open finance s.a. group consolidated financial … · statement of compliance with international...

Open Finance S.A. Group

Consolidated Financial Statements

for the year ended on 31 December 2013

prepared in accordance with International Financial Reporting Standards

Open Finance S.A. Group Consolidated Financial Statements for the Year Ended on 31 December 2013 (Figures in PLN thousand)

2Notes V - XIX to these consolidated financial statements, as contained in pages 9 – 87,

are an integral part of these statements.

CONTENTS

I. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED ON 31

DECEMBER 2013 .................................................................................................................................................... 4

II. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 .............................. 5

III. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON 31 DECEMBER

2013 ......................................................................................................................................................................... 6

IV. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31 DECEMBER 2013 ............... 8

V. GENERAL INFORMATION ............................................................................................................................... 9

VI. BASIS FOR THE PREPARATION OF THESE FINANCIAL STATEMENTS AND IDENTIFICATION OF THE

CONSOLIDATED FINANCIAL STATEMENTS ....................................................................................................... 12

VII. SIGNIFICANT FIGURES BASED ON PROFESSIONAL JUDGEMENT AND ESTIMATES ............................ 12

VIII. ACCOUNTING POLICY .................................................................................................................................. 20

1. Statement of compliance with International Financial Reporting Standards ......................................... 20

2. Currency of measurement and presentation ........................................................................................ 20

3. Changes in accounting principles ......................................................................................................... 20

4. New standards and interpretations issued but not yet effective. ........................................................... 21

5. Consolidation principles ........................................................................................................................ 22

6. Investments in subordinated entities .................................................................................................... 22

7. Material accounting principles .............................................................................................................. 23

IX. OPERATING SEGMENTS .............................................................................................................................. 44

X. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ..................................................................... 46

1. Revenue ............................................................................................................................................... 46

2. Operating costs .................................................................................................................................... 46

3. Other operating revenue ....................................................................................................................... 47

4. Other operating costs ........................................................................................................................... 47

5. Financial revenue ................................................................................................................................. 48

6. Financial costs ...................................................................................................................................... 48

7. Income tax ............................................................................................................................................ 48

7.1 Tax liabilities ......................................................................................................................................... 48

7.2 Effective interest rate ............................................................................................................................ 49

7.3 Deferred income tax ............................................................................................................................. 50

8. Earnings per share (PLN per share) ..................................................................................................... 52

9. Business combinations ......................................................................................................................... 53

10. Employee Benefit Funds and Related Liabilities .................................................................................. 56

11. Tangible fixed assets ............................................................................................................................ 57

12. Financial leases .................................................................................................................................... 58

13. Intangible assets ................................................................................................................................... 59

14. Investments in subordinated entities .................................................................................................... 61

15. Investment real estate .......................................................................................................................... 62

16. Prepayments and accrued revenue, including accrued commission revenue (current assets) ............. 62

17. Other non-financial short-term and long-term assets ............................................................................ 63

18. Trade receivables ................................................................................................................................. 63

19. Other receivables ................................................................................................................................. 64

20. Cash and cash equivalents .................................................................................................................. 64


3 Notes V - XIX to these consolidated financial statements, as contained in pages 9 – 87, are an integral part of these

statements

21. Share capital and other reserve capital ................................................................................................ 64

21.1 Share capital ........................................................................................................................................ 64

21.2 Shareholders in the parent company .................................................................................................... 65

21.3 Other capital reserves .......................................................................................................................... 66

22. Finance lease liabilities ......................................................................................................................... 67

23. Operating leases .................................................................................................................................. 67

24. Bonds issues ........................................................................................................................................ 68

25. Trade liabilities ...................................................................................................................................... 69

26. Liabilities arising from the acquisition of shares in Home Broker Nieruchomości S.A. ......................... 69

27. Other non-financial liabilities ................................................................................................................. 69

28. Accruals and deferred revenue, including accrued remuneration (liabilities) ........................................ 70

29. Provisions ............................................................................................................................................. 70

30. Contingent assets and liabilities ........................................................................................................... 71

31. Lawsuits ............................................................................................................................................... 71

32. Tax settlements..................................................................................................................................... 71

33. Open Finance’s incentive scheme ........................................................................................................ 72

XI. FINANCIAL INSTRUMENTS .......................................................................................................................... 73

1. Fair values of different classes of financial instruments ........................................................................ 73

2. Net gains and losses broken down by financial instrument category, recognised in the statement of

comprehensive income ...................................................................................................................................... 74

XII. ADDITIONAL EXPLANATIONS RELATING TO THE CASH FLOW STATEMENT ......................................... 75

XIII. TRANSACTIONS WITH RELATED PARTIES ................................................................................................ 77

XIV. INFORMATION OF AUDITOR’S FEES ........................................................................................................... 80

XV. OBJECTIVES AND PRINCIPLES OF FINACIAL RISK MANAGEMENT ........................................................ 80

XVI. CAPITAL MANAGEMENT ............................................................................................................................... 83

XVII. EMPLOYMENT STRUCTURE ............................................................................................................. 83

XVIII. IMPORTANT EVENTS OCCURRING BETWEEN THE DATE OF THESE CONSOLIDATED

FINANCIAL STATEMENTS AND THE DATE OF THEIR APPROVAL FOR PUBLICATION ................................... 83

XIX. CORRECTIONS OF ERRORS IN THE PREVIOUS REPORTING PERIOD ........................................ 84


4Notes V - XIX to these consolidated financial statements, as contained in pages 9 – 87,

are an integral part of these statements.

I. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED ON 31 DECEMBER 2013

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012

PLN thousand PLN thousand

CONTINUED OPERATIONS

Financial intermediation revenue X.1 440 274 450 713

Operating costs X.2 373 841 364 942

Gross profit on sales 66 433 85 771

Oither operating revenue X.3 11 736 16 389

Other operating costs X.4 7 202 12 622

Operating profit 70 967 89 538

Financial revenue X.5 992 115 817

Share of the associate's profit X.14 5 159 21 688

Financial costs X.6 8 691 8 582

Impairment of Home Broker Nieruchomości S.A's goodwill X.9 - (101 172)

Gross profit 68 427 117 289

Income tax X.7 11 624 (5 926)

Net profit for the financial year 56 803 123 215

- attributable to shareholders in the parent company 56 186 123 215

- attributable to non-controlling shareholders 617 -

Other comprehensive income - -

Comprehensive income for the reporting period 56 803 123 215

- attributable to shareholders in the parent company 56 186 123 215

- attributable to non-controlling shareholders 617 -

Net profit per share

– basic profit per share from profit for the period (PLN) X.8 1,0 2,3

– diluted profit per share from profit for the period (PLN) X.8 1,0 2,3

Comprehensive income per share

– basic income per share (from profit for the period (PLN) 1,0 2,3

– diluted income per share (from profit for the period (PLN) 1,0 2,3

Note

As was described in more detail in Note V, the Group did not discontinue any of its operations in any of the financial years.


5 Notes V - XIX to these consolidated financial statements, as contained in pages 9 – 87, are an integral part of these

statements

II. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013

31 Dec.2013 31 Dec.2012


ASSETS

Fixed Assets 459 873 414 271

Tangible fixed assets X.11 29 377 31 600

Intangible assets X.13 331 161 292 819

Investment in an associate X.14 60 413 55 254

Investment real estate X.15 7 182 4 145

Deferred income tax assets X.7.3 27 162 26 157

Other long-term accounts receivables X.19 4 052 3 619

Other non-financial long-term assets X.17 526 677

Current Assets 179 786 186 714

Trade receivables X.18 61 884 98 211

Current income tax receivables 875 3 060

Other short-term receivables X.19 2 693 3 208

Prepayments and accrued revenue, including accrued commission revenueX.16

95 626 67 273

Other non-financial short-term assets X.17 3 952 834

Cash and cash equivalents X.20 14 756 14 128

TOTAL ASSETS 639 659 600 985

LIABILITIES AND EQUITY

Equity 417 648 362 125

Share capital X.21.1 543 542

Other reserve capital X.21.3, X.33 272 545 228 833

Retained earnings 144 560 132 750

Capital attributable to non-controlling shareholders 2 437 -

Total equity 420 085 362 125

Long-term liabilities 144 116 62 486

Provision for deferred income tax X.7.3 27 988 16 996

Long-term provisions X.29 62 79

Financial lease liabilities (long-term liabilities) X.12,X.22 1 154 1 606

Bonds issued (long-term liabilities) X.24 114 912 43 805

Short-term liabilities 75 458 176 374

Financial lease liabilities (short-term liabilities) X.12,X.22 517 694

Bonds issued (short-term liabilities) X.24 7 193 34 937

Short-term provisions X.29 4 4 612

Share acquisition liability X.26 3 833 53 328

Trade liabilities X.25 15 412 17 173

Accruals and deferred revenue, including accrued remuneration X.28 31 595 39 893

Current income tax liabilities 2 337 5 660

Other short-term non-financial liabilities X.27 14 567 20 077

Total liabilities 219 574 238 860

TOTAL LIABILITIES AND EQUITY 639 659 600 985

Note

Grupa Open Finance S.A. Skonsolidowane sprawozdanie finansowe za rok zakończony dnia 31 grudnia 2013 roku (w tys. zł)

6Noty od V do XIX do skonsolidowanego sprawozdania finansowego załączone na stronach od 9 do 87

stanowią jego integralną część

III. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON 31 DECEMBER 2013


Supplementary

capital

Capital reserve

appropriated for

the repurchase of

treasury shares

Share-based

payments (equity

item)

Nota PLN thousand PLN thousand PLN thousand PLN thousandPLN

thousand

PLN

thousandPLN thousand PLN thousand

As at 1 January 2013 X.21 542 213 470 11 311 4 052 132 750 362 125 - 362 125

Net profit for the period - - - - 56 186 56 186 617 56 803

Other comprehensive income - - - - - - - -

Valuation of incentive scheme for key employees X.33 - - - (439) - (439) - (439)

Increase in the share capital (as part of the incentive

scheme, series A warrants) X.21.1 1 - - - - 1 - 1

Settlement of the sale of part of the shares in Open

Finance TFI S.A. - - - - (225) (225) 1 820 1 595

Distribution of profit: - 44 151 - - (44 151) - - -

- Transfer of net profit for 2012 to supplementary capital - 44 151 - - (44 151) - - -

As at 31 December 2013 X.21 543 257 621 11 311 3 613 144 560 417 648 2 437 420 085

Total equity

Capital attributable to

non-controlling

shareholders

Attributable to shareholders in the parent company

TotalShare capitalRetained

earnings

Other capital reserves

The capital reserve for the purchase of own shares has been reduced by the Company's own shares already repurchased. Information on the number and value of the repurchased own share is contained in Note X.21.3.





Supplementary

capital

Capital reserve

appropriated for

the repurchase of

treasury shares

Share-based

payments (equity

item)

Note PLN thousand PLN thousand PLN thousand PLN thousandPLN

thousand

PLN


As at 1 January 2012 X.21 542 158 015 - 3 932 95 303 257 792 - 257 792

Net profit for the period - - - - 123 215 123 215 - 123 215

Other comprehensive income - - - - - - - -

Valuation of incentive scheme for key employees X.33 - - - 120 - 120 - 120

Appropriation of reserve capital for repurchase of

Treasury shares - (15 687) 15 687 - - - - -

Treasury shares repurchased - - (1 476) - - (1 476) - (1 476)

Repurchase of Treasury shares as part of the Option

Programme X.33 - - (2 900) - - (2 900) - (2 900)

Distribution of profit: - 71 121 - - (85 768) (14 647) - (14 647)

- Transfer of 2011 net profit to supplementary capital - 71 121 - - (71 121) - - -

- Distribution of 2011 net profit as dividend - - - - (14 647) (14 647) - (14 647)

Dividend on the Treasury shares repurchased - 21 - - - 21 - 21

As at 31 December 2012 X.21 542 213 470 11 311 4 052 132 750 362 125 - 362 125

Capital attributable to

non-controlling

shareholdersTotalTotal equity


Share capital

Attributable to shareholders in the parent company

Retained

earnings




IV. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31 DECEMBER 2013

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Cash flows from operating activities

Net profit 56 803 123 215

Total adjustments: (8 533) (94 161)

Depreciation/amortisation X.11,X.13, X.2 29 488 27 921

Profit (loss) on investing activities (3 341) (34 255)

Interest income 7 525 4 025

Change in trade receivables XII 6 370 (38 901)

Change in trade liabilities XII (2 002) 13 154

Change in deferred income tax assets / provisions XII 9 987 (16 889)

Change in other long-term receivables XII (433) (1 160)

Change in other short-term receivables XII 515 (1 336)

Change in other non-financial short-term assets XII (3 118) 2 690

Change in accruals and prepayments XII (36 651) (907)

Change in the share acquisition liability X.26 - (110 902)

Change in other non-financial (short- and long-term) liabilitiesXII (3 325) (44 254)

Change in other non-financial long-term assets XII 151 (473)

Change in provisions XII (4 625) 4 473

Allowance for impairment of Home Broker Nieruchomości S.A.'s goodwill X.9 - 101 172

Current income tax presented in the statement of comprehensive income X.7.1 2 061 10 962

Income tax paid (5 414) (10 072)

Current income tax presented in the statement of comprehensive income (5 721) 591

Net cash from operating activities 48 270 29 054

Cash flows from investing activities

Sale of tangible fixed assets and intangible assets 4 251 7 812

Acquisition of tangible fixed assets (11 665) (26 686)

Acquisition of intangible assets (54 045) (40 730)

Acquisition of a subsidiary (Home Broker Nieruchomości S.A.) - partial settlement of

the liability (49 495) -

Acquisition of shares and increase in capital of the subsidiary Open Life X.14 - (22 050)

Sale of a subsidiary 4 265 -

Sale of shares in a subsidiary 1 595 -

Sales of investment real estate 26 515 -

Expenditure on investment real estate (4 183) (5 339)

Net cash from investing activities (82 762) (86 993)

Cash flows from financing activities

Repayment of financial lease liabilities (719) (731)

Proceeds from issue of bonds X.24 45 000 46 900

Repayment of bond issue liabilities (3 000) -

Payment of interest on bonds (5 991) (2 657)

Dividend paid X.21.3 - (14 647)

Treasury shares repurchased - (4 376)

Interest paid (171) (191)

Proceeds from issue of shares 1 -

Net cash from financing activities 35 120 24 298

Increase (decrease) in net cash and cash equivalents 628 (33 641)

Net exchange differences - -

Opening balance of cash X.20 14 128 47 769

Closing balance of cash X.20 14 756 14 128

including cash not fully disposable - -

Note


9

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 0000196186 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 015672908.

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 2013 and as at the date of approval of these consolidated financial statements, the

Management Board of Open Finance consisted of the following individuals:

1. Maurycy Kϋhn – President of the Management Board,

1. Wojciech Gradowski – Member of the Management Board

2. Krzysztof Sokalski – Member of the Management Board

3. Helena Kamińska – Member of the Management Board

On 6 December 2013, Mr Krzysztof Spyra stepped down as President of the Management Board with effect from

9 December 2013. On the same day, i.e. 6 December 2013, Mr Maurycy Kϋhn was appointed to sit as President

of the Management Board for a three-year term, with effect from 9 December 2013. On 13 December 2013, Ms

Helena Kamińska was appointed to sit as a Member on the Management Board for a three-year term.

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 2013 and until the date of approval of these

consolidated financial statements.

The parent company’s Supervisory Board

As at 31 December 2013, the Supervisory Board of Open Finance consisted of the following individuals:

1. Leszek Czarnecki, PhD – Chairman of the Supervisory Board,

2. Remigiusz Baliński – Deputy Chairman of the Supervisory Board,

3. Dariusz Niedośpiał – Member of the Supervisory Board,

4. Izabela Lubczyńska – Member of the Supervisory Board,

5. Marek Kaczałko – Member of the Supervisory Board,


10

On 26 June 2013, Mr Jarosław Augustyniak stepped down as a Member of the Supervisory Board. On 28 June

2013, the parent company's annual general meeting elected Ms Izabela Lubczyńska to sit on 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. Krzysztof Spyra – Chairman of the Supervisory Board,

2. Remigiusz Baliński – Deputy Chairman of the Supervisory Board,

3. Jarosław Augustyniak – Member of the Supervisory Board,

4. Leszek Czarnecki, PhD – Member of the Supervisory Board,

5. Izabela Lubczyńska – Member of the Supervisory Board,

On 7 January 2014, Mr Marek Kaczałko and Mr Dariusz Niedośpiał stepped down as Members of the

Supervisory Board. On the same day, Open Finance’s annual general meeting elected Mr Jarosław Augustyniak

and Mr Krzysztof Spyra to sit on the Supervisory Board, for a three-year term each.

On 12 February 2014, Mr Leszek Czarnecki, PhD, stepped down as Chairman of the Supervisory Board of Open

Finance S.A and now sits as a Member on the Supervisory Board. He was replaced as Chairman the Supervisory

Board by Mr Krzysztof Spyra. No other changes were made to the composition of the Supervisory Board of Open

Finance S.A. until the date of approval of these financial statements.

No other changes were made to the composition of the Supervisory Board of Open Finance S.A. until the date of

approval of these financial statements.

These consolidated financial statements for the year ended on 31 December 2012 were approved for publication

by the parent company’s Management Board on 20 February 2014.

The Open Finance S.A. Group is controlled by Leszek Czarnecki, PhD, holding, as at 31 December 2013 and as

at the date of approval of these consolidated financial statements, directly and indirectly through subsidiaries (i.e.

Getin Noble Bank S.A., Getin Holding S.A. and LC Corp B.V), 54.27% 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:

31 Dec.2013 31 Dec.2012

Open Finance TFI S.A. subsidiaryWarsaw,

Przyokopowa 33investment fund management 61,25% 100%

Open Brokers S.A. subsidiaryWarsaw,

Przyokopowa 33financial intermediation 100% 0%

Home Broker Nieruchomości S.A. subsidiaryWarsaw,

Przyokopowa 33real estate agency services 100% 100%

HB Doradcy Finansowi Sp. z o.o. subsidiaryWarsaw,

Przyokopowa 33management consulting 100% 100%

HB Finance Sp. z o.o. subsidiaryWarsaw,

Przyokopowa 33financial intermediation 100% 100%

HB Fundusz Inwestycyjny Zamknięty Aktywów

Niepublicznych subsidiary

Warsaw,

Przyokopowa 33

depositing funds collected

through private placements of

investment certificates

100% 0%

- udziały poprzez Home Broker Nieruchomości S.A.

Core BusinessRegistered OfficeCompany Name

Percentage Share of

Company's CapitalStatus


11

On 25 February 2013, Home Broker Nieruchomości S.A. acquired a 100% stake in Ettrick Investments sp. z

o.o from Trinity Shelf Companies sp. z o.o. for the price of PLN 15.6 thousand. The main object of the

acquired company is the purchase of land for investment purposes.

On 7 March 2013, an Extraordinary General Meeting of Open Finance TFI S.A. adopted a resolution to

increase its share capital by PLN 500 thousand. On 8 March 2013, the Management Board of Open Finance

signed an agreement to take shares in the increased share capital of Open Finance TFI S.A, in the total par -

value amount of PLN 500 thousand. The increase in the share capital of Open Finance TFI S.A. was

registered with the National Court Register on 4 April 2013.

On 10 April 2013, a close-end investment fund called HB Fundusz Inwestycyjny Zamknięty Aktywów

Niepublicznych was established. All of the investment certificates (100%) in the newly established fund were

acquired by HB Money Sp. z o.o. (formerly: HB Doradcy Finansowi Sp. z o.o. Sp. k-a).

On 11 June 2013, the Supervisory Board of Open Finance gave its consent to the formation, by the

Company, of a subsidiary called Open Broker S.A. The share capital of the newly formed company is PLN

100,000 and is divided into 100,000 shares with the nominal value of PLN 1.00 each. The formation of the

subsidiary was registered with the National Court Register on 30 July 2013.

Under investment agreements dated 5 August 2013 as entered into by Open Finance S.A. with certain

natural persons and bodies corporate, Open Finance agreed to transfer, to such persons and bodies, a total

of 2,131,250 shares in Open Finance TFI S.A., accounting for 38.75% of Open Finance TFI S.A’s share

capital. The agreements to sell the shares were signed on 2 August and 9 August 2013. The total sale price

was PLN 1,595 thousand.

The above investment agreements provide for a put option (that may be exercised by the natural persons

and bodies corporate) to sell the shares in Open Finance TFI S.A. and a call option (that may be exercised

by the Company) to require such natural persons and bodies corporate to transfer their shares to Open

Finance S.A.).

In accordance with the accounting policy (as described in Note VIII) regarding the ca ll option, the Company

recognises the option at historical cost, which amounts to zero as at 31 December 2013.

On 12 August 2013, Home Broker Nieruchomości S.A. notified the relevant registration court of a merger of

Home Broker Nieruchomości S.A. with its subsidiary HB Money Sp. z o.o. (formerly HB Doradcy Finansowi

Sp. z o.o. Sp.k-a). On 26 August 2013, the merger of the two companies was registered with the

National Court Register.

On 23 December 2013, Home Broker Nieruchomości S.A. entered into a conditional agreement to sell 100%

of its shares in its subsidiary Ettrick Investments Sp. z o.o. for the price of PLN 4,266 thousand to the close-

end investment fund called Property Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych. The

conditions regarding the conditional sale were satisfied on 30 December 2013 and that date is the date of

sale of 100% of the shares in the company. ,

On 20 January 2014, the merger of Home Broker Nieruchomości S.A (the acquirer) from HB Doradcy Finansowi Sp.

z o.o. (the acquiree).

On 31 January 2014, a merger plan involving Home Broker Nieruchomości S.A. (the acquirer) and HB Finance sp. z

o.o. (the acquiree) was prepared. The merger resolution is scheduled to be adopted by the acquiree on 3 March

2014.

As at 31 December 2013 and 31 December 2012, the Company’s share of the total number of voting rights in each


12

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 2013 financial year or the 2012 financial year.

VI. BASIS FOR THE PREPARATION OF THESE FINANCIAL STATEMENTS AND IDENTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The reported figures cover the Group’s consolidated statement of financial position as at 31 December 2013, its

consolidated statement of comprehensive income for the twelve-month period ended on 31 December 2013, i.e.

from 1 January 2013 to 31 December 2013, its consolidated statement of changes in equity and its consolidated

cash flow statement for the period from 1 January 2013 to 31 December 2013. The comparative figures cover the

Group’s consolidated statement of financial position as at 31 December 2012, its consolidated statement of

comprehensive income for the twelve-month period ended on 31 December 2012, i.e. from 1 January 2012 to 31

December 2012, its consolidated statement of changes in equity and its consolidated cash flow statement for the

period from 1 January 2012 to 31 December 2012. 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 and for the financial liabilities in respect of the contingent payment for the shares

in Home Broker Nieruchomości S.A., which are measured through profit or loss.

These consolidated financial statements are presented in the Polish currency (PLN) and all figures, unless

otherwise stated, are expressed in PLN thousand.

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 2012. 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.

Closing ratio for financial products

The Bank recognises commission income from the loan applications submitted (but for loans not yet paid out),

applications for term deposits and saving plans (submitted but not yet processed) with other financial institutions

based on “a closing ratio”. This ratio is based on historical data for the likelihood of a loan applied for being

actually paid out, a term deposit or a saving plan realised This ratio is also used in determining the amount of

provision for commission to be paid to the Group’s advisers and to the Group’s business partners in respect of

such loans, term deposits and savings plans The Group periodically reviews its estimated closing ratios and, if


13

any difference between the estimated ratio and the actual ratio is identified, the difference is recognised in

accordance with IAS 8 Accounting policies, changes in accounting estimates and errors.

