ING Bank Śląski | Annual Report 2014

ING BANK ŚLĄSKI

ING BANK ŚLĄSKIAnnual Report 2014

Financial results
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24. Non-financial assets

View the data in terms of 8-year-period

  end of 2014 end of 2013
Investment properties 60.0 121.4
Property, plant and equipment 595.0 576.6
Intangible assets 377.3 365.9
Total 1,032.3 1,063.9

24.1. Investment properties

View the data in terms of 8-year-period

  2014 2013
Value at the beginning of period 121.4 120.9
Additions, due to: 0.2 0.5
  - purchase of additional equipment 0.2 0.5
Disposals, due to: -64.4 0.0
  - reclassification to own real properties -64.4 0.0
Revaluation at the fair value 2.8 0.0
Value at the end of period 60.0 121.4

Since the investment property Chorzowska 50 was earmarked for the Group’s own purposes, a part of that investment real property was reclassified to the “property, plant and equipment” category.

There are no legal constraints on the investment property nor contractual obligations relating to the purchase of the aforementioned real property.

On account of the investment property ownership, the Group posted rental income and incurred maintenance costs, which were recognised in the statement of profit and loss in the item Net income on the other basic activities.

​24.2. Property, plant and equipment

  end of 2014 end of 2013
Real estate and leasehold improvements 339.4 343.9
Computer hardware 52.3 44.4
Other fixtures and fittings 165.6 155.4
Constructions in progress 37.7 32.9
Total 595.0 576.6

 

2014
  Real estate and leasehold improvements Computer hardware Other fixtures and fitting Constructions in progress TOTAL
Gross value at the beginning of period 675.2 209.1 430.0 32.9 1,347.2
Additions, due to: 117.9 31.9 58.7 123.7 332.2
  - purchases 0.1 0.4 0.4 123.7 124.6
  - investment take-overs 30.3 31.5 57.1 0.0 118.9
  - reclassification from assets held
for sale
3.4 0.0 0.0 0.0 3.4
  - reclassification from investment
real properties
62.0 0.0 0.0 0.0 62.0
  - other 22.1 0.0 1.2 0.0 23.3
Disposals, due to: -59.5 -5.5 -20.0 -118.9 -203.9
  - sale and liquidation -3.4 -5.4 -9.1 0.0 -17.9
  - investment take-overs 0.0 0.0 0.0 -118.9 -118.9
  - reclassification to assets held
for sale
-26.6 0.0 -4.1 0.0 -30.7
  - other -29.5 -0.1 -6.8 0.0 -36.4
Revaluation at the fair value -32.5 0.0 0.0 0.0 -32.5
Gross value at the end of period 701.1 235.5 468.7 37.7 1,443.0
Accumulated depreciation at the
begining of the period
-331.3 -164.7 -274.6 0.0 -770.6
Changes in the period (due to): -30.4 -18.5 -28.5 0.0 -77.4
  - amortisation charges -39.2 -23.5 -39.0 0.0 -101.7
  - sale and liquidation 3.1 5.2 8.2 0.0 16.5
  - reclassification to assets held
for sale
6.7 0.0 3.1 0.0 9.8
  - other -1.0 -0.2 -0.8 0.0 -2.0
Accumulated depreciation
at the end of the period
-361.7 -183.2 -303.1 0.0 -848.0
Net value at the end of period 339.4 52.3 165.6 37.7 595.0

 

