. which account for 51% of the shares in the capital of the company, for the total amount of 16,200. The call option is the Company s right to require legal persons to sell their shares in Open Brokers S.A. to Open Finance S.A. at contractually agreed prices, in the period from 2017 to The purchase price would be calculated as the product of (a) the percentage of the sold shares in Open Brokers S.A.'s share capital multiplied by (b) Open Brokers S.A. s net profit for the year preceding the year of the purchase and by (c) a fixed multiplier as agreed. The call option meets the definition of financial instrument as defined in IAS 32. As such, it is recognised and measured in accordance with IAS 32 and IAS 39. Open Finance S.A. considers it impossible to measure the call option at fair value reliably, mostly because the underlying instruments are the equity instruments of an entity that is not listed in an open market. Therefore, the Company has exercised the exemption provided for in IAS 39 and recognises the call option at historical cost, which is equal to zero. Impairment of accounts receivable in respect of the supply of goods and services and in respect of security deposits The value of trade receivables and security deposit receivables is impaired on the basis of an analysis of individual balances of the receivables. The following is recognised by the Group as evidence of impairment of accounts receivable in respect of the supply of goods and services and in respect of security deposits: the counterparty failing to meet the deadline for payment, the debtor having considerable financial difficulties, 13

14 it becoming highly probable that the debtor will enter bankruptcy or other financial reorganisation, bankruptcy proceedings pending against the debtor. All the evidence of impairment is analysed at least as at the end of each reporting period. The identified impairment loss is recognised in profit or loss. The changes of impairment losses in respect of trade receivables are described in Note X.16. Deferred tax The Group recognises a deferred income tax asset based on the assumption that it will in the future achieve profit before tax and will be able to use the asset. If the Group s future results deteriorate, this assumption may be illegitimate. Calculations of the deferred income tax assets are presented in Note X.7.3. Provisions for disability/retirement severance pay The provision for disability/retirement severance pay is calculated actuarially by an independent actuary, as the current value of the Group s future amounts due to its employees, taking into account the number of employees and pay rates as at the date of revaluation. The provision for disability/retirement severance pay is updated annually. The calculation of the provision is based on a number of assumptions as to macroeconomic conditions, the Group s personnel turnover rates, the risk of death and other assumptions. Information on the estimated amounts of severance pay is presented in Note X.26. VIII. ACCOUNTING POLICY 1. Statement of compliance with International Financial Reporting Standards These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) and the IFRS endorsed by the European Union (collectively referred to as IFRS-EU or IFRS ). IFRS-EU comprise standards and interpretations accepted by the International Accounting Standards Board ( IASB ) and the International Financial Reporting Interpretations Committee ( IFRIC ). The Group first applied IFRS-EU in the preparation of its Consolidated Historical Financial Information for the year ended on 31 December 2009 and for the purposes of a prospectus. The Company adopted IFRS-EU on 1 January Therefore, this set of consolidated financial statements is another set of financial statements prepared in accordance with IFRS-EU. The accounting principles applied by the Group are described in Note VIII.7 to these consolidated financial statements. 2. Currency of measurement and presentation The currency of measurement and presentation used by the parent company, its subsidiaries and its associate and applicable to these consolidated financial statements is the Polish zloty (). 3. Changes in accounting principles Changes to the existing standards and interpretations applied for the first time in the 2015 financial statements: The following amendments to the existing standards and new interpretation issued by the International Accounting Standards Board (IASB) and adopted by the EU are effective for current financial period: Amendments to various standards Improvements to IFRSs (cycle ) resulting from the annual improvement project of IFRS (IFRS 3, IFRS 13 and IAS 40) primarily with a view to removing inconsistencies and clarifying wording - adopted by the EU on 18 December 2014 (amendments are to be applied for annual periods 14

