Notes to the consolidated financial statements

38. Operating leases

Download note 38 in XLS

Group as a lessee
The Group is a party to lease agreements based on which it uses third-party fixed assets and derives economic benefits therefrom for an agreed period of time in return for a payment. In accordance with IAS 17, lease agreements are classified based on the criterion of the scope in which the risks and rewards arising from the holding of the leased asset are distributed between the lessee and the lessor.
In case of operating lease agreements concluded by the Group, where substantially all the risks and rewards related to the leased assets are held by the lessor (mainly lease or rental agreements), lease payments are recognized as costs in the consolidated profit or loss using the straight-line method over the lease term.
Operating lease agreements with the Group as the lessee:

• lease of space – the standard term of these agreements is 5 years with a rollover option;
• lease of cars – the term of these agreements is 48 months (the leased assets may be bought at a price similar to the market price).

Agreements concluded for an indefinite term have been taken into account based on the notice period. No significant contingent lease payments or non-cancellable sublease agreements occurred.

As at the end of the reporting period, the Bank was a party to two significant operating lease agreements concerning office space in the Bank’s head office in Warsaw. One agreement was concluded in February 2007 for a term of 69 months with no extension option. It will be terminated in June 2014.
On 21 May 2013, an agreement providing for the lease of space for the Bank’s new head office in Warsaw was concluded. The agreement was concluded for a fixed term (until 14 June 2019) and it may be extended for another five years.
Future minimum lease payments under non-cancellable operating lease as at 31 December 2013 and 31 December 2012:

	Balance as at 31 December 2013	Balance as at 31 December 2012 (restated)
	PLN ‘000	PLN ‘000
Up to 1 year	11,701	13,356
From 1 to 5 years	22,350	19,816
Above 5 years	0	0
Total	34,051	33,172