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Notes to the consolidated financial statements

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43. Related parties

Entities related to the Group:

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 2016, 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:

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

* 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.

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 revenues and costs in the table below is the same as the presentation in the consolidated income statement.

* 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.

* 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.

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 revenues and costs in the table below is the same as the presentation in the consolidated income statement.

* 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.

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.

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.

* 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.

* 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.

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

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