15 beginning on or after 1 January 2015), IFRIC 21 Levies adopted by the EU on 13 June 2014 (effective for annual periods beginning on or after 17 June 2014). The adoption of these amendments to the existing standards and interpretation has not led to any material changes in the Group financial statements. 4. New standards and interpretations issued but not yet effective. Standards and interpretations which have already been published and approved by the EU but are not yet effective At the date of authorisation of these financial statements the following amendments to the existing standards issued by IASB and adopted by the EU were in issue but not yet effective: Amendments to IFRS 11 Joint Arrangements Accounting for Acquisitions of Interests in Joint Operations - adopted by the EU on 24 November 2015 (effective for annual periods beginning on or after 1 January 2016), Amendments to IAS 1 Presentation of Financial Statements - Disclosure Initiative - adopted by the EU on 18 December 2015 (effective for annual periods beginning on or after 1 January 2016), Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets - Clarification of Acceptable Methods of Depreciation and Amortisation - adopted by the EU on 2 December 2015 (effective for annual periods beginning on or after 1 January 2016), Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture - Agriculture: Bearer Plants - adopted by the EU on 23 November 2015 (effective for annual periods beginning on or after 1 January 2016), Amendments to IAS 19 Employee Benefits - Defined Benefit Plans: Employee Contributions - adopted by the EU on 17 December 2014 (effective for annual periods beginning on or after 1 February 2015), Amendments to IAS 27 Separate Financial Statements - Equity Method in Separate Financial Statements - adopted by the EU on 18 December 2015 (effective for annual periods beginning on or after 1 January 2016). Amendments to various standards Improvements to IFRSs (cycle ) resulting from the annual improvement project of IFRS (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38) primarily with a view to removing inconsistencies and clarifying wording - adopted by the EU on 17 December 2014 (amendments are to be applied for annual periods beginning on or after 1 February 2015), Amendments to various standards Improvements to IFRSs (cycle ) resulting from the annual improvement project of IFRS (IFRS 5, IFRS 7, IAS 19 and IAS 34) primarily with a view to removing inconsistencies and clarifying wording - adopted by the EU on 15 December 2015 (amendments are to be applied for annual periods beginning on or after 1 January 2016) The Management Board of the parent company does not expect the introduction of the above standards and interpretations to have a significant effect on the accounting principles (policy) applied by the Group. Standards and Interpretations issued by IASB but not yet adopted by the EU At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except from the following new standards and amendments to the existing standards, which were not endorsed for use in EU as at [date of publication of financial statements] (the effective dates stated below is for IFRS in full): IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1 January 2018), 15

16 IFRS 14 Regulatory Deferral Accounts (effective for annual periods beginning on or after 1 January 2016) - the European Commission has decided not to launch the endorsement process of this interim standard and to wait for the final standard, IFRS 15 Revenue from Contracts with Customers and further amendments (effective for annual periods beginning on or after 1 January 2018), IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019), Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 28 Investments in Associates and Joint Ventures - Investment Entities: Applying the Consolidation Exception (effective for annual periods beginning on or after 1 January 2016), Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and further amendments (effective date was deferred indefinitely until the research project on the equity method has been concluded). The Group anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact on the financial statements of the Group in the period of initial application. At the same time, hedge accounting regarding the portfolio of financial assets and liabilities, whose principles have not been adopted by the EU, is still unregulated. According to the entity s estimates, application of hedge accounting for the portfolio of financial assets or liabilities pursuant to IAS 39: Financial Instruments: Recognition and Measurement, would not significantly impact the financial statements, if applied as at the balance sheet date. 5. Changes in accounting policy comparative data On 1 June 2015 with effect from 1 January 2015, the Management Board of Open Finance S.A. adopted a resolution to make a change in accounting policy in terms of revenue recognition. Until 31 December 2014 the Group recognized revenue from submitted loan applications (and still not activated loans), applications for deposits, savings plans (not yet realized) in other financial institutions based on the closing ratio of financial products. These ratios were based on historical data regarding the probability of loan disbursement and the realization of investments and savings plans from submitted applications. This method was used due to the possibility of obtaining a reliable estimate of revenues from the sale of financial products in terms of the Group's reporting in the environment of homogeneous products. Due to the significant increase in the number of products offered (cash loans, corporate loans, mortgages, insurance, structured products and the regular saving plans) and the number of financial institutions with which the Group cooperates and also because of the need to integrate reporting of various sales networks operating in the Group, further use of the method of the average closing ratio, does not bring the above-described benefits for users of financial statements (fast reporting deadlines with high reliability of data). Therefore, the Management Board of the Parent company decided to change the accounting policy from 1 January 2015 year. Since that day, the Group sets the amount of revenue from loan intermediation based on the actual volumes of activated financial products reported by the financial institutions at the end of the reporting period. Due to the fact that the change relates to a method for determining the amount of income attributable to the period for transactions which does not differ as to the economic content of transactions concluded so far - the change complies with the definition of changes in accounting policy in accordance with International Accounting Standard 8 (IAS 8). This change is justified in accordance with IAS 8 providing disclosure of information that is more reliable and responds to the needs of users of financial statements in a more comprehensive manner. Information on revenue in the amount of commissions from products reported by financial institutions in the current period is more reliable than estimates previously used, the use of which was mainly due to the possibility of timely delivery of financial information in an environment of homogeneous products. Without a change in policy previously used, the reliability of estimates would 16