2013
  Real estate and leasehold improvements Computer hardware Other fixtures and fitting Constructions in progress TOTAL
Gross value at the beginning of period 711.9 209.8 421.1 34.6 1,377.4
Additions, due to: 37.3 15.9 36.4 73.8 163.4
  - purchases 0.8 0.5 1.6 73.8 76.7
  - investment take-overs 25.3 15.4 34.8 0.0 75.5
  - reclassification from assets held
for sale
11.2 0.0 0.0 0.0 11.2
Disposals, due to: -74.9 -17.0 -27.1 -75.5 -194.5
  - sale and liquidation -55.2 -17.0 -21.0 0.0 -93.2
  - investment take-overs 0.0 0.0 0.0 -75.5 -75.5
  - reclassification to assets held
for sale
-18.9 0.0 -4.4 0.0 -23.3
  - other -0.8 0.0 -1.7 0.0 -2.5
Revaluation at the fair value 0.9 -0.1 0.1 0.0 0.9
Transfers 0.0 0.5 -0.5 0.0 0.0
Gross value at the end of period 675.2 209.1 430.0 32.9 1,347.2
Accumulated depreciation at the
begining of the period
-363.3 -154.9 -259.2 0.0 -777.4
Changes in the period (due to): 32.0 -9.4 -16.0 0.0 6.6
  - amortisation charges -24.8 -26.2 -39.1 0.0 -90.1
  - sale and liquidation 55.0 16.8 20.6 0.0 92.4
  - reclassification to assets held
for sale
1.0 0.0 2.6 0.0 3.6
  - other 0.8 0.0 -0.1 0.0 0.7
Transfers 0.0 -0.4 0.6 0.0 0.2
Accumulated depreciation
at the end of the period
-331.3 -164.7 -274.6 0.0 -770.6
Net value at the end of period 343.9 44.4 155.4 32.9 576.6

The item Real estate and leasehold improvements comprises, among others, land whose value considering the fair value measurement as at 31 Dec 2014 was PLN 5.3 million (PLN 5.4 million as at  31 Dec 2013).

There are no legal constraints on property, plant and equipment.

Contractual obligations to purchase property, plant and equipment

In 2014, the Group concluded agreements with counterparties that in the future will effect increase in the value of property, plant and equipment to the amount of PLN 1.1 million. The agreements refer to real properties (buildings and structures), lease hold improvements, non-current assets under construction and other non-current assets. These are framework agreements and their value will be estimated under cost overviews developed in performance thereof. 

In 2013, the Group concluded framework agreements refer to real properties (buildings and structures), lease hold improvements, non-current assets under construction and other non-current assets.

24.3. Intangible assets

  end of 2014 end of 2013
Goodwill 223.8 223.8
Software 130.5 95.2
Outlays for intangible assets 21.3 46.0
Other 1.7 0.9
Total 377.3 365.9

 

2014
  Goodwill Software Outlays for intangible assets Other intangible assets TOTAL
Gross value at the beginning of period 223.8 599.2 46.0 6.8 875.8
Additions, due to: 0.0 114.2 79.4 1.7 195.3
  - purchases 0.0 6.7 78.4 0.0 85.1
  - investment take-overs 0.0 102.4 0.0 1.7 104.1
  - other 0.0 5.1 1.0 0.0 6.1
Disposals, due to: 0.0 -6.5 -104.1 0.0 -110.6
  - sale and liquidation 0.0 -1.3 0.0 0.0 -1.3
  - investment take-overs 0.0 0.0 -104.1 0.0 -104.1
  - other 0.0 -5.2 0.0 0.0 -5.2
Transfers 223.8 706.9 21.3 8.5 960.5
Gross value at the end of period 0.0 -504.0 0.0 -5.9 -509.9
Accumulated depreciation
at the begining of the period
0.0 -72.4 0.0 -0.9 -73.3
Changes in the period (due to): 0.0 -72.5 0.0 -0.9 -73.4
  - amortisation charges 0.0 1.4 0.0 0.0 1.4
  - sale and liquidation 0.0 -1.3 0.0 0.0 -1.3
Accumulated depreciation
at the end of the period
0.0 -576.4 0.0 -6.8 -583.2
Net value at the end of period 223.8 130.5 21.3 1.7 377.3

 