The accounts receivable in respect of the supply of financial intermediation services (presented as accruals in the

assets) amounted to PLN 89,213 thousand as at 31 December 2013 and PLN 62,826 thousand as at 31

December 2012). In estimating its revenue from saving products, the Group takes into account a contract

termination ratio. The closing ratios used as the basis for estimating the above accounts receivables in respect of

the supply of financial intermediation services are presented in Note X.16.

The liabilities in respect of commission for financial advisers (presented as prepayments and accruals in the

liabilities), estimated on the basis of closing ratios, amounted to PLN 13,121 thousand as at 31 December 2013

and PLN 17,972 thousand as at 31 December 2012). The closing ratios used by the Group are presented in Note

X.14

The effect of changes in the closing ratio is as follows: In the event of a change by -/+1% , the effect of the

change on net accruals and deferrals (deferred expenses less accrued expenses) as at 31 December 2013

would be PLN -2,900/+2,900 thousand, respectively. The effect of the change of profit (loss) for 2013 would be

PLN -2,349/+2,349 thousand respectively. In the event of a change by -/+1% , the effect of the change on net

accruals and deferrals as at 31 December 2012 would be PLN -3,014/+3,014 thousand, respectively. Its change

on the profit (loss) for 2012 would be PLN -2,441/+2,441 thousand, respectively.

The estimated revenue calculated based on the applications made (and the corresponding commission for

financial advisers) and to be actually received during the following financial years is not significantly different from

the Group’s estimates.

Closing ratio for real estate agency services

The Group recognises, based on a closing ratio, commission income in respect of its real estate agency services

for transactions for which preliminary sale agreements exist but which are not finalised (i.e. the final sale

agreements are yet to be executed before a notary public). The closing ratio is based on historical data for the

likelihood of such a transaction being finalised. The ratio is also used in calculating the amount of provision for

commission payable in respect of such transactions to the Group’s advisers and business partners. The Group

periodically reviews its estimated closing ratios and, if any difference between the estimated ratio and the actual

ratio is identified, the difference is recognised in accordance with IAS 8 Accounting policies, changes in

accounting estimates and errors.

The accounts receivable in respect of the supply of the Group’s real estate agency services (presented as

accrued revenue in the assets) amounted to PLN 4,555 thousand as at 31 December 2013, and PLN 1,750

thousand as at 31 December 2012). The estimated revenue calculated based on the applications made (and the

corresponding commission for financial advisers) and to be actually received during the following financial years

is not significantly different from the Group’s estimates.

The liabilities in respect of commission for financial advisers (presented as prepayments and accruals in the

liabilities), estimated on the basis of closing ratios, amounted to PLN 3,035 thousand as at 31 December 2013

and PLN 4,910 thousand as at 31 December 2012). The closing ratios used by the Group are presented in Note

X.16

The effect of changes in the closing ratio is as follows: In the event of a change by -/+1% , the effect of the

change on net accruals and deferrals (deferred expenses less accrued expenses) as at 31 December 2013

would be PLN -62/+62 thousand, respectively. The effect of the change of profit (loss) for 2013 would be PLN -

50/+50 thousand respectively. In the event of a change by -/+1% , the effect of the change on net accruals and

deferrals as at 31 December 2012 would be PLN -68/+68 thousand, respectively. Its change on the profit (loss)


14

for 2012 would be PLN -55/+55 thousand, respectively.

The replacement commission revenue and the commission 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.

Provisions

Based on quarterly figures for 2012, which confirm the growing trend in regular saving product termination, Open

Life TUŻ S.A. estimated the expected costs of such early termination of contracts to be incurred by the Company

in 2013 in connection with the sale of such products in 2012. As at 31 December 2012, provision was made for

the potential costs of such termination, in the amount of PLN 4,600 thousand.

In 2013, a total of PLN 3,800 thousand of the provision was used. The remaining amount of the provision was

released because the product termination ratio returned to its average level and because an increase product

termination ratio was included in calculating the estimated revenue from the sale of regular saving products.

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 23 and 25.

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 Company's intangible assets, the Company changed, starting

from 1 July 2013, 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 3 to 5 years. In the opinion of the

Company's Management, the 5-year period is the period during which each such database generates most of the

future probable economic benefits (commission revenue). In the opinion of the Company's Management, the 5-

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.

An analysis of the accounting implications, an assessment of the economic content and selection of the

settlement method for the acquisition of Home Broker Nieruchomości S.A., together with its subsidiaries


15

On 30 September 2011, Open Finance S.A. entered into four conditional agreements to acquire shares in Home

Broker Nieruchomości S.A. In order to determine the accounting effects of the transactions, the parent company’s

management board carried out an analysis of the terms and conditions of the agreements. The analysis revealed

that all the agreements should be treated as a single transaction. In particular, it is important that all the

agreements were entered into on the same day, which in fact makes it impossible to determine the order in which

the agreements were entered into if they were treated as separate transactions.

Taking into account the capital links between Home Broker Nieruchomości S.A. (the acquiree) and Open Finance

(the acquirer) both before and after the transaction, the contemplated transaction is, in the opinion of the parent

company’s management board, a combination of jointly controlled companies.

Based on an analysis of the economic reasons for the transaction involving the purchase of Home Broker

Nieruchomości S.A. and the fact of the arm’s length basis of the transaction, Open Finance’s management

considered the transaction as having economic value and, therefore, adopted the acquisition method for the

purpose of accounting for the transaction. For the purpose of accounting for the transaction in 2011, the Group

used approximate amounts of the position not yet accounted for in 2011 and finally accounted for the position in

2012. The effects of the accounting are disclosed below.

Determination of the fair value of the net assets acquired in a transaction to acquire Home Broker Nieruchomości

S.A.

Professional judgement of the parent company’s management was applied to determine of the fair value of the

different assets and liabilities acquired in a transaction to acquire Home Broker Nieruchomości S.A. In the opinion

of the parent company’s management, the book amounts of the individual assets and liabilities of the acquiree

best reflected the fair value of the assets and liabilities as at the time of accounting for the transaction,

All adjustments to the fair values of the acquired assets and liabilities resulting from the parent company’s

management becoming aware of events existing as at the date of the acquisition but which were not known to the

parent company’s management will, during the measurement period (i.e. at least 12 months from the settlement

date) be recognised in goodwill. The only such identified adjustment regarding the acquisition of assets was

related to customer databases, which were measured at PLN 6,794 thousand as at the date of purchase

(described in Note X.9).

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.

As at 31 December 2012, the impairment tests revealed impairment of the goodwill recognised as a result of the

transaction involving the acquisition of Home Broker Nieruchomości S.A. (Note X.13). The impairment tests

performed as at 31 December 2013 revealed no further impairment of the goodwill.

The impairment tests performed as at 31 December 2013 and 31 December 2011 revealed no further impairment

of the trademark (Note X.13).

The Company’s right (call option) under investment agreements signed on 5 August 2013

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


16

account for 38.75% of the shares in the capital of the company, for the total amount of PLN 1,595 thousand.

The agreements to sell the shares were signed on 2 August and 9 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, in the period from 2017 to 2018.

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.

The right of natural persons and bodies corporate (put 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, in the period from 2016 to 2019.

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.).

Given the fact that no other specific accounting standards applicable to such agreements exist, the

Management Board believes that the option should not be recognised in standalone financial statements of

Open Finance S.A.

Classification of leases

The Group classifies leases as either finance or operating, based on its assessment of the extent to which the

benefits and risks of ownership are transferred to the lessor and the lessee. Such assessment is based on the

economic content of each transaction.

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,


17

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.18.

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.29.

Uncertainty of estimates - Open Life TUŻ S.A. (an associate) (associate)

Classification of insurance contracts according to IFRS 4

The Group’s insurance company applies the guidelines contained in IFRS 4 regarding the classification of its

products as insurance contracts falling within the scope of IFRS 4 or as investment contracts. A contract meets

the definition of an insurance contract only if the insured event may result in the insurance company having to pay

considerable amounts of additional compensation under any scenario, excluding those which lack economic

content (i.e. they do not have any noticeable impact on the economics of the transaction), i.e. when the contract

carries a significant insurance risk.

In order to assess whether a contract transfers a significant insurance risk, it is necessary to analyse the cash

flows related to the product concerned under different scenarios and to estimate the probability of their

occurrence. Such an assessment contains an element of subjective judgement, which materially affects the

applied accounting principles.

Based on the analysis, the Company’s Management Board has found that the Company offers products which do

not transfer a significant insurance risk (these include certain products with a guaranteed rate of return and certain

products offered in the form of a capital fund) and, as such, they do not meet the definition of an insurance

contract as defined by IFRS 4 and have been classified, for the purposes of these separate financial statements,

as investment contracts measured in accordance with the requirements of IAS 39, i.e. depending on the structure

and classification of the product, according to amortised cost or fair value.

Recognition of the difference in the measurement of financial assets and liabilities relating to investment contracts

at initial recognition

In measuring the financial assets and liabilities arising from the conclusion of investment contracts and classified

as financial instruments measured at fair value through profit or loss, there will be a difference, at the time of


18

concluding an investment contract and at the initial recognition of the resulting financial assets and liabilities,

between the measured values of such assets and liabilities due to different types of flows recognised in the

measurement of such instruments.

The Company applies professional judgement with regard to the recognition of the difference in the measured

value of such assets and liabilities, determining which part of the difference should be recognised on a one-off

basis in the profit and loss account (the so-called “first day result”) and which part should be recognised as future

periods’ revenue and amortised gradually in the profit and loss account in subsequent reporting periods. This

decision is based on an analysis of the scope of the services provided and on the economic content of the fees

charged by the Company in connection with a given investment contract, as well as an analysis of the

measurement techniques used in the measurement of the resulting financial assets and liabilities related to the

investment contract.

In particular, the decision depends on which part of the fees the Company is entitled to charge under its

investment contract should be treated as consideration for the services provided during the term of the insurance

contract (such as asset management services, administrative services provided after the conclusion of the

insurance contract, liquidation etc.). This part of the Company’s remuneration (and the corresponding costs) is

recognised in the balance sheet as deferred revenue and is gradually amortised in the profit and loss account as

different services are provided during the term of the investment contract.

In addition, the recognition of the full or partial difference as “first-day result” depends on the level of the

accounting fair value hierarchy at which the techniques used in measuring the financial assets and liabilities

related to the investment contract are classified. Where a financial asset or a financial liability related to an

investment contract is measured at fair value using measurement techniques classified, in accordance with IAS

39, at Level III of the fair value hierarchy (i.e. measurement using models not based only on observable market

data), it is impossible to recognise the “first-day result), so the full difference between the price of the financial

asset or liability at its initial recognition is treated over time in proportion to the costs of the services provided

during the term of the investment contract.

Fair value of financial instruments

In the case of financial assets and liabilities recognised at fair value in the balance sheet and for which an active

market is not identified, the asset or liability is measured using commonly used measurement models based on,

above all, variables observable on the market. In choosing appropriate methods and assumptions, the Company

applies professional judgement. Some of such variables, e.g. the performance of future interest rates, variation

parameters, correlations, require professional judgement. Such models and variables are reviewed on a regular

basis. A change of such models and/or variables in such models might affect accounting estimates regarding such

measurement.

Given the fact in the case of financial liabilities arising as a result of concluding investment contracts, there is no

active market for such financial instruments, and that it is usually difficult to find similar observable market

transactions regarding the same financial instrument (i.e. without modifying and “repacking” them), the Company

applies, for the purposes of recognising and measuring its financial liability towards the insured persons and its

business partners, models that involving measurement at fair value. Such models are based on the following:

the measurement of financial assets arising from financial instruments resulting from the conclusion of

investment contracts, adjusted, using the discounted cash flow methods, by

additional future negative cash flows for the customer expected in connection with a financial liability

and which do not occur in relation to a financial asset, and


19

that part of future investment contract maintenance costs directly related to a given product whose

value at the time of concluding the contract is not certain, because if the investment contract is terminated by

the customer within a specified period of the date of its conclusion, the business partner will not be entitled

to the full amount of consideration and a specified part will be deducted.

The fair value of the future investment contract maintenance costs directly related to the contract

(financial liabilities towards business partners) which are certain will not be refunded to the insurance

company, irrespective of the term of the insurance contract.

the discount rate for the measurement of future cash flows.

In addition, in accordance with IAS 39, a financial liability measured at fair value through profit or loss is measured

at a value not lower than the amount payable to the other party on demand, discounted as of the first day on

which the amount may be due.

Provisions for life insurance

In relation to insurance contracts, the Company makes provision for life insurance. The value of the provision is

equal to the value of the liabilities resulting from the insurance contracts concluded by the Company and is

determined as the difference between the current value of expected payments under the contracts and the current

value of expected premiums, using the net premium method. Life insurance provisions are determined using the

actuarial prospective method, which involves determining the amount of provision for each new insurance

contract separately, based on specified statistical data. The assumptions used in calculating provisions for life

insurance are determined separately for different insurance products at the time of determining the premiums and

launching the product on the market. The adequacy of the assumptions is reviewed periodically.

The basic assumptions in calculating provisions for life insurance relate to the frequency of occurrence of certain

events (death rate, incidence of a particular disease, occurrence of accidents), as well as rates of return on the

investment, discount rates, plus early termination/withdrawal ratios and costs. The Company’s assumptions

regarding the death rates/disease incidence rates/life expectancy rates with respect to the insured persons are

based on publicly available statistics, such as Polish Life Expectancy Tables (“PLET”) or the Company’s own

statistics based on historical data for each group of products in the Company’s portfolio.

With regard to investment contracts, the provision for life insurance is created for the risk of death, if the forecast

payment to be made in the event of death is higher than the amount of the liability arising from the measurement

of the contract at fair value.

Provision adequacy tests

Based on an analysis and extrapolation of trends in death rates, accident rates, termination rates and the

expected service costs and the costs of processing payments, the Company regularly tests the adequacy of the

assumptions used by it in calculating the amount of provision for life insurance, including the technical rates used

by the Company. If in the future the Company identifies evidence of a potential decrease in the profitability of the

assets to be used to make payments under insurance contracts, the Company revises its assumptions and

accordingly corrects the amounts of technical insurance provisions.


20

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”). As at the date of approval of these consolidated financial statements for publication, taking into account

both the continuing process of implementing IFRS within the European Union and the Company’s activities, no

differences exist between the IFRS in effect and the IFRS endorsed by the European Union with regard to the

Group’s accounting principles.

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 2007. 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 (PLN).

3. Changes in accounting principles

Below is a list of the new or amended IFRS standards and interpretations published by IFRIC which the Group

applied in the reporting year.

The accounting principles (policies) applied in the preparation of these financial statements are consistent with

those applied in the preparation of the financial statements for 2011, except for the application of the following

amendments and new interpretations effective for financial years beginning on or after 1 January 2013:

IFRS 13 Fair Value Measurement – endorsed by the EU on 11 December 2012 and effective for financial

years beginning on or after 1 January 2013;

Amendments to IFRS 1 First–time Adoption of International Financial Reporting Standards: Severe

Hyperinflation and Removal of Fixed Dates for First–time Adopters, endorsed by the EU on 11 December

2012 and effective for financial years beginning on or after 1 January 2013;

Amendments to IFRS 1 First–time Adoption of International Financial Reporting Standards: Severe

Hyperinflation and Removal of Fixed Dates for First–time Adopters, endorsed by the EU on 4 December 2013

and effective for financial years beginning on or after 1 January 2013;

Amendments to IFRS 7 Financial Instruments – Disclosures: Offsetting financial assets and financial liabilities

– endorsed by the EU on 13 December 2012 and effective for financial years beginning on or after 1 January

2013;

Amendments to IAS 1 Presentation of Financial Statements: Presentation of Items of Other Comprehensive

Income - endorsed by the EU on 5 June 2012 and effective for financial years beginning on or after 1 July

2012;


21

Amendments to IAS 12 Income Taxes: Deferred Tax: Recovery of Underlying Assets – endorsed by the EU on

11 December 2012 and effective for financial years beginning on or after 1 January 2013;

Amendments to IAS 19 Employee Benefits – corrections to benefit accounting after employment - endorsed by

the EU on 5 June 2012 and effective for financial years beginning on or after 1 January 2013;

Amendments to various standards: "Amendments to IFRS (2012)” – amendments made as part of the annual

process of amending IFRS, published on 17 May 2012 (IFRS 1, IAS 2, IAS 16, IAS 32 and IAS 34) aimed

mainly at resolving inconsistencies and introducing more precise terminology, endorsed by the EU on 27

March 2013 (effective for financial years beginning on or after 1 January 2013);

Interpretation of IFRIC 20:Stripping Costs in the Production Phase of a Surface Mine, endorsed by the EU on

11 December 2012 and effective for financial years beginning on or after 1 January 2013;

The above amendments to IFRS that came into effect after 1 January 2013 did not materially affect the

accounting principles applied by the Group.

4. New standards and interpretations issued but not yet effective.

In approving these abridged interim consolidated financial statements, the Group did not apply the following

standards, amendments to standards and interpretations that were published and endorsed by the EU for

application but which are not yet effective.

IFRS 10 Consolidated Financial Statements – endorsed by the EU on 11 December 2012 and effective for

financial years beginning on or after 1 January 2014);

IFRS 11 Joint Arrangements – endorsed by the EU on 11 December 2012 and effective for financial years

beginning on or after 1 January 2014;

IFRS 12 Disclosure of Interests in Other Entities –endorsed by the EU on 11 December 2012 and effective for

financial years beginning on or after 1 January 2014;

IFRS 27 (revised in 2011) Standalone Financial Statements – endorsed by the EU on 11 December 2012 and

effective for financial years beginning on or after 1 January 2014);

IFRS 28 (revised in 2011) 28 Investments in Associates and Joint Arrangements – endorsed by the EU on 11

December 2012 and effective for financial years beginning on or after 1 January 2014);

Amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12

Disclosure of Interests in Other Entities – explanations on transitional provisions, endorsed by the EU on 4

April 2013 and effective for financial years beginning on or after 1 January 2014;

Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Joint Arrangements and IFRS 27

Disclosure of Interests in Other Entities – explanations on transitional provisions, endorsed by the EU on 20

April 2013 and effective for financial years beginning on or after 1 January 2014;

Amendments to IFRS 32 Financial Instruments – Presentation: Offsetting financial assets and financial

liabilities – endorsed by the EU on 13 December 2012 and effective for financial years beginning on or after 1

January 2014;

Amendments to IAS 36: Impairment of assets: Recoverable Amounts Disclosures for Non-Financial Assets,

endorsed in the European Union on 19 December 2013 (effective for financial years beginning on or after 1

January 2014);


22

Amendments to IAS 39: Financial instruments: recognition and measurement. Novation of derivatives and

continuation of hedge accounting, endorsed in the European Union on 19 December 2013 (effective for

financial years beginning on or after 1 January 2014).

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.

5. 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. The financial statements of the

subsidiaries are prepared for the same reporting periods as the parent company’s statements, using consistent

accounting principles and applying uniform accounting principles to similar transactions and events. To eliminate

any discrepancies in the application of accounting principles, adjustments are made.

All significant balances and transactions between the Group’s entities, including unrealized profits arising from

intra-group transactions, have been fully eliminated. Unrealised losses are eliminated unless they are evidence of

impairment.

A subsidiary of the Group is subject to consolidation from the date when the Group takes control of the subsidiary

and ceases to be subject to consolidation on the date when such control ceases. The parent company controls a

company if the parent company owns, indirectly or directly, through its subsidiaries, more than a half of the voting

rights in the company unless it can be proved that such ownership does not mean that the parent company

controls the company. The parent company controls a company also if the parent company can influence the

financial and operating policies of that company.

Changes in the parent company’s ownership share that result in the parent company losing control of its

subsidiary are recognised as equity transactions. In such cases, to reflect the changes in the parent company’s

relative share in the capital of its subsidiary, the Group adjusts the carrying amount of the controlling shares and

non-controlling shares. All differences between the adjustment amount of the non-controlling shares and the fair

value of the amount paid or received are recognised in equity and attributed to the owners of the parent company.

6. Investments in subordinated entities

Investments in subordinated entities are measured using the equity method. A subordinated entity is an entity

which the parent company directly or indirectly through its subsidiaries significantly controls and which is neither a

subsidiary nor a joint venture. The financial statements of associates are the basis for measuring the parent

company’s shares using the equity method. The financial year of an associate is the same as the financial year of

the parent company. The Group’s associates apply the accounting principles laid down in the Accounting Act.

Before calculating the Group’s share of the net assets of its associates, adjustments are made to ensure that the

financial figures presented by the associates comply with the International Financial Reporting Standards applied

by the Group.

Investments in associates are recognised in the statement of financial position at the purchase price increased by

subsequent changes in the parent company’s share of the net assets of its associates, less impairment losses (if

any). The parent company’s share of the profits (or losses) of its associates is reflected in consolidated profit or

loss. The carrying amount may require adjustment also due to changes in the parent company’s proportional

share of its associate, as a result of changes in the associate’s other comprehensive income. The Group’s

participation in such changes is recognised in the Group’s other comprehensive income.

It is no longer required to assess the parent company’s investment in associates in terms of impairment when


23

there is evidence of such impairment or that impairment losses were recognised in the previous years.

7. Material accounting principles

The accounting principles described below are applied to all the reporting periods presented in these

consolidated financial statements by all of the Group’s companies.

Conversion of items expressed in foreign currencies

Transactions expressed in foreign currencies are converted to PLN at the exchange rate applicable as at the

date of the transaction.

As at the date of these consolidated financial statements, monetary assets and liabilities denominated in

currencies other than PLN are converted to PLN at the relevant average exchange rate of the National Bank

of Poland applicable as at the end of the reporting period. The exchange differences resulting from such

conversion are recognised in the financial revenue (expenses) item or, in the cases specified in the

accounting principles (policy), they are capitalised in the assets. Non-monetary assets and liabilities

denominated in foreign currencies and recognised at their histor ical cost are recognised at the historical

exchange rate applicable on the date of the transaction. Non-monetary assets and liabilities denominated in

foreign currencies and measured at fair value are converted using the exchange rate applicable on the date

of measurement at fair value.

The following exchange rates were used for balance sheet measurement purposes:

USD 3,0120 3,0996

EUR 4,1472 4,0882

31 Dec.201231 Dec.2013

Tangible fixed assets

Tangible fixed assets are recognised at acquisition or manufacturing cost less depreciation and any impairment

losses. The initial cost of a tangible fixed asset comprises its acquisition price and all the costs directly attributable

to the acquisition and preparation of the asset to be put into operation. The initial cost also includes the costs of

replacement of parts of plant and equipment when incurred if the criteria for recognition are met. Any costs

incurred after the date when a fixed asset is put into operation, such as the costs of maintenance and repairs, are

recognised in profit or loss when incurred.

Fixed assets, when acquired, are divided into component parts that are items of significant value and to which a

separate period of economic life can be allocated. The costs of complete overhauls are also a component part.

Depreciation is provided on a straight-line basis over the estimated useful life of the respective asset. The

useful lives of assets are as shown below:

Type of Asset Useful Life

Investments in third-party assets 3-4 years (not longer than the rental term)

Plant and equipment 3 – 6 years

Computer units 3 – 4 years

Vehicles 4 – 5 years (not longer than the lease term)

Office equipment, furniture 3 – 4 years


24

A tangible fixed asset can be removed from the statement of financial position when the asset is sold or

when no economic gains are expected from continuing to use such an asset. All gains or losses resulting

from the removal of such an asset from the statement of financial position (such gains and loss calculated as

the difference between possible net proceeds from the sale of the asset and the carrying amount of t he

asset) are recognised in the statement of comprehensive income for that period in which the asset was

removed.

Construction in progress applies to fixed assets under construction or assembly and is recognised at

acquisition or manufacturing cost less any impairment losses. Fixed assets under construction are not

depreciated until their construction is completed and the assets are put into operation.

The residual value, useful life of and the depreciation method used for tangible assets are verified and , if

necessary, corrected as of the end of each reporting period.

When an asset is overhauled, the cost of the overhaul is recognised in the carrying amount of tangible fixed

assets if the criteria for such recognition are met.

