Financial results

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44. Related parties

The Group’s related parties are:

• Parent: Poczta Polska S.A.;
• entity exercising significant influence on the Bank: PKO Bank Polski S.A.;
• other entities from the Poczta Polska Capital Group;
• other subsidiaries of PKO Bank Polski S.A.;
• Top executives of the Group: top executives of the Bank (Members of the Management Board, Members of the Supervisory Board, Managing Directors and their Deputies, Office Directors and their Deputies) and top executives of the Bank’s subsidiaries;
• top executives of the Bank’s Parent.

In accordance with IAS 24, the Group treats the subsidiaries of the State Treasury of the Republic of Poland as its related parties, since the State Treasury controls the Bank through its majority shareholder. For the purposes of consolidated financial statements, subsidiaries of the State Treasury are companies wholly-owned by the State Treasury, state-owned enterprises and entities with the State Treasury as the majority shareholder, whose list is published on the website of the Ministry of State Treasury, as well as local government entities. Furthermore, the Group has benefited from the exemptions referred to in points 25-26 of IAS 24, i.e. with respect to transactions with related parties of the State Treasury; in the absence of individually significant transactions they have been presented jointly.

In 2015, non-standard, significant related-party transactions whose nature and terms were not related to ongoing business operations were not concluded. All transactions were concluded on the arm’s length basis.

Presented below is the nature of significant agreements with related parties:

• cooperation agreement dated 2 September 2011 as amended (entered into by and between the Bank and Poczta Polska S.A.) determining the areas and terms of cooperation, general terms and conditions of mutual relations, non-competition and obligations of the parties. The agreement does not directly affect the current operations, but it exerts considerable impact on this area;
• agreements concerning financial intermediation services provided on behalf of and for the Bank in respect of a wide array of products and services of the Bank, including, in particular, the Agency Agreement concluded with Poczta Polska S.A. on 2 September 2011;
• agreements related to financial intermediation services provided by the Bank on behalf of and for a related party – Poczta Polska S.A. (including a bank account agreement with additional products);
• bancassurance agreements, including in particular the general agreement for group accident insurance of the debtors of Bank Pocztowy S.A. of 10 January 2010 (valid until end of March 2015), the agency agreement with Pocztowe Towarzystwo Ubezpieczeń na Życie S.A. of 8 April 2015 and the agency agreement with Pocztowe Towarzystwo Ubezpieczeń Wzajemnych of 30 November 2010;
• a package of agreements regarding financial services performed by the Bank, in particular with regard to cash processing (agreement with Poczta Polska S.A. on cash services for the Bank’s own sales outlets);
• a lease agreement setting out the terms and conditions of leasing/sub-leasing space or premises to be used as the Bank’s branches as part of the sales outlet infrastructure of Poczta Polska S.A.;

Receivables, liabilities, revenue and expenses arising from related-party transactions have been presented below.

Balance as at	Parent	Entity exercising significant influence on the Group and its subsidiaries	Key management personnel	Other entities in the Poczta Polska S.A. Capital Group
31 December 2015
	PLN’000	PLN’000	PLN’000	PLN’000
Receivables	13 748	125	6 903	3 009
Nostro accounts	0	19	0	0
Originated loans	0	0	6 903	0
Other receivables*	13 748	106	0	3 009
Liabilities	273 358	14 057	867	31 559
Deposits received**	198 680	14 057	866	28 282
Liabilities due to sold securities (repo and sell-buy-back transactions)	0	0	0	3 000
Other liabilities*	74 678	0	1	277
Off-balance sheet transactions	85 000	941	120	277
Off-balance sheet contingent liabilities	85 000	941	120	277
-’originated	85 000	0	120	277
-’received	0	941	0	0

_{* Settlements with the parent company due to payments to and withdrawals from bank accounts and deposits are presented as a net value in the Group’s balance sheet.
** Including the Parent’s cash generated from the entity’s operations deposited on current and special purpose accounts under agreements concluded with the Bank, including transfer funds, payments to the Social Insurance Institution and standard payments} 

 

The revenue and costs have been presented in the table below in amounts received from counterparties (i.e. on a cash basis).

The accounting presentation of revenue and costs in the table below is the same as the presentation in the income statement.

