Embed Size (px)
Citation preview
Aasa Polska EXCELLENCE IN CONSUMER FINANCE
Annual Report and
Financial Statements
2016
Financial statements of Aasa Polska Spółka Akcyjna for one year period ended as at
31.12.2016 prepared in accordance with the International Financial Reporting Standards
CONTENTS
STRATEGIC REPORT
► Introduction 3
► Performance highlights 4
► Country manager's statement 5
► Milestones 6
► Aasa across the markets 7
► Structure and history 8
► Management board 9
► Supervisory board 10
► Corporate Social Responsibility 11
► Inspiring employer 12
► Annual results summary 13
FINANCIAL STATEMENTS
► Statement of comprehensive
income 15
► Statement of financial position 16
► Statement of changes in equity 17
► Statement of cash flows 18
► General information 19
► International Financial Reporting
Standards applied 21
► International financial reporting
standards applied 22
► Major accounting policies 23
► Critical accounting estimates
and judgements 33
► Interest and commission income 34
► Interest expense 35
► Operating expenses, other operating
income and expenses 36
► Wages and salaries 37
► Receivables allowances and income
tax 38
► Non-current receivables and
subsidiaries 40
► Property, plant and equipmentand
intangible assets 41
► Amounts due from customers and
other receivables 42
► Cash and cash equivalents 43
► Share capital 44
► Ernings per share 45
► Borrowings received and bonds
liabilities 46
► Other liabilities 47
► Transactions with personally related
entities in terms of equity 48
► Post balance sheet events and risk
management 49
► Fair value of financial assets and
liabilities disputed claims 51
► Contingent liabilities 52
► Independent auditor’s report 53
2
Aasa Polska is financial technology
company which offers credit solutions to
consumers and small-to medium sized
businesses.
Aasa originated in Finland and has been
active on the Polish market since 2012. Our
mission is to provide fast and convenient
access to financial products and services. We
are focused on enabling individuals and
small entrepreneurs to manage their income
efficiently and plan better for the future. We
especially serve those who have difficulties
accessing or using financial services and
products in the mainstream market with
solutions that are appropriate to their needs.
The core of Aasa’s activity is a combination of
the best features of banks and loan
companies offer. Our firm specialises in
instalment loans. We use a state-of-the-art,
industry-leading processes for evaluating the
creditworthiness.
We operate on-line, but also use traditional
channels of accessing our customers. We are
constantly developing new innovative financing
solutions. Our offer does not include payday
loans – we care about our clients and the
development of the financial market.
In recent years Aasa Polska received funding of
in excess of 250 million zlotys for a long-term
development investments. Thanks to these funds
Aasa has been able to keep pace with rapid
growth in the demand of the Company’s
products and general expansion in the non-
banking credit market.
Aasa has received high praise in the industry,
including recognition from Loan Magazine
Awards including Installment Loan Provider of
the year 2015 and 2016, Business Loan Provider
of the year 2016, as well as Laurel of Financial
Intermediaries 2016 Award in the category of
lending institutions in Poland.
3
INTRODUCTION
Awards and certificates
Aasa Polska is one of TOP 3 non-bank lenders in Poland in its sector
Aasa Polska grew much faster than non-banking lenders market in Poland. We
recorded almost 8-fold increase of active customers number over the last 2 years
compared to 2014-2016 market CAGR of ca. 26%
The Aasa business has strong financial support from the biggest and most
recognizable banks and funds in the region
4
PERFORMANCE HIGHLIGHTS
* Revenues include: Interest income and Income on additional fees
Revenues
(PLNm)*
Number of active loans
at the year end (k)
Average period of granted loan
(months)
Average value of granted loan
(PLN)
Net profit/loss
(PLNm)
Number of active customers
at the year end (k)
5
COUNTRY MANAGER'S STATEMENT
For me, it is essential to provide professional
financial support and assistance to our clients,
following a policy of responsibility and highest
ethical standards.
Ovais Siddiqui
Country Manager Aasa Polska
At Aasa, an innovative company in the
FinTech industry, we are committed to
ensure transparency, speed, simplicity and
safety of our business model.
The core of our business is responsibility. As
an innovative organization from FinTech area
we are obliged to consider social issues as
well as the interests of our customers,
shareholders, associates and employees.
This approach results in the ethical and
transparent way of conducting our business.
We do respect the enforced legislation. We
meet all formal requirements and implement
the principles of responsible lending.
Strategy
As part of Aasa group, we are constantly
seeking for new business opportunities by
developing new innovative financing
solutions and products. We will continue to
serve customers and small entrepreneurs
with digital offering as well as the through
the traditional distribution channels.
Responsible lending
We have a transparent rules of providing
loans. We offer responsible credit only to
bankable customers through streamlined
processes and state-of-the-art technology.
Our sophisticated credit scoring models allow
us to build a quality loan portfolio. We offer
instalment loans usually for a period of 10-24
months. We do not operate in payday-
lending segments.
We committed to developing small businesses and the local economy by offering specific products for small and medium-sized enterprises that have registered business in Poland and are not listed in the registry of debtors (BIG).
In 2016 Aasa Polska granted over 160 thousands loans worth more than 319 mln PLN, which translates into 67% y/y growth of granted loans value.
Partnership in business
We care about the quality of cooperation with our partners. We cooperate with the top business associations and organizations in Poland. We work on the Principles of Good Practice Book concerning sales of credit products together with the Conference of Financial Companies in Poland (KPF) and affiliated companies.
Corporate ResponsibilityResponding to the needs of our customers we had decided to launch an educational campaign on Digital Exclusion, which is important social problem in Poland, where 9 million people over the age of 50 do not use the Internet, and every third Pole is digital illiterate.
With thanks to the whole Aasa team, I present the report for fiscal year 2016.
Ovais Siddiqui
Country Manager Aasa Polska
6
MILESTONES
Aasa business has strong financial support from the biggest and most recognizable banks
and funds in the region.
Over past 3 years Aasa obtained financing of EUR 85m from large financial institutions including:
third largest bank in Poland Bank BZ WBK (Santander Group), Olympia group and Novator Partners
(owners of PLAY, Polish leading telecom with over 12 millions users) and Credit Value Investments
(one of biggest funds in Poland in terms of assets).
Aasa group, that operates already in 6 markets, is constantly seeking for new business
opportunities by developing new innovative financing solutions and looking for expansion
to markets with high growth-potential.
KEY FIGURES FOR POLAND 2015 AND 2016
7
AASA ACROSS THE MARKETS
2015 2016
We paid out
103k 161kloans
8
STRUCTURE AND HISTORY
AMC III Jet B.V.
Aasa Lux Co
Aasa Lux Co
9
MANAGEMENT BOARD
Przemysław Kromer, CFO
Member of the Management Board of Aasa
Polska S.A., CFO at Aasa Polska S.A. and Group
CFO at Supernova JV S.a.r.l. Prior joining Aasa
Financial Director of the Dominium Group,
Senior Manager at Transaction Services at PwC
Polska and Manager at M&A Transaction
Services at Deloitte Advisory. He graduated from
Finance & Banking at Warsaw School of
Economics.
Ovais Siddiqui, Country Manager
Country Manager at Aasa Polska S.A. since April
2017. Has over 14 years of finance industry
experience, including 7 years spent driving the
growth of several lending companies in the CEE
Region. Member of the Institute of Chartered
Accountants of England & Wales qualifying with
Deloitte in London and a graduate of the
London School of Economics & Political
Sciences.
Paweł Pawlukiewicz, CLO
Attorney at Law, Chief Legal Officer of Aasa
Polska S.A. , Member of Lublin Bar
Association. Master of Law at Law at
Catholic University of Lublin and The Center
for American Law at Catholic University of
Lublin in cooperation with Chicago Kent
College of Law, Illinois Institute of
Technology.