Intangible assets

An intangible asset acquired in a separate transaction is initially measured at acquisition or manufacturing

cost. The cost of acquisition of an intangible asset in a business combination is equal to its fair value as of

the date of the combination. An initially recognised intangible asset with a definite useful life is recognised at

the cost of acquisition or manufacturing less depreciation and impairment losses. Expenditure on internally

generated intangible assets, except for activated expenditure on development, is not activated and is

recognised in the costs of the period in which it was incurred.

The Group assesses whether the useful life of an intangible asset is definite or indefinite. An intangible asset

with a definite useful life is amortised throughout its useful life and subject to impairment tests every time

evidence is identified that the asset is impaired. The period and method of amortisation of intangible assets

with a definite useful life are verified at least as of the end of each reporting period.

Changes in the expected useful life or in the expected method of consuming the economic benefits from an

intangible asset are recognised through a change of, respectively, the period or method of amortisation, and

treated as changes of the estimated values. Amortisation charges for intangible assets with a definite useful

life are recognised in the statement of comprehensive income, in the respective category for the function of

that intangible asset.

Intangible assets with an indefinite useful life and those which are not used are, on an annual basis, subject

to impairment tests in respect of individual assets or at the level of a cash-generating unit. In the case of

other intangible assets, the Company assesses, on an annual basis, whether there is evidence that such

assets are impaired. The useful lives are also subject to verification on an annual basis and, if necessary,

corrected with effect from the beginning of the reporting period.

The customer databases purchased by the Group are recognised as intangible assets. The Group classifies

the useful life of the intangible asset (a customer database) as a definite useful life and the asset is

amortised using the straight-line method. The customer databases purchased by the Group are amortised

for the period during future gains for the Group from the sale of products to customers included the

database are expected After initial recognition, the Group applies the purchase price model. 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 of the review is recognised as a change of estimated values in

accordance with IAS 8. The Group tests such intangible assets (customer databases) for impairment in


25

accordance with IAS 36 annually and whenever evidence is identified that the particular intangible asset is

impaired. The Group derecognises such an intangible asset (a customer database) when it is sold or when

no future economic gains are expected from the use and subsequent sale of such an asset (as described in

more detail in Note X.13).

As part of an annual review of the useful lives of the Company's intangible assets, the Company changed,

starting from 1 July 2013, 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 3 to 5 years. In

the opinion of the Company's Management, the 5-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.

Goodwill

Goodwill is the value created as a result of the acquisition of subsidiaries. Goodwill is initially measured at

its cost, being the excess of the cost of the business combination over the acquirer’s interest in the net fair

value of the identifiable assets, liabilities and contingent liabilities. Goodwill is recognised at cost less any

accumulated impairment losses. Goodwill is not amortised, but tested for impairment annually. The amount

of impairment losses is determined by estimating the identifiable value of the cash-generating unit to which

the goodwill relates. If the identifiable value of the cash-generating unit is lower than its carrying amount

plus goodwill, the goodwill is impaired.

Trademark

The Group’s trademark is an intangible asset acquired in a business comb ination, separable, determined in

a reliable manner, and recognised separately from goodwill. As the trademark is expected to contribute to

generating net cash flows for an indefinite period of time, it is considered to be an asset with an indefinite

useful life. The trademark is not amortised until its useful life is reclassified as definite. In accordance with

IAS 36, the trademark is tested for impairment as at the end of each reporting period and every time

evidence is identified that it is impaired.

Below is a summary of the rules applied in relation to the Group’s intangible assets:

Goodwill Trademark Computer

software

Customer

databases

Other

intangible

assets

Useful lives indefinite indefinite 2-10 years 5 years 2 - 10 years

Amortisation method not subject to amortisation

not subject to amortisation

straight-line method



Internally generated or acquired

acquired acquired acquired acquired acquired

Tested for impairment / reviewing the recoverable value

tested for impairment annually

tested for impairment annually

tested for evidence of impairment annually



Other intangible assets include, among other things, expenditure on the design of the Group Companies’

website as well as the IT copyrights acquired by the Company.

The gain or loss resulting from the removal of an intangible asset from the statement of financial position is


26

measured as the difference between the net proceeds from the sale of the asset and the carrying amount of

the asset, and is recognised in the statement of comprehensive income when it is derecognised.

Leasing – the Group as the lessee

Finance leases which transfer, to the Group, substantially all the risks and rewards incident to ownership of the

leased asset are recognised in the statement of financial position as of the date of commencement of the lease

term at the lower of the fair value of the asset and the present value of the minimum lease payment Finance

lease payments are apportioned between other operating costs and the reduction in the outstanding leasing

liability in such a manner so as to produce a constant periodic rate of interest on the remaining balance of the

liability. Financial expenses are recognised directly in profit or loss.

Tangible fixed assets used under finance leases are depreciated over the shorter of the lease term and the life of

the asset

Leases where the lessor retains substantially all the risks and rewards of ownership of the leased asset are

classified as operating leases. Operating lease payments are charged directly in profit or loss on a straight-line

basis over the term of the relevant lease.

Investment real estate

Real estate is initially recognised at generation cost or at the purchase price plus the costs of the transaction. The

value of investment real estate presented in the statement of financial position includes the cost of replacing a

constituent of the real estate when the cost is incurred if the recognition criteria are met and does not include the

costs of day-to-day maintenance of the real estate.

Investment real estate, when initially recognised, is presented at fair value. The gains or losses from changes of

the fair value of the real estate are recognised in profit or loss in the period in which they occurred.

Investment real estate is removed from the statement of financial position if it is disposed of or if the real estate is

put out of use permanently if no other future benefits from its sale / use are expected. All the gains or losses

resulting from the removal of the real estate from the statement of financial position are recognised in profit or loss

in the period in which they were removed.

An asset is moved to investment real estate only when the manner of using the asset is changed, i.e. when the

asset is no longer used by its owner or when an operate lease is made in respect of that asset. If an asset used

by the owner (the Group) is reclassified as investment real estate, the Group applies the principles described in

the Tangible fixed assets section until the date of changing the manner of using the real estate. If an asset is

moved from inventory to investment real estate, the difference between the fair value of the real estate

determined as at the date of such movement and its previous value presented in the statement of financial

position is recognised in profit or loss.

If an investment real estate asset is moved to assets used by the owner or to inventory, the presumed cost of

such an asset as adopted for the purpose of recognising the asset in a different category is equal to the fair value

of the real estate asset determined as at the date of changing the manner of it use.

Impairment of non-financial fixed assets

The Group assesses, as at each reporting date, whether there is any evidence that a non-financial asset or a

group of non-financial assets is impaired. If such evidence is identified or if it is necessary to carry out an annual

test for impairment, the Group estimates the recoverable value of the asset or the relevant cash-generating unit

to which the asset belongs.


27

The recoverable value of the asset or cash-generating unit is equal to the higher of its fair value less the cost of

sale of, respectively, the asset or the cash-generating unit, or to its value in use. This value is determined for

each asset unless a particular asset does not independently generate cash flows that are mostly independent of

the cash flows generated by other assets or groups of assets. If the carrying amount of an asset is higher than

the recoverable value of the asset, the asset is impaired and an impairment loss up to the calculated recoverable

value is recognised. In estimating the use value of an asset, the forecast cash flows are discounted to their

current value using a discount rate before adjustment for the effects of taxation and which reflects the current

estimated market time value of money and the risk typical of that asset. Impairment losses in respect of assets

used in the Company’s continuing operations are recognised in the respective cost category for the function of

that the impaired asset.

The Group assesses, as at each reporting date, whether there is any evidence that the impairment loss

recognised in previous periods with respect to a particular asset is unnecessary or whether it should be reduced.

If such evidence is identified, the Group estimates the recoverable value of that asset. The impairment loss

previously recognised is reversed only if the estimated values used in calculating the value of the recoverable

value of that asset have changed since the impairment loss was recognised. In such a case, the carrying value of

the asset is increased to its recoverable value. The increased recoverable value may not exceed the carrying

amount of the asset that would be determined (less depreciation) if no impairment loss had been recognised in

previous years with respect to that asset. The reversal of the impairment loss with respect to the asset is

immediately recognised as revenue. After the impairment loss is reversed, the depreciation charge with respect

to that asset is adjusted in such a way that it is possible, during the remaining period of using that asset, to write

off its reviewed carrying amount less its residual value regularly.

Combinations of jointly controlled business entities

A combination of jointly controlled entities or undertakings is a business combination where all the entities or

undertakings are controlled by the same party or parties both before and after the combination and that control is

not temporary (IFRS 3).

IFRS 3 is not applicable to business combinations involving jointly controlled entities or undertakings. In such a

case (in accordance with IAS 8: “in the absence of a standard or an interpretation that specifically applies to a

transaction, other event or condition”), management uses its judgement in developing and applying an accounting

policy that results in information that is reliable (i.e. represents faithfully the financial position, reflects the

economic substance of transactions, and not merely the legal form, is neutral, prudent and complete in all

material respect) and that is relevant to the economic decision-making needs of the user.

In making the judgement, management refers to, and consider the applicability of, the following sources

he requirements and guidance in standards and interpretations dealing with similar and related issues,

the definitions, recognition criteria and measurement concepts for assets, liabilities, income and

expenses in the Framework.

In making the judgement, management may also consider the most recent pronouncements of other standard

setting bodies that use a similar conceptual framework to develop accounting standards.

In connection with the provisions of IAS 8, the parent company’s Management Board may apply the guidelines of

IFRS 3 in accounting for the transaction involving the acquisition of shares in Home Broker Nieruchomości S.A..

In order to account for the business combination of jointly controlled entities in 2011 (the acquisition of shares in

Home Broker Nieruchomości S.A. by Open Finance S.A), the Group applied the acquisition method. The parent


28

company’s management board believes that the pooling of interests method meets the criteria laid down in IAS 8

Accounting policies, changes in accounting estimates and errors.

Accounting for a business combination using the pooling of interests method involves adding up all the relevant

asset, liabilities and contingent liabilities of the combined companies at their fair values determined as at the date

of the combination. The difference between the fair value of the payment and the acquired company’s net assets

recognised at fair value may result in goodwill or gain from a bargain acquisition.

The potential tax effects of temporary differences (between the tax value of the acquired company’s net assets as

determined as at the date of the transaction and their value adopted for the purpose of accounting for the

transaction) existing as at the acquisition date or resulting from the acquisition will be recognised in accordance

with IAS 12 Income Tax (“IAS 12”). The recognition of a deferred tax asset will depend on the probability of

realising the asset, and the provision for such tax will be recognised at its full amount. The amount of the deferred

tax recognised as at the acquisition date will affect goodwill or gain from a bargain acquisition

The identification of the acquired company’s net assets and the determination of their fair values as at the

acquisition date may result in the recognition, in the consolidated financial statements, of assets and liabilities not

recognised in the acquired company’s books before the merger. This applies, in particular, to intangible assets

generated internally by the acquired company, which might not have met the criteria for recognition in separate

financial statements.

The fair value of the payment being the basis for calculating the value of goodwill or profit from a bargain

purchase is, in each case, determined as the fair value of the payment, taking into account the fair values of

contingent payments.

The costs directly related to the acquisition transaction are not part of the acquisition price and are recognised in

these consolidated financial statements when incurred.

In applying the acquisition method (in accordance with IFRS 3), the acquiring company must, within 12 months,

finally account for the acquisition (the measurement period). This applies to both measurement of the fair value of

the acquired assets, liabilities and contingent liabilities and determination of the fair value of the payment. During

the measurement period, the acquiring company retrospectively adjusts the values currently recognised as at the

acquisition date to reflect all the new facts and circumstances existing as at the acquisition date which if had been

known would have affected the measurement of the items recognised as at that date. The effect of such changes

increases / decreases the goodwill item. In the event of such adjustments of the fair value of the acquired assets,

liabilities and contingent liabilities and of the fair value of the payment which are the result of becoming aware of

such new facts and circumstances (which could not have been known at the time of accounting for the

acquisition), the effect of such changes is recognised directly in the Group’s profit or loss. Such facts and

circumstances include, for example, events occurring after the acquisition transaction, such as the achievement,

by the acquired company, of particular financial results, or new customers and/or transactions attracted or made

by the acquired company after the acquisition date. After the measurement period, the acquiring company

changes the accounting treatment of the transaction only if it is necessary to adjust an error in accordance with

IAS 8.

Financial assets

Financial assets are classified as follows:

financial assets held to maturity,

financial assets measured at fair value through profit or loss,

loans and receivables,


29

available-for-sale financial assets.

Financial assets held to maturity are non-derivative financial assets with fixed or determinable payments and

fixed maturity that the Group has the positive intention and ability to hold to maturity and other than

assets designated by the Group, when initially recognised, as assets measured at fair value through

profit and loss,

assets designated by the Group as assets available for sale; and

assets that fall within the definition of loans and receivables.

Financial assets held to maturity are measured at amortised cost using the effective interest rate. A financial

asset held to maturity is classified as long-term assets if its maturity period is longer than 12 months from

the reporting date.

Financial assets measured at fair value through profit and loss are financial assets that meet at least one of

the following conditions:

1. it is classified as an asset available for sale. A financial asset is classified as available for sale if

It is acquired mainly to be resold within a short period of time,

it is part of a group of financial instruments managed jointly and which are likely to generate gains

in the short term,

it is a derivative instrument, excluding derivative instruments used as part of hedge accounting a nd

financial guarantee agreements.

2. it is classified, in accordance with IAS 39, into this category when initially recognised.

Financial asset measured at fair value through profit and loss are measured at fair value taking into account

their market values as at the date of preparation of the financial statements, without taking into account the

costs of the sale transaction. Changes in the value of such financial instruments are recognised as financial

revenue or financial expenses in the statement of comprehensive income. If the contract provides for one or

more embedded derivative instruments, it may be classified as a financial asset measured at fair value

through profit or loss. This does not apply if the embedded derivative instrument does not material ly affect

the cash flows from the contract or if separation of the embedded derivative instruments is expressly

forbidden. A financial asset when initially recognised may be classified as a financial asset measured at fair

value through profit or loss if the following criteria are met:

this eliminates or significantly reduces inconsistency with regard to the measurement or recognition

if both the measurement and recognition of gains or losses are subject to different regulations, or

the asset is part of a group of financial assets managed and measured at fair value, in accordance

with a documented risk management strategy, or

the financial asset includes embedded derivative instruments that should be recognised separately.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. Loans and receivables are classified as current assets if the maturity period is

not longer than 12 months from the date of preparation of financial statements. Loans and receivables are

classified with a maturity period longer than 12 months from the date of preparation of financial statements

are classified as fixed assets.

Financial assets available for sale are non-derivative financial assets designated as available for sale or not

classified as financial assets measured at fair value through profit or loss, loans and receivables or financial

assets held to maturity. Available-for-sale financial assets are recognised at fair value, less the transaction

costs that cannot be directly attributed to their acquisition of issue, taking into account the market value as


30

at the date of preparation of financial statements. If an available-for-sale financial asset is not quoted in an

active market and if the fair value of the asset cannot be reliable determined using alternative methods, the

asset is measured at acquisition cost less impairment losses. The positive or negative difference between

the fair value of an available-for-sale asset (if the market value of the asset determined in an active

regulated market is available or if the fair value of the asset can be determined using any other reliable

method) and its acquisition cost less deferred tax is recognised as other comprehensive income in the

revaluation reserve item. A decrease in the value of available-for-sale assets attributable to loss of their

value is recognised as financial expense in the statement of comprehensive income.

The acquisition and sale of financial assets are recognised as at the t ransaction date. A financial asset when

initially recognised is measured at fair value increased by, in the case of an asset not classified as

measured at fair value through profit or loss, the transaction costs that can be directly attributed to the

acquisition.

A financial asset is derecognised when the Company loses control of the contractual rights to a particular

financial instrument. This is usually the case when the financial instrument is sold or when all the cash flows

from that instrument are transferred to an independent third party.

As of 31 December 2013 and 31 December 2012, none of the Group’s financial assets were classified as:

financial assets measured at fair value through profit or loss;

financial assets held to maturity; and

available-for-sale financial assets.

Impairment of financial assets

The Group assesses as of the end of each reporting period whether there is any objective evidence that a

financial asset or a group of financial assets is impaired. If any such evidence exists, the Group determines the

amount of impairment losses. A financial asset or a group of financial assets is impaired and impairment losses

are incurred if there is objective evidence of impairment as a result of one or more events that occurred after the

initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated

future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Assets recognised at amortised cost

If the Group identifies objective evidence of impairment of loan receivables measured at amortised cost, the

amount of the impairment loss is equal to the difference between the carrying amount of the financial asset and

the current value of the estimated future cash flows (except for future losses not yet incurred resulting from failure

to recover certain receivables) discounted using the original (i.e. determined at initial recognition oif the asset)

effective interest rate. The carrying amount of the asset is reduced directly or through provision. The loss is

recognised as other operating costs in the statement of comprehensive income.

The Group first assesses whether there is any objective evidence of impairment of individually significant financial

assets and evidence of impairment of individually significant intangible assets. If the Group identifies any

objective evidence that an individually assessed financial asset is impaired, whether or not that asset is

significant, the Group includes the asset into a group of assets with similar credit risk characteristics and tests all

of the assets jointly for impairment The assets that are individually tested for impairment and for which impairment

losses have been recognised or it was found that the existing impairment loss would not change are not

considered in the joint assessment of that group of assets for impairment.


31

If the impairment loss is reduced in the subsequent period and if the reduction can be objectively attributed to an

event occurring after the impairment loss is recognised, the previously recognised impairment loss is reversed.

The subsequent reversal of the impairment loss is recognised in the statement of comprehensive income as other

operating revenue to the extent that the carrying amount of the asset does not exceed, as of the date of the

reversal, its amortised cost.

Financial assets recognised at cost

If the Company identifies any objective evidence of impairment of an unquoted equity instrument not recognised

at fair value because its fair value cannot be reliably determined or evidence of impairment of a related derivative

instrument that must be accounted for by the provider of such an unquoted equity instrument, then the

impairment loss is determined as the difference between the carrying amount of the financial asset and the

current value of the estimated future cash flows discounted using the current market rate of return on similar

financial assets.

Available-for-sale financial assets.

If the Group identifies any objective evidence of impairment of an available-for-sale financial asset, then the

amount equal to the difference between the acquisition price of that available-for-sale financial asset (less all

capital repayments and amortisation) and its current fair value (less all impairment losses previously recognised

as costs in the statement of comprehensive income) is derecognised from equity and recognised as profit or loss.

The reversal of an impairment loss with respect to equity instruments classified as available-for-sale assets may

not be recognised in profit or loss. If the fair value of the available-for-sale debt instrument increases in the

subsequent period and if the increase may be objectively linked with an event occurring after recognising the

impairment loss in profit or loss, then the amount of the reversed impairment loss is recognised in profit or loss.

Derivative instruments

Derivative financial instruments are measured at fair value, without the transactional costs incurred at the sale of

such instruments.The basis for calculating the fair value of a derivative financial instrument is The exception is

liabilities being derivative financial instruments linked with and settled through the provision of an equity

instrument and an equity instrument in respect of which there is no price quoted on an active market for an

identical instrument (i.e. there are no tier 1 input data), whose fair value may not be reliably measured and which

is measured at cost.

Hedge accounting

From 1 January 2013 to 31 December 2012 and from 1 January 2012 to 31 December 2012, the Group did not

apply hedge accounting.

Embedded financial instruments

From 1 January 2013 to 31 December 2013 and from 1 January 2012 to 31 December 2012, the Group did not

hold any embedded financial instruments.

Trade receivables

Trade receivables are recognised at originally invoiced amounts, less an allowance for doubtful accounts

receivable. The allowance is estimated when recovering a certain amount of accounts receivable is not longer

probable.

If the effect of the time value of money is significant, the amount of accounts receivable is determined by

discounting the forecast future cash flows to the current value using a gross discount rate reflecting the current


32

market estimates of the time value of money. If a discounting method is used, the increase in the amount of

accounts receivable as a result of the passage of time is recognised as financial revenue.

Other receivables

Other receivables include, in particular, security deposit paid under office lease agreements. Each such security

deposit is presented according to its maturity as a fixed asset or a current asset. If the effect of the time value of

money is significant, the amount of accounts receivable is determined by discounting the forecast future cash

flows to the current value using a gross discount rate reflecting the current market estimates of the time value of

money and the risk related to the account receivable concerned. If a discounting method is used, the increase in

the amount of accounts receivable as a result of the passage of time is recognised as financial revenue.

Accounts receivable from the Treasury are presented as other non-financial assets, except for current corporate

tax receivables, which are presented as a separate item in the statement of financial position.

Cash and cash equivalents

Cash and cash equivalents recognised in the statement of financial position include cash in bank and on hand as

well as short-term deposits with the original maturity period up to three months.

The balance of cash and cash equivalents recognised in the cash flow statement consists of the aforementioned

cash and cash equivalents, less current account overdraft not repaid (if any).

Prepaid and accrued expenses

In order to ensure that the Group’s expenses are recognised in the reporting periods to which they relate, the

Group recognises prepaid and accrued expenses. Prepaid expenses are expenses relating to future reporting

periods. In addition, the Group recognises, as prepaid expenses, recognised revenue from intermediation in the

sale of financial products, estimated based on historical closing ratios for applications (as described in more detail

in Note X.16).

Deferred revenue from the provision of financial intermediation services also includes revenue as replacement

commission and commission on the value of assets recognised based on the results of an analysis supported by

the model described on page 14 (Note VII).

Accrued expenses include current expenses not yet incurred and provisions for liabilities determined by the Group

on the basis of reliable estimates of future expenses related to the Group’s operations, in accordance with the

principles provided for in law, as well as provisions created to cover future payments to employees, e.g. pay in lieu

of holiday or rewards for the completion of certain tasks Accrued expenses also include non-invoiced commission

for the Group’s advisers (advisers working in the Group’s offices as well as Open Direct mobile advisers) that

relate to estimated revenue as recognised.

Provisions

Inventory is measured at their purchase prices not higher than their net selling prices as at the date of preparation

of financial statements.

Financial liabilities

Financial liabilities measured at fair value through profit or loss

Financial liabilities measured at fair value through profit or loss include financial liabilities held of sale and

financial liabilities initially classified as financial liabilities measured at fair value through profit or loss. A financial

liability is classified as a financial liability held for sale if it is acquired to be sold in the near future. A financial


33

liability when initially recognised may be classified as a financial liability measured at fair value through profit or

loss if the following criteria are met:

this eliminates or significantly reduces inconsistency with regard to the measurement or recognition

if both the measurement and recognition of gains or losses are subject to different regulations, or

the liability is part of a group of financial liabilities managed and measured at fair value, in

accordance with a documented risk management strategy, or

the financial liability includes embedded derivative instruments that should be recognised

separately.

Financial liabilities measured at fair value through profit and loss are measured at fair value taking into account

their market values as at the date of preparation of financial statements, without taking into account the costs of

the sale transaction. Changes in the value of such financial instruments are recognised as financial revenue or

financial expenses in the statement of comprehensive income.

Financial liabilities arising from contingent payments in connection with the purchase of shares in

Home Broker Nieruchomości S.A.

The liability arising from the acquisition of shares in Home Broker Nieruchomości S.A. on 30 September 2011

was, until the final settlement of the transaction, classified as a financial liability arising from contingent payments

(the condition was the amount of the final settlement, while the liability itself met the definition of financial liabilities

as defined in IAS 32, as a contractual obligation to deliver money or any other financial asset to another entity). At

the time of the final settlement of the share acquisition transaction, the final amount to be paid for the shares was

determined in Open Finance S.A.'s books. As a result, the profit for 2012 includes a revenue item of PLN 110,901

thousand, because the originally recognised fair value of the contingent payment was higher than the final price

paid as part of the transaction. Since the final amount to be settled was determined in accordance with the

relevant agreement, the amounts of the liability were not remeasured in 2013.