- personnel expenses	Parent	Entity exercising significant influence on the Group and its subsidiaries	Key management personnel	Other entities in the Poczta Polska S.A. Capital Group
from 1 January 2015
to 31 December 2015
	PLN’000	PLN’000	PLN’000	PLN’000
Revenue	3 837	132	195	11 464
-  interest*	(13 194)	0	190	9 872
-’fees	17 013	132	5	1 414
-’other revenue	18	0	0	178
Expenses	(42 074)	(1 917)	(20 892)	(716)
-’interest	(4 954)	(213)	(13)	(716)
-’fees	(26 092)	(111)	0	0
-’non-personnel expenses	(11 028)	(1 593)	0	0
-’personnel expenses	0	0	(20 879)	0

_{* The negative value of revenue and costs results from the costs of distribution of bank product accounted for using the effective interest method, offset by interest income.}

	Parent	Entity exercising significant influence on the Group and its subsidiaries	Key management personnel	Other entities in the Poczta Polska S.A. Capital Group
Balance as at
31 December 2014
	PLN’000	PLN’000	PLN’000	PLN’000
Receivables	57 611	12	6 860	294
Nostro accounts	0	12	0	0
Originated loans	0	0	6 860	0
Other receivables*	57 611	0	0	294
Liabilities	764 578	0	927	68 838
Deposits received**	646 738	0	927	60 441
Liabilities due to sold securities (repo and sell-buy-back transactions)	0	0	0	5 312
Other liabilities*	117 840	0	0	3 085
Off-balance sheet transactions	48 800	941	27	277
Off-balance sheet contingent liabilities	48 800	941	27	277
-’originated	48 800	0	27	277
-’received	0	941	0	0

* Settlements with the parent company due to payments to and withdrawals from bank accounts and deposits are presented as a net value in the Group’s balance sheet.
_{** Including the Parent’s cash generated from the entity’s operations deposited on current and special purpose accounts under agreements concluded with the Bank, including transfer funds, payments to the Social Insurance Institution and standard payments.}

The revenue and costs have been presented in the table below in amounts received from counterparties (i.e. on a cash basis).

Period	Parent	Entity exercising significant influence on the Group and its subsidiaries	Key management personnel	Other entities in the Poczta Polska S.A. Capital Group
from 1 January 2014
to 31 December 2014
	PLN’000	PLN’000	PLN’000	PLN’000
Revenue	16 648	157	265	30 768
-’interest	0	0	262	4
-’fees	16 607	157	3	30 589
-’other revenue	41	0	0	175
-’personnel expenses	(63 159)	(2 645)	(18 448)	(945)
-’interest	(7 832)	0	(26)	(737)
-’fees	(38 795)	(1 102)	0	0
-’non-personnel expenses	(16 532)	(1 543)	0	(208)
-’personnel expenses	0	0	(18 422)	0

The accounting presentation of revenue and costs in the table below is the same as the presentation in the income statement.

Period	Parent	Entity exercising significant influence on the Group and its subsidiaries	Key management personnel	Other entities in the Poczta Polska S.A. Capital Group
from 1 January 2014
to 31 December 2014
	PLN’000	PLN’000	PLN’000	PLN’000
Revenue	8 350	157	265	15 314
-’interest*	(8 298)	0	262	12 060
-’fees	16 607	157	3	3 079
-’other revenue	41	0	0	175
Expenses	(53 246)	(2 645)	(18 448)	(945)
-’interest	(9 570)	0	(26)	(737)
-’fees	(27 144)	(1 102)	0	0
-’non-personnel expenses	(16 532)	(1 543)	0	(208)
-’personnel expenses	0	0	(18 422)	0

_{* The negative value of revenue and costs results from the costs of distribution of bank product accounted for using the effective interest method, offset by interest income.}

In these consolidated financial statements the Group changed the presentation method applied to certain items versus the consolidated financial statements for the year ended 31 December 2014 through:

• standardizing the method of presenting data in the "Top executives of the Group” column. The item includes receivables, liabilities, off-balance sheet transactions, revenue and expenses related to top executives referred to in this note;
• presenting related party revenue and expense on a cash basis (in the amount received from the counterparty) and disclosing them in accordance with the income statement.