17 be decreasing or would require gathering a large quantity of data for the precise determination, which would increase the cost of obtaining financial information. In the opinion of the Management Board of the parent company, this information is also more in line with the needs of users by reducing the scope of the use of estimates and judgments against the increasing diversity of products offered and the number of cooperating financial institutions. The new accounting policy has been applied fully retrospectively in accordance with IAS 8. This means that: For the financial years to 31 December 2014 (cumulatively), the retained earnings are lower by , the balance of prepaid expenses are lower by , the balance of deferred tax liabilities are lower by , the balance of deferred tax asset is increased by 7.124, the balance of trade receivables is increased by 3.227, the balance of accruals and accrued remuneration is higher by In 2014 the amount of sales revenue is less than reported on 31 December 2014 by and the amount of operating costs by This resulted in a decrease in earnings before tax in the period by 5.458, decrease in the amount of tax by the amount of and as a result decrease in net profit for the period by (including attributable to equity holders of the parent by the amount of ). The Group has changed the presentation of the consolidation adjustments on transactions between Open Finance S.A. and Open Life TUŻ S.A. So far, these adjustments were recognized in the positions of accruals (active and passive), after the change, these adjustments are recognized under other non-current liabilities. Transformation of comparative data due to changes in presentation had no impact on the net results for the 12 months ended 31 December These financial statements have been prepared taking into consideration the above adjustments and periods subject to these adjustments were marked Restated. The comparative figures for the 12 months ended 31 December 2014 and as at 31 December 2014 presented in these consolidated financial statements have been restated to take into account changes in presentation and changes in accounting principles (policy) introduced in the current reporting period. The impact of the restatements introduced in 2015 on the interim condensed financial statements resulting from changes in accounting policy is presented below: CONTINUED OPERATIONS change (restated) in '000 in '000 in '000 Sales revenue (8 526) Operating costs (3 068) Gross profit on sales (5 458) Other operating revenue Other operating costs Operating profit (5 458) 855 Financial revenue Share of the associate's profit Profit on sale of controlling interest Financial costs Gross profit (5 458) Income tax (1 037) Net profit for the financial year (4 421)

18 (audited) change (restated) in '000 in '000 in '000 ASSETS Fixed Assets Tangible fixed assets Intangible assets Investment in associates Investment property Deferred tax asset Other long-term accounts receivables Other non-financial long-term assets 3-3 Current Assets (74 479) Trade receivables Current income tax receivables Other short-term receivables Prepayments and accrued revenue, including accrued commission revenue (77 706) Other financial short-term assets Other non-financial short-term assets Cash and cash equivalents TOTAL ASSETS (67 355) LIABILITIES AND EQUITY Equity (76 644) Share capital Other reserve capital (41 501) Retained earnings (35 143) Capital attributable to non-controlling shareholders Total equity (76 644) Long-term liabilities (10 854) Deferred tax liability (10 854) Long-term provisions Financial lease liabilities (long-term liabilities) Bonds issued (long-term liabilities) Short-term liabilities Credits, loans and financial lease liabilities (short-term liabilities) Bonds issued (short-term liabilities) Short-term provisions 4-4 Share acquisition liability (Home Broker S.A.) Trade liabilities Accruals and deferred revenue, including accrued remuneration Current income tax liabilities Other short-term non-financial liabilities Total liabilities TOTAL LIABILITIES AND EQUITY (67 355)

19 (audited) change (restated) in '000 in '000 in '000 ASSETS Fixed Assets Tangible fixed assets Intangible assets Investment in associates Investment property Deferred tax asset Other long-term accounts receivables Other non-financial long-term assets Current Assets (69 043) Trade receivables Current income tax receivables Other short-term receivables Prepayments and accrued revenue, including accrued commission revenue (69 043) Other financial short-term assets Other non-financial short-term assets Cash and cash equivalents TOTAL ASSETS (61 837) LIABILITIES AND EQUITY Equity (72 223) Share capital Other reserve capital (41 501) Retained earnings (30 722) Capital attributable to non-controlling shareholders Total equity (72 223) Long-term liabilities (9 735) Deferred tax liability (9 735) Long-term provisions Financial lease liabilities (long-term liabilities) Bonds issued (long-term liabilities) Short-term liabilities Credits, loans and financial lease liabilities (short-term liabilities) Bonds issued (short-term liabilities) Short-term provisions 4-4 Share acquisition liability (Home Broker S.A.) Trade liabilities Accruals and deferred revenue, including accrued remuneration Current income tax liabilities Other short-term non-financial liabilities Total liabilities TOTAL LIABILITIES AND EQUITY (61 837) Consolidation principles These consolidated financial statements include the financial statements of Open Finance S.A and the financial statements of its subsidiaries, each prepared for the year ended on 31 December, with exception of Home Broker S.A., which prolonged its accounting year in 2015 and as a result will prepare its next yearly financial statements as at 30 November The financial statements of the subsidiaries are prepared for the same reporting periods as the parent company s statements (with exception of Home Broker S.A.), using consistent accounting principles and applying uniform accounting principles to similar transactions and events. To eliminate any discrepancies in the application of 19