Financial liabilities classified as financial instruments measured at fair value through profit or loss,

Financial liabilities other than not classified as financial instruments measured at fair value through profit or loss

when initially recognised are recognised at fair value less the costs of the liability concerned (e.g. the cost of

obtaining a loan or credit). After their initial recognition, such financial assets are measured at amortised cost

using the effective interest rate.

A financial liability (or part of a financial liability) is removed from the Group’s statement of financial position when

the obligation specified in the contract is discharged or cancelled or expires. The replacement of an existing debt

instrument with an instrument with substantially different conditions, if such replacement takes place between the

same entities, is recognised as expiry of the original financial liability and recognition of the new financial liability.

Similarly, any significant modification to the terms and conditions of a contract for an existing financial liability is

recognised as expiry of the original financial liability and recognition of the new financial liability. The resulting

difference between the relevant carrying amounts is recognised in profit or loss.

Interest –bearing debt securities

Debt securities are initially recognised as debt securities measured at fair value less the costs of issuing them.

After their initial recognition, interest-bearing debt securities are measured at amortised cost using the effective

interest rate.


34

In determining the amortised cost, the Group takes into account the costs of issuing the security and the discounts

and/or premiums received in connection with the liability.

The revenues and costs are recognised in profit or loss when the liability is removed from the statement of

financial position and also as a result of accounting using the effective interest rate.

Short-term trade liabilities and other non-financial liabilities

Short-term trade liabilities and other non-financial liabilities are recognised at the amount due.

Other non-financial liabilities include, in particular, amounts due to tax authorities with respect to VAT and

personal income tax, amounts due to the Polish national insurance institution (ZUS) and amounts due to

employees with respect to salaries and wages.

Provisions

A provision is made if the Group has a present obligation (legal or constructive) as a result of past events and if it

is probable that an outflow of economic benefits will be required to settle the obligation, and if a reliable estimate

can be made of the amount of the obligation. If the Group expects reimbursement of the expenditure required to

settle a provision (for example, through insurance contracts), the Group recognises the reimbursement as a

separate asset, but only and only when it is virtually certain that the reimbursement will be received. The expense

relating to a provision is presented in the statement of comprehensive income, net of the amount recognised for a

reimbursement.

If the effect of the time value of money is significant, the amount of accounts receivable is determined by

discounting the forecast future cash flows to the current value using a gross discount rate reflecting the current

market estimates of the time value of money. If a discounting method is used, the increase in the amount of the

provision as a result of the passage of time is recognised as financial revenue.

Share-based payments

The Group applies IFRS 2 Share-based payments to the Group’s incentive scheme for its key personnel (as

described in more detail in Note X.33), in place since 13 September 2011. The incentive scheme meets the

definition of an equity-settled share-based payment, as

the incentive scheme is open to the Group’s personnel (participants in the scheme);

if the conditions for acquiring warrants (rights) are satisfied, the scheme participants receive

consideration in the form of equity instruments (warrants with the right to acquire shares) whose value

depends on the value of Open Finance’s equity instruments;

The parent company receives services from its personnel (work) in exchange for consideration as part of

the incentive scheme.

Given the above, the Group’s incentive scheme is presented in accordance with IFRS 2 as follows:

the equity instruments granted are measured at fair value as at the date of granting the rights (13

September 2011). As the transaction is classified as an equity-settled transaction, the equity instruments

granted as part of the incentive scheme are not remeasured at fair value as at subsequent balance sheet

dates or as at the settlement date of the scheme;


35

the costs of the incentive scheme are recognised gradually throughout the vesting period (recognised in

the statement of comprehensive income as employee costs in correspondence with other reserve capital

funds);

the vesting conditions (other than market conditions) are recognised, throughout the duration of the

scheme, by adjusting the number of equity instruments that is used in measuring the value of the entire

transaction to ensure the value of the recognised services received in exchange of the equity

instruments granted reflects the number of instruments finally vested;

the total amount of recognised costs depends on the progress of the vesting process; if the vesting

process is completed, the total amount of recognised costs is equal to the fair value of the entire

transaction as at the vesting date. If the incentive scheme is not completed, the cost of the scheme is not

recognised only if the non-market vesting conditions (the Company’s incentive scheme provides for non-

market vesting conditions only) are not satisfied.

Details regarding the costs of the incentive scheme as recognised in 2013 and 2012 are contained in Note X.33.

Equity

Equity is capital, reserves and funds made in accordance with the applicable laws, regulations and the

Company’s Articles of Association.

The Group’s equity consists of share capital, retained earnings (undistributed profit) and other capital

reserves.

Share capital

The share capital is presented at nominal value, in accordance with the parent company’s Articles of

Association and incorporation records.

Dividends for a financial year that have been approved by the parent company’s General Shareholders

Meeting but have not been paid as of the end of the reporting period are disclosed as other short -term non-

financial liabilities in the statement of financial position.

Retained earnings (undistributed profit)

Retained earnings are created as a portion of the Group’s current-year profit and profit for previous financial

years not transferred to supplementary capital or distributed to the Group’s shareholders.


The parent company’s supplementary capital reserve was created at the time of establishing the parent

company / issuing shares as a result of acquiring the shares for a price exceeding their nominal value. The

remainder of the supplementary capital fund is profits carried over from previous reporting periods.

Other capital reserves also include capital resulting from the estimation of the fair value of the services

received as part of the Company’s incentive scheme based on equity instruments (share-based payments –

an equity component).

The supplementary capital fund for the repurchase of own shares was created in 2012 to finance the

acquisition, by the Company, of its own shares required for the purposes of an incentive scheme as part of

which persons holding managerial positions at the Company and its subsidiary Home Broker Nieruchomości

S.A. will have the right to acquire shares in the Company. Details of the scheme are described in the

consolidated financial statements for the year ended on 31 December 2012 (Note X.21.3).


36

In addition, other supplementary capital includes revaluation reserve, which includes amounts resulting from

the revaluation of available-for-sale financial assets. As at 31 December 2013 and 31 December 2012, there

was no revaluation reserve.

Revenue and costs

Revenue is recognised at such an amount for which it is likely that the Group will receive the economic

benefits of the transaction concerned and if the revenue amount can be reliably measured. Revenue is

recognised at the fair value of the payment received or due, less VAT and discounts. In addition, the following

criteria apply to the recognition of revenue.

Costs are recognised in the statement of comprehensive income if the future economic benefits decreased as

a result of a decrease in assets or an increase in liabilities. whose value can be reliably determined.

Costs are recognised in the statement of comprehensive income if there is a direct correlation between the

costs incurred and the corresponding revenue received.

Revenue from financial intermediation and the related costs of sale

The Group receives revenue for the provision of financial intermediation services with respect to the sale of,

in particular, the following financial products:

mortgage loans and products related to mortgage loans,

investment and insurance products.

The Group recognises revenue from financial intermediation services with respect to the sale of financial

products and the corresponding costs of sales based on sales invoices and estimates in accordance with the

principle described below.

In its statement of comprehensive income, the Group recognises (a) revenue from the sale of a financial

product in the month in which a customer’s application for the financial product is delivered to the relevant

bank and/or other financial institutions and (b) the commission payable to the Group’s sales force (external

advisers) with respect to the sale of financial products.

The amount of revenue is determined at the fair value of the payment received or due. In accordance with

IAS 18, revenue from intermediation in the sale of a financial product is recognised in the statement of

comprehensive income if the following conditions are met:

the entity has transferred to the buyer the significant risks and rewards of ownership of the product (by

delivering the loan application / application for an investment product or insurance product in such form as

required by the relevant bank / financial institution);

the entity retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the product;

the amount of revenue can be measured reliably.

Revenue from real estate agency services and the related costs of sales

The Group recognises revenue from real estate agency services and the corresponding costs of sales based

on sales invoices and estimates in accordance with the principle described below.

In the statement of comprehensive income, the Group recognises (a) revenue from real estate agency

services in the month of signing a preliminary agreement for the sale of a property and the costs and (b)

expense in respect of the commission payable to external advisers for the sale of the property.

The amount of revenue is determined at the fair value of the payment received or due. In accordance with


37

IAS 18, revenue from real estate agency services is recognised in the statement of comprehensive income if

the following conditions are met:

the entity has transferred to the buyer the significant risks and rewards of ownership of the product (by

signing a preliminary sale agreement);

the entity retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the product;

the amount of revenue can be measured reliably.

Other operating revenue and costs

Other operating revenue and costs are revenue and costs not directly related to the Group’s banking activities.

These include, without limitation, the following:

gain (loss) on the sale and liquidation of fixed assets,

compensation, damages, penalties and fines received and paid,

gain (loss) on the creation or release of provisions and allowances for revaluation of assets,

costs and recharged costs.

Financial revenue and costs

Financial expenses include mainly interest on liabilities paid and accrued and the effects of measurement of

financial liabilities measured at fair value through profit or loss (but the effect of a discount of liabilities over time is

presented as financial expenses). Such revenue is recognised gradually as it accrues in relation to the net

carrying amount of the financial asset concerned.

Financial expenses include mainly interest on liabilities paid and accrued and the costs of lease payments, to the

extent that it is possible to obtain a fixed interest rate on the balance of the liability concerned.

Income tax

Current tax

The liabilities and receivables with respect to current income tax for the current period and previous periods are

measured at the expected amount of payment to tax authorities (the amount to be refunded by tax authorities),

using such tax rates and tax regulations which were legally or actually effective as at the date of preparation of

these financial statements.

Deferred tax

For the purposes of financial reporting, deferred tax is created using the liability method with regard to all

temporary differences arising as of the end of the reporting period between the tax bases of assets and liabilities

and their carrying amounts presented in the financial statements.

Provision for deferred tax is recognised with reference to all positive temporary differences:

• except when the provision for deferred tax arises from initial recognition of goodwill or of an asset or

liability in a transaction other than a business combination and at the time of the transaction affects

neither gross profit (loss) nor taxable profit or loss, and

• in the event of positive temporary differences that arise from investments in subsidiaries or affiliated

entities and from participation in joint undertakings, except where the dates of reversal of the

temporary differences are subject to the investor’s control or where it is probable that the temporary

differences will not be reversed in the foreseeable future.

Deferred tax assets recognised with reference to all negative temporary differences, as well as unexercised tax


38

concessions and unexercised tax losses transferred to the following years, in the amount which corresponds to

the probability of generating taxable income sufficient for realisation of the aforementioned differences, assets

and losses:

• except when the deferred tax assets related to negative temporary differences arise from initial

recognition of an asset or liability in a transaction other than a business combination and at the time of

the transaction affects neither gross profit (loss) nor taxable profit or loss, and

• in the event of negative temporary differences that arise from investments in subsidiaries or affiliated

entities and from participation in joint undertakings, a deferred tax asset is recognised in the statement

of financial position only in such an amount in which it is probable that the aforementioned temporary

differences will be reversed in the foreseeable future and that taxable income is generated sufficient

for deduction of the negative temporary differences.

The carrying amount of a deferred tax asset is verified as of the end of each reporting period and is subject to a

respective decrease by the amount which corresponds to the lower probability of generating taxable income

sufficient for partial or full realisation of the deferred tax asset. A deferred income tax asset that is not recognised

is re-assessed as of the end of each reporting period and is recognised to the amount which corresponds to the

probability of generating taxable income in the future sufficient for recovering that asset.

Deferred income tax assets and provision for deferred income tax are measured using tax rates that are expected

to apply when the deferred tax asset is realized or the provision is released, based on tax rates (and laws) that

have been enacted as of the end of the reporting period or that will substantially be enacted by the end of the

reporting period.

The Group offsets deferred income tax assets against provisions for deferred income tax only if it holds a valid

and enforceable legal right to offset current income tax receivables against current income tax liabilities and if the

deferred income tax is linked to the same taxpayer and the same tax authority.

Goods and services tax (VAT)

Revenues, costs, assets and liabilities are recognised less goods and services tax (VAT) except:

where the goods and services tax paid on the purchase of assets and/or services cannot be reclaimed from

tax authorities; where such tax is recognised as, respectively, part of the purchase price of an asset or part of a

cost item; and

for accounts receivable and liabilities recognised inclusive of goods and services tax.

The amount of the goods and services tax payable to tax authorities is recognised as a liability in the statement of

financial position.

Net earnings per share

Basic earnings per share for each reporting period is calculated as consolidated net profit for a given

reporting period divided by the weighted average number of shares in the same reporting period.

For the purposes of calculating diluted earnings per share, the earnings attributable to shareholders in the

parent company and the weighted average number of existing shares are adjusted for the effect of all the

diluting potential ordinary shares.

Contingent liabilities

A contingent liability is


39

a possible obligation that arises from past events and whose existence will be confirmed only by the

occurrence or non-occurrence of one or more uncertain future events not wholly within the Group’s

control;

or a present obligation that arises from past events but is not recognised in the statement of financial

position because it is not probable that an outflow of cash or other assets will be required to settle the

obligation or the amount of the obligation cannot be measured reliably.

Off-balance sheet liabilities that carry the risk of a breach of contract by the principal are provided in accordance

with IAS 37.

Financial guarantees are treated and recognised in accordance with IAS 39.

Significant accounting principles – Open Life TUŻ S.A. (an associate)

Classification of insurance and investment contracts

The Company enters into contracts that generate an insurance risk, a financial risk or both types of risk.

The company classifies such contracts as follows:

• Contracts that generate a significant insurance risk are classified as insurance contracts. A significant

insurance risk occurs if the discount value of the insurance payment made as a result of the occurrence of the

insured risk (irrespective of the time of payment) is different from the discounted value of the payment made if the

insured risk does not occur by at least 10%. Such contracts may, however, contain elements of a financial risk.

• Contracts that carry a financial risk but do not carry an insurance risk are classified by the Company as

investment contracts. Where an investment contract is made, a financial asset and a financial liability are

recognised in the Company’s statement of financial position.

No life insurance contracts have been identified in the classification process.

where both an insurance risk and a financial risk are transferred, in which case it would be necessary to separate

the insurance part from the investment part (unbundling). Regarding contracts where the separation of embedded

options (such as the right to redeem a contract, the right to replace a contract with a non-premium contract, a

guaranteed pension for a pre-defined premium, indexation of the sums insured and premiums) is possible but not

compulsory, the investment part is not separated.

Both insurance contracts and investment contracts may contain discretionary participation features (“DPF”) that

give the insured the right to receive an additional payment or premium as an addition to the guaranteed payment,

with such an additional payment being a significant part of the entire contractual payment, its amount or period

are contractual and depend on the insurer’s decision, and the occurrence of such an additional payment depends

on the following:

• the performance of a particular group or type of contracts;

• the realisation or not of gains on certain assets;

• whether the insurer, fund or other contract-related entity has made a profit or loss.

All the contracts containing a discretionary participation feature that may be determined unilaterally by the

insurance company are measured in accordance with IFRS 4 according to the rules applicable to the

measurement of insurance contracts.

In the financial year ended on 31 December 2013 and the financial year ended on 31 December 2012, the


40

Company did not enter into any investment contracts containing DPF.

The rules for the presentation and measurement of contracts that do not meet the IFRS 4 criteria for being

classified as insurance contracts, i.e. contracts to be classified as investment contracts, are contained in IAS 39.

Regarding investment contracts, the following principles of measuring financial liabilities are applied:

measurement using the effective interest rate or measurement at fair value through profit or loss. The effect of the

measurement of the financial liabilities resulting from investment contracts are recognised in the profit and loss

account and presented under “Net gain (loss) on the measurement of financial assets and liabilities at fair value

through profit and loss”.

Net gain (loss) on the measurement of financial assets and financial liabilities measured at fair value through

profit or loss.

financial assets measured at fair value through profit or loss,

Financial assets measured at fair value through profit and loss are financial assets that meet at least one of the

following conditions:

a it is classified as an asset available for sale. A financial asset is classified as available for sale if

• It is acquired mainly to be resold within a short period of time,

• it is part of a group of financial instruments managed jointly and which are likely to generate gains in the

short term,

• it is a derivative instrument, excluding derivative instruments used as part of hedge accounting and financial

guarantee agreements.

b) it is classified, in accordance with IAS 39, into this category when initially recognised. A financial asset when

initially recognised may be classified as a financial asset measured at fair value through profit or loss if the

following criteria are met:

• this eliminates or significantly reduces inconsistency with regard to the measurement or recognition if both

the measurement and recognition of gains or losses are subject to different regulations, or

• the asset is part of a group of financial assets managed and measured at fair value, in accordance with a

documented risk management strategy, or

• the financial asset includes embedded derivative instruments that should be recognised separately.

If the contract provides for one or more embedded derivative instruments, it may be classified as a financial asset

measured at fair value through profit or loss. This does not apply if the embedded derivative instrument does not

materially affect the cash flows from the contract or if separation of the embedded derivative instruments is

expressly forbidden.

In particular, assets measured at fair value through profit or loss include such assets related to investment

contracts which generate insurance capital funds (created using the customers’ invested premiums) and

investment products.

with a guaranteed rate of return other than products where the assets of insurance capital funds are invested in

unquoted debt instruments. Financial assets arising from fees due from the issuers of financial instruments

purchased under investment contracts are also classified by the Company as financial assets measured at fair

value through profit or loss. The fair value of such assets is determined as the discounted future cash flows from

such fees. Such classification is possible because the assets are managed and their performance is evaluated

based on fair values, in accordance with the fair value determined for a given investment contract.

The funds received from customers under the investment contracts with them may be invested, in accordance


41

with the terms and conditions of the investment contracts,

in various financial instruments whose fair value is, depending on the instrument, determined on the basis of

market prices from an active market for the same assets or by applying appropriate measurement models.

In addition, this category includes certain financial instruments which, in accordance with the Polish Act on

Insurance Activities, are appropriated for covering technical insurance provisions. The applied classification of

such instruments eliminates or significantly limits the mismatch in measurement and recognition in the case of

assets and the liabilities covered by the assets.

Financial asset measured at fair value through profit and loss are measured at fair value taking into account their

market values as at the date of preparation of the financial statements, without taking into account the costs of

the sale transaction. Net gain (loss) on the measurement of financial assets and financial liabilities measured at

fair value through profit or loss

Technical insurance reserves

Premium reserve

The part of the premium written which relates to subsequent reporting periods is deferred as a premium reserve.

Changes in the value of the premium reserve is recognised in the profit and loss account in order to recognise

the related revenue over the entire period of the insured risk.

The premium reserve is written premium related to subsequent reporting periods, in proportion to the period for

which the premium is written or in relation to the degree of risk predicted for subsequent reporting periods. The

premium reserve is determined individually, separately for each contract.

Provisions for life insurance

The provision for life insurance in the case of life insurance products is created using the retrospective actuarial

method, separately for each insurance contract.

Technical insurance adequacy tests

The Company performs periodic adequacy tests of its technical insurance reserves. The purpose of the test is to

ensure as to the sufficiency of the Company’s technical insurance reserves less deferred acquisition costs for

covering expected liabilities under the existing insurance contracts. For the purpose of the test, the Company

uses the best up-to-date estimates of cash flows from its insurance contracts, the costs of claim adjustment and

insurance policy maintenance costs. If the test reveals that the value of the Company’s technical insurance

reserves is insufficient in relation to the estimated future cash flows, then the full difference is immediately

recognised in the profit and loss account through impairment of deferred acquisition costs and/or by creating

additional reserves.

Financial liabilities measured at fair value through profit or loss

Financial liabilities measured at fair value through profit or loss include financial liabilities held of sale and

financial liabilities initially classified as financial liabilities measured at fair value through profit or loss. A financial

liability is classified as a financial liability held for sale if it is acquired to be sold in the near future. Derivative

instruments, including embedded instruments, are also classified as instruments helds for sale, unless they are

classified as effective hedging instruments. A financial liability when initially recognised may be classified as a

financial liability measured at fair value through profit or loss if the following criteria are met:

• this eliminates or significantly reduces inconsistency with regard to the measurement or recognition if both

the measurement and recognition of gains or losses are subject to different regulations, or


42

• the liability is part of a group of financial liabilities managed and measured at fair value, in accordance with

a documented risk management strategy, or

• the financial liability includes embedded derivative instruments that should be recognised separately.

Finance lease liabilities

In particular, financial liabilities measured at fair value through profit or loss include “financial liabilities arising

from investment contracts” (where such financial liabilities arise from investment contracts with DPF). This

classification allows the Company to eliminate the mismatch between measurement and recognition that would

occur if financial liabilities were measured at amortised cost in a situation where the assets linked to a given

investment contract were measured at fair value through profit or loss.

Financial liabilities arising from investment contracts are measured on the basis of appropriately adjusted

measurement of the financial assets arising from the conclusion of investment contracts, the fair value of future

costs of investment contract servicing directly related to the product concerned, and the discount rate for the

measurement of future cash flows.

All changes in the fair value of such instruments are recognised in the profit and loss account as financial costs or

financial revenue and presented in the “Net gain (loss) on financial assets and financial liabilities measured at fair

value through profit or loss” item.

Net gain (loss) on the measurement of financial assets and financial liabilities measured at fair value through

profit or loss

The “Net gain (loss) on the measurement of financial assets and financial liabilities measured at fair value

through profit or loss” item includes the effects of measurement of financial assets and financial liabilities

measured at fair through profit or loss and generated as a result of concluding investment contracts, insurance

contracts or as a result of the insurance company making an investment on its own account.

In measuring the financial assets and liabilities arising from the conclusion of investment contracts and classified

as financial instruments measured at fair value through profit or loss, there will be a difference, at the time of

concluding an investment contract and at the initial recognition of the resulting financial assets and liabilities,

between the measured values of such assets and liabilities due to different types of flows recognised in the

measurement of such instruments.

This decision is based on an analysis of the scope of the services provided and on the economic content of the

fees charged by the Company in connection with a given investment contract, as well as an analysis of the

measurement techniques used in the measurement of the resulting financial assets and liabilities related to the

investment contract. The above difference between the measurement of that asset and that liability at their initial

recognition is recognised as follows:

• it is recognised partially or fully (on a one-off basis) as revenue in the profit and loss account at the time of

concluding the investment contract and the initial recognition of the liability;

• it is recognised partially or fully as deferred revenue in the profit and loss account gradually as different

services are provided during the term of the investment contract and the related costs are incurred during the

term of the contract.

The part recognised fully in the profit and loss account (the so-called “first-day result”) is recognised in the “Net

gain (loss) on the measurement of financial assets and financial liabilities measured at fair value through profit or


43

loss” item The deferred part (corresponding to the services provided during the term of the investment contract) is

initially recognised in the ‘deferred revenue’ item of the balance sheet and subsequently amortised in the profit

and loss account in subsequent reporting periods – the effects of this amortisation are recognised in the “Net

gain (loss) on the measurement of financial assets and financial liabilities measured at fair value through profit or

loss” item.

In addition, the “Net gain (loss) on the measurement of financial assets and financial liabilities measured at fair

value through profit or loss” item also includes the following:

• the effects of observable market factors affecting the measurement of the financial assets and liabilities

recognised in connection with the investment contract concerned which are classified as financial instruments

measured at fair value through profit or loss (including interest income and the interest part corresponding to the

amortisation of the discount with respect ot the measurement of financial assets and liabilities and the changes

arising from foreign exchange fluctuations);

• all the revenue received in advance and costs paid in advance and directly related tothe resulting financial

assets and liabilities regarding the investment contract concerned (e.g. the remuneration received by the

Company from the issuers of the securities purchased in connection with the investment contracts, the costs of

provisions for the risk of death in the case of investment contracts).


44

IX. OPERATING SEGMENTS

For management purposes, the Group's operations are divided into two segments based on the nature of the

products sold. Therefore, the following operating segments are subject to reporting:

investment products,

credit / lending products.

real estate agency services.

Investment products

The broadly defined distribution of investment products covers the sale of savings plans, term deposits,

structured products and investment funds. The business activities in this area are pursued by the parent company

and HB Money Sp. z o.o. (formerly HB Doradcy Finansowi Sp. z o.o. sp. k-a) (until 1 December 2012) and HB

Finance Sp. z o.o. (since 1 December 2012).