Receivables, liabilities, revenue and costs of transactions with State Treasury entities and local authorities excluding companies from the Poczta Polska Capital Group and PKO Bank Polski S.A. Capital Group.

 

	Balance as at		Balance as at
	31 December 2015		31 December 2014
	Companies with interest of the State Treasury	Government agencies and local authorities	Companies with interest of the State Treasury	Government agencies and local authorities
	PLN’000	PLN’000	PLN’000	PLN’000
Receivables	20 149	252 825	131 775	303 395
Receivables from other banks	20 147	0	131 775	0
Loans and advances granted to customers	0	252 825	0	303 395
Other receivables	2	0	0	0
Liabilities	9 909	49 681	22 132	57 826
Deposits received	9 908	49 676	22 132	57 825
Other liabilities	1	5	0	1

 

	Period		Period
	from 1 January 2015		rom 1 January 2014
	to 31 December 2015		to 31 December 2014
	Companies with interest of the State Treasury	Government agencies and local authorities	Companies with interest of the State Treasury	Government agencies and local authorities
	PLN’000	PLN’000	PLN’000	PLN’000
Revenue	1 047	7 302	2 753	11 243
-’interest	986	7 188	2 655	11 018
-’fees	61	114	98	215
-’other revenue	0	0	0	10
Expenses	(487)	(712)	(591)	(2 030)
-’interest	(112)	(708)	(279)	(1 965)
-’fees	0	0	0	(57)
-’non-personnel expenses	(375)	0	(312)	0
-’other expenses	0	(4)	0	(8)

Transactions with subsidiaries of the State Treasury other than those from the Poczta Polska S.A. Capital Group and PKO Bank Polski S.A. Capital Group are related to banking operations (funding, deposits).

Loans and advances granted to members of the Management and Supervisory Board of the Bank and the Bank's Parent

Transactions with the management are in line with the standard product offering

Balance as at	Members of the Management Board	Supervisory Board of the Bank	Members of the Management Board of the Bank’s Parent*
31 December 2015
	PLN’000	PLN’000	PLN’000
Receivables	153	0	0
Originated loans	153	0	0
Liabilities	83	51	0
Deposits received	83	51	0
Off-balance sheet transactions	0	0	0

* Members of the Management Board of the Bank’s Parent who are not members of the Supervisory Board of the Bank.

Period	Members of the Management Board of the Bank	Supervisory Board of the Bank	Members of the Management Board of the Bank’s Parent*
from 1 January 2015
to 31 December 2015
	PLN’000	PLN’000	PLN’000
Revenue	9	0	3
-’interest	9	0	3
Expenses	(2)	(1)	(1)
-’interest	(2)	(1)	(1)

* Members of the Management Board of the Bank’s Parent who are not members of the Supervisory Board of the Bank.

* Members of the Management Board of the Bank’s Parent who are not members of the Supervisory Board of the Bank.

Period	Members of the Management Board of the Bank	Supervisory Board of the Bank	Members of the Management Board of the Bank’s Parent*
from 1 January 2014
to 31 December 2014
	PLN’000	PLN’000	PLN’000
Revenue	14	0	9
-’interest	14	0	9
Expenses	(3)	0	(7)
-’interest	(1)	0	0
-’fees	(2)	0	(7)

* Members of the Management Board of the Bank’s Parent who are not members of the Supervisory Board of the Bank. 

Remuneration paid or due to the Management and Supervisory Boards of the Bank and its subsidiaries

	Period	Period
	from 1 January 2015	from 1 January 2014
	to 31 December 2015	to 31 December 2015
	PLN’000	PLN’000
Management Board	3 466	3 065
Short-term employee benefits (payroll, bonuses and payroll charges)	2 674	2 818
Termination benefits	792	247
Supervisory Board	2 471	2 193
Short-term employee benefits (payroll, bonuses and payroll charges)	2 471	2 193
Total	5 937	5 258

Remuneration paid or due to other senior management of the Bank and its subsidiaries

	Period	Period
	from 1 January 2015	from 1 January 2014
	to 31 December 2015	to 31 December 2014
	PLN’000	PLN’000
Short-term employee benefits (payroll, bonuses and payroll charges)	14 854	13 047
Termination benefits	88	117
Total	14 942	13 164