The ING Foundation for Polish Arts

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1 ING COMMERCIAL FINANCE POLAND ANNUAL REPORT 2011

2 The ING Foundation for Polish Arts All images presented in Annual Report belong to The ING Foundation for Polish Arts. The ING Foundation for Polish Arts has been registered on September 1, It was established by companies being members of the ING Group that operate in Poland. The aim of the Foundation is to promote the Polish contemporary art, in particular to promote of the work of young artists, The collection is composed of the works representing various trends of the contemporary art and different handicraft techniques: painting, drawing, graphic arts, photography, and examples of figurative and abstract arts.

It was established by companies being members of the ING Group that operate in Poland.

3 Dear Colleagues, I m pleased to present you the annual report of ING Commercial Finance Polska S.A. for the year Despite recessionary trends in Europe and rising uncertainty as a consequence of the debt crisis, especially in the eurozone, the factoring market in Poland recorded again double digit growth. The turnover of factoring companies members of Polish Factors Association increased by over 19% in 2011 to 17,9 bln EUR.. At the end of 2011 ING Commercial Finance Polska S.A. has undergone an acquisition process. On 29 December 2011 ING Bank Śląski S.A. and ING Lease Holding N.V. signed an agreement whereby ING Bank Śląski S.A. acquired all ING Commercial Finance Polska shares, effective on 1 January In 2011, ING Commercial Finance followed its strategic assumptions for to maintain a high quality of service for the existing Clients and an effective credit risk management. The Company s profit for 2011 increased by 40,1% in comparison to 2010 (highest level in the Company s history ever). I d like to express my thanks to all our clients and factor correspondents for their support and trust. We do hope we will have a fruitful cooperation in the years to come. Andrzej Żbikowski CEO

The turnover of factoring companies members of Polish Factors Association increased by over 19% in 2011 to 17,9 bln EUR.. At the end of 2011 ING Commercial Finance Polska S.A. has undergone an acquisition process.

4 Introduction ING Commercial Finance Polska S.A. was established in July 1994 as the first company in Poland providing a full range of factoring services. Since March 2006, it is a part of ING Group one of the world s largest financial institutions. With its 14.7% market share, ING Commercial Finance is one of the factoring leaders in Poland. The Company s main strength is the combination of local market expertise with ING s worldwide business solutions. In 2011 ING Commercial Finance Polska introduced some new products just to name a few: Local Government factoring, maturity factoring and invoice discounting. The Company employs top-skilled specialists offering their knowledge in receivables financing and management to diversified companies. ING Commercial Finance Polska is an active member of Polish Factors Association and Factors Chain International. The FCI network allows the Company to offer its customers foreign transactions in cooperation with over 250 factoring companies across the world. The Company s local branches are sited all over the country: in Bydgoszcz, Gdańsk, Katowice, Kraków, Łódź, Poznań, Rzeszów and Wrocław. Market Environment In 2011 the GDP in Poland increased by 4.3% y/y, compared with 3.9% in This achievement placed the polish economy on the top ranking places not only in the EU but worldwide. The GDP growth rate was largely boosted by private consumption and to a significant extent by investments (mainly stimulated by public spending on infrastructure boosted by EU funds inflows) and accompanied by conservative investing activities of enterprises as a result of the high uncertainty as to the prospects for their products demand. The accelerating growth of GDP in 2011 was accompanied by employment growth in the corporate sector of 3.2% y/y, compared with 0.8% in In 2011, the average annual inflation rate - measured with the consumer price index - increased to 4.3% y/y from 2.6% y/y in Due to above the Monetary Policy Council (RPP Rada Polityki Pieniężnej) increased interest rates by 100 b.p. in total to 4.5%.

The Company s main strength is the combination of local market expertise with ING s worldwide business solutions.