2013
  Goodwill Software Outlays for intangible assets Other intangible assets TOTAL
Gross value at the beginning of period 223.8 542.3 25.7 8.4 800.2
Additions, due to: 0.0 57.6 74.8 0.7 133.1
  - purchases 0.0 3.5 73.7 0.0 77.2
  - investment take-overs 0.0 53.8 0.0 0.7 54.5
  - other 0.0 0.3 1.1 0.0 1.4
Disposals, due to: 0.0 -0.7 -54.3 -2.3 -57.3
  - sale and liquidation 0.0 -0.4 0.0 -2.3 -2.7
  - investment take-overs 0.0 0.0 -54.3 0.0 -54.3
  - other 0.0 -0.3 0.0 0.0 -0.3
Transfers 0.0 0.0 -0.2 0.0 -0.2
Gross value at the end of period 223.8 599.2 46.0 6.8 875.8
Accumulated depreciation
at the begining of the period
0.0 -430.8 0.0 -7.8 -438.6
Changes in the period (due to): 0.0 -73.2 0.0 1.9 -71.3
  - amortisation charges 0.0 -73.5 0.0 -0.4 -73.9
  - sale and liquidation 0.0 0.3 0.0 2.3 2.6
Accumulated depreciation
at the end of the period
0.0 -504.0 0.0 -5.9 -509.9
Net value at the end of period 223.8 95.2 46.0 0.9 365.9

Contractual obligations to purchase intangible assets

In 2014, the Group concluded with counterparties the agreements resulting in the future in an increase of intangible assets of PLN 9.1million with the proviso that due to the framework nature of some agreements, this is not the ultimate amount. As in the previous year, those agreements concern licence purchase and computer software implementation.

In 2013 the Group concluded the agreements for licence purchase and computer software implementation at the amount of PLN 5.4 million. These agreements were part framework.

Impairment test of cash generating units with respective goodwill

The goodwill impairment test is carried out at least twice yearly, irrespective of detecting any objective evidence of impairment.

In the Group parent, the impairment test is applied to the goodwill created as the result of the in-kind contribution of ING Bank NV. The smallest identifiable cash-generating units were determined and goodwill of total amount of PLN 223.3 million was assigned thereto. No other additional elements of intangible value and indefinite useful life were identified that could be assigned to the identified cash-generating units. 

The input data for the test’s needs cover the economic capital, risk-weighted assets and profit before tax per segments.

The test is performed based on the model that calculates and compares the current value of free cash flow of the unit to the estimated book value of the unit’s funds. The free cash flows of the unit are defined as net profits less capital needed to maintain the solvency ratio at the required level. To discount the cash flows, 11.5% discount rate is used that represents the cost of capital calculated by the Group parent.

The remaining assumptions include: forecasts of income tax rate, nominal growth rate after the forecast period (3%) and predicted 3M WIBOR rate.

The recoverable value was determined based on the estimation of the useable value of the assets component taking into account the estimated forecast of expected future cashflow generated during the continued use. The cashflow forecasts are based on rational assumptions that reflect the most accurate appraisal of the management regarding all the conditions that will appear during the remaining lifetime of the assets. The cashflow forecasts are based on mid-term plan approved by the Group parent company and the strategy covering the maximum period of the next three years. The data regarding the subsequent two years are the result of extrapolation. Extrapolation assumes that the cashflow generating centre will maintain the gross profit to risk weighted assets ratio at the level from the last year of the Group’s forecast and its profits will increase by previously determined growth rate. Legitimacy of the assumptions made is verified periodically, and any divergence between the cashflows estimated based on the future cashflows and the actual ones is analysed as appropriate. 

Net present value of cash flows as at 31 Dec 2014 amounted to PLN 4,949.1 million.The test carried out showed the surplus of present value over the net book value of the cash-generating unit, totalling PLN  2,767.1 million thus, no impairment thereof was determined. For the discount rate lower by 1p.p. the surplus of present value of cash flows over the net book value of the cash-generating unit would amount to PLN 3,290.2 million; for the rate higher by 1p.p. the surplus of the present value of cash flows over the net book value of the cash-generating unit would be PLN 2,351.0 million.

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