Credit / lending products

The Group’s services in the area of distribution of loan products cover the sale of mortgage loans, financial and

consumer loans. These services are provided to both new and existing customers that have, in the past, entered

into loan agreements using the Group’s intermediation. The business activities in this area are pursued by the

parent company and HB Doradcy Finansowi Sp. z o.o. sp. k. (until 1 December 2012) and HB Finance Sp. z o.o.

(since 1 December 2012).

Real estate agency services

The Group operates as a real estate agency in the new and used property markets throughout Poland. In

addition, the Group provides agency services in finding offices (flats). The Group pursues its real estate agency

activities in both the commercial and retail markets. The Group’s activity in this segment is carried out by Home

Broker Nieruchomości S.A.

None of the Group’s operating segments is connected with any other segment to create the above operating

segments for reporting purposes.

The parent company’s Management Board monitors the performance of each operating segment separately in

making its decisions regarding the allocation of the parent company’s resources, assessment of such allocation

and the results of the parent company’s operations. The basis for assessing the Group’s performance is a sales

margin calculated as the difference between the revenue from and costs of Group’s intermediation services,

which costs include commission to financial advisers analysed on an accrual basis. The profit/loss on the

operating segments includes revenue and costs directly related to financial intermediation services / real estate

agency services. The Group’s assets and liabilities, operating costs other than financial intermediation / real

estate agency costs directly related to sales, other revenue and other operating costs, financial costs and

financial revenue, as well as income tax are monitored at the Group level and are not allocated to operating

segments. In the tables below, these items are presented as Unallocated.


45

Investment

Products

Loan

Products

Real Estate

Agency Services

Managing Funds

& AssetsUnallocated

Products

Total

PLN thousand

PLN

thousand PLN thousand PLN thousand PLN thousand

PLN

thousand

Sales revenue 182 948 176 125 65 567 15 634 440 274

Sales revenue 182 948 176 125 65 567 15 634 - 440 274

Costs of sales (43 097) (62 578) (29 276) (12 597) (147 548)

Other operating costs - - - (226 293) (226 293)

Gross profit on sales 139 851 113 547 36 291 3 037 (226 293) 66 433

Other operating revenue - - - 519 11 217 11 736

Other operating costs - - - (481) (6 721) (7 202)

Operating profit 139 851 113 547 36 291 3 075 (221 797) 70 967

Financial revenue - - - 139 853 992

Share of the associate's profit - - - - 5 159 5 159

Financial costs - - - (44) (8 647) (8 691)

Gross profit 139 851 113 547 36 291 3 170 (224 432) 68 427

Income tax - - - (611) (11 013) (11 624)

Net profit for the financial year 139 851 113 547 36 291 2 559 (235 445) 56 803

Assets for the segment as at 31 Dec.2013 - - - 11 173 628 486 639 659

Liabilities for the segment as at 31 Dec.2013 - - - 4 885 214 689 219 574

Other information:

investments in associates - - - - 60 413 60 413

1 Jan.2013 - 31 Dec.2013

Investment

Products

Loan

Products

Real Estate

Agency Services

Managing Funds

& Assets Unallocated

Products

Total

PLN thousand

PLN

thousand PLN thousand PLN thousand PLN thousand

PLN

thousand

Financial intermediation revenue 174 593 197 248 71 623 - 7 249 450 713

Sales revenue 174 593 197 248 71 623 - 7 249 450 713

Financial intermediation costs (52 762) (47 818) (41 077) - - (141 657)

Other operating costs - - - - (223 285) (223 285)

Gross profit on sales 121 831 149 430 30 546 - (216 036) 85 771

Other operating revenue - - - - 16 389 16 389

Other operating costs - - - - (12 622) (12 622)

Operating profit 121 831 149 430 30 546 - (212 269) 89 538

Impairment of Home Broker Nieruchomości S.A.'s goodwill (16 377) (78 472) (6 323) - - (101 172)

Financial revenue - - - - 115 817 115 817

Share of the associate's profit - - - - 21 688 21 688

Financial costs - - - - (8 582) (8 582)

Gross profit 105 454 70 958 24 223 - (83 346) 117 289

Income tax - - - - 5 926 5 926

Net profit for the financial year 105 454 70 958 24 223 - (77 420) 123 215

Assets for the segment as at 31 Dec.2012 - - - - 600 985 600 985

Liabilities for the segment as at 31 Dec.2012 - - - - 238 860 238 860

Other information:

investments in associates - - - - 55 254 55 254

1 Jan.2012 - 31 Dec.2012

Revenue from transactions with individual external customers which individually in each period exceed 10% of the

Group’s total revenue is presented in the following tables:

Investment

Products

Loan

Products

Real Estate Agency

Services

Managing Funds &

Assets Total

PLN thousand

PLN

thousand PLN thousand PLN thousand w tys. zł

Getin Noble Bank S.A. 45 656 70 249 - - 115 905 26%

Open Life Towarzystwo Ubezpieczeń Życie S.A. 49 062 - - - 49 062 11%

Investment

Products

Loan

Products

Real Estate Agency

Services

Managing Funds &

AssetsTotal

PLN thousand

PLN

thousand PLN thousand PLN thousand

PLN

thousand

Getin Noble Bank S.A. 12 663 105 645 - - 118 308 26%

Open Life Towarzystwo Ubezpieczeń Życie S.A. 88 923 - - - 88 923 20%

1 Jan.2013 - 31 Dec.2013 Percentage of

Sales

1 Jan.2012 - 31 Dec.2012 Percentage of

Sales


46

X. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The figures presented in these notes to these consolidated financial statements are expressed in PLN’000.

1. Revenue

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Loan products 176 125 197 248

Investment products, including 182 948 174 593

Savings products 93 887 139 559

Deposit products 14 430 9 570

One-off investment products 74 631 25 464

Real estate agency services, incl. 65 567 71 623

New property market 32 730 27 711

Used property market 32 837 43 912

Managing assets and funds 15 634 -

Other - 7 249

Total 440 274 450 713

Sales revenue

The other revenue is related to services regarding real estate management, the coordination of construction

work and real estate market analyses for third-party customers.

2. Operating costs

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Employee benefits, including: 172 813 167 591

- salaries 147 430 142 921

- social insurance 22 374 19 699

- other benefits 3 009 4 971

Materials and energy 11 530 12 239

External services, including: 154 237 148 509

- external financial advisers' commission costs 71 618 76 608

- lease and rental 46 745 44 911

- marketing, representation and advertising 13 759 9 876

- telecommunications and postal services 6 630 8 037

- IT services 2 559 2 170

- repair and maintenance services 3 967 3 584

- distribution fees and asset management costs 4 376 377

- insurance 770 673

- advisory services 524 638

- legal services 398 481

- physical security services 176 124

- other 2 715 1 030

Taxes and charges 1 577 3 633

Amortisation and depreciation 29 488 27 921

Other costs 4 196 5 049

Total 373 841 364 942

Operating costs


47

3. Other operating revenue

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Incidental revenue 4 454 2 841

Measurement of investment real estate 3 037 -

Profit on the sale of investment real estate 1 831 1 675

Release of provisions for trade receivables 600 5

Release of provisions 371 -

Sales of Open TV services 232 -

Customer acquisition costs 219 -

Administrative services 218 88

Penalties, compensation and fines received 179 271

Gain (loss) from bargain purchase of fixed assets 113 155

Provision of content for Internet portals 105 122

Revaluation of provisions for retirement / disability severance pay 25 127

Bonus for compliance with deadlines for payment of personal

income tax 43 49

Profit on the sale of investment real estate - 8 780

Profit on the sale of the Lion's House trademark - 1 700

Sales of inventory - 48

Gain (loss) from assignment of vehicles under leases - 29

Other revenue 309 499

Total 11 736 16 389

Other operating revenue

The “Incidental revenue” item is revenue from cost recharging (including courier services,

telecommunications services, services charges and rent payments).

4. Other operating costs

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Costs related to incidental revenue 4 389 2 955

Allowances for security deposits and trade receivables 1 162 1 394

Costs related to termination of products 387 7 374

Amortisation of rent payments at non-market rates 282 240

Liquidation of non-financial fixed assets 202 23

Allowances for inventory 189 -

Allowances for other assets 123 -

Penalties, compensation and fines paid 58 -

Donations 5 5

Other costs 405 631

Total 7 202 12 622

Other operating costs

The “Costs linked with incidental revenue” item is recharged costs (includ ing courier services,

telecommunications services, services charges and rent payments).


48

5. Financial revenue

1 Jan.2013-

31 Dec.2013

1 Jan.2012-

31 Dec.2012

NotePLN

thousand

PLN

thousand

Bank interest income 494 1 099

Discount of long-term security deposits 255 -

Trade receivables discounted 159 583

Gain on the sale of participation units 51 98

Measurement of the liability arising from the purchase of

shares in Home Broker Nieruchomości SA at fair valueX.26 - 113 966

Other 33 71

Total 992 115 817

Financial revenue

6. Financial costs

1 Jan.2013-

31 Dec.2013

1 Jan.2012-

31 Dec.2012

NotePLN

thousand

PLN

thousand

Interest on bonds 7 326 3 746

Interest on liabilities 614 88

Interest on an advance 360 970

Financial costs arising from finance leases 171 191

Discount of advance 65 270

Loss on the sale of shares in a subsidiary 50 -

Negative exchange differences 43 34

Settlement of the discount of a conditional liability arising

from the purchase of shares in Home Broker

Nieruchomości S.A.

X.26 - 3 065

Discount of long-term security deposits - 93

Other financial costs 62 125

Total 8 691 8 582

Financial costs

7. Income tax

7.1 Tax liabilities

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Recognised in profit

Current income tax 1 638 10 962

Current income tax charge 3 363 10 962

Adjustments of current income tax for previous years (1 725) -

Deferred income tax 9 986 (16 888)

Relating to origination and reversal of temporary differences 9 986 (16 888)

Tax charge recognised in profit 11 624 (5 926)

Statement of other comprehensive income

Current income tax - -

Deferred income tax - -

Tax charge recognised in other comprehensive income - -

Total 11 624 (5 926)

Major components of tax expense


49

7.2 Effective interest rate

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Gross profit before tax 68 427 117 289

Income tax recognised in the statement of comprehensive income 11 624 (5 926)

Effective tax rate 17,0% -5,1%

Income tax at the rate of 19% 13 001 22 285

Effect of permanent differences on the tax charge, including (1 377) (28 211)

Adjustments of current income tax for previous years (1 291) -

Non-tax-deductible costs, including 978 1 515

- State Disabled Person Rehabilitation Fund 264 270

- representation, advertising, car insurance 166 320

- tax at HB DF Sp. z o.o. S.K.A for the period from 12 Oct.2012-31 Dec.2012 208 (13)

- costs related to termination of products 200 261

- costs related to the incentive program - 23

- tax on the "organised enterprise part" transaction at HB DF Sp. z o.o. - 247

- donations - 16

- discount of a contingent liability - 335

- other 140 56

Non-taxable revenue (Open Life Towarzystwo Ubezpieczeń Życie S.A.'s profit) (980) (4 121)

Non-taxable revenue (84) (558)

Deferred income tax asset related to the ”organised enterprise part” (*) - (25 047)

Total income tax recognised in the statement of comprehensive income 11 624 (5 926)

(*) - A detailed description is containe din Note 7.3.

Effective tax rate


50

7.3 Deferred income tax

Provision for deferred tax

Prepayments and accrued revenue (estimated revenue from

financial intermediation and real estate agency services) 8 370 9 872 - 18 242


financial intermediation and real estate agency services) 7 824 6 434 - 14 258

Fixed assets and intangible assets (tax amortisation faster than

accounting amortisation) 270 (2) - 268

Advance discounted 14 (12) - 2

Valuation of investment real estate - 354 354

Other (299) 40 - (259)

Recognition of trademarks as at the time of accounting for the

acquisition of Home Broker Nieruchomości S.A. (*) 10 260 - - 10 260

Provision for deferred tax 26 439 16 686 - 43 125

Deferred income tax asset

Prepayments and accrued revenue (costs not invoiced) 6 418 (1 399) - 5 019

Finance lease liabilities 358 (115) - 243

Fixed assets and intangible assets (tax amortisation slower than

accounting amortisation) 1 158 (115) - 1 043

Trade receivables (allowances for revaluation of assets) 424 190 - 614

Discount of a contingent payment for shares in Home Broker

Nieruchomości S.A. - - - -

Trade receivables discounted 30 (30) - -

Interest accrued but not paid (incl. interest on bonds) 658 312 - 970

Previous years' tax losses 268 6 904 - 7 172

Tax losses to be set off 331 2 414 - 2 745

Revaluation allowances for real estate 223 (223) - -

Deferred income tax asset resulting from the ”organised

enterprise part” transaction 25 047 (1 276) - 23 771

Other 684 38 - 722

Gross deferred income tax assets 35 599 6 700 - 42 299

Deferred income tax charge recognised in the statement of

comprehensive income

x 9 986 - x

Deferred income tax charge recognised in goodwill x x - x

Net deferred income tax assets 26 157 x x 27 162

Net provision for deferred income tax 16 996 x x 27 988

Recognised

in goodwill

As at 1

Jan.2013

As at 31

Dec.2013Recognised in

profit (loss)

Changes during the period


51

Provision for deferred tax


financial intermediation and real estate agency services) 9 785 (1 415) - 8 370

Fixed assets and intangible assets (tax amortisation faster than

accounting amortisation) 2 084 5 740 - 7 824

Fixed assets under financial leases 371 (101) - 270

Advance discounted 66 (52) - 14

Other 152 (451) - (299)

Recognition of trademarks as at the time of accounting for the

acquisition of Home Broker Nieruchomości S.A. (*) 10 264 - (4) 10 260

Provision for deferred tax 22 722 3 721 (4) 26 439

Deferred income tax asset

Prepayments and accrued revenue (costs not invoiced) 10 795 (4 377) - 6 418

Finance lease liabilities 402 (44) - 358

Fixed assets and intangible assets (tax amortisation slower than

accounting amortisation) 942 216 - 1 158

Trade receivables (allowances for revaluation of assets) 172 252 - 424

Discount of a contingent payment for shares in Home Broker

Nieruchomości S.A. 335 (335) - -

Trade receivables discounted 141 (111) - 30

Interest accrued but not paid 505 153 - 658

Previous years' tax losses 824 (556) - 268

Tax losses to be settled - 331 - 331

Revaluation allowances for inventory 223 - - 223

Deferred income tax asset resulting from the ”organised

enterprise part” transaction - 25 047 - 25 047

Other 655 29 - 684

Gross deferred income tax assets 14 994 20 605 - 35 599

Deferred income tax charge recognised in the statement of

comprehensive income

x (16 884) - x

Deferred income tax charge recognised in goodwill x x (4) x

Net deferred income tax assets 1 879 x x 26 157

Net provision for deferred income tax 9 607 x x 16 996

(*) - The change in 2012 relates to the sale of the Lion's House trademark.

Recognised

in goodwill

As at 1

Jan.2012 Recognised in

profit (loss)

Changes during the period As at 31

Dec.2012

In 2007-2013, the subsidiary Home Broker Nieruchomości S.A. recorded total tax losses of PLN 42,225 thousand.

Pursuant to Article 7.5 of the Corporate Income Tax (published in Dziennik Ustaw of 2000, No.54, item 654, as

later amended), the tax loss incurred in a fiscal year may be set off against the income in the following successive

five fiscal years, provided that the amount of such reduction in any of the five years may not exceed 50% of the

loss. Until 31 December 2013, Home Broker reduced its income by PLN 4,507 thousand in tax losses. For the

remaining amount of the tax loss, i.e. PLN 37,748 thousand, the Company created, as at 31 December 2013, a

tax asset of PLN 7,172 thousand, in anticipation that the tax loss will be fully deducted from income in the

following years. The Company may set off the tax loss of PLN 64 thousand in 2014 at the latest, the tax loss of

PLN 204 thousand in 2015 at the latest, and the tax loss of PLN 6,904 thousand in 2018 at the latest.

On 1 December 2012, the subsidiary HB Doradcy Finansowi Sp. z o.o. S.K.A sold, to the subsidiary HB Finance

Sp. z o.o., an organisationally and financially separated set of tangible and intangible assets, including liabilities,

that constituted an organised part of the seller’s enterprise and were intended to perform specific economic tasks.

The above transaction is reflected in the Group’s consolidated financial statements by recognising deferred


52

income assets. As part of the transaction involving the sale of the organised part of the seller’s enterprise, the net

book and tax values of the assets purchased by HB Finance Sp. z o.o. amounted to PLN 29,744 thousand and

161,714 thousand respectively, generating a negative temporary difference of PLN 131,970 thousand and

deferred income tax assets of PLN 25,047 thousand. The negative temporary difference will be realised in the

future through tax amortisation of goodwill. The tax amortisation period is 20 years, starting from the time of

payment of the amount due in the transaction. Following the above transaction, the Group incurred transaction

costs of PLN 1,736 thousand.

In 2013, the parent company incurred a tax loss of PLN 13,579 thousand. Pursuant to Article 7.5 of the

Corporate Income Tax (published in Dziennik Ustaw of 2011, No.74, item 397, as later amended), the tax loss

incurred in a fiscal year may be set off against the income in the following successive five fiscal years,

provided that the amount of such reduction in any of the five years may not exceed 50% of the loss.

Given the above and based on the Company's estimates of the Company's taxable income in 2014 -2016, the

parent company recognised, as at 31 December 2013, a deferred tax asset with regard to the 2013 tax loss of

PLN 2,580 thousand that can be deducted from the taxable income but not yet so deducted.

8. Earnings per share (PLN per share)

Basic earnings per share for a given reporting period are calculated as consolidated net profit attributable to

the ordinary shareholders in the parent company for a given reporting period divided by the weighted average

number of issued ordinary shares existing in the same reporting period.

Diluted earnings per share for a given reporting period are calculated as consolidated net profit attributable to

the ordinary shareholders in the parent company (after deducting interest on redeemable preference shares

convertible for ordinary shares) divided by the weighted average number of issued ordinary shares that would

be issued by converting all diluting potential equity instruments for ordinary shares (e.g. adjusted for the

effect of diluting options and diluting redeemable preference shares convertible for ordinary shares).

The tables below contain the net consolidated profit and the number of shares figures used in calculating the

basic and diluted earnings per share.


53

Yea ended on Yea ended on

31 Dec.2013 31 Dec.2012

Consolidated profit attributable to shareholders in the parent company (PLN

thousand) 56 186 123 215

Weighted average number of ordinary shares in the reporting period (in

thousand) 54 273 54 250

Earnings per share (PLN per share) 1,0 2,3


31 Dec.2013 31 Dec.2012

Consolidated profit attributable to shareholders in the parent company

(PLN'000) 56 186 123 215

Weighted average number of ordinary shares as the basis for calculating diluted

earnings (in thousand) 54 273 54 569

Diluted earnings per share (PLN per share) 1,0 2,3


31 Dec.2013 31 Dec.2012

Weighted average number of ordinary sares in the reporting period (in

thousand) as the basis for calculating basic earnings 54 273 54 250

Weighted average number of shares resulting from the incentive program for

key employees (a) - 319

Weighted average number of ordinary shares in the reporting period (in

thousand) as the basis for calculating diluted earrnings 54 273 54 569

Earnings per share

Diluted earnings per share

Reconciliation of the weighted average number of shares

(a) - This applies to the incentive program described in more details in Note X.33 of these financial statements

From 31 December 2013 until the date of preparation of these consolidated financial statements, no other

transactions related to ordinary or potential ordinary shares were made.

9. Business combinations

On 30 September 2011, Open Finance S.A. entered into 4 conditional agreements to acquire shares in Home

Broker Nieruchomości S.A. The purchase price of 100% of the shares in Home Broker Nieruchomości S.A.

was calculated as seven times the Home Broker Nieruchomości S.A Group’s consolidated net profit for the

2012 financial year as shown in the Group’s audited financial statements approved by its General Meeting,

with the minimum price being PLN 200 million The surplus, if any, over PLN 200 million is a conditional

payment.

As at the acquisition date, the Company calculated the expected purchase price of the shares in Home Broker

Nieruchomości S.A. at PLN 369,565 thousand. At 31 December 2012, the Company finally settled the transaction

and adjusted the acquisition price of the shares in Home Broker Nieruchomości S.A. down to PLN 260,328

thousand.

The fair values of identifiable assets and liabilities of Home Broker Nieruchomości S.A. (formerly Home Broker

S.A.) as at the acquisition date are shown below:


54

As at the

acquisition date

As at the date of

accounting

31 Dec.2011 31 Dec.2012

PLN thousand PLN thousand PLN thousand

ASSETS

Tangible fixed assets 12 416 - 12 416

Intangible assets 55 080 6 794 61 874

Investment real estate 8 725 - 8 725

Deferred income tax assets 1 835 - 1 835

Trade receivables 18 418 - 18 418

Accruals, including accrued revenue 18 367 - 18 367

Other short-term and long-term receivables 732 - 732

Inventory 3 435 - 3 435

Other short-term and long-term non-financial assets 3 511 - 3 511

Cash and cash equivalents 37 113 - 37 113

TOTAL ASSETS 159 632 6 794 166 426

LIABILITIES AND PROVISIONS

Provision for deferred income tax 1 841 - 1 841

Provision for deferred income tax related to the recognition of

trademarks10 264 - 10 264

Short-term and long-term finance lease liabilities 1 541 - 1 541

Short-term and long-term liabilities arising from the issue of bonds 30 309 - 30 309

Trade liabilities 7 713 - 7 713

Accruals, including accrued salaries 11 736 - 11 736

Current income tax liability 750 - 750

Other non-financial liabilities 36 571 - 36 571

TOTAL LIABILITIES AND PROVISIONS 100 725 - 100 725

Identifiable net assets at fair value 58 907 6 794 65 701

Goodwill measured as at the time of accounting for the acquisition 310 558 -6 794 303 764

Fair values of assets and liabilities

Assets

recognised after

the acquisition

date

Note X.26 contains a calculation of the liability arising from the acquisition of shares in Home Broker

Nieruchomości S.A.

As at the

acquisition date

As at the date of

accounting

31 Dec.2011 31 Dec.2012


Goodwill 310 558 (6 794) 303 764

Trademark 54 020 (20) 54 000

Customer databases - 6 794 6 794

Total assets 364 578 (20) 364 558

Assets

recognised after

the acquisition

dateIdentified values of assets

The analyses, by the parent company’s management board, of the fair values of the acquired assets and liabilities

has revealed that, as at the time of accounting for the transaction, the book values of the different assets and

liabilities of the acquired company were the best reflection of their fair values. In addition to the assets and

liabilities presented in the acquired company’s financial statements, the acquiring company identified two

trademarks, which were measured by an independent specialist. By comparing the fair value of the payment with

the fair values of the acquired company’s net assets identifiable as at the time of the merger, goodwill was

recognised in the amount of PLN 310,558 thousand. As at 31 December 2012, the parent company identified

additional assets existing as at the acquisition date, i.e. customer databases, whose gross value as at the


55

acquisition date was PLN 9,644 thousand and the amortisation charges for which were PLN 2,850 thousand. The

net value of the customer databases acquired as at the acquisition date was PLN 6,794 thousand. The goodwill

identified as at the acquisition date was adjusted in 2012. Additionally, in 2012, the Lion’s House trademark was

sold. The value of the trademark as at the acquisition date was measured at PLN 20 thousand.

The recognised goodwill reflects the benefits to be derived by the acquiring company and the Group following the

merger. The parent company’s Management Board expects benefits in, for example, the following areas:

greater opportunities for negotiations with business partners,

diversification of the range of services and revenue flows,

better conversion of the existing customers to products,

the ability to market investment products directly to a new group of customers,

more effective channel marketing (cooperation with property developers),

lower costs of attracting new customers,

longer periods of communication with customers,

a double increase in the distribution potential for life insurance and property insurance products (Open

Life),

cost synergies.