Meliina Räty, Interim CEO
Chief Executive Officer at Aasa Polska S.A. from
November 2016 until April 2017*. Before
Meliina held position of Chief Operating Officer
at Aasa Polska S.A. and Management Board
Member. She holds Master of Science from
Finance with Risk Management at
Bournemouth University, Bachelor of Business
Administration from Evtek School of Business
Administration
*Since May 2017 Meliina Räty helds CSO position at Supernova Sarl
10
SUPERVISORY BOARD
In June 2017 Aasa will launch an educational campaign on Digital Exclusion dedicated to its
current and potential key customers – women aged 45 to 70 who are both digitally and
socially excluded.
Campaign target groups and stages
► Aasa will organize online Digital Skills Workshops for women over 45 on a dedicated website
► An Aasa Digital Skills Expert will conduct the workshops
► Men and younger customers will be also engaged - their role will be to encourage their mothers,
grandmothers, sisters and aunts to take part in the workshops
► The platform will also include an Online Contest with prizes for those who take part in the
workshops
► We will also engage our employees, partners, experts, NGO’s and local societies in the campaign
11
OUR CORPORATE SOCIAL RESPONSIBILITY
Why Digital Exclusion is our CSR
campaign subject?
► It is an important social problem - 9
million people in Poland over the age of
50 do not use the Internet, and every
third Pole is digital illiterate
► It corresponds with our customers current
needs and expectations, according to
three opinion surveys among customers,
brokers, agents and employees
► It is in line with Aasa values and strategy
► It will strengthen our company's position
as a reliable expert from fin-tech sector
who cares about its customers as well as
development of modern society in
Poland.
How can Aasa help to prevent Digital
Exclusion in Poland?
We can share our know-how on why using new
technologies is so important today and become
an educator and opinion leader by:
► Raising the awareness of digital exclusion
amongst the public through the media and
social media
► Reaching out to individuals to help them
improve their life chances and contact with
relatives through technology
► Promoting the transformative effect that the
internet can have on people’s lives
► Engaging experts in digital from the private,
public and NGO sector to work together to
help disadvantaged people benefit from new
technologies
Aasa Spirit Hub – we share our knowledge
In 2017 we have implemented an internal
international program “Aasa Spirit”. Once a
quarter our employees from different countries
and sectors meet for creative brainstorming
sessions outside of the office.
The purpose of these meetings is to find
solutions to the major challenges faced by the
various departments in the company, improving
processes and developing new products.
Ninja – we boost our innovativeness
We run the “Ninja” internal project, which aim is
to support innovation of our team. Our
employees can submit their ideas in different
areas and the best of them are implemented with
the support of the management board.
So far, there were 4 editions of the program,
during which our employees have submitted
more than 40 proposals. The jury, consisting of
representatives of the Board selected then 7 best
initiatives for implementation, and their authors
received financial bonuses. In addition, each
program participant received a T-shirt with the
logo of the program.
12
INSPIRING EMPLOYER
We are an inspiring employer, that supports innovative grass-roots initiatives and cooperation between different divisions and offices.
Our employee development and satisfaction as well as creating excellent work culture are priorities for us.
Our organisation encourages collaboration and team effort that is why people tend to work well together. Aasa fosters positive relationships and loyalty, our employees are warm and sincere. Company sets focused and ambitious goals and people work hard toward achieving them. The organization is able to adapt to changing conditions. People tend to be flexible in how they view the world and solve problems.
We want to inspire and support our employees while developing their own ideas. On this purpose we organize different programs and initiatives aimed at releasing creativity and finding solutions that are important for the development of our employees and the company.
Aasa Heart Inside – we do care
We support all internal voluntary initiatives. With the “Aasa Heart Inside” program we regularly support actions, individuals and groups indicated by our staff. Together we participate in charitable initiatives and marathons.
Summary
2016 was a challenging year due to the
implementation of new regulations affecting
our industry. However, Aasa recorded the
best results in its history – we delivered
outstanding performance benefitting from
our product already complying with the new
regulations supported by best in class
decisioning support for credit risk and
prudent risk appetite thresholds.
In 2016 the Company reported its first net
profit of PLN 7,7m (vs. net loss of PLN 13m
in 2015). Such improvement in profitability
resulted from significant revenues growth
combined with operational leverage as Aasa
business model is based on light cost
structure. Main growth drivers were due
to the access of substantial financing and
change in product mix resulting in increases
of the average value of granted loans.
Financing fueled sales growth
In 2016 Aasa took another step to diversify
sources and optimise costs of its financing.
We signed a revolving facility agreement of
up to PLN 80m with third largest bank in
Poland - Bank BZ WBK (Santander Group)
and issued bonds of PLN 50m directed to
Credit Value Investment. Access to significant
financing fueled sales that translated into:
(i) 56% y/y increase in paid outs number to
161k and (ii) 67% y/y growth of granted
loans value, which amounted to PLN 319m.
Increase in sales was reflected in revenues
figures – as a result in 2016 interest income and income on additional fees tripled reaching level of PLN 180m (vs. PLN 60m in 2015). Slight changes in product mix were reflected in increase of granted loan value to PLN 1.990 in 2016 from PLN 1.850 in 2015.
Profitability
In 2016 Aasa not only reached its break even point but also reported outstanding growth of profitability. Company's business model is based on light cost structure – focusing on online and sales through broker channels. Variable costs – mostly fees and commissions account for ca. 70% of our OPEX that enables flexible cost management and to benefit from operational leverage.
Receivables impairment subject to conservative accounting policy
As a result of our conservative accounting policy we use effective interest rate method to discount future cashflows. Following dynamic growth of sales, impairment provisions increased to PLN 84m from PLN 41m in 2015.
Loanbook
In 2016, to maximise return on our receivables we decided to sell a portfolio of non-performing loans to an external party.
We strongly believe that Aasa Polska is in a strong position to grow profitability in 2017, utilising and developing on the funding structures established over the recent period and continuing to define its products and credit policies to best deliver profitable growth.
13
ANNUAL RESULTS SUMMARY
The enclosed financial statements of Aasa Polska S.A. comprising:
• the statement of comprehensive income for the year ended 31 December 2016,
• the statement of financial position as at 31 December 2016,
• the statement of changes in equity for the year ended 31 December 2016,
• the statement of cash flows for the year ended 31 December 2016
• the notes to the financial statements have been prepared in accordance with the International
Financial Reporting standards as endorsed by the European Union (IFRS).
14
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD FROM 1 JANUARY 2016 TO 31 DECEMBER 2016
15
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
16
STATEMENT OF FINANCIAL POSITION
STATEMENT OF CHANGES IN EQUITY
FOR THE REPORTING PERIOD ENDED 31 DECEMBER 2016
17
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
FROM 1 JANUARY 2016 TO 31 DECEMBER 2016 [INDIRECT METHOD]
18
STATEMENT OF CASH FLOWS
Year ended 31/12/2016
Year ended 31/12/2015
Cash flows from operating activities PLN PLN
Profit/(loss) for the financial year 7 668 580,47 -12 971 935,59
Adjusted for: -136 531 974,17 -116 069 947,36
Amortization and depreciation 656 704,84 62 985,20
Interest accrued 1 197 882,15 10 507 081,55
Unrealized foreign exchange gains/losses 2 878 358,61 507 162,84
Increase in receivables -147 858 590,69 -152 157 639,04
Increase in trade and other liabilities 9 377 688,05 25 926 604,20
Increase in provisions -2 784 017,13 -916 142,11
Net cash from operating activities -128 863 393,70 -129 041 882,95
Cash flows from investing activities
Payments for property, plant and equipment 5 769,25 0,00
Net cash used in investing activities 0,00 -411 258,19
Purchase of entities 0,00 -423 135,62
Borrowings granted 214 007,40 -247 093,70
Interest received 3 324,71 0,00
Net cash from investing activities 223 101,36 -1 081 487,51
Cash flows from financing activities
Inflows from issue of own shares 0,00 100 611 545,12
Inflows from bonds 49 998 600,00 0,00
Inflows from borrowings 111 300 000,00 70 443 411,01
Repayment of borrowings - principal -38 948 293,49 -3 551 467,41
Repayment of interest -9 620 246,41 -4 024 184,67
Repayment of finance lease liabilities 0,00 -15 390,19
Repayment of interest on finance lease 0,00 -2 312,06
Net cash used in financing activities 112 730 060,10 163 461 601,80
Net increase in cash and cash equivalents -15 910 232,24 33 338 231,34
Cash and cash equivalents at beginning of year 36 790 906,11 3 452 674,77
Cash and cash equivalents at the end of the year 20 880 673,87 36 790 906,11
AS AT 31 DECEMBER 2016
1. GENERAL INFORMATION
1.1 The Company
Aasa Polska Spółka Akcyjna was formed on the basis of the Notarial Deed dated 24 January 2012
at the Notary Public’s office Paweł Curpiak and Marcin Łaski Notariusze, Spółka Partnerska (Rep. No.