5 Factoring in Poland Factoring industry performance shows double digit growth rate with 19,3 %. The volumes of Polish Factors Association members reached 67,1 bln PLN (16 bln EUR) in Entire market together with non-members of PFA is estimated at 80 bln PLN (17,9 bln EUR), what means that PFA members cover appr. 84% of the polish market. This excellent outcome is partly a result of increased interest in value added factoring products. There were 1,7 mln active SME s registered in Poland by the end of More and more companies know and make use of factoring services. Acc. to statistics disclosed by PZF, at the end of last year 4100 clients were using factoring as a mean of financing current activity. But more than businesses have seen an assignment on their invoice! The level of bank s financing of SME s (such as overdrafts) has dropped in the Q from 55 bln Euro by ca 1,2 bln against Q Entire factoring market has financed its clients with ca 2,7 bln Euro, which constitutes ca 5 % of the overdrafts credits. Legal environment stays stable and there were not any tax or legal changes affecting factoring. Factoring is offered based on the Civil Code and the assignment for its validity needs notification. ING Commercial Finance strategy in 2011 To sum up, in 2011 ING Commercial Finance effectively performed its primary tasks. The company flexibly responded to developments in the external environment by a further tailoring of products, processes and credit risk management The core developments of last year s operations are summarized below: Development of cooperation with ING Bank Śląski in respect of comprehensive product range for corporate clients and integration of sales channels. Further development of products for the strategic clients segments and Local Government Units Simplification of customer service processes Organizational changes to introduce a customer centricity model.

This excellent outcome is partly a result of increased interest in value added factoring products. There were 1,7 mln active SME s registered in Poland by the end of 2010.

6 Financial Position In 2011, ING Commercial Finance Polska SA reported a turnover of PLN 9,85 bln, lower by 10.45% than in This decrease was was mainly due to an one-off event: the take-over of a significant client by another sister company within ING Group. Taking into account the effects of this one-off event, the Company s factoring turnover increased by 65.62% in The total assets at the end of 2011 amounted to PLN 1.434,1 m, higher by 92.2% in comparison to prior period. Such a significant increase resulted from gaining several strategic clients characterized by a high turnover. Liabilities relating to loans for financing the factoring operations of ING Commercial Finance Polska S.A. amounted to PLN m. The Company is fully financed by ING Group. Total sales revenues amounted to PLN 81.6 m. The main revenues were generated by commissions charged for receivables management and interest on advances paid-out. The Company s expenses mainly consist of loans, whereas the operating costs encompass employees salaries, office rental costs, amortization/depreciation and insurance of trade receivables. The Company s profit for 2011 increased by 40.1% in comparison to 2010 and amounted to PLN 19.9 m (the highest level ever). As at 31 December 2011, the Company employed 77 persons.

Taking into account the effects of this one-off event, the Company s factoring turnover increased by 65.62% in 2011. The total assets at the end of 2011 amounted to PLN 1.434,1 m, higher by 92.

7 BALANCE SHEET (in PLN) Assets Non-current assets Intangible assets Tangible fixed assets Long term prepayments and deferred costs Current assets Short term receivables Short term investments Short term prepayments and deferred costs Total Assets Equity and Liabilities Equity Share capital Reserve capital Other capital reserves Net profit Liabilities and provisions for liabilities Provisions for liabilities Short term liabilities Accruals and deferred income Total equity and liabilities PROFIT AND LOSS ACCOUNT (in PLN) Profit and loss account Net revenues and net revenue equivalents Operating expenses Profit on sales Other operating income Other operating expenses Operating profit Financial income Financial expenses Gross profit Corporate income tax Net profit

2010 Non-current assets 2 435 631 1 575 362 Intangible assets 120 923 10 490 Tangible fixed assets 897 977 647 593 Long term prepayments and deferred costs 1 416 731 917 279 Current assets 1 431 712

8 ING Commercial Finance Polska S.A. Malczewskiego 45 Street, Warsaw, POLAND tel.: (+48 22) , fax: (+48 22) ING Commercial Finance Polska S.A.; ul. Malczewskiego 45, Warszawa; KRS: , Sąd Rejonowy dla Miasta Stołecznego Warszawy, XII Wydział Gospodarczy, NIP: ; Kapitał zakładowy: PLN (w całości wpłacony)

pl www.ingcomfin.pl ING Commercial Finance Polska S.A.; ul.

The ING Foundation for Polish Arts

ING COMMERCIAL FINANCE POLAND ANNUAL REPORT 2012 The ING Foundation for Polish Arts All images presented in the Annual Report belong to The ING Foundation for Polish Arts. The ING Foundation for Polish