The transaction costs of PLN 100 thousand were recognised in other operating costs in the statement of

comprehensive income and in cash flows from operating activities in the cash flow statement.

Impairment

The impairment losses recognised in the consolidated profit and loss account with respect to goodwill were as

follows:

1 Jan.2013 - 31

Dec.2013

1 Jan.2012 - 31

Dec.2012


Home Broker Nieruchomości - (101 172)

Total - (101 172)

Cash-generating unit

The impairment loss in 2012 was calculated by calculating the utility value. The discount rate used before tax

used this purpose was 12.45% for 2012.

The impairment loss recognised for 2012 was mainly due to the deepening financial crisis resulting in, among

other things, banks tightening their credit policies, which adversely affects the financial results of credit

intermediaries, particularly those related to the real estate market.

The goodwill impairment tests performed in 2013 showed no further impairment of the goodwill. The discount rate

used before tax used this purpose was 11,23%.

Goodwill presented in Open Finance’s consolidated financial statements:

Home Broker Nieruchomości 2013 2012


As at 1 January 202 592 303 764

Impairment - (101 172)

As at 31 December 202 592 202 592

Key assumptions in the calculation of the use value


56

Assumption Method of determination

The tested assets were the assets of the Home Broker Nieruchomości Group‘s cash

generating unit as at 31 December 2013, adjusted by non-operating deferred tax

assets. The liabilities directly related to such assets were also included in the test.

The changes in working capital were based on assumptions of the recoverability of

receivables and repayment of liabilities separately for the activities related to financial

products and those related to real estate products.

The costs and revenue were based on planning assumptions adopted by the

Company for subsequent years.

Network expansion was taken into account as an important assumption, as follows

The increase in cash flows during the residual period was assumed at 2.5% annually,

which is equal to inflation rate projections. A fixed tax rate of 19% was assumed.

Budgeted CAPEX

Capital expenditure (CAPEX) forecasts are based on budgets and plans for the

expansion of the adviser network. The forecast expenditure is based on the needs

regarding the maintenance of the existing network. In 2015, the assumption was made

that capital expenditure will only be replacement expenditure and equal to

depreciation/amortisation amounts.

Long-term growth rate

It was assumed in the test that the costs may increase by 2.5% annually. A similar

assumption was made with respect to revenue, at 2.5%, which is equal to the average

expected inflation rate.

The comparative group for the purpose of calculating the beta ratio included four

European financial intermediaries. The market value of Open Finance S.A.’s capital

and the book value of the Company's debt were included in calculating the beta ratio.

The risk-free rate was 4.39%, which is equal to the yield rate for 10-year Treasury

bonds in November 2013. The market risk premium was assumed at 7.3 percentage

points, in accordance with Damodaran Online. The cost of debt was assumed at the

average interest rate for the bonds held by Home Broker NIeruchomości in 2013.

The interest rate was determined using the CAPM model, adjusting the result based on

this model up by 3 percentage points, because of the perceived short validity period of

the low risk-free market interest rate (1 point) and the risk of failure to achieve the

company's financial forecasts (2 points). For the purpose of disclosing the pre-tax

discount rate in accordance with IAS 36, a simulation was performed, using the

iterative method, to determine the interest rate at which the value in use is the same,

assuming that cash flows are discounted before tax.

Cash flows

Pre-tax discount rate

Regarding the Home Broker trademark recognised as at the acquisition date, the trademark was classified as an

intangible asset with a definite useful life. As such, the trademark is tested for impairment annually. The trademark

is one of the corporate assets owned by two cash-generating units: Home Broker Nieruchomości S.A. and Home

Broker Doradztwo Finansowe. The impairment test was performed at the Group level of both cash-generating

units by comparing the use values of both units with their book values. As a result of the impairment test, the

goodwill allocated to the two cash-generating units was impaired. In accordance with IAS 36, the impairment as a

result of the test was fully allocated to goodwill. As a result, the book value of the trademark was not impaired.

10. Employee Benefit Funds and Related Liabilities

The Employee Benefit Fund Act of 4 March 1994 (as later amended) provides that an Employee Benefit Fund

may be set up and maintained by an employer with more than 20 full-time employees. The Group maintains

such a fund and recognises periodic allowances at the basic amount. The purpose of the fund is to subsidise

the Group’s staff welfare activities, loans granted to the Group’s employees and other costs related to staff

welfare activities.

In accordance with the Management Board's decision, under article §3, 3a of the Act of 4 March 1994 on Employee Benefit Funds (published in Dziennik Ustaw of 1996, No. 70, item 335, as amended), the

Company has not maintained an Employee Benefit Fund since 18 October 2012.


57

The Group offset the fund’s assets against its amounts due to the fund, as such assets are not the Group’s assets. Therefore, the settlements balance related to the Fund is zero.

The table below contains analytical information on the fund’s assets, liabilities and costs.

31 Dec.2013 31 Dec.2012


Loans granted to employees 17 31

Cash and cash equivalents 356 601

Liabilities arising from the Fund (373) (632)

Balance after setoff - -

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Allowance for the Fund during the reporting period - 1 364

Company Employee Benefits Fund

Company Employee Benefits Fund

11. Tangible fixed assets

Changes in fixed assets for the year ended on 31

December 2013

Investments in

third-party

fixed assets

Plant and

equipment Vehicles

Other fixed

assets

Fixed assets

under

construction Total

PLN thousand PLN thousand PLN

thousand


Opening balance

Opening balance as at 1 January 2013 29 400 20 641 3 782 15 558 344 69 725

Increases, incl. 4 274 4 997 346 2 150 56 11 823

Acquisition 2 311 4 997 346 2 150 2 019 11 823

Transfer from fixed assets under construction 1 963 - - - (1 963) -

Decreases, incl. (3 320) (2 710) (524) (1 919) (40) (8 513)

Liquidation (3 320) (2 590) (287) (1 900) (40) (8 137)

Sale - (120) (237) (19) - (376)

Closing balance as at 31 December 2013 30 354 22 928 3 604 15 789 360 73 035

Depreciation

Opening balance as at 1 January 2013 (15 844) (11 282) (1 539) (9 120) - (37 785)

Increases, incl. (4 605) (4 801) (781) (3 686) - (13 873)

Depreciation for the reporting period (4 605) (4 801) (781) (3 686) - (13 873)

Decreases, incl. 3 225 2 559 325 1 913 - 8 022

Liquidation 3 225 2 465 181 1 897 - 7 768

Sale - 94 144 16 - 254

Closing balance as at 31 December 2013 (17 224) (13 524) (1 995) (10 893) - (43 636)

Revalution allowances

Opening balance as at 1 January 2013 - - - - (340) (340)

Decreases - - - - 318 318

Closing balance as at 31 December 2013 - - - - (22) (22)

Net value




58

Changes in fixed assets for the year ended on 31

December 2012

Investments in

third-party

fixed assets

Plant and

equipment Vehicles

Other fixed

assets

Fixed assets

under

construction Total


thousand


Opening balance


Increases, incl. 10 038 5 800 1 422 5 152 21 22 433

Acquisition 2 802 5 798 1 422 5 106 7 003 22 131

Transfer from fixed assets under construction 7 236 2 - 46 (6 982) 302

Decreases, incl. (3 158) (540) (1 051) (1 718) (207) (6 674)

Liquidation (399) (252) (803) (459) - (1 913)

Sale (2 759) (288) (248) (1 275) (207) (4 777)


Depreciation

Opening balance as at 1 January 2012 (11 125) (7 214) (1 350) (6 536) - (26 225)

Increases, incl. (5 209) (4 340) (794) (3 172) - (13 515)

Depreciation for the reporting period (5 209) (4 340) (794) (3 172) - (13 515)

Decreases, incl. 490 272 605 588 - 1 955

Liquidation 387 225 473 457 - 1 542

Sale 103 47 132 131 - 413

Closing balance as at 31 December 2012 (15 844) (11 282) (1 539) (9 120) - (37 785)

Revalution allowances

Opening balance as at 1 January 2012 - - - - - -

Increases - - - - (340) (340)

Closing balance as at 31 December 2012 - - - - (340) (340)

Net value



The carrying amount of the vehicles in use, as at 31 December 2013, under finance lease agreements is PLN

1,600 thousand (PLN 2,183 thousand as at 31 December 2012). The lease agreements signed with Getin

Leasing S.A. (for some of the vehicles) are secured with blank promissory notes.

As at 31 December 2013, the value of the Group’s fixed assets was 16,596 thousand gross (PLN 15,127

thousand as at 31 December 2012), which were fully depreciated.

12. Financial leases

As at 31 December 2013 and 31 December 2012, the future, minimum lease payments under the agreements

and the current value of net minimum payments are shown in the table below:

Minimum

payment

Current value

of payments

Minimum

payment

Current value

of payments

PLN

thousand

PLN

thousand

PLN

thousand

PLN

thousandUp to 1 year 673 517 835 694

From 1 year to 5 years 1 256 1 154 1 680 1 606

Over 5 years - - - -

Total 1 929 1 671 2 515 2 300

Unrealised financial costs (-) (258) (215)

Net lease investment 1 671 2 300

Current value of minimum lease

payments, including 1 671 2 300

short-term payments 517 694

long-term payments 1 154 1 606

Financial lease liabilities

31 Dec.201231 Dec.2013

From 1 January 2013 to 31 December 2013 and from 1 January 2012 to 31 December 2012, no significant

conditional lease payments were recognised as costs in the relevant reporting period.


59

13. Intangible assets

31 Dec.2013 31 Dec.2012

PLN

thousand

PLN

thousand

Home Broker's goodwill 202 592 202 592

Trademarks 54 000 54 000

Customer databases 67 617 31 989

Other intangible assets 5 994 3 403

Advances on account of intangible assets 958 835

Total 331 161 292 819

Intangible assets

The Group's significant intangible assets are the Home Broker trademark and the goodwill, both recognised at the

time of the relevant business combination, plus the customer databases purchased by the Group.

Goodwill

Goodwill has been calculated as the excess of the cost of the business combination over the acquirer’s interest in

the net fair value of the identifiable assets, liabilities and contingent liabilities of the Home Broker Group. The fair

value of the payment has been determined taking into account the fair value of contingent payments. Details of

the calculation of goodwill are presented in Note X.9 above.

The above goodwill will be tested for impairment. The Group tested the recognised goodwill for impairment as at

31 December 2013 and 31 December 2012. The results of the impairment test are contained in Note X.9 above.

Trademarks

The Home Broker trademark was measured at fair value at PLN 54,000 thousand. The basis for measuring the

trademark was a report prepared by an independent company.

In accordance with IAS 38, the company assesses, as at the end of the reporting period, whether the useful life of

an intangible asset is definite or indefinite. The parent company’s Management Board has found, based on

analysis of all the significant factors, that there is no foreseeable limitation of time within which it can be expected

that the asset will cease to generate net cash flows. Open Finance’s Management Board believes that the fact

that no useful lives are defined for trademarks, taking into account all the related consequences (testing the

trademarks for impairment not less than frequently than once a year in order to identify their impairment) makes it

easier for users of the Open Finance Group’s consolidated financial statements easier to understand and provides

a genuine picture of the Group’s financial standing. The above decision was made taking into account the

following factors:

No legal limitations exist that might affect the useful lives of the trademarks.

No regulatory or economic limitations or other predictable activities by the Group’s competitors and/or

potential competitors that result in reduction in the useful lives of the Group’s trademarks.

The useful lives of the trademark are not sensitive to technological, technical or commercial loss of

usefulness.

The useful lives of the trademark are independent of the useful lives of other assets.

As at the end of each reporting period, the parent company’s management board will determine whether the

above factors are still valid and whether its decision is still valid.

The Group tested the recognised goodwill for impairment as at 21 December 2012.

Customer databases


60

During the twelve-month period ended on 31 December 2013, the Group capitalised the costs of its customer

databases, of PLN 49,421 thousand (PLN 37,573 thousand in the twelve-month period ended on 31 December

2012)..

As part of an annual review of the useful lives of the Company's intangible assets, the Company changed, starting

from 1 July 2013, 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 3 to 5 years. In the opinion of the

Company's Management, the 5-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.

As at 31 December 2013 and 31 December 2012, the Group tested its customer databases for impairment. The

tests showed no impairment of this asset.

Fully amortised intangible assets

As at 31 December 2013, the value of the Group’s intangible assets was 8,386 thousand gross (PLN 7,669

thousand as at 31 December 2012), which were fully amortised.

Trademark GoodwillCustomer

databases

Other

intangible

assets

Advance

payments on

account of

intangible Total

PLN

thousand

PLN

thousand

PLN

thousand


thousand

Opening balance


Increases, incl. - - 49 421 4 429 123 53 973

Acquisition 49 421 4 429 123 53 973

Decreases, incl. - - (223) - (223)

Liquidation and sale - (223) (223)


Amortisation

Opening balance as at 1 January 2013 - - (12 378) (9 575) - (21 953)

Increases, incl. - - (13 793) (1 822) - (15 615)

Amortisation for the reporting period - - (13 793) (1 822) - (15 615)

Decreases, incl. - - - 207 - 207

Liquidation and sale - - - 207 - 207

Closing balance as at 31 December 2012 - - (26 171) (11 190) - (37 361)

Net value



Changes in the value of intangible assets for the year

ended on 31 December 2013


61

Trademark GoodwillCustomer

databases Other

intangible

assets

Advance

payments on

account of

intangible

assets Total

PLN

thousand

PLN

thousand

PLN

thousand

PLN

thousand

PLN

thousand

PLN

thousand

Opening balance


Increases, incl. - - 37 573 2 872 285 40 730

Acquisition - - 37 573 1 817 1 340 40 730

Acquisition - - - 1 055 (1 055) -

Decreases, incl. (20) (101 172) (343) - (101 535)

Liquidation and sale (20) - - (343) (363)

Allowance for impairment of Home Broker's goodwill - (101 172) - - - (101 172)


Amortisation

Opening balance as at 1 January 2012 - - - (7 864) - (7 864)

Increases, incl. - - (12 378) (2 027) - (14 405)

Amortisation for the reporting period - - (12 378) (2 027) - (14 405)

Decreases, incl. - - - 316 - 316

Liquidation and sale - - - 316 - 316

Closing balance as at 31 December 2012 - - (12 378) (9 575) - (21 953)

Net value



Changes in the value of intangible assets for the year

ended on 31 December 2012

14. Investments in subordinated entities

As at 31 December 2013, the value of the Group’s investment in its subsidiary Open Life TUnŻ S.A. is PLN

60,413 (PLN 55,254 thousand as at 31 December 2012) and is the purchase price plus a share of the profits of

the Parent Company’s associate. The purchase price was estimated as equal to 49% of Open Life TUnŻ S.A.’ net

assets as at 30 June 2011 and increased by a premium of PLN 245 thousand.

From the date of acquisition of the company until 31 December 2013, the Group recognised PLN 28,767

thousand as its share of the associate’s net profit.

Changes in investments in the associate2013

PLN thousand

2012

PLN thousand

Value of investments as at 1 January 55 254 11 516

Share of profits 5 159 21 688

Increase in capital - 22 050

Value of investments as at 31 December 60 413 55 254

Basic information on the company as at 31 December 2013 and as at 31 December 2012 is contained in the table

below (the data presented after final adjustments made to ensure compliance with the IFRS’s applied by the

Group):

As at Assets Liabilities For the period Revenue Net profitPercentage of

shares held

PLN


PLN

thousand

31.12.2013 5 094 815 4 972 803 1.01.2013-31.12.2013 116 081 10 529 49%

31.12.2012 3 463 043 3 350 903 1.01.2012-31.12.2012 150 067 44 261 49%


62

15. Investment real estate

1 Jan.2012- 31

Dec.2012

1 Jan.2011- 31

Dec.2011


Gross value

Opening balance at the beginning ot the period 4 145 9 418

Increases 1 862 11 409

Acquisition of real estate - 323

Activation of expenditure - 5 151

Reclassification from inventory - 3 435

Revaluation 1 862 2 500

Decreases 1 175 (16 682)

Disposal of real estate - (16 682)

Reversal of revaluation allowance 1 175 -

Closing balance at the end ot the period 7 182 4 145

Change in the value of investment real estate

Remeasurement at fair value (PLN 1,862 thousand as at 31 December 2013) and the reversal of the revaluation

allowance (PLN 1,175 thousand as at 31 December 2013) represent an increase in the value of investment real

estate in 2013. The remeasurement was based on appraisals of real estate in possession of the subsidiary Home

Broker Nieruchomości S.A.

As at 19 June 2012, the subsidiary Home Broker Nieruchomości S.A signed sale agreements with respect to the

following property rights: Inspektowa street in Warsaw to Veso Investements Sp. z o.o. for the price of PLN

23,277 thousand. The Company’s profit on the sale of the real estate was PLN 8,780 thousand.

16. Prepayments and accrued revenue, including accrued commission revenue (current assets)

Prepayments and accrued revenue 31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

Accrued revenue (unsettled applications relating to financial

intermediation 89 213 62 826

Accrued revenue (unsettled applications relating to real estate agency

services 4 555 1 750

Compensation settled over time 664 945

Rental agency costs 179 479

Insurance and insurance guarantees 228 341

Rent and costs of maintenance 79 14

Subscriptions 107 41

Technical maintenance of IT systems 87 77

Advertising costs 33 22

Other 481 778

Total 95 626 67 273

Accrued commission revenue has been estimated based on the closing ratios adopted by the Company. The

average closing ratio for loan applications in 2013 was 47% and the closing ratio in the same period of the

previous year was 49%, while the closing ratio for applications for term deposits and savings plans was not lower

than 62% in both periods. The closing ratio for applications related to real estate agency services was not lower

than 94%.

The compensation settled over time relates to a transaction involving the acquisition of branches from Allianz

Bank Polska S.A. in 2011. In 2013 and 2012, no changes to the method of accounting for the compensation.


63

17. Other non-financial short-term and long-term assets

Other non-financial short-term assets 31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

VAT receivables 2 154 94

Open-end investment fund units 1 065 -

Advance payments to employees and other settlements with

employees 496 247

Goods - 317

Other 237 176

Total 3 952 834

Other non-financial long-term assets 31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

Long-term prepayments and accrued revenue, including 526 677

Real estate rental agency costs 488 660

Technical maintenance of IT services 10 -

Bond issue costs 19 -

Insurance and insurance guarantees - -

Other 9 17

Total 526 677

18. Trade receivables

Trade receivables 31 Dec.2013

PLN thousand

31 Dec.2012

PLN

thousand

Trade receivables

- related parties 25 215 74 012

- other entities 39 858 26 545

Total (gross) receivables 65 073 100 557

Receivables discounted - (158)

Allowance for revalution of receivables (3 189) (2 188)

Total (net) receivables 61 884 98 211

Trade receivables do not bear interest and usually have a 14-day maturity period. Deferred payment terms were

applied only in the case of receivables from Open Life TUnŻ S.A. rising from the sale of products. In accordance

with the signed agreements, the maturity period was not longer than 24 months from the date of invoice. As at 31

December 2012, the receivables amounted to PLN 5,882 thousand. As at 31 December 2013, deferred payment

terms were applied in relation to that company.

The revaluation allowance for receivables was changed as follows:

Allowances

1 Jan.2013 -31

Dec..2013

PLN thousand

1 Jan.2012 -

31 Dec..2012

PLN

thousand

Allowance for revaluation as at 1 January 2 188 857

Increase 1 003 1 394

Used - (58)

Released (2) (5)

Allowance for revaluation as at 31 December 3 189 2 188

All the above allowances for trade receivables were created on the basis of individual analyses of the different

receivable balances. The following is recognised by the Group as evidence of impairment of trade receivables:

the counterparty failing to meet the deadline for payment,

the debtor having considerable financial difficulties,


64

it becoming highly probable that the debtor will enter bankruptcy or other financial reorganisation,

bankruptcy proceedings pending against the debtor.

In the case of receivables classified as irrecoverable, the Group did not hold any security for the payment of the

receivables to improve the lending conditions.

The above table contains an analysis of the Group’s trade receivables:

<30 days30 - 60

days60 - 90 days

90 - 180

days>180 days

31 December 2013 39 666 8 691 2 543 1 085 3 043 6 856 3 189 65 073

incl. Related parties 16 100 4 984 953 311 822 2 045 - 25 215

31 December 2012 79 824 4 704 3 916 2 400 3 199 4 326 2 188 100 557

incl. Related parties 68 034 159 2 217 1 254 1 045 1 303 - 74 012

Total gross

value

Aging of receivables (PLN

thousand)

Not overdue

receivables

Overdue, without impairmentOverdue,

with

impairment

Trade receivables that are overdue but considered by the parent company’s management as recoverable are

amounts due from entities that the Group cooperates with on a regular basis and whose financial situation is

monitored by the Group on an ongoing basis. Therefore, the Group believes that as at 31 December 2013 and 31

December 2012, there was no evidence of impairment of the trade receivables, despite the fact that the amounts

were overdue.

19. Other receivables

Other short- and long-term receivables 31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

Security deposits - undiscounted value 7 069 7 424

Discount (324) (597)

Fair value of receivables 6 745 6 827

short-term receivables 2 693 3 208

long-term receivables 4 052 3 619

Other receivables include security deposits paid with respect to office rental. The deposits are provided as

security for the payment of amounts that may be due in the future. Each such deposit was paid for the duration of

the rental agreement to which it relates, but no such deposit bears interest. The Group continuously monitors the

credit quality of the above receivables. The Group has no difficulty recovering its deposits.

20. Cash and cash equivalents

Cash and cash equivalents recognised in the statement of financial position include cash in bank and on hand as

well as short-term deposits with the original maturity period of up to three months.

31 Dec.2013 31 Dec.2012


Cash and current accounts 586 3 123

Short-term deposits 14 170 11 005

Total 14 756 14 128

Cash and cash equivalents

The balance of cash and cash equivalents recognised in the cash flow statement consists of the aforementioned

cash and cash equivalents.

As at 31 December 2013 and 31 December 2012, the Group had no current account overdraft facilities.

21. Share capital and other reserve capital

21.1 Share capital


65

PLN thousand Number of

shares

PLN

thousand

Number of

shares

Ordinary A-series shares with the nominal value of PLN

0.01 each150 15 000 000 150 15 000 000

Ordinary B-series shares with the nominal value of PLN

0.01 each350 35 000 000 350 35 000 000

Ordinary C-series shares with the nominal value of PLN

0.01 each42 4 250 000 42 4 250 000

Ordinary D-series shares with the nominal value of PLN

0.01 each1 106 663 - -

Total 543 54 356 663 542 54 250 000

Conditional increase in the share capital - issue of up to

596,252 D-series shares with the nominal value of PLN

0.01 each

5 489 589 6 596 252

Share capital

31 Dec.2013 31 Dec.2012

The share capital was conditionally increased in 2011. The purpose of the increase was to enable the Company to

implement an incentive scheme (Note X.33). The conditional increase in the Company’s share capital is to be

effected to enable the holders of subscription warrants (i.e. the persons participating in the incentive scheme) to

take series-D shares. All of the series-D shares will be acquired only and exclusively in exchange for cash. The

conditional increase in the Company’s share capital is to be effected to enable the holders of subscription

warrants (i.e. the persons participating in the incentive scheme) to take series-D shares. As at the date of signing

these consolidated financial statements, the conditional increase in the share capital with regard to the B and C

series warrants will not be effected, because the financial plans specified as part of the incentive scheme have not

been achieved. In addition, the conditional increase in the share capital with regard to the D series warrants as

part of the scheme will not be effected, because the D series warrants have been settled by repurchasing the

Company’s own shares, as described in Note X.21.3. Therefore, the above conditional increase is not taken into

account in calculating the diluted earnings per share as at 31 December 2013.