A 727/2012). The Company’s registered office is in Warsaw, ul. Hrubieszowska 2 (Poland). The
Company has been entered in the National Court Register maintained by the District Court for the
Capital City of Warsaw in Warsaw, 12th Business Department under the number KRS 0000411939
from 21 February 2012.
As at the reporting date, Supernova JV S.a.r.l. registered in Luxembourg is the parent of Aasa Polska
S.A.
The registered audit company auditing the annual financial statements, Ernst & Young Audyt Polska
Sp. z o.o Sp.k., was appointed in accordance with the legal regulations.
As at the date of preparing these financial statements, the composition of the Company’s
management bodies is as follows:
Management Board:
Siddiqui Ovais – Chairman of the Management Board
Kromer Przemysław – Board Member
Pawlukiewicz Paweł – Board Member
Supervisory Board:
Rytkönen Kimmo – Member of the Supervisory Board
Tammisto Eva – Member of the Supervisory Board
Svensk Jukka – Member of the Supervisory Board
Mcinroy Graham – Member of the Supervisory Board
Cetin Serdar – Member of the Supervisory Board
Fafaliou Tatiana – Member of the Supervisory Board
Manos Alexandros – Member of the Supervisory Board
Sadowski Piotr – Member of the Supervisory Board
Proxy:
Stawicka Monika
19
GENERAL INFORMATION
AS AT 31 DECEMBER 2016, THE SHAREHOLDING STRUCTURE OF THE PARENT COMPANY
IS AS FOLLOWS:
The Company’s operations comprise granting cash loans offered to customers through the Internet
and directly, via a network of agents. In its activities, Aasa Polska S.A. is governed by the rules
developed by the European Coalition for Responsible Credit (ECRC), the fairlending principle and the
current legal regulations and consumer protection laws.
The Company started operating in March 2012. Until June 2015 the Company was member of the
Aasa Global OU financial group. In July 2015 the Company’s structure changed; in consequence of
the ownership changes Supernova JV became the parent company with a 100% interest.
The Company’s financial year is a calendar year. These financial statements have been prepared for
the period from 1 January 2016 to 31 December 2016. The financial statements contain the
comparatives for the period from 1 January 2015 to 31 December 2015.
1.2 Functional and reporting currency
These financial statements have been prepared in Polish zloty (PLN). The Polish zloty is the functional
and reporting currency of the Company. The data in the financial statements is presented in Polish
zlotys.
20
GENERAL INFORMATION
2. INTERNATIONAL FINANCIAL REPORTING STANDARDS APPLIED
2.1 Statement of compliance
These financial statements have been prepared based on the International Financial Reporting
Standards (IFRS) and the related interpretations announced in the form of EC Regulations, and in the
scope not regulated by the aforementioned Standards – in accordance with the requirements of the
Accounting Act of 29 September 1994 (Journal of Laws of 2016, item 1047, as amended) and the
relevant secondary legislation and other binding provisions of the law.
2.2 Change in accounting policies
During the reporting period the Company did not make material changes to its accounting policies
which would have an impact on the measurements and the presented results.
The Management Board is of the opinion that the following standards and interpretations will have
no material impact on the Company’s accounting policies.
The financial statements account for the requirements of the International Accounting Standards, the
International Financial Reporting Standards as endorsed by the EU and the related interpretations.
Amendments to standards and interpretations which became binding on or after 1 January 2016 did
not have a material impact on the Company’s financial statements.
The financial statements do not take into account the amendments to standards and interpretations
which are awaiting endorsement by the European Union or have been endorsed by the European
Union but became or will become binding after the reporting date.
In the Company’s opinion any amendments to standards and interpretations will not have a material
impact on the Company’s financial statements.
2.3 Published Standards and Interpretations which have been issued and binding for the
Company for annual periods starting on 1 January 2016
• IAS 19 (Amended), Defined Benefit Plans: Employee Contributions, published by the International
Accounting Standards Board on 21 November 2013, approved by European Union on 17 December
2014 and binding for annual periods starting on or after 1 July 2014, in EU effective at the latest for
financial years beginning on or after 1 February 2015.,
• Improvements to IFRSs 2010 – 2012 Cycle, published by the International Accounting Standards
Board on 12 December 2013, approved by European Union on 17 December 2014, in majority
binding for annual periods starting on or after 1 July 2014 and some effective prospectively for
transactions occurring on or after 1 July 2014, in EU effective at latest for financial years beginning
on or after 1 February 2015.,
• IFRS 11 (Amended), Accounting for acquisitions of interests in joint operations, published by the
International Accounting Standards Board on 6 May 2014, approved by European Union on 24
November 2015 and binding for annual periods beginning on or after 1 January 2016.,
• Amendments to IAS 16 and IAS 38, Clarification of acceptable methods of depreciation and
amortization, published by the International Accounting Standards Board on 12 May 2014,
Amendments to IAS 16 and IAS 38, Clarification of acceptable methods of depreciation and
amortization, published by the International Accounting Standards Board on 12 May 2014,
21
INTERNATIONAL FINANCIAL REPORTING
STANDARDS APPLIED
• Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants published by the International
Accounting Standards Board on 30 June 2014, approved by European Union on 23 November 2015
and binding for annual periods beginning on or after 1 January 2016.,
• Annual Improvements to IFRSs 2012-2014 Cycle, changing 4 standards, published by the
International Accounting Standards Board on 25 September 2014, approved by European Union on
15 December 2015 and binding for annual periods beginning on or after 1 January 2016,
• Amendments to IAS 1, Disclosure initiative, published by the International Accounting Standards
Board on 18 December 2014, approved by European Union on 18 December 2015 and binding for
annual periods starting on or after 1 January 2016.
Standards and interpretations not yet approved by the European Union
• IFRS 9 Financial Instruments (issued on 24 July 2014) – effective for financial years beginning on
or after 1 January 2018;
• IFRS 14 Regulatory Deferral Accounts (issued on 30 January 2014) – effective for financial years
beginning on or after 1 January 2016;
• IFRS 15 Revenue from Contracts with Customers (issued on 28 May 2014), including amendments
to IFRS 15 Effective date of IFRS 15 (issued on 11 September 2015) - effective for financial years
beginning on or after 1 January 2018;
• Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets Between an Investor and its
Associate or Joint Venture (issued on 11 September 2014) - effective for financial years beginning
on or after 1 January 2019;
• Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
(issued on 12 September 2016) - effective for financial years beginning on or after 1 January
2018;
Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses (issued on 19
January 2016) – effective for financial years beginning on or after 1 January 2017;
• Amendments to IAS 7 Disclosure Initiative (issued on 29 January 2016) – effective for financial
years beginning on or after 1 January 2017;
• Clarifications to IFRS 15 Revenue from Contracts with Customers (issued on 12 April 2016) - –
effective for financial years beginning on or after 1 January 2018;
• Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions
(issued on 20 June 2016) - effective for financial years beginning on or after 1 January
2018,Annual Improvements to IFRS Standards 2014-2016 Cycle (issued on 8 December 2016) -
Amendments to IFRS 12 are effective for financial years beginning on or after 1 January 2017,
while amendments to IFRS 1 and IAS 28 are effective for financial years beginning on or after 1
January 2018;
• IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration (issued on 8
December 2016) - effective for financial years beginning on or after 1 January 2018;
• Amendments to IAS 40: Transfers of Investment Property (issued on 8 December 2016) - effective
for financial years beginning on or after 1 January 2018.
