41. Investments in associates and joint ventures

Selected information on associates and joint ventures

The Group holds the following associates and joint ventures:

Lp.NAME OF ENTITYHEADQUARTERS% SHARE IN EQUITY *
   31.12.201631.12.2015
 Joint Ventures of PKO Bank Polski SA   
1Centrum Elektronicznych Usług Płatniczych eService Sp. z o.o.Warsaw3434
 1 EVO Payments International Sp. z o.o.Warsaw100100
 2 EVO Payments International s.r.o.Prague, Czech Republic100100
 Joint Ventures of NEPTUN - fizan   
3 'Centrum Obsługi Biznesu' Sp. z o.o.Poznań41.4441.44
 Associates of PKO Bank Polski SA   
1Bank Pocztowy SABydgoszcz25.000125.0001
 1 Centrum Operacyjne Sp. z o.o.Bydgoszcz100100
 2 Spółka Dystrybucyjna Banku Pocztowego Sp. z o.o.Warsaw100100
2'Poznański Fundusz Poręczeń Kredytowych' Sp. z o.oPoznań33.3333.33
3FERRUM SAKatowice22.1420.97
 3 FERRUM MARKETING Sp. z o.o.Katowice100100
 4 Zakład Konstrukcji Spawanych FERRUM SAKatowice100100
 Walcownia Blach Grubych Batory Sp. z o.o.1Katowice100-

* Share in equity of direct parent entity / entity exercising significant influence

 

name of joint ventures and associatesThe core business
Centrum Elektronicznych Usług Płatniczych eService Sp. z o.o.

Centrum Elektronicznych Usług Płatniczych eService Sp. z o.o. offers services which consist of processing transactions involving payment instruments conducted both through POS terminals in Poland and abroad and online, lease of POS terminals, top-ups of mobile phone cards and servicing of gift cards. PKO Bank Polski SA, together with the Company, offer comprehensive services which involve attracting and servicing entities which use POS terminals and settling transactions conducted with payment instruments using such terminals. The cooperation is governed by agreements on, i.a.:

  • servicing cashless transaction concluded using payment instruments for bilateral agreements with merchants,
  • marketing cooperation as regards services of fundamental importance to the functioning of the products and services offered both by the Bank and the Company,
  • the provision of services relating to withdrawals of cash in the Bank’s agent and branch offices and in post offices using Visa and MasterCard payment cards using POS terminals,
  • cooperation in providing services associated with attracting retail outlets which accept payment instruments. 
The Company has two direct subsidiaries and exerts full control over these subsidiaries.    
‘Centrum Obsługi Biznesu’ Sp. z o.o.‘Centrum Obsługi Biznesu’ Sp. z o.o. is the joint project of PKO Bank Polski SA, Buildco Poznań SA and the City of Poznań which consists of building a hotel in Poznań. PKO Bank Polski SA is a member of a syndicate of banks which granted the Company an investment loan for the execution of the said project. The hotel was completed and started operating in 2007. The operating results generated by the Company are insufficient to ensure the current, full servicing of the liabilities arising from the loan agreement. At the Company’s request, as part of the restructuring of the loans, the syndicate temporarily modified the repayment schedule of principal and interest instalments which is valid until 30 June 2017. Since June 2015, the Company’s shares are included in the portfolio of a Bank’s subsidiary, NEPTUN – fizan.
Bank Pocztowy SABank Pocztowy SA specializes in standard banking products offered to retail clients and a supplementary offer for micro-businesses and institutional clients. The Bank also operates in the segment of settlements and treasury. As part of the strategic partnership with Poczta Polska SA (shareholder with 75% minus 10 shares of the Company) uses a potential of a shareholder and develops a range of products in collaboration with stakeholders across the Poczta Polska Group. Bank Pocztowy SA is also a client of the Bank and uses the selected services provided by PKO Bank Polski SA. The Company has two direct subsidiaries and exerts full control over these subsidiaries.
‘Poznański Fundusz Poręczeń Kredytowych’ Sp. z o.o.‘Poznański Fundusz Poręczeń Kredytowych’ Sp. z o.o is a specialized entity supporting the development of small and medium-sized enterprises by providing guarantees and provision services. The company guarantees loans, advances and the guarantees granted by banks, including PKO Bank Polski SA, as well as leasing and factoring transaction. The entity cooperates with PKO Leasing SA. The Company’s offer also includes guarantees for small and medium-sized enterprises, under the JEREMIE (Join European Resources for Micro to Medium Enterprises), which are re-underwritten mutually at 70% or 80% from the Wielkopolski Regionalny Program Operacyjny, managed by Bank Gospodarstwa Krajowego. Bid bond guarantees are a novelty in the guarantee market and in the Company’s offer.
FERRUM SAThe Company’s operations comprise manufacturing welded steel tubes, hollow profiles and insulating tubes. The Company has two direct subsidiaries and exerts full control over these subsidiaries. The Company’s shares were taken up under the debt recovery actions (foreclosure of collateral). The Company is a public company whose shares are listed on the Warsaw Stock Exchange.
  