On 16 October 2013, the Board of the Warsaw Stock Exchange resolved to admit ordinary D series bearer shares

in Open Finance to trading on the main market of the Warsaw Stock Exchange and to introduce the shares into

trading on the market. A total of 106,663 ordinary D series bearer shares in Open Finance, with the nominal value

of PLN 0.01 each, were admitted to trading on the main market. The Board of the Warsaw Stock Exchange

decided to introduce the above shares into trading on the main market of the Warsaw Stock Exchange as of 18

October 2013, using the standard procedure for such introduction, after Krajowy Depozyt Papierów

Wartościowych S.A. registered the shares on 18 October 2013. On 18 November 2013, the increase was

registered with the National Court Register. The above shares were converted form series A warrants as part of

the Company's incentive scheme (as described in more detail in Note X.33 to the consolidated financial

statements for the year ended on 31 December 2013).

21.2 Shareholders in the parent company

Shareholders holding over 5% of the votes at the

General meeting as at 31 Dec.2013

Number of

shares

Number of

voting rights

Percentage

of voting

rights at the

General

Meeting

Leszek Czarnecki, PhD, and his subsidiaries:

Getin Noble Bank S.A. 22 909 818 22 909 818 42,15%

Getin Holding S.A. 3 590 182 3 590 182 6,60%

LC Corp B.V. 2 000 000 2 000 000 3,68%

directly 1 000 000 1 000 000 1,84%

Amplico PTE S.A. 3 778 949 3 778 949 6,95%

ING OFE 2 990 010 2 990 010 5,50%

Aviva OFE 2 828 179 2 828 179 5,20%


66

Shareholders holding over 5% of the votes at the

General meeting as at 31 Dec.2012

Number of

shares

Number of

voting rights

Percentage

of voting

rights at the

General

Meeting

Leszek Czarnecki, PhD, and his subsidiaries:

Getin Noble Bank S.A. 26 500 000 26 500 000 48,85%

LC Corp B.V. 2 000 000 2 000 000 3,69%

directly 1 000 000 1 000 000 1,84%

Amplico PTE S.A. 3 900 000 3 900 000 7,19%

21.3 Other capital reserves

Other capital reserves include a supplementary capital fund, a reserve fund for the repurchase of own shares and

the capital component of share-based payments.

The Company’s supplementary capital reserve was created at the time of establishing the Company, as a result of

acquiring the shares for a price exceeding their nominal value (PLN 3,500 thousand) and as a result of selling

series C shares at their nominal value (PLN 75,641 thousand). The remainder of the supplementary capital fund is

profits carried over from previous reporting periods.

The supplementary capital fund for the repurchase of own shares was created in 2012 to finance the acquisition,

by the Company, of its own shares required for the purposes of an incentive scheme as part of which persons

holding managerial positions at the Company and its subsidiary Home Broker Nieruchomości S.A. will have the

right to acquire shares in the Company.

Number of

shares

PLN

thousand

As at 31 Dec.2011 - -

Own shares repurchased from 1 Jan.2012 to 31 Dec. 2012 271 508 4 376

Own shares transferred as part of the 2011 incentive scheme 177 758 2 900

As at 31 Dec.2012 93 750 1 476

Own shares transferred as part of the 2011 incentive scheme 93 492 1 473

As at 31 Dec.2013 258 4

Own shares repurchased*

*Repurchased own shares are presented as a reduction in the capital reserve for the repurchase of such shares.

In 2011, a total of 271,250 shares were transferred to Mr Kszysztof Spyra. From 1 January 2012 to 31 December

2012 and until the date or approval, for publication, of the financial statements for the twelve-month period ended

on 31 December 2012, a total of 177,758 Treasury shares in Open Finance S.A. were resold to Mr Krzyszfof

Spyra’s subsidiary, International Consultancy Strategy Implementation B.V., a company with its registered office in

the Netherlands, as part of the Company’s incentive scheme. The cost of the repurchased shares resold to Mr

Krzysztof Spyra’s subsidiary was PLN 2,900 thousand.

On 20 December 2013, the remaining 93,492 Treasury shares (of the 271,250 shares transferred to Mr Spyra) in

Open Finance were resold to Mr Krzysztof Spyra’s subsidiary, International Consultancy Strategy Implementation

B.V., a company with its registered office in the Netherlands. The cost of the repurchased shares resold to Mr

Krzysztof Spyra’s subsidiary on 20 December 2013 was PLN 1,473 thousand.

Na dzień 31 grudnia 2013 roku oraz na dzień zatwierdzenia niniejszego sprawozdania finansowego do publikacji

Spółka była w posiadaniu 258 sztuk akcji własnych o wartości 3,7 tys. zł.

The capital component of share-based payments is the result of measuring Open Finance’s incentive scheme,

described in more detail in Note X.33.


67

22. Finance lease liabilities

Finance lease liabilitiesEffective

interest rate (%)

31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

Lease liabilities 7-9% 1 671 2 300

including

short-term lease liabilities 517 694

long-term lease liabilities 1 154 1 606

The Group is party to lease agreements recognised in the books as finance leases. The assets leased under the

agreements are cars. Key terms and conditions of the leases:

- as at 31 December 2013:

Agreements with Getin Leasing S.A. Raiffeisen Leasing S.A. Idea Leasing S.A.

Number of vehicles 33 9 8

Lease term 48 or 60 months 5 years 5 years

Initial payment 1% of the gross value of

the leased vehicle 1% of the initial value 1% of the initial value

Residual value 1% of the gross value of


Basis for calculation of the

consideration under the

lease

WIBOR 3M

Variable, depending on the base rate

applicable on the last day of the month

preceding the due date of a given

Periodic Lease Payment

A variable interest rate – base interest rate:

4.929%

- as at 31 December 2012:

Agreements with Getin Leasing S.A. Raiffeisen Leasing S.A. Idea Leasing S.A.

Number of vehicles 45 9 8

Lease term 48 or 60 months 5 years 5 years

Initial payment 1% of the gross value of


Residual value 1% of the gross value of


Basis for calculation of the

consideration under the

lease

WIBOR 3M

Variable, depending on the base rate

applicable on the last day of the month

preceding the due date of a given

Periodic Lease Payment

A variable interest rate – base interest rate:

4.929%

During the periods covered by these consolidated financial statements, there were no cases of failure to make

any finance lease payment or to comply with any other provisions of the lease agreements.

23. Operating leases

The Group’s operating leases cover the rental of premises where Open Finance S.A.’s branches and offices are

located. In accordance with the lease agreements, the premises are in the Group’s possession throughout the

lease term. As consideration for the use of the premises, the Group is required to make lease payments in such

amounts and on such dates as specified in the lease agreements.

As at 31 December 2013 and 31 December 2012, the future minimum lease payments under the irrevocable

operating lease agreements are shown in the table below:

Liabilities arising from operating

leases with the following payment

periods until the end of the reporting

period

31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

Up to 1 year 33 164 34 036

From 1 year to 5 years 54 861 67 244

Over 5 years 716 4 901

Total 88 741 106 181


68

The liabilities shown in the table above have been calculated taking into account the termination notice periods for

each of the lease agreements. In the case of agreements for an indefinite term with a specified termination notice

period, the notice period was included in the calculation of the liabilities. This liability is presented as a net

amount.

Both in 2013 and 2012, there were no significant conditional lease payments or irrevocable sublease agreements.

24. Bonds issues

Bonds issuedEffective

interest rate (%)

31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

Liabilities arising from issue of bonds: 7,3%(*), 5,6-

6,3% (**)

122 105 78 742

including

short-term liabilities 7 193 34 937

long-term liabilities 114 912 43 805

(*) This relates to bonds issued by Home Broker Nieruchomości S.A.

(**) This relates to bonds issued by Open Finance S.A.

On 11 February 2013, the subsidiary Home Broker Nieruchomości S.A. issued 28.000 D-series bearer bonds with

the nominal value of PLN 1,000 each, i.e. with the total value of PLN 28,000 thousand. Interest on the bonds is

calculated at the rate of WIBOR 1Y + 3.5%. The interest will be paid in annual intervals. The bonds will be

repurchased on 11 February 2016, and the repurchase amount will be paid together with interest for the third

interest period. The purpose of the issue by Home Broker Nieruchomości S.A. is to roll over 28 A-series

registered bonds. The bonds are not secured. On 11 February 2013, Home Broker Nieruchomości S.A. allotted

the bonds, meaning that the issue was effected.

On 26 July 2012, Open Finance S.A. issued 40,000 (forty thousand) A-series bearer bonds with the nominal

value of PLN 1,000 (one thousand zlotys) each, i.e. with the total nominal value of PLN 40,000,000 (forty million).

The issue price of the bonds is PLN 1,000.00 (one thousand zlotys 00/100). Interest on the bonds will be paid

annually. The bonds will be repurchased on 27 July 2015, and the repurchase amount will be paid together with

interest for the third interest period. The bonds are not secured, and the purpose of their issue has not been

defined. Interest on the bonds is calculated at the rate of WIBOR 1Y + 2.75%. All of the bonds issued were

purchased by Getin Noble Bank S.A. The owner of the bonds as at 31 December 2013 is the close-end

investment fund called Green Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych.

On 6 August 2012, the subsidiary Home Broker Nieruchomości S.A. issued 7 C-series registered bonds with the

nominal value of PLN 1,000 each, i.e. with the total value of PLN 7,000 thousand. All of the bonds issued were

purchased by Getin Noble Bank S.A. On 17 January 2013, three C-series bonds with the nominal value of PLN

3,000 thousand were repurchased early. As a result of the repurchase, the mortgage over the real estate in

Inspektowa street in Warsaw was released. . The other bonds will be repurchased on 6 August 2015, and the

repurchase amount will be paid together with interest for the third interest period.

On 15 March 2013, Open Finance S.A issued 45,000 B-series bearer shares with the nominal value of PLN 1,000

each, i.e. with the total nominal value of PLN 45,000 thousand. The interest will be paid in annual intervals. The

bonds will be repurchased on 16 March 2015, and the repurchase amount will be paid together with interest for

the second interest period. Interest on the bonds is calculated at the rate of WIBOR 1Y + 2.75%. The bonds are

not secured and Open Finance has not determined the purpose of their issue. The bond issue was completed on

15 March 2013. The owner of the bonds as at 31 December 2013 is the close-end investment fund called Green

Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych.


69

No other bonds other than those described above were issued from 31 December 2012 to the date of approval of

these consolidated financial statements for publication.

During the twelve months ended on 31 December 2013 and on 31 December 2012, there were no cases of

breach of any repayment conditions and/or security conditions.

25. Trade liabilities

31 Dec.2013 31 Dec.2012


to related parties 1 694 3 264

to other entities 13 718 13 909

Total 15 412 17 173

Trade liabilities

26. Liabilities arising from the acquisition of shares in Home Broker Nieruchomości S.A.

The difference between the estimated fair value of the payment for shares in Home Broker Nieruchomości S.A.

and the amount of funds paid to date is a financial liability measured at fair value through profit or loss.

The total payment for the shares in Home Broker Nieruchomości S.A. was PLN 260,328 thousand, with a total of

PLN 207,000 thousand paid until 31 December 2012. The difference, i.e. PLN 53,328 thousand, was a liability as

at 31 December 2012.

In 2013, the remaining part of the payment for the shares (except for PLN 3,833 thousand) was paid to the former

shareholders in Home Broker Nieruchomości S.A.

The table below shows the value of the liability broken down by former shareholders.

31 Dec.2013 31 Dec.2012

PLN thousand PLN

thousand

Damian Millibrand 3 833 7 666

H.P. Holding 3 B.V. - 30 538

Aegaeon B.V. - 7 666

LC Corp B.V. - 3 036

A.Nagelkerken Holding B.V. - 4 423

Total liability 3 833 53 328

Liability arising from the purchase of shares in Home Broker

27. Other non-financial liabilities

31 Dec.2013 31 Dec.2012


Advances 6 445 13 192

Liabilities arising from taxes, customs, social insurance and other,

incl. 7 961 6 645

Social insurance 4 572 2 520

Personal income tax 3 033 1 593

VAT 23 2 149

Other 333 383

Liabilities arising from changes of the market value of rent 160 209

Other non-financial liabilities 1 31

Total, incl. 14 567 20 077

Other non-financial (short- and long-term liabilities)

The advances of PLN 6,445 thousand (PLN 13,192 thousand as at 31 December 2012) include, among other

things, an advance of PLN 4,000 thousand granted by Getin Noble Bank S.A. The advance is repaid in

instalments of PLN 1,000 thousand each, increased by interest calculated as the WIBOR rate plus 0.5%.


70

28. Accruals and deferred revenue, including accrued remuneration (liabilities)

31 Dec.2013 31 Dec.2012


Commission payable to advisers (financial intermediation) 13 121 17 972

Holiday accrual 7 645 9 769

Bonuses 4 508 2 596

Costs of complaints 283 1 200

Commission payable to real estate agency advisers 3 035 4 910

Uninvoiced supplies 1 735 2 249

Marketing services 429 232

Commission for distribution 235 154

Other 604 811

Total 31 595 39 893

Accruals and deferred revenue

29. Provisions

Changes in provisionsProvision for retirement /

disability severance payOther provisions Total


Balance as at 1 January 2013 91 4 600 4 691

Created - - -

Used - (3 800) (3 800)

Rleleased (25) (800) (825)

Balance as at 31 December 2013 66 - 66

including

short-term provisions 4 - 4

long-term provisioins 62 - 62

Changes in provisionsProvision for retirement /

disability severance payOther provisions Total


Balance as at 1 January 2012 218 - 218

Created - 4 600 4 600

Used - - -

Rleleased (127) - (127)

Balance as at 31 December 2012 91 4 600 4 691

including

short-term provisions 12 4 600 4 612

long-term provisioins 79 - 79

Retirement pensions and other benefits after the employment period

The Group is required to make payment of retirement and disability severance pay to retiring employees in such

amounts as provided for in the Polish Labour Code.

The key assumptions made by the actuary, as at the date of preparation of these financial statements, for the

purposes of calculating the amount of the liabilities are as follows:


71

31 Dec.2013 31 Dec.2012

Presumed retirement age

67 years - women

67 years – men

67 years - women

67 years – men

Personnel mobility model

Multiple Decrement

Model

Multiple Decrement

Model

Average age of personnel (in years) 30 29

Discount rate 4,20% 3,70%

Likelihood of personnel becoming entitled to disability pension 0,10% 0,25%

Expected growth rate for salaries 3,00% 0% - 1,5%

Principal actuarial assumptions

From 1 January 2013 to 31 December 2013 and from 1 January 2012 to 31 December 2012, the Group made

payments of retirement and disability severance pay to its employees.

Other provisions

Based on regular saving product termination data, Open Life TUŻ S.A. estimated the expected costs of such

early termination of contracts to be incurred by the Group in 2014 in connection with the sale of such products in

2012. As at 31 December 2013, the provision for the potential costs of such termination was PLN 0.00 (PLN

4,600 thousand as at 31 December 2012).

30. Contingent assets and liabilities

As at 31 December 2013, the Group was party finance lease contracts with Getin Leasing S.A., Idea Leasing

S.A.. and Raiffeisen Leasing S.A. (as at 31 December 2012, Getin Leasing S.A., Idea Leasing S.A. and

Raiffeisen Leasing S.A.), which are secured with a blank promissory note that may be issued up to the amount of

the Group’s current liability (including interest).

In addition, as at 31 December 2012, the Group had a liability arising from bonds issued by Home Broker

Nieruchomości S.A. and secured with blank promissory notes issued by Home Broker Nieruchomości S.A. As at

31 December 2013, the Group had no such liabilities.

As at 31 December 2013, 31 December 2012 and as at the date of approval of these consolidated financial

statements, the Group had no other contingent assets and liabilities (whether granted or received).

31. Lawsuits

As at the date of approval of these consolidated financial statements and as at 31 December 2013, the Group

was party to lawsuits. The total value of the claims as part of the lawsuits where the Group's companies are

involved as defendants was PLN 1,046 thousand. As at 31 December 2012, the total value of the claims as part of

the lawsuits where the Group's companies are involved as defendants was PLN 291 thousand. The total value of

the claims as part of the lawsuits where the Group's companies are involved as claimants was PLN 105 thousand

as at 31 December 2013 and PLN 0 thousand as at 31 December 2012.

32. Tax settlements

The Group’s tax settlements and other business areas subject to regulations may be subject to inspections by

administrative authorities authorised to impose high penalties and sanctions. Lack of reference to established

regulations in Poland results in the applicable provisions of law being unclear and inconsistent. Frequent

differences in opinions on the legal interpretation of tax regulations both within government authorities internally

and between such authorities and businesses result in uncertainty and conflicts in certain areas. As a result, the

level of tax risk in Poland is significantly higher than the normal tax risk level in countries with more developed tax

systems.

Tax settlements may be subject to tax inspections within 5 years from the last day of the year in which payment of


72

tax was made. As a result of such tax inspections, the Group’s current tax liabilities may be increased.

In the 2013 and 2012 reporting years, no tax inspections were carried out. Also, no tax inspections have been

carried out in 2014 until the date of approval of these financial statements.

33. Open Finance’s incentive scheme

The rules of the Company’s incentive scheme (“Rules”, “Scheme”) were approved by the Company’s Supervisory

Board on 24 August 2011.

For the purpose of the Scheme, the Company has issued / will issue warrants and shares. The warrants have

been issued as A, B, C and D series warrants, as follows:

(i) 108,334 A series warrants,

(ii) 108,334 B series warrants,

(iii) 108,334 C series warrants,

(iv) 271,250 D series warrants,

The warrants will be acquired without consideration.

The conditions for acquiring the warrants are set out in the agreements entered into with the individuals and

company eligible to participate in the Scheme. The warrants may be acquired, after the conditions for their

acquisition are satisfied, between 21 August and 10 September of a given year of the Scheme (i.e. of 2012, 2013,

2014) on days within that period other than Saturdays, Sundays and bank holidays. Immediately after their

acquisition, the holders of the warrants will have the right to convert them into series D shares in the Company.

The shares so acquired may not be disposed of for the period of six months of their acquisition.

As a result, 13 September 2011 was considered as the vesting date and the fair value of the Scheme was

measured as at that date. The equity instruments granted as part of the Scheme were measured as at the vesting

date based on a measurement model for European call options. The different warrant series were measured

separately due to differences in their maturity dates.

In 2013, the Group recognised no costs of the C series warrants and derecognised the costs of the C warrants

recognised in previous years, as the financial plans for 2013 to be achieved as one of the conditions for acquiring

the related rights for 2013 were not achieved (a non-market condition).

In 2012, no costs of series B warrants were recognised and the costs of series B warrants recognised in 2011

were derecognised, as a result of failure to achieve the financial plans for 2012. In 2012, only series C warrants

were recognised.

The table below shows the final settlement figures with respect to the incentive scheme, broken down by warrant

series and balance sheet years:

Date Series A Series B Series C Series D Total

31.12.2011 1 020 218 101 2 593 3 932

31.12.2012 - -218 338 - 120

31.12.2013 - - -439 - -439

Total 1 020 - - 2 593 3 613

The series A warrants were converted into D series shares, which is described in more detail in Note X.21.1 of

these statements. The cost of the series D warrants was settled as part of the own share repurchase scheme,

described in more detail in Note X.21.3.


73

XI. FINANCIAL INSTRUMENTS

1. Fair values of different classes of financial instruments

The fair value of an instrument in accordance with IFRS 13 is the price received for the sale of an asset or paid for

the transfer of a liability in a transaction effected on ordinary terms between market participants as at the

measurement date.

The table below compares the carrying amounts and fair values of all of the Company’s financial instruments,

broken down by class and category of assets and liabilities.

Category

31 Dec.2013 31 Dec.2012 31 Dec.2013 31 Dec.2012


thousand

PLN

thousand

Fianancial assets 83 385 119 166 83 385 119 166

Trade receivables PiN 61 884 98 211 61 884 98 211

Other (short- and long-term) receivables PiN 6 745 6 827 6 745 6 827

Cash and cash equivalents PiN 14 756 14 128 14 756 14 128

Financial liabilities 143 021 151 543 143 154 151 585

(Short- and long-term) financial lease liabilities ZFZK 1 671 2 300 1 804 2 342

Trade liabilities ZFZK 15 412 17 173 15 412 17 173

Short-term and long-term bonds issued ZFZK 122 105 78 742 122 105 78 742

Share acquisition liability ZFWGWF 3 833 53 328 3 833 53 328

Abbreviations:

PiN – Loans and receivables

ZFZK – Other financial liabilities measured at amortised cost

ZFWGWF - Financial liabilities measured at fair value through profit or loss

acc.to MSR

39

Fair valueCarrying amount

The fair value of the other (short-term and long-term) receivables is equal to their carrying amounts and was

estimated as the future receivable discounted (with respect to long-term receivables) using the current interest

rate less impairment losses. The fair value of liabilities arising from finance leases is equal to the value of future

cash flows discounted using the current market interest rate. In the case of other assets and liabilities, the

carrying amount of an asset or liability is equal to the fair value of that asset or liability.

As at 31 December 2012, the Group held the following financial instruments measured at fair value:

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

PLN

thousand

PLN

thousand

PLN

thousand

PLN

thousand

PLN

thousand

PLN

thousand

Fianancial liabilities - - - - - -

Share acquisition liability ZFWGWF - - - - - 53 328

acc.to MSR

39

As at the 31 December 2013, the liability was presented at the due amount after the final settlement amount was

determined and was not remeasured at the fair value. A detailed description of the above liability is contained in

Note X.26.

In the year ended on 31 December 2011 and in the year ended on 31 December 2010, no movements between

tier 1 and tier 2 of the fair value measurement hierarchy occurred, and none of the instruments was moved from /

to tier 3 of the fair value measurement hierarchy.


74

2. Net gains and losses broken down by financial instrument category, recognised in the statement of comprehensive income

Year ended on 31 December 2013

PLN thousand PLN thousand PLN thousand PLN thousand PLN thousand

Financial assets

Trade receivables PiN 159 - - (562) (403)

Other (short- and long-term) receivables PiN 255 - - - 255

Cash and cash equivalents PiN 494 - - - 494


(Short- and long-term) financial lease liabilities ZFZK (171) - - - (171)

Trade liabilities ZFZK (614) (43) - - (657)

Short-term and long-term bonds issued ZFZK (7 326) - - - (7 326)

Share acquisition liability ZFWGWF - - - - -

Total net gains (losses) (7 203) (43) - (562) (7 808)

7 203 - 504,00 -

Year ended on 31 December 2012

PLN thousand PLN thousand PLN thousand PLN thousand PLN thousand

Financial assets

Trade receivables PiN - - - (1 389) (1 389)

Other (short- and long-term) receivables PiN (93) - - - (93)

Cash and cash equivalents PiN 1 099 - - - 1 099


(Short- and long-term) financial lease liabilities ZFZK (191) - - - (191)

Trade liabilities ZFZK (88) (34) - - (122)

Short-term and long-term bonds issued ZFZK (3 746) - - - (3 746)

Share acquisition liability ZFWGWF (3 065) - 113 966 - 110 901

Total net gains (losses) (6 084) (34) 113 966 (1 389) 106 459

Abbreviations:

PiN – Loans and receivables

ZFZK – Other financial liabilities measured at amortised cost

ZFWGWF - Financial liabilities measured at fair value through profit or loss

Total

Kategoria

wg MSR 39

Interest income /

expense

Gain (loss) from

exchange differences

Release (Creation) of

revaluation allowances

Effects of

measurement at fair

value

Total

Effects of

measurement at fair

value

Kategoria

wg MSR 39

Interest income /

expense

Gain (loss) from

exchange differences

Release (Creation) of

revaluation allowances

All interest income and expense presented in the above tables have been calculated using the effective interest rate.