22
INTERNATIONAL FINANCIAL REPORTING
STANDARDS APPLIED
3. Major accounting policies
3.1 Going concern
The financial statements have been prepared on the assumption that Aasa Polska S.A. will continue
its business activities in the foreseeable future covering a period of at least one year from the
reporting date, without materially curtailing the scope of its operations.
The financial statements for 2016 do not contain any adjustments which might be necessary should
the Company be unable to continue as a going concern within an unchanged scope.
3.2 Basis of preparation
The financial statements have been prepared on the historical cost basis, with the exception of some
financial instruments, which are measured at fair value in accordance with the accounting policies set
out below. The remaining financial assets are carried at amortized cost less impairment losses or at
cost less impairment losses.
Property, plant and equipment is stated at cost (purchase price), less accumulated depreciation and
impairment losses.
The major accounting policies adopted by the Company are presented below.
3.3 Changes in presentation of comparatives
No changes were made to presentation of data compared with the prior year.
3.4 Correction of error
There were no corrections of errors in the financial statements for the period from 1 January 2016 to
31 December 2016.
23
MAJOR ACCOUNTING POLICIES
3.5 Interest income and expense
Interest income includes mainly interests on loans granted, bank deposits and on debt securities.
Interest income is recognized in the income statement for all financial instruments measured at
amortized cost using the effective interest rate method. The effective interest rate method is a
method of calculating the amortized cost of a financial asset or a financial liability and of allocating
the interest income or interest expense over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments or receipts to the net carrying amount of the
financial asset or financial liability. When calculating the effective interest rate, the Company
estimates cash flows considering all contractual terms of the financial instrument (for example,
prepayment options) but does not consider future credit losses. The calculation includes all fees paid
or received between parties to the contract that are an integral part of the effective interest rate,
transaction costs and all other premiums or discounts.
Interest income is recognized when it is probable that the Company will obtain economic benefits
and the amount of income can be reliably measured. Once a financial asset or a group of similar
financial assets has been written down as a result of an impairment loss, interest income is
recognized using the rate of interest used to discount the future cash flows for the purpose of
measuring the impairment loss.
Interest expense, in particular borrowing costs, is carried at amortized cost.
3.6 Fee and commission income and expenses
Fees and commission which constitute an integral part of the calculation of the effective interest rate
are recognized in the income statement as net interest income/expense, whereas fees charged at the
moment of providing additional services to the customer are recognized as commission income.
Fees arising from the services provided are recognized as income on an accruals basis over the
period of providing the service. The scope of the services provided arises from the contracts
concluded and costs are incurred in the course of providing the service. The price for the service is
usually fixed in advance and there are specific parameters of its calculation.
Fees and commissions constituting an expense are charged to the income statement when incurred,
unless they are costs which can be directly attributed to the act of granting borrowings, when they
are an element of the effective interest rate.
Fees and commissions are recognized when it is probable that the Company will obtain economic
benefits and the amount of income can be measured reliably.
3.7 Financial assets
The Company classifies its financial assets into the following categories: financial assets at fair value
through profit or loss, loans and receivables, held-to-maturity investments; and available-for-sale
financial assets.
Management decides upon the classification of an investment at the moment of its initial
recognition.
Financial assets are recognized when an entity becomes a contractual party of a financial instrument.
They are initially carried at fair value. Transaction costs attributable directly to the purchase or issue
of financial assets (with the exception of financial assets carried at fair value through profit or loss)
increase the fair value of financial assets on initial recognition.
24
MAJOR ACCOUNTING POLICIES
A financial asset is derecognized when the contractual rights to the cash flows from the financial
asset expire or when the Company transfers the contractual rights to receive cash flows from the
financial assets, i.e. the rights to receive cash flows from a given financial asset are transferred to
another entity or these rights are retained by the Company but at the same time a liability was
imposed to pay out these cash flows. On transferring a financial asset the Company assesses to what
extent it retains the risks and benefits of ownership of a financial asset. In such situation:
• if the Company transfers substantially all risks and benefits of ownership of a financial asset, it
derecognizes the financial asset from the balance sheet;
• if the Company retains substantially all risks and benefits of ownership of a financial asset, it
continues to recognize the financial asset in the balance sheet;
• if the Company neither transfers nor retains substantially all risks and benefits of ownership of a
financial asset, it determines whether it has retained control over this financial asset. If control has
been retained, the financial asset continues to be recognized in the balance sheet, and if there is no
control it is derecognized up to the amount arising from the continuing involvement.
The Company derecognizes loans granted and other receivables or their parts from the balance
sheet when the rights related to the loan agreement expire and when the Company waives these
rights or sells the loan.
Financial assets are recognized and derecognized at the transaction date.
At the end of the current and prior reporting period, the Company held financial assets classified as
loans and receivables.
3.8 Loans and receivables
The Company grants unsecured cash loans from PLN 1 000 to PLN 10 000 for a period of 6 to 24
months.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market other than: receivables designated for sale in a short-term which
were initially classified as available-for-sale instruments, instruments in the case of which the
Company is not going to recover substantially the whole invested amount for reasons other than
due to credit risk.
All amounts due from customers are initially recorded at an amount of a loan granted to a given
customer, adjusted for costs directly related to granting the loan. After initial recognition, amounts
due from customers are measured at amortized costs. Amortized cost represents amounts due from
customers according to their initial recognition less any repayments made by the customer, and is
properly adjusted for the accumulated difference between the initial cost and their value on maturity
calculated using EIR, less any impairment losses.
Amounts due from customers are presented in the balance sheet net of impairment losses.
Interest income and expenses are described in Note 3.5.
25
MAJOR ACCOUNTING POLICIES
3.9 Financial liabilities
A financial liability is each liability being a contractual obligation to issue cash or another financial
asset to another entity or exchange financial assets or liabilities with another entity on potentially
unfavourable terms.
Financial liabilities are classified as financial liabilities measured at fair value through profit or loss or
as other financial liabilities.
Financial liabilities are initially recognized at fair value, net of transaction costs incurred (with the
exception of financial liabilities measured at fair value through profit or loss). After initial recognition,
financial liabilities are shown at amortized cost. Any difference between the proceeds received and
the redemption value is recognized in the income statement over the period of the relevant
contracts using the effective interest method.
The Company derecognizes a financial liability when the liability has expired, i.e. when the obligation
specified in the contract has been fulfilled, forgiven or has expired.
Financial liabilities are recognized and derecognized at the transaction date.
3.10 Impairment of financial assets
At each reporting date, the Company assesses whether there are objective indications of
impairment of a given financial asset or a group of financial assets. A financial asset or a group of
financial assets is impaired and impairment losses are incurred if, and only if, there is objective
evidence of impairment as a result of one or more events that occurred after the initial recognition
of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future
cash flows of the financial asset or group of financial assets that can be reliably estimated. The
objective indications of impairment of a given financial asset or a group of financial assets may
include information on:
- contract default, e.g. failure to pay or delayed payment of interest or the principal portion of the
liability;
- the probability of bankruptcy or other financial reorganization of the debtor.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized (such as an
improvement in the debtor’s credit rating), the previously recognized impairment loss is reversed by
adjusting the allowance account. The amount of the reversal is recognized in the income statement.
Financial assets classification:
- financial assets measured at fair value through the income statement,
- loans and receivables,
- investments held to maturity,
- financial assets held for trading.