A summary of the financial data separately for each joint venture and each associate of the Group was presented below. The amounts presented are derived from the financial statements of the specific entities prepared in accordance with IFRS or Polish Accounting Standards (PAS). The data for 2015 has been derived from audited financial statements.

Centrum Elektronicznych Usług Płatniczych eService Sp. z o.o. (in accordance with IFRS)31.12.201631.12.2015
Current assets124.4103.4
Non-current assets212.1132.7
Short-term liabilities103.970.5
Long-term liabilities33.837.2
 01.01-31.12.201601.01-31.12.2015
Revenues473.7456.5
Profit (loss) for the year102.888.4
Total comprehensive income102.888.4
Dividends received from an entity classified as joint venture11.025.6

„Centrum Obsługi Biznesu" Sp. o.o. (in accordance with PAS)31.12.201631.12.2015
Current assets10.59.5
Non-current assets85.487.2
Short-term liabilities18.212.9
Long-term liabilities73.677.5
 01.01-31.12.201601.01-31.12.2015
Revenues23.120.5
Profit (loss) for the year(2.2)(3.2)

Bank Pocztowy SA (in accordance with IFRS data published by the Company)30.06.201631.12.2015
Total assets7 238.27 213.0
Total liabilities6 698.26 670.5
 01.01-30.06.201601.01-31.12.2015
Revenues248.3474.2
Profit (loss) for the year9.633.9
Other comprehensive income(11.8)9.0
Total comprehensive income(2.2)42.9

FERRUM SA (in accordance with IFRS, data published by the Company)30.09.201631.12.2015
Current assets105.290.9
Non-current assets171.2171.8
Short-term liabilities129.1115.4
Long-term liabilities94.299.3
 01.01-30.09.201601.01-31.12.2015
Revenues242.3314.0
Profit (loss) for the year5.1(49.7)
Other comprehensive income--
Total comprehensive income5.1(49.7)
   

Financial information

Joint ventures31.12.201631.12.2015
'Centrum Obsługi Biznesu' Sp. z o.o.--
Purchase price17.517.5
Change in share of net assets(16.1)(14.8)
Impairment allowance(1.4)(2.7)
Centrum Elektronicznych Usług Płatniczych eService Sp. z o.o. Group226.8206.2
Value of shares as at the date of obtaining joint control197.3197.3
Change in share of net assets29.58.9
Total 226.8 206.2

Associates31.12.201631.12.2015
Bank Pocztowy SA Group132.4161.5
Purchase price161.5161.5
Change in valuation with equity method83.781.4
Impairment allowance(112.8)(81.4)
'Poznański Fundusz Poręczeń Kredytowych' Sp. z o.o.--
Purchase price1.51.5
Change in valuation with equity method4.44.2
Impairment allowance(5.9)(5.7)
FERRUM SA Group26.424.1
Purchase price25.324.1
Change in share of net assets1.1-
Total 158.8 185.6

Change in investments in joint ventures20162015
Investments in joint ventures as at the beginning of the period206.2204.8
Share in profits and losses30.329.6
Net impairment allowance1.3(2.7)
Dividend(11.0)(25.5)
Investments in joint ventures as at the end of the period 226.8 206.2

Change in investments in associates20162015
Investments in associates as at the beginning of the period185.6117.6
Net impairment allowance(31.6)21.6
Share in profits and losses4.28.5
Share in other comprehensive income of an associate(0.6)(1.2)
Increase in equity interest in an associate1.239.1
Investments in associates as at the end of the period 158.8 185.6
 

Impairment allowances

In 2016 in its investment valuation of ‘Centrum Obsługi Biznesu’ Sp. z o.o the Group included its share in the net loss of PLN 1.3 million and reduced the impairment allowance on the Company’s shares by the same amount.

In 2016 the Group increased the impairment allowance on investment in Bank Pocztowy SA by PLN 31.4 million and the impairment allowance on investment in ‘Poznański Fundusz Poręczeń Kredytowych’ Sp. z o.o. by PLN 0.2 million.

As at 31 December 2016 and 31 December 2015, the parent company had no share in contingent liabilities of associates acquired jointly with other investor.

Impairment allowances – reconciliation of movements20162015
Value at the beginning of the period89.8108.7
Recognised during the period31.62.7
Reversed during the period(1.3)(21.6)
Value at the end of the period 120.1 89.8
   
Net impact in the profit and loss statement (30.3)18.9