75

XII. ADDITIONAL EXPLANATIONS RELATING TO THE CASH FLOW STATEMENT

For the purposes of the cash flow statement, the following classification of the Group’s activities was used:

operating activities: the Group’s core business involving the supply of services for profit by the Group’s

companies, other than investing or financing activities. The Group’s statement of cash flows from operating

activities is prepared using the indirect method, where the net profit (loss) for a given reporting period is adjusted

for the effects of non-cash transactions, past or future deferred revenue, prepaid and accrued expenses related to

the Company’s operating activities, and other revenue and costs and expenses related to cash flows from

operating activities.

investing activities involving the acquisition and disposal of fixed assets, especially financial assets not classified

as held for sale, shares, including shares in subordinated entities, and tangible fixed assets and intangible assets.

financing activities involving activities to raise funds in the form of capital or liabilities, as well as managing

sources of financing.

Explanation of the differences between changes in the assets and liabilities presented in the statement of financial

position and the changes presented in the cash flows statement for 2013 and 2012:

1 Jan.2013-31 Dec.2013

(PLN thousand)

Statement of

Financial

Position

Cash Flow

StatementDifference

Change in trade receivables 36 327 6 370 29 957 1).

Change trade liabilities (1 761) (2 002) 241 2).

Change in deferred income tax assets / liabilities 9 987 9 987 -

Change in other long-term receivables (433) (433) -

Change in other short-term receivables 515 515 -

Change in other non-financial short-term assets (3 118) (3 118) -

Change in accruals and prepayments (36 651) (36 651) -

Change in other short-term and long-term non-financial liabilities (5 510) (3 325) (2 185) 3).

Change in financial liabilities measured at fair value through profit or loss (49 495) - (49 495) 4).

Change in other non-financial long-term assets 151 151 -

Change in provisions (4 625) (4 625) -

1 Jan.2012-31 Dec.2012

(PLN thousand)

Statement of

Financial

Position

Cash Flow

StatementDifference

Change in trade receivables (62 178) (38 901) (23 277) 1).

Change trade liabilities 7 815 13 154 (5 339) 2).

Change in deferred income tax assets / liabilities (16 889) (16 889) -

Change in other long-term receivables (1 160) (1 160) -

Change in other short-term receivables (1 336) (1 336) -

Change in other non-financial short-term assets 2 690 2 690 -

Change in accruals and prepayments (907) (907) -

Change in other short-term and long-term non-financial liabilities (44 254) (44 254) -

Change in financial liabilities measured at fair value through profit or loss (110 902) (110 902) -

Change in other non-financial long-term assets (473) (473) -

Change in provisions 4 473 4 473 -

Explanation of the differences:

1). Revenue from the sale of investment real estate – described in Note X.15.

2). Acquisition of intangible assets.

3). Setoff of corporate tax receivables against personal income tax receivables.

4) Liabilities arising from the acquisition of shares in Home Broker Nieruchomości S.A.


76

Explanation of the differences (2012):

1). Revenue from the sale of investment real estate – described in Note X.15.

2) Expenditure Home Broker Nieruchomości S.A.’s investment real estate

Grupa Open Finance S.A. Open Finance S.A. Group Consolidated Financial Statements for the Year Ended on 31 December 2013 (Figures in PLN thousand)

77

XIII. TRANSACTIONS WITH RELATED PARTIES

Information on transactions with related parties

Transactions with related parties -

2013

Revenue, incl.

Recognised revenue

in respect of

unsettled

applications

PurchaseFinancial

revenue

Financial

costs

Purchase of

shares

Term deposits and

cash at bank

Receivables and

deferred revenue in

respect of unsettled

applications

Liabilities

PLN thousand PLN thousand PLN thousandPLN

thousandPLN thousand PLN thousand PLN thousand PLN thousand

Total transactions 174 297 16 726 64 7 777 4 267 2 801 49 840 133 056

Transactions with associates 49 116 1 246 - - - - 17 968 159

Open Life TUŻ S.A. (*) 49 116 1 246 - - - - 17 968 159

Transactions with other related parties 125 181 15 480 64 7 777 4 267 2 801 31 872 132 897

LC Corp S.A. 6 - - - - - 7 -

Getin Noble Bank S.A. (**) 116 776 10 757 64 2 690 - 2 801 27 816 38 932

Green FIZAN - - - 2 738 - - - 40 955

Property Solutions FIZAN - - - 2 257 - - - 47 257

Noble Concierge Sp. z o.o. 15 241 - - - - 3 14

Noble Securities S.A. 357 100 - - - - 27 1

Noble Funds TFI S.A. 776 - - - - - 68 -

Idea Bank S.A. 4 332 351 - - - - 1 717 44

Idea Leasing S.A. 40 66 - 18 - - - 5

Idea Money S.A. 249 1 146 - - - - 44 754

Idea Expert S.A. 25 9 - - - - 14 -

ZSA Idea Bank 51 - - - - - 6 -

Getin Leasing S.A. 206 609 - 74 - - 119 1 037

Getin International S.A. 1 - - - - - - -

Tax Care S. A. 234 3 - - - - 194 -

Warszawa Przyokopowa Sp. z o.o. - 1 690 - - - - - 1

Arkady Wrocławskie S.A. - 166 - - - - - 56

Kraków Zielony Złocień Sp. z o.o. - 16 - - - - - -

LC Corp Invest XV sp. z o.o. projekt 1 sp.k. 186 72 - - - - 77 -

LC Corp Invest XV sp. z o.o. projekt 2 sp.k. 24 18 - - - - - -

LC Corp Invest XV sp. z o.o. projekt 5 sp.k. 84 76 - - - - 30 -

LC Corp Invest XV sp. z o.o. projekt 4 sp.k. 42 - - - - - - -

LC Corp Invest XV sp. z o.o. projekt 6 sp.k. 103 - - - - - 9 -

LC Corp Invest XV sp. z o.o. projekt 8 sp.k. 372 - - - - - 123 -

LC Corp Invest XV sp. z o.o. projekt 7 sp.k. 7 - - - - - - -

LC Corp Invest XV sp. z o.o. projekt 14 sp.k-a 139 - - - - - 44 -

LC Corp Invest III sp. z o.o. 20 - - - - - - -

LC Corp Invest VIII sp. z o.o. 90 - - - - - 31 -

GetBACK S.A. - 8 - - - - - 8

LC Corp SkyTower Sp. z o.o. - 152 - - - - 1 230 -

Property FIZAN - - - - 4 266 - - -

Lion's House Sp. z o.o. 890 - - - - - 259 -

VESO Investments Sp. z o.o. 156 - - - - - 54 -

International Consultancy Strategy Implementation B.V. - - - - 1 - - -

Damian Milibrand - - - - - - - 3 833

(**) - The revenue from Getin Noble Bank S.A. of PLN 116,776 thousand is revenue from the sale of investment products and loan products (PLN 115,905 thousand) and other revenue with respect to recharged costs (PLN 871 thousand). The purchase from Getin Noble Bank S.A. includes the cost of rent

and maintenance costs related to the sublease of office space from oGetin Noble Bank S.A., as well as telecommunications and other costs recharged to the Open Finance Group. The amount of PLN 38,932 thousand owed to Getin Noble Bank is a bond liability of PLN 33,893 thousand, advance liabilities

of PLN 4,000 thousand and trade liabilities of PLN 1,039 thousand. The amount owed from Getin Noble Bank S.A. includes trade receivables of PLN 8,134 thousand and deferred revenue from unsettled applications of PLN 19,682 thousand.

(*) - The revenue from Open Life TUŻ S.A. of PLN 49,116 thousand is revenue from the sale of investment products (PLN 49.062 thousand) and other revenue with respect to recharged costs (PLN 54 thousand).


78

Transactions with related parties -

2012

Revenue, incl.

Recognised revenue

in respect of

unsettled

applications

PurchaseFinancial

revenue

Financial

costs

Purchase of

shares

Term deposits and

cash at bank

Receivables and

deferred revenue in

respect of unsettled

applications

Liabilities

PLN thousand PLN thousand PLN thousandPLN

thousandPLN thousand PLN thousand PLN thousand PLN thousand

Total transactions 264 658 13 819 624 4 894 2 1 521 117 522 99 454

Transactions with associates 88 966 12 - - - - 34 636 12

Open Life TUŻ S.A. (*) 88 966 12 - - - - 34 636 12

Transactions with other related parties 175 692 13 807 624 4 894 2 1 521 82 886 99 442

LC Corp B.V. - - - - - - - -

Getin Noble Bank S.A. (**) 119 867 10 519 624 4 714 - 1 521 33 548 89 082

International Consultancy Strategy Implementation B.V. - - - - 2 - - -

Noble Concierge Sp. z o.o. 8 768 - - - - 1 235

Noble Securities S.A. 1 431 54 - - - - 13 1

Idea Bank S.A. (***) 23 936 97 - - - - 16 389 49

Idea Money S.A. - 510 - - - - 359 828

Noble Funds TFI S.A. 863 27 - - - - 71 -

Getin Leasing S.A. - 896 - 156 - - 247 1 565

Tax Care S. A. 384 157 - - - - 197 -

LC Corp Sky Tower Sp. z o.o. 4 059 273 - - - 3 729 -

Idea Leasing S.A. - 43 - 24 - - - -

Maurycy Kuhn - - - - - 56 -

Idea Expert S.A. 111 20 - - - 59 -

Veso Investments Sp. z o.o. (****) 23 724 - - - - - 27 065 -

Development System Sp. z o.o. 895 1 101

LC Corp Invest XV Sp. z o.o. Projekt 6 S.K 414 - - - 51 -

Damian Milibrand - 443 - - - - - 7 682

(****) - The revenue from Veso Investments is revenue from the sale of the property located in Inspektowa street in Warsaw of PLN 23,277 thousand (note X.15) and other revenue (PLN 447 thousand).

(*) - The revenue from Open Life TUŻ S.A of PLN 88,966 thousand is revenue from the sale of investment products and loan products (PLN 88,923 thousand) and other revenue related to recharged costs (PLN 43

thousand).

(***) - In 2012, the Lion's House trademark was sold together with related rights to Idea Bank SA for the total amount of PLN 2,383 thousand..

(**) - The revenue from Getin Noble Bank S.A. of PLN 119,867 thousand is revenue from the sale of investment products and loan products (PLN 119,215 thousand) and other revenue related to recharged costs (PLN 652

thousand). The purchase from Getin Noble Bank S.A. is the costs of rent and maintenance costs related to the sublease of office space from Getin Noble Bank S.A., as well as telecommunications and other costs

recharged to the Open Finance Group. The amount of PLN 89,082 thousand owed to Getin Noble Bank is a bond liability of PLN 75,000 thousand, advance liabilities of PLN 13,192 thousand and trade liabilities of PLN 890

thousand. The amount owed from Getin Noble Bank S.A. includes trade receivables of PLN 4,240 thousand and deferred revenue from unsettled applications of PLN 29,308 thousand.


79

Joint ventures in which the Group is a partner / shareholder

In the 2013 and 2012 reporting years, the Group did not participate in any joint ventures.

Conditions for transactions with related parties

In the 2013 and 2012 reporting years, all transactions with related parties were arm’s length transactions. In the

2013 and 2012 reporting years, the Group received no guarantees from its related parties.

Loans granted to members of the Management Board

In the 2013 and 2012 reporting years, the Group granted no loans to members of its Management Board.

Other transactions involving members of the Management Board

In the 2013 and 2012 reporting years, the Group made no other transactions with members of its Management

Board.

Remuneration paid to the parent company’s management

The table below shows the remuneration paid and payable to the members of the Management Board and the

Supervisory Board for the reporting period concerned.

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Management Board

Short-term employee benefits (salaries) 1 936 1 150

Maurycy Kuhn 45 -

Krzysztof Spyra 981 130

Wojciech Gradowski 362 410

Krzysztof Sokalski 530 610

Helena Kamińska (*) 18 -

Recognised costs of services as part of the Company's

incentive scheme - 94

Krzysztof Spyra - -

Wojciech Gradowski - 21

Krzysztof Sokalski - 73

Supervisory Board

Short-term employee benefits (salaries) - -

Total 1 936 1 244

Remuneration paid to the parent company's management

Remuneration paid to the management of the Group’s subsidiaries

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Management Board

Short-term employee benefits (salaries) 2 034 1 053

Recognised costs of services as part of the Company's incentive

scheme - -

Supervisory Board

Short-term employee benefits (salaries) - -

Total 2 034 1 053

Remuneration paid to the subsidiaries' management


80

Payments to the members of the parent company’s the Management Board and Supervisory Board in respect of

their positions at the Group’s subsidiaries and associates

1 Jan.2013-31

Dec.2013

1 Jan.2012-31

Dec.2012


Leszek Czarnecki, PhD - -

Izabela Lubczyńska - -

Krzysztof Spyra - -

Wojciech Gradowski - -

Krzysztof Sokalski - -

Remigiusz Baliński - -

Dariusz Niedośpiał - -

Jarosław Augustyniak - -

Marek Kaczałko - -

Krzysztof Tymoszyk - -

Payments to members of the Management Board and

Supervisory Board of

Open Finance S.A.

with respect to their functions at the subsidiaries and

associates

XIV. INFORMATION OF AUDITOR’S FEES

The table below shows the fees paid or payable to the auditor appointed to audit the Group’s financial statements

for the financial years ended on 31 December 2013 and 31 December 2012, broken down by type of services:

1 Jan.2013-31

Dec.2013 (*)

1 Jan.2012-31

Dec.2012 (**)


Obligatory audit of the annual financial statements 387 258

Review of interim half-yearly financial statements 119 112

Other certification services 86 150

Total 592 520

(**) - services provided by Ernst&Young Audit Sp. z o.o.

Types of service

(*) - services provided by Deloitte Polska spółka z ograniczoną odpowiedzialnością sp. k. and BPG

Audyt Sp. z o.o. oraz do Ernst&Young Audit Sp. z o.o.

XV. OBJECTIVES AND PRINCIPLES OF FINACIAL RISK MANAGEMENT

The main financial instruments used by the Group include bonds, cash and short-term deposits. The Group also

has other financial instruments, such as trade receivables and trade liabilities arising directly in the course of the

Group’s business. In addition, as at 31 December 2013 and 31 December 2012, the Company recognised

financial liabilities arising from contingent payments in connection with the purchase of shares in Home Broker

Nieruchomości S.A. These are described in more detail in Note X.26.

The main types of risk related to the Group’s financial instruments include interest rate risk, liquidity risk, currency

risk and credit risk. The parent company’s Management Board reviews and approves the principles of managing

each of the above types of risk. A brief description of the principles is given below. In the reporting period, no

changes were made to the Group’s financial risk management principles. One principle applied by the Group

since the beginning of its operation is to refrain from trading in financial instruments.

Interest rate risk


81

The Group’s exposure to interest rate risk is related to, above all, the fact that the Group’s assets and liabilities

may be adversely affected by changes to market interest rates. As the Group does not have significant financial

assets or liabilities with fixed interest rates (except for finance lease liabilities), the Group is not significantly

exposed to fair value risk resulting from interest rates. As the Group does not have significant financial assets or

liabilities with variable interest rates, the Group is not significantly exposed to cash flow risk. The table below

shows the sensitivity of the Group’s net profit (loss) to reasonably possible changes to the interest rates used by

the Group to calculate interest on bonds.

Scenarios / effect on net profit (loss) 2013 2012


Scenario 1: Increase in the WIBOR 12M rate by 1 percentage point (474) (417)

Scenario 2: Decrease in the WIBOR 12M rate by 1 percentage point 474 417

Scenario 3: Increase in the WIBOR 12M rate by 2 percentage points (948) (834)

Scenario 4: Decrease in the WIBOR 12M rate by 2 percentage points 948 834

The Group’s exposure to interest rate risk is related mainly to long-term balances, which are discounted for the

purpose of including the time value of money in measuring the value of such balances.

The table below shows the exposure of the Group’ net profit (loss) to reasonably possible changes to the interest

rates used in discounting long-term balances, based on the assumption that other factors are not changed.

The current interest rate applied in discounting selected items presented in the statement of financial position is

3.1%. The table below shows changes to balances and their effect on the Company’s profit, with a change to the

discount rate by 1.5 percentage points.

Scenarios for 2013

balance increase

/decrease

effect on net profit

(loss)

balance

increase/decrease


(loss)

PLN thousand PLN thousand PLN thousand PLN thousand

Change in discount rate +1,5p.p. +1,5p.p. -1,5p.p. -1,5p.p.

Trade receivables - - - -

Other (short- and long-term) receivables (124) (100) 124 100

Other non-financial (short- and long-term) liabilities (12) 10 12 (10)

Total (136) (91) 136 91

Scenarios for 2012

balance increase

/decrease


(loss)

balance

increase/decrease


(loss)

PLN thousand PLN thousand PLN thousand PLN thousand

Change in discount rate +1,5p.p. +1,5p.p. -1,5p.p. -1,5p.p.

Trade receivables (36) (29) 36 29

Other (short- and long-term) receivables (91) (74) 91 74

Other non-financial (short- and long-term) liabilities (81) 66 81 (66)

Total (208) (37) 208 37

In addition, the Group monitors and reviews, on an ongoing basis, the structure of its assets and the structure of

its liabilities sensitive to interest rate changes, which has a significant impact on risk optimisation.

Currency risk

Currency risk results from sales and/or purchases, by the operating entity, in currencies other than the

measurement currency. The Group is exposed to insignificant currency risk related to its transactions, as the

value of the Group’s transactions in foreign currencies is lower than 1% in relation to the Group’s total revenues or

costs


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In the opinion of the parent company’s Management Board, there was no concentration of currency risk as at 31

December 2013 and 31 December 2012.

Liquidity risk

The Group monitors the risk of lack of funds through periodic liquidity planning. This method takes into account

the maturity dates of both investments and financial assets (e.g. accounts receivable, other financial assets) and

the forecast cash flows from operating activities.

It is the Group’s intention to maintain a balance between the continuity and flexibility of financing through the use

of external financing, such finance leases.

The table below contains an analysis of the maturity of financial liabilities:

Credit risk

The Group is exposed to minimum credit risk related to its financial assets. The Group does business mainly with

reputable and reliable financial institutions, and the trade receivables arising from the services supplied to them

are mainly short-term receivables. The Group’s cash is deposited with Getin Noble Bank S.A. and ING Bank

Śląski S.A. The maximum amount exposed to credit risk is equal to the relevant carrying amount.

In addition, the Group has long-term receivables related to security deposits paid as security for payments under

its rental agreements. The Group rents offices from reliable businesses, and the maximum amount exposed to

credit risk is equal to the undiscounted value of the security deposit. As at 31 December 2013, the Group had

accounts receivable related to security deposits with 227 entities. In the case of three of the entities, the

receivables accounted for 5%-7.07% of the total balance of such receivables In the case of the other entities, the

receivables accounted for less than 3.41% of the total balance of such receivables. As at 31 December 2012, the

Group had accounts receivable related to security deposits with 221 entities. In the case of three of the entities,

the receivables accounted for 5%-6.3% of the total balance of such receivables In the case of the other entities,

the receivables accounted for less than 4.8% of the total balance of such receivables.

In the periods covered by these financial statements, the terms and conditions of the Group’s financial assets

were not renegotiated.

Maximum exposure to credit risk31 Dec.2013

PLN thousand

31 Dec.2012

PLN thousand

Financial assets

Trade receivables 65 073 98 369

Other non-financial (short- and long-term)

receivables 7 069 7 424

Cash and cash equivalents (except cash at hand) 14 756 14 128

Total exposure to credit risk 86 898 119 921

Total off-balance sheet liabilities - -

Total exposure to credit risk 86 898 119 921

Concentration risk

In relation to concentration risk, there were receivables and deferred revenue as at 31 December 2013 whose

value exceeded 10% of the balance of trade receivables and the balance of deferred revenue from applications

not yet settled. These balances were amounts due from Open Life Towarzystwo Ubezpieczeń na Życie S.A.

(12%) and Getin Noble Bank S.A. (18%).

As at 31 December 2012, the amounts due from Open Life Towarzystwo Ubezpieczeń Życie S.A. (22%), Getin

Noble Bank S.A. (21%) and Veso Investments Sp. z o.o. (17%) exceeded 10% of the balance of receivables and

deferred revenue.


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XVI. CAPITAL MANAGEMENT

The main objective of managing the Group’s capital is to maintain a good credit rating and capital ratios at secure

levels to support the Group’s operating activities and to increase the value for its shareholders.

The Group manages its capital structure and makes changes to the structure as a result of changes to economic

conditions. In order to maintain or adjust its capital structure, the Group may make changes to payment of

dividend to its shareholders, to return their capital to them or to issue new shares. From 1 January 2013 to 31

December 2013 and from 1 January 2012 to 31 December 2012, no changes were made to the objectives,

principles and processes in this area.

The following items are included in the Group’s net debt:

31 Dec.2013 31 Dec.2012


(Short- and long-term) finance lease liabilities 1 671 2 300

Trade liabilities 15 412 17 173

Accruals and deferred revenue, incl. accrued remuneration 31 595 39 893

Share acquisition liability 3 833 53 328

Other non-financial (short- and long-term) liabilities 14 567 20 077

Short-term and long-term bonds issued 122 105 78 742

Current income tax liability 2 337 5 660

less cash and cash equivalents (14 756) (14 128)

Net debt 176 764 203 045

Net debt

Equity

31 Dec.2013 31 Dec.2012


Share capital 543 542

Other reserve capital 272 545 228 833

Retained earnings 144 560 132 750

Total equity 417 648 362 125

Equity

XVII. EMPLOYMENT STRUCTURE

The average number of employees at the Group in the following reporting years is presented in the table below:

Number of employees1 Jan.2013 – 31

Dec.2013

1 Jan.2012 – 31

Dec.2012

Management Board 3 3

Head Office 300 412

Sales support and online sales 695 649

Financial advisers 2 126 1 826

Total 3 124 2 890

(*) average number of employees

(**) Helena Kamińska has been a Member of the Management Board since 13 December 2013.

XVIII. IMPORTANT EVENTS OCCURRING BETWEEN THE DATE OF THESE CONSOLIDATED FINANCIAL STATEMENTS AND THE DATE OF THEIR APPROVAL FOR PUBLICATION


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On 7 January 2014, Mr Marek Kaczałko and Mr Dariusz Niedośpiał stepped down as Members of the Supervisory

Board. On the same day, Open Finance’s annual general meeting elected Mr Jarosław Augustyniak and Mr

Krzysztof Spyra to sit on the Supervisory Board, for a three-year term each.

On 12 February 2014, Mr Leszek Czarnecki, PhD, stepped down as Chairman of the Supervisory Board of Open

Finance S.A and now sits as a Member on the Supervisory Board. He was replaced as Chairman the Supervisory

Board by Mr Krzysztof Spyra. No other changes were made to the composition of the Supervisory Board until the

date of approval of these financial statements.

On 20 January 2014, the merger of Home Broker Nieruchomości S.A (the acquirer) from HB Doradcy Finansowi

Sp. z o.o. (the acquiree).

On 31 January 2014, a merger plan involving Home Broker Nieruchomości S.A. (the acquirer) and HB Finance

sp. z o.o. (the acquiree) was prepared. The merger resolution is scheduled to be adopted by the acquiree on

3 March 2014.

There were no other important events occurring between the date of these financial statements and the date of

their approval for publication.

XIX. CORRECTIONS OF ERRORS IN THE PREVIOUS REPORTING PERIOD

There are no errors relating to the previous financial years that would require correction in these financial statements.


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Signatures of all the members of the Management Board

20 February 2014 Maurycy Kϋhn President of the Management Board ………………………………

20 February 2014 Wojciech Gradowski Member of the Management Board ………………………………

20 February 2014 Krzysztof Sokalski Member of the Management Board ………………………………

20 February 2014 Helena Kamińska Member of the Management Board ……………………………….

Signature of the person responsible for maintaining Open Finance S.A.’s books of account

20 February 2014 Marek Chomicki Chief Accountant ………………………………

open finance s.a. group consolidated financial … · statement of compliance with international...

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