26
MAJOR ACCOUNTING POLICIES
Financial liabilities classification:
- financial liabilities measured at fair value through the income statement,
- other financial liabilities.
Initial recognition of financial assets principles
The Company recognises financial asset or liability, when is a party of a contract regarding the
financial instrument only. Initial recognition of the financial asset or liability is made based on its fair
value. In case of financial instruments not classified as valued at fair value through the income
statement, the initial recognition takes into account transaction costs, that can directly related to
acquisition or issue of financial instrument.
3.11 Offsetting of financial instruments
Financial assets and liabilities are offset and shown net in the balance sheet only if the Company has
a valid legal title to offset the amounts and intents to settle them in a net amount or realize a given
asset and settle a liability at the same time. According to para. 42 of IAS 32 that, the legal title cannot
be contingent on a specific future event.
The Company does not conclude offsetting agreements which would meet the offsetting criteria in
the statement of financial position.
3.12 Derivative financial instruments
Derivative financial instruments are stated at fair value beginning from the transaction date. Fair
value is determined on the basis of quotations of instruments on active markets or on the basis of
valuation techniques, including the models based on discounted cash flows. All derivative
instruments with a positive fair value are shown as assets in the balance sheet, and those with a
negative fair value are shown as liabilities.
3.13 Intangible assets
3.13.1 Computer software
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and
bring to use the specific software. These costs are amortized on the basis of the expected useful lives
of the software (2–5 years) using the straight line method.
The expenditure related to the maintenance of computer software is recognized in the income
statement when incurred.
3.13.2 Other intangible assets
Other intangible assets acquired by the Company are disclosed at cost of purchase or manufacture
net of accumulated amortization and impairment.
27
MAJOR ACCOUNTING POLICIES
3.13.3 Costs of development projects
Costs of completed development projects are included in intangible assets if economic benefits can
be obtained and specific conditions have been met, i.e. if the Company has the ability and intention
to complete and use a given intangible asset, has appropriate technical and financial means to
complete the development works and use the asset and is able to reliably determine the expenditure
incurred which can be allocated to the tasks of production of the intangible assets.
3.13.4 Goodwill
Goodwill arising on acquisition of subsidiaries is recognized in intangible assets.
3.14 Property, plant and equipment
Property, plant and equipment (PPE) items are stated at cost less accumulated depreciation and
impairment losses. Subsequent costs are included in the asset’s carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Company and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to the income statement during the financial period in which
they are incurred.
The Company applies the straight line depreciation/amortization method to its property, plant and
equipment items and intangible assets and sets the principles, rates and depreciation/amortization
periods taking into account their economic useful lives.
Depreciation/amortization of PPE and intangible assets starts in the month following the month of
their commissioning.
Land is not depreciated. Depreciation of PPE items is calculated on a straight line basis over the
estimated useful lives of the assets, which are as follows for the individual categories:
– buildings 40 years,
– leasehold improvements – 10 years or less if it follows from the contract,
– equipment and vehicles – 3-10 years.
At each reporting date, the residual value and useful lives of the assets are verified.
Assets that are subject to depreciation are reviewed for impairment whenever events or
circumstances indicate that the carrying amount may not be recoverable. An asset’s carrying amount
is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount. The recoverable amount is the higher of the asset’s fair value less
costs to sell and value in use.
A PPE item is derecognized from the balance sheet at the moment of its sale or when it is expected
that no economic benefits will be obtained from using the asset. Gains and losses on disposals are
determined by comparing proceeds from sale with carrying amounts and recognized in the income
statement.
28
MAJOR ACCOUNTING POLICIES
Costs of borrowings related to the construction of an asset which can be classified as property, plant
and equipment or an intangible asset are capitalized over the period of the asset’s preparation for its
intended use. Other costs of borrowings are charged to profit or loss in the period to which they
relate.
3.15 Shares in related entities
Shares in related entities are stated at cost. If circumstances arise which indicate impairment,
appropriate allowances are recorded.
3.16 Leasing
A lease agreement is classified as a finance lease when the terms of the agreement transfer
substantially all potential benefits and risks of ownership to the lessee. All the remaining leases are
treated as operating leases.
The operating lease agreements relate to the temporary transfer of investment assets for use. The
Company classifies an agreement as an operating lease if substantially all the risks and rewards of
ownership are not transferred.
All of the lease payments made as part of operating leases are charged to the income statement on
a straight line basis over the period of the lease agreement. In the event of terminating a lease
agreement before the end of its term, a potential payment to be made to the lessor as a contractual
penalty increases the costs of the period in which the agreement was terminated.
3.17 Foreign currencies
Transactions concluded in a currency other than the functional currency (foreign currencies) are
booked at the exchange rate binding on the transaction date. As at the reporting date, monetary
assets and liabilities denominated in foreign currencies are translated using the rate binding as at
that date. Non-monetary items carried at fair value and denominated in foreign currencies are
translated using the rate binding as at the date of determining the fair value. Non-monetary items
are stated at historical cost. Foreign exchange differences arising on monetary items are charged or
credited to profit or loss in the period in which they arise.
3.18 Prepayments, accruals and deferred income
3.18.1 Prepayments and deferred costs
Deferred costs include costs related to the future period when the expenditure incurred is above PLN
1,000. Prepayments include costs incurred in the current financial year, which refer to future periods.
They are recorded under “Other assets” in the statement of financial position.
3.18.2 Accruals and deferred income
Accruals are costs relating to the current period, which the Company will incur in future periods.
Accruals and deferred income are disclosed in the statement of financial position under “Other
liabilities".
29
MAJOR ACCOUNTING POLICIES
3.19 Receivables allowances in respect of loans granted
As at each reporting date, the Company evaluates whether there is objective evidence indicating
impairment of loans or groups of loans granted or other receivables. Financial assets are at risk of
impairment when from the moment of their initial recognition in the Company’s assets
circumstances arose which had a negative effect on the amount or timeliness of the future cash
flows from these assets. In respect of assets measured at amortized cost, the Company estimates
impairment calculated as the difference between the present value of the assets or groups of assets
and the present value of the estimated cash flows from these assets or groups of assets, discounted
using the initial effective interest rate. Impairment allowances are assessed collectively for the assets.
Future cash flows from a given portfolio are estimated on the basis of repayments history for
concluded loan agreements and historic ratios of losses having occurred in the case of assets with a
similar credit risk level. The historic loss ratios are adjusted for currently available data in order to
reflect the circumstances which did not occur in the past. The costs of recording the allowances are
recognized in the statement of comprehensive income and the carrying amount of an asset or a
group of assets is reduced by the amount of the allowances. In the following period, the amount of
recognized impairment can be reduced as a result of an improvement in the quality of the assets’
portfolio. The loss recognized can then be reduced by releasing a part or the whole of the allowance
up to the amount of the amortized cost calculated without taking impairment into account. In the
event of concluding that receivables in respect of loans granted are not collectible, they are charged
to the allowances account. In the event of recovering a previously written off amount, it is added
back to the balance on the allowances account.
The Company has its CRM system which provides information on:
- outstanding principal on loans granted
- accrued interest calculated on gross receivables
- other commissions and fees.
Receivables in respect of loans granted comprise non secured cash loans, granted in low amounts
and with a short repayment term to retail customers, therefore, impairment allowances are
calculated on a portfolio basis. The Company estimates impairment losses for the portfolios with
identified impairment and records allowances for losses incurred but not reported (IBNR) in respect
of receivables with no impairment identified.
3.20 Provisions
Provisions are recorded when all of the following conditions have been met:
- as at the reporting date, the Company has a present, legal or constructive obligation to expend
resources, as a result of past events; legal opinions are used to determine the existence of such an
obligation;
- the likelihood that an outflow of resources will be required to settle the obligation is higher than
the likelihood that the outflow will not be required, and
- the amount of the outflow can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle
the obligation taking account of the time value of money (if material) and the risks specific to the
obligation.
30
MAJOR ACCOUNTING POLICIES
3.21 Taxation
The income tax expense of the Company covers current income tax payable and deferred tax.
3.21.1 Current income tax
Current income tax is calculated on the basis of taxable income (tax base) for a given reporting
period. Taxable income (loss) differs from accounting net profit (loss) for the year due to excluding
temporarily non-taxable income and temporarily non-deductible costs as well as cost and income
items that would never be deductible or taxable. Tax is calculated on the basis of tax rates binding in
a given financial year.
3.21.2 Deferred tax
Deferred tax is recorded on the temporary differences between the carrying values of assets and
liabilities in the financial statements and the corresponding tax base used for calculating profit after
tax, and tax loss carryforwards and unused tax relief. Deferred tax provisions are recognized in
principle for all temporary differences. Deferred tax assets are recognized in respect of all deductible
temporary differences, to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilized.
The amount of deferred tax asset is analysed at each reporting date, and it is written down if the
expected future taxable income is not sufficient to utilize the asset or a portion thereof.
Deferred tax is calculated using the tax rates which will be binding at the moment when a given
asset is realized or a liability becomes due. The valuation of deferred income tax provisions and
deferred income tax assets reflects the tax effects which will occur in line with the method of
realization or settlement of the carrying amounts of assets and liabilities anticipated by the Company
as at the reporting date.
Deferred income tax assets and provisions are offset when the Company has a legal title enabling it
to offset deferred tax assets and liabilities.
3.21.3 Current and deferred income tax for the financial year
Current and deferred income tax is recorded in the income statement, with the exception of items
recorded in other comprehensive income or directly in equity. In such situation, current and deferred
tax is also recorded accordingly in other comprehensive income or equity.
3.22 Equity
Equity comprises capital and reserves recorded in accordance with the specific regulations, i.e.
relevant acts, the Company’s statutes or articles of association.
31
MAJOR ACCOUNTING POLICIES
3.22.1 Share capital
Primary capital comprises registered share capital and share premium.
Share capital is shown at the nominal value in accordance with the statute and the entry in the
commercial register.
3.22.2 Revaluation reserve
Revaluation reserve covers the changes in valuation of available-for-sale financial assets.
3.22.3 Retained earnings
Retained earnings comprise non-distributed profits and non-covered losses from previous years,
supplementary capital and other reserves.
Supplementary capital and other reserves are created out of profit appropriation and are designated
for purposes specified in the statutes or other regulations.
3.23 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and other current investments not bearing credit
risk with maturity up to three months on inception, including overnight deposits and other term
deposits.
3.24 Employee benefits
3.24.1 Long-service and retirement bonuses
The Company is not obliged to pay long-service bonuses; therefore, it does not set up the respective
provision. The Company does not pay bonuses related to years in service.
The Company pays retirement bonuses in accordance with the Labour Code. Due to the age of
employees and the amount of the potential retirement benefit provision (equivalent of monthly
salary), which would have no material impact on the Company’s results, the Company does not set
up a retirement benefit provision.
3.24.2 Certificates related to termination of employment
In respect of termination of employment, the Company’s employees are entitled to benefits
stipulated in the Polish Labour Law, such as unused holiday pay and compensation for not engaging
in competitive activities.
The amount of the unused holiday pay provision does not have a material impact on the Company’s
results, therefore, the Company does not set up such a provision.
32
MAJOR ACCOUNTING POLICIES
3.24.3 Other employee benefits
Other employee benefits are recognized in the costs for the financial year in which they were
approved for payment, only at the time of approving an amount for payment can be reliably
determined.
4. Critical accounting estimates and judgements
Based on the accounting policies binding at the Company, discussed in Note 3, the management
board is obliged to make estimates, judgements and assumptions as to the valuation amounts of the
individual assets and liabilities. The estimates and the related assumptions are based on experience
and other factors considered material. The actual results may differ from the adopted estimates.
Due to the fact that the Company began operations in 2012, there are limited statistics available on
loans granted by Aasa Polska S.A. on the Polish market. In view of the above, the Management Board
adopts certain estimates as to loan repayment based on collected statistics and based on experience
in the Aasa Group.
The methodology and assumptions used for estimating both the amount and timing of future cash
flows are reviewed regularly to identify differences between loss estimates and actual loss
experience.
The Company reviews its assumptions for the impairment allowance methodology in respect of the
loans granted on a regular basis. The main factors which have an impact on the amounts of the
allowances are the non-performing loans (NPL) ratio and the Credit Loss ratio. The ratios used to
calculate impairment allowances are verified on a monthly basis, based on historical parameters of
the collectability of loan dues. This data is analysed based on loans grouped by monthly draw-downs
from the date of commencement of operating activities by the Company.
33
CRITICAL ACCOUNTING ESTIMATES
AND JUDGEMENTS
5. Interest and commission income
The structure of interest income for the current and prior reporting period is as follows:
Interest income relates to cash loans offered to customers and comprises interest calculated under
the effective interest rate method, and admission fees and commission constituting an integral part
of the effective interest rate calculation.
In the case of loans with identified impairment, interest income is accrued based on the net exposure
calculated as a difference between a loan’s gross value and impairment allowance.
The fees charged for additional services provided by the Company to customers, are recognized as
commission income at the moment of providing the service. These include – among other things –
fees for reminder notices, costs of resignation and court bailiff costs.
6. Other finance income
34
INTEREST AND COMMISSION INCOME
7. Interest expense and other finance costs
(i) In April 2016 the Company acquired short term external founding in amount of 80 000 000,00
PLN. 72 833 333,30 PLN of that founding was used as of 31.December 2016.
(ii) In March 2014 the Company acquired external long term funding.
(iii) In April 2016 the Company issued 50 760 series A bonds with nominal value of 1 000PLN each.
Final value of transaction was 50 760 000,00 PLN.
Acquired funding was allocated to operating activity by the Company. Operating activities of the
Company is mainly consisted of issuing consumer loans in Poland.
35
INTEREST EXPENSE
8. Operating expenses, other operating income and expenses
8.1 Other operating income
8.2 Operating expenses
36
OPERATING EXPENSES, OTHER OPERATING
INCOME AND EXPENSES
8.3 Other operating expenses
9. Wages and salaries
On 28th April 2016 Supervisory Board approved bonus plan:
37
WAGES AND SALARIES
10. Receivables allowances
11. Income tax
11.1 Income tax in the income statement
The current income tax expense is calculated on the basis of the binding tax regulations. Due to the
application of these provisions, taxable income (loss) differs from accounting net profit (loss) for the
year in connection with excluding non-taxable income and non-deductible costs as well as cost and
income items that would never be deductible or taxable. Tax expense is calculated on the basis of tax
rates binding in a given financial year, i.e. at 19%.
The Company is subject to the general provisions related to corporate income tax. The Company
does not constitute a tax group nor does it conduct business activities in the Special Economic Zone,
which would diversify the principles for establishing the tax expense compared with the general tax
provisions. The tax year and the financial year are the same as the calendar year.
The reconciliation of the tax base to accounting profit/loss is as follows:
In 2016 the company utilized tax loss from previous years in amount of 12 401 121,24 PLN.
In this case tax liabilities for the year 2016 amount to 278 118 PLN.
38
RECEIVABLES ALLOWANCES AND INCOME TAX
11.2 Deferred tax
Below is an analysis of the temporary differences affecting the amount of deferred tax.
2016
Temporary differences
39
INCOME TAX
12. Non-current receivables
The Company does not have long term receivables as of balance sheet date. On 11 April 2016 Aasa
Czech a. s. repaid loan received from the Company on 11 September, 2015.
Settlement of the loan issued on 26 Jun, 2015 to Aasa Slovensko a. s. took place in the second half of
the year of 2016.
13. Subsidiaries
In the first half of 2016 Aasa Polska S.A. acquired shares which are presented as long-term financial
assets.
Value of long-term financial assets at acquisition cost
40
NON-CURRENT RECEIVABLES AND SUBSIDIRIES
As at the balance sheet date, i.e. 31 December 2016, the Company did not decide to set up a write-
off for shares in subsidiaries due to no impairment of shares. As at 31 December, 2015, the Company
created a write-off up to the net asset value of Aasa Czech a.s. Based in Prague (Czech Republic) for
shares worth PLN 6 328 674.40.
14. Property, plant and equipment and intangible assets
14.1 Property, plant and equipment
As at 31 December 2016 the Company did not record impairment on its property, plant and
equipment.
14.2 Intangible assets
41
PROPERTY, PLANT AND EQUIPEMENT AND
INTANGIBLE ASSETS
Plant and
machinery Vehicles
Investments in
extraneus
asset
Plant and
machinery Vehicles
Investments
in extraneus
asset
PLN PLN PLN PLN PLN PLN PLN PLN
Gross amount Gross amount
As at 1 January 2016 206 080,53 53 900,00 0,00 259 980,53 As at 1 January 2015 48 559,55 53 900,00 0,00 102 459,55
Increases 1 056 308,65 0,00 453 276,48 1 509 585,13 Increases 157 520,98 0,00 0,00 157 520,98
Disposals 2 901,60 0,00 0,00 5 769,25 Disposals 0,00 0,00 0,00 0,00
As at 31 December 2016 1 259 487,58 53 900,00 453 276,48 1 763 796,41
As at 31 December
2015 206 080,53 53 900,00 0 259 980,53
Plant and
machinery Vehicles
Investments in
extraneus
asset
Plant and
machinery Vehicles
Investments
in extraneus
asset
PLN PLN PLN PLN PLN PLN PLN PLN
Accumulated
depreciation and
impairment
Accumulated
depreciation and
impairment
As at 1 January 2016 73 262,61 18 864,93 0,00 92 127,54 As at 1 January 2015 21 361,12 8 084,97 0,00 29 446,09
Depreciation charge 592 722,63 10780 37 773,04 641 275,67 Depreciation charge 51 901,49 10779,96 0,00 62 681,45
As at 31 December 2016 665 985,24 29 644,93 37 773,04 733 403,21
As at 31 December
2015 73 262,61 18 864,93 0,00 92 127,54
Total Total
Total Total
As at 31 December 2016, no impairment losses on intangible assets were recorded.
15. Amounts due from customers and other receivables
42
AMOUNTS DUE FROM CUSTOMERS AND OTHER
RECEIVABLES
On 30 June 2016, Aasa Poland signed an agreement securing repayment of loans, which are past due
for a minimum of 90 days (as at 30 June 2016). Credit Default Swap (CDS) covered the loans paid out
after 1 September, 2015. Under the agreement, in return for a CDS fee of PLN 43,732,656.16, the
counterparty was obliged to repurchase all the loan receivables covered by the agreement, which as of
31 August, 2016, were retained for a minimum of 90 days. The company signed the same type of
contract in November 2016, the settlement date was 27 December, 2016. Under the agreement, in
return for a CDS fee of PLN 55,307,252.32, the counterparty was obliged to repurchase all of the loan
receivables covered by the agreement, which as of 31 August, 2016 had been retained for a minimum
of 90 days.
15.2 Other receivables
16. Cash and cash equivalents
43
CASH AND CASH EQUIVALENTS
17. Share capital
The share capital comprises:
100 000 (one hundred thousand) ordinary registered A-series shares with numbers from 1 to 100 000
and with a nominal value of PLN 1 each; 100 000 ordinary registered B-series shares with numbers
from 1 to 100 000 and with a nominal value of PLN 1 each; 38 434 072 ordinary registered C-series
shares with numbers from 000000001 to 38434072 and 1 365 928 ordinary registered D-series shares
with numbers from 0000001 to 1365928, 1 000 000 ordinary registered E-series shares with numbers
from 0000001 to 1000000, and 1 000 000 ordinary registered F-series shares with numbers from
0000001 to 1000000. The shares are fully covered with equity as at 31 December 2016.
A, B, C and D, E-series shares, with a nominal value of PLN 1 each, each represent one vote at the
General Shareholders’ Meeting and are entitled to dividend.
A, B, C, D, E and F-series shares are pledged under a registered pledge on behalf of BZ WBK S.A. with
its registered office in Poland, 50-950 Wrocław, ul. Rynek 9/11.
44
SHARE CAPITAL
As at 31.12.2016
As at 31.12.2015
PLN PLN
Share capital 42 000 000,00 41 000 000,00
Capital subject to registration 0,00 1 000 000,00
Supplementary capital 98 611 545,12 98 611 545,12
140 611 545,12 140 611 545,12
As at 31 December 2016, the structure of the Company’s share capital was as follows:
18. EARNINGS PER SHARE
The calculation of basic earnings per share was based on the net profit/ (loss) of the Company’s
shareholders and the weighted average number of shares as at the date of preparation of the
financial statements. These values have been determined in the following manner:
45
SHARE CAPITAL AND EARNINGS PER SHARE
19. Borrowings received
Summary of loan agreements
The Company received borrowings to finance its current operations consisting of granting consumer
loans on the Polish market.
The interest rate of the borrowings in the reporting period was from 6,66 % do 15%.
As at 31 December 2016, there were no overdue borrowings.
The borrowing shown second in the table is payable on demand within 45 days of notification.
20. Bonds liabilities
In 2016, the Company issued bonds with a nominal value of PLN 50,760,000.00, classified as
measured at amortized cost. The bonds are repurchased on April 15, 2019. The bonds bear a fixed
interest rate of 8.9% per annum, interest is payable quarterly, the first interest payment took place on
July 14, 2016.
46
BORROWINGS RECEIVED AND BONDS LIABILITIES
As at 31/12/2016
As at 31/12/2015
PLN PLN
Borrowings received from:
related entities 125 657,11 569 256,55
other entities: 144 248 577,71 66 403 358,06
Total 144 374 234,82 66 972 614,61
No. Type of exposure Maturity date Amount Currency %
1 Borrowing 31.03.2019 15 000 000 EUR 11
2 Borrowing 28 000 EUR 15
3 Borrowing 31.03.2018 420 000 PLN 10
4 Borrowing 31.03.2018 100 000 PLN 15
5 Borrowing 72 833 333 PLN 6,66
As at
31/12/2016 As at
31/12/2015 Financial instruments measured at amortized cost - bonds
51 725 413,48 0,00
51 725 413,48 0,00
Bond issue liabilities with maturity As at 31/12/2016
As at 31/12/2015
Up to 3 months 965 413,48 0,00
Over 3 months 50 760 000,00 0,00
51 725 413,48 0,00
21. Other liabilities
The liabilities are not overdue as at the reporting date.
22. Transactions with personally related entities and in terms of equity
In accordance with the binding regulations, the conditions agreed by the personally related entities
and in terms of equity comply with the conditions determined between unrelated entities and are on
an arm’s length basis.
47
OTHER LIABILITIES
As at 31/12/2016
As at 31/12/2015
PLN PLN
Short-term liabilities payable within 12 months 9 384 344,90 11 071 588,24
Long-term liabilities payable after 12 months 0,00 0,00
9 384 344,90 11 071 588,24
22.1. Commercial transactions with related entities
Detailed information on commercial transactions between the Company and its related entities is
presented below.
22.1.1 Borrowings from related entities
48
TRANSACTIONS WITH ENTITIES RELATED
PERSONALLY AN IN TERMS OF EQUITY
Related entity Revenue in
2016 Revenue in 2015
Costs in 2016
Costs in 2015
Receivables as at
31.12.2016
Receivables as at
31.12.2015
Liabilities as at 31.12.2016
Liabilities as at 31.12.2015
Aasa OY 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00
AA Global OU 0,00 0,00 0,00 7 118,68 0,00 0,00 0,00 0,00
Aasa Czech A.S. 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00
AA Yleislaina OU 0,00 0,00 0,00 15 052,08 0,00 0,00 0,00 0,00
Supernova JV S.ar.l. 0,00 0,00 3 567 513,57 0,00 0,00 0,00 10 434 140,55 19 943 396,15
Senter Investments 0,00 0,00 0,00 0,00 11 587 874,65 31 784 737,60 0,00 0,00
Total 0,00 0,00 3 567 513,57 22 170,76 11 587 874,65 31 784 737,60 10 434 140,55 19 943 396,15
23. Post balance sheet events
No significant events occurred after the balance sheet date, the disclosure of which would be
required in the financial statements and which could have an impact on the financial statements or
continuation of the Company's operations.
24. Risk management
Credit risk
Credit risk involves potential losses related to customer default in respect of a liability incurred or its
part on dates specified in the related agreement. The Company’s Management Board estimates the
level of credit risk based on the regressions analysis and based on professional experience. The
target customer group to which the lending offer of AASA Polska is addressed are working adults
with clean credit history, positively verified based on internal procedures covering an assessment of
creditworthiness (including based on the scoring model developed and periodically verified), who
need short-term cash for unplanned expenses or purchases. The loans granted are not secured.
To assess the creditworthiness of its customers – apart from the standard industry tools – the
Company uses the experience of the company Big Data Scoring (a related entity, member of the
Supernova JV S.a.r.l. Group). Big Data Scoring engages in analysis of large databases. The knowledge
and solutions offered by Big Data Scoring enable a more individualized approach to the credit risk
assessment of potential customers, by including information which is not universally available for
entities competitive to Aasa in the scoring analysis (such as data from the social portals of potential
customers).
Credit risk may be increased by changes in the binding legal provisions which regulate the principles
for granting loans and changes in the scope of bankruptcy petitions filed by individuals.
Receivables in respect of loans granted are exposed to credit risk. These receivables are assessed for
impairment on a group basis. In the case of exposures with reported impairment (overdue for more
than 90 days), Aasa Polska S.A. creates an impairment allowance. In respect of receivables with no
impairment identified, the IBNR (incurred but not reported) allowance is recorded.
Financial risk
Financial risk covers price risk and refinancing risk and it arises when the maturities of assets and
liabilities differ. Financial risk also arises in the event of excessive concentration of assets and
liabilities of specific customers.
Due to the fact that the average period for which Aasa Polska S.A. grants loans is short, the Company
is able to maintain longer maturities of liabilities compared with the maturities of the loans granted.
Foreign exchange risk
Foreign exchange risk is defined as an uncertainty related to potential exchange rate fluctuations
against the basic currency, i.e. the PLN. As at 31 December 2016, the Company had trade payables
denominated in EUR amounting to PLN 304 102,83. As at 31 December 2016, liabilities in respect of
borrowings denominated in EUR amounted to PLN 71 194 475,07.
49
POST BALANCE SHEET EVETS
AND RISK MANAGEMENT
The value of borrowings denominated in EUR and granted to subsidiaries amounted to PLN 00,0. In
the event of a 10% change in the EUR exchange rate against the Polish currency, the effect on net
profit and equity would amount to PLN +/- 7 150 thousand.
Liquidity risk management
Liquidity risk means a risk that the Company would have limited ability or be unable to settle its
financial liabilities on a regular basis. The Company estimates liquidity risk by comparing the
maturities of loans granted and other significant receivables with the maturities of its liabilities.
Liquidity risk management involves matching the maturity profiles of financial assets and liabilities.
The short-term nature of the Company’s operations means that the majority of amounts due from
customers and other receivables and other liabilities are payable within 12 months. Thus, the risk of
insufficient liquid funds is low. Additionally, the Company may limit the scope of its lending activities.
The following analysis presents amounts due from customers and borrowings received at carrying
amounts by maturity dates.
Market risk and interest rate risk
The loan agreements concluded with customers and the borrowing agreements concluded by the
Company are based on fixed interest rates and mainly comprise short-term agreements; therefore,
the Company assesses its exposure to interest rate risk as low.
Operational risk
The Company’s operational risk may arise from disruptions in the operation of its technological
solutions, misappropriations or negligence of its employees, customer frauds, errors in credit
assessment and in estimates and assumptions related to the Company’s strategy.
The Company minimizes its operational risk by continued training and supervision over the work of
the call centre staff, securing the maintenance of IT systems and deconcentration of know-how. Due
to the scale of its operations, Aasa Polska is exposed to operational risk related to changes in the
binding legal regulations.
50
RISK MANAGEMENT
As at 31/12/2016 Receivables in respect
of loans granted Percentage share
Liabilities in respect of loans and borrowings
Percentage share
PLN % PLN %
Up to 1 year 218 066 864,04 96,43% 73 154 628,32 50,67%
More than 1 year 8 082 158,37 3,57% 71 219 606,50 49,33%
Total 226 149 022,41 144 374 234,82
As at 31/12/2015 Receivables in respect
of loans granted Percentage share
Liabilities in respect of loans and borrowings
Percentage share
PLN % PLN %
Up to 1 year 147 880 728,54 94,67% 367 714,32 0,55%
More than 1 year 8 329 530,83 5,33% 66 604 900,29 99,45%
Total 156 210 259,37 66 972 614,61
27. Fair value of financial assets and liabilities
Fair value is the price that would be obtained for selling an asset or paid for transferring a liability in
a transaction conducted at an arm’s length between market participants as at the valuation date.
In respect of the loans granted the Company applies the discount rate equal to the current yields on
financial instruments with similar terms and conditions and of a similar type, bearing in mind the
quality / credit assessment of the instrument, the remaining period for which the interest rate is
fixed, the remaining time to repayment of principal and the currency in which the repayment is to be
made.
Due to the fact that the maturity of the loans granted is shorter than 12 months, it is assumed that
their book value is equal to fair value.
It is adopted that in the case of current receivables and liabilities without a set interest rate, the book
value shown in the statement of financial position is equal to the fair value.
For financial liabilities in respect of borrowings received, their carrying amounts are considered to
approximate their fair value.
28. Disputed claims
As at 31 December 2016, the Company did not have any disputed claims for which it would have to
set up provisions.
51
FAIR VALUE OF FINANCIAL ASSETS AND
LIABILITIES AND DISPUTED CLAIMS
29. Contingent liabilities
Pursuant to IAS 37 a contingent liability is:
1) a potential obligation resulting from past events whose existence will be confirmed at the moment
of occurrence or non-occurrence of one or more uncertain future events which are not fully under
the entity’s control; or
2) a current obligation which arises as a result of past events but is not recognized in the statement
of financial position because it is improbable that cash or other assets would have to be expended to
discharge the obligation or the amount of the liability could not be assessed reliably.
“Contingent and off-balance sheet liabilities received”. In accordance with IAS 37 upon initial
recognition a financial guarantee agreement in measured at fair value. After initial recognition, it is
measures at the higher of:
1) the amount determined in accordance with IAS 37 “Provisions, Contingent Liabilities and
Contingent Assets”; and
2) the initial value net of (if applicable) accumulated amortization recognized in accordance with IAS
18 “Revenue”.
As at 31 December 2016 the Company has no guarantees or contingent liabilities.
52
CONTINGENT LIABILITIES
53
INDEPENDENT AUDITOR’S REPORT
54
INDEPENDENT AUDITOR’S REPORT
55
INDEPENDENT AUDITOR’S REPORT
56
INDEPENDENT AUDITOR’S REPORT
57
INDEPENDENT AUDITOR’S REPORT
58
INDEPENDENT AUDITOR’S REPORT
Aasa Polska S.A.ul. Hrubieszowska 2, 01-209 Warszawa
Telephone: +48 801 40 40 40
Email: [email protected]
Websites: www.aasaglobal.com, www.aasapolska